Crown Crafts, Inc. (NASDAQ:CRWS) (the “Company”) today reported
results for the fourth quarter and fiscal year 2018, which ended
April 1, 2018.
“Fiscal 2018 has brought several challenges,
including the bankruptcy and subsequent liquidation of one of our
major customers, which negatively impacted net income by $1.3
million, including credit costs, uncollectible receivables and
royalty shortfalls associated with licenses that relied heavily on
Toys “R” Us.,” said E. Randall Chestnut, Chairman, President and
Chief Executive Officer. “Net income for the year was also
negatively impacted by acquisition costs of $339,000 and non-cash
charges to income tax expense of $497,000 related to recently
enacted tax legislation.”
“Despite the challenges, we are confident that
our future holds many exciting opportunities. The integration of
our most recent acquisitions, Carousel Designs and Sassy, has
resulted in exciting new products and distribution channels for our
company. We now have a robust, direct-to-consumer sales channel
through Carousel Designs, and we have expanded into new categories
through the acquisition of Sassy. Both brands are well known and
highly regarded in the industry, and we are thrilled to have them
contributing to the future of Crown Crafts,” continued
Chestnut.
Financial Results
Net income for the fourth quarter of fiscal 2018
was $1.2 million, or $0.12 per diluted share, on net sales of $22.7
million, compared with net income of $1.6 million, or $0.16 per
diluted share, on net sales of $17.3 million for the fourth quarter
of fiscal 2017. Gross profit for the current-year quarter was
25.9% of net sales, down from 29.9% in the prior-year
quarter. Excluding non-recurring expenses totaling $1.2
million pre-tax and $785,000 post-tax, the Company’s gross profit
percentage, net income and diluted earnings per share for the
current year quarter would have been 29.0%, $2.0 million and $0.20,
respectively.
For the fiscal year, net income was $3.0
million, or $0.30 per diluted share, on net sales of $70.3 million,
compared with net income of $5.6 million, or $0.55 per diluted
share, on net sales of $66.0 million for fiscal 2017. Gross
profit for the current year was 28.1% of net sales, down from 29.4%
in the prior year. Excluding non-recurring expenses totaling
$2.8 million pre-tax and $2.4 million post-tax, the Company’s
current year gross profit percentage, net income and diluted
earnings per share would have been 29.8%, $5.4 million and $0.53,
respectively.
Quarterly Cash Dividend
As announced on April 30, 2018, the Board of
Directors declared a quarterly cash dividend on the Company’s
Series A common stock of $0.08 per share, which will be paid on
July 6, 2018 to stockholders of record at the close of business on
June 15, 2018. “We are pleased to once again announce this
dividend payment, which reflects our Board's confidence in the
business and rewards our stockholders for their support,” Chestnut
said.
Conference Call
The Company will host a teleconference today at
11:00 a.m. Central Daylight Time to discuss the Company’s results,
during which interested individuals will be given the opportunity
to ask appropriate questions. To join the teleconference,
dial (844) 861-5504 and ask to be joined into the Crown Crafts,
Inc. call. The teleconference can also be accessed in
listen-only mode by visiting the Company’s website at
www.crowncrafts.com. The financial information to be
discussed during the teleconference may be accessed prior to the
call on the investor relations portion of the Company’s
website. A telephone replay of the teleconference will be
available one hour after the end of the call through 4:00 p.m.
Central Daylight Time on June 20, 2018. To access the replay,
dial (877) 344-7529 in the United States or (412) 317-0088 from
international locations and refer to conference number
10120114.
About Crown Crafts, Inc.
Crown Crafts, Inc., founded in 1957, is one of
America’s largest producers of infant bedding, toddler bedding,
bibs and developmental toys. Crown Crafts, Inc. operates through
its three wholly owned subsidiaries, Crown Crafts Infant Products,
Inc., Hamco, Inc. (which includes the Sassy product line) and
Carousel Designs, LLC. The Company’s subsidiaries market a variety
of infant, toddler and juvenile products under Company-owned
trademarks, as well as licensed collections and exclusive private
label programs. Sales are made directly to retailers such as mass
merchants, large chain stores and juvenile specialty stores, as
well as directly to consumers through www.babybedding.com. For more
information, visit the Company’s website at
www.crowncrafts.com.
Forward-Looking Statements
The foregoing contains forward-looking
statements within the meaning of the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Such statements are based upon
management’s current expectations, projections, estimates and
assumptions. Words such as “expects,” “believes,” “anticipates” and
variations of such words and similar expressions identify such
forward-looking statements. Forward-looking statements involve
known and unknown risks and uncertainties that may cause future
results to differ materially from those suggested by the
forward-looking statements. These risks include, among others,
general economic conditions, including changes in interest rates,
in the overall level of consumer spending and in the price of oil,
cotton and other raw materials used in the Company’s products,
changing competition, changes in the retail environment, the
Company’s ability to successfully integrate newly acquired
businesses, the level and pricing of future orders from the
Company’s customers, the extent to which the Company’s business is
concentrated in a small number of customers, the Company’s
dependence upon third-party suppliers, including some located in
foreign countries, customer acceptance of both new designs and
newly-introduced product lines, actions of competitors that may
impact the Company’s business, disruptions to transportation
systems or shipping lanes used by the Company or its suppliers, and
the Company’s dependence upon licenses from third parties.
Reference is also made to the Company’s periodic filings with the
Securities and Exchange Commission for additional factors that may
impact the Company’s results of operations and financial condition.
The Company does not undertake to update the forward-looking
statements contained herein to conform to actual results or changes
in our expectations, whether as a result of new information, future
events or otherwise.
Contact:
Olivia W. ElliottVice President and Chief Financial
Officer (225)
647-9124 oelliott@crowncrafts.com
or
Halliburton Investor Relations (972) 458-8000
CROWN CRAFTS, INC. AND SUBSIDIARIESCONSOLIDATED
STATEMENTS OF INCOMESELECTED FINANCIAL DATAIn thousands, except
percentages and per share data |
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
April 1, 2018 |
April 2, 2017 |
|
April 1, 2018 |
April 2, 2017 |
|
|
(Unaudited) |
|
|
|
Net sales |
|
$ |
22,686 |
|
$ |
17,308 |
|
|
$ |
70,270 |
|
$ |
65,978 |
|
Gross profit |
|
|
5,886 |
|
|
5,176 |
|
|
|
19,779 |
|
|
19,411 |
|
Gross profit
percentage |
|
|
25.9% |
|
|
29.9% |
|
|
|
28.1% |
|
|
29.4% |
|
Income from
operations |
|
|
1,978 |
|
|
2,641 |
|
|
|
5,507 |
|
|
8,700 |
|
Income before income
tax expense |
|
|
1,897 |
|
|
2,660 |
|
|
|
5,421 |
|
|
8,796 |
|
Income tax expense |
|
|
650 |
|
|
1,051 |
|
|
|
2,400 |
|
|
3,224 |
|
Net income |
|
|
1,247 |
|
|
1,609 |
|
|
|
3,021 |
|
|
5,572 |
|
Basic earnings per
share |
|
$ |
0.12 |
|
$ |
0.16 |
|
|
$ |
0.30 |
|
$ |
0.56 |
|
Diluted earnings per
share |
|
$ |
0.12 |
|
$ |
0.16 |
|
|
$ |
0.30 |
|
$ |
0.55 |
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
Basic |
|
|
10,086 |
|
|
10,033 |
|
|
|
10,072 |
|
|
10,013 |
|
Diluted |
|
|
10,093 |
|
|
10,045 |
|
|
|
10,079 |
|
|
10,041 |
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETSSELECTED FINANCIAL DATAIn
thousands |
|
|
|
April 1, 2018 |
April 2, 2017 |
Cash and cash
equivalents |
|
$ |
215 |
$ |
7,892 |
Accounts receivable,
net of allowances |
|
|
18,498 |
|
15,614 |
Inventories |
|
|
19,788 |
|
15,821 |
Total current
assets |
|
|
39,754 |
|
41,110 |
Finite-lived intangible
assets - net |
|
|
7,272 |
|
3,128 |
Goodwill |
|
|
7,125 |
|
1,126 |
Total assets |
|
$ |
56,581 |
$ |
47,184 |
|
|
|
|
Total current
liabilities |
|
|
6,788 |
|
7,573 |
Long-term debt |
|
|
9,458 |
|
- |
|
|
|
|
Shareholders’
equity |
|
|
39,318 |
|
38,923 |
Total liabilities and
shareholders’ equity |
|
$ |
56,581 |
$ |
47,184 |
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