Crown Crafts Reports Fiscal 2018 Fourth Quarter and Full Year Results

  • Sales up 31.1% for the quarter and 6.5% for the year
  • Non-recurring charges impact quarter and fiscal year by $0.08 and $0.24, respectively
  • Excluding non-recurring charges, gross margin improved for the quarter and fiscal year

GONZALES, La., June 13, 2018 (GLOBE NEWSWIRE) -- 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. Elliott
Vice President and Chief Financial Officer    
(225) 647-9124  
oelliott@crowncrafts.com     

or

Halliburton Investor Relations
(972) 458-8000

CROWN CRAFTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
SELECTED FINANCIAL DATA
In 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 SHEETS
SELECTED FINANCIAL DATA
In 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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