Crown Crafts Reports Fiscal 2017 Third Quarter Results
15 February 2017 - 10:45PM
Crown Crafts, Inc. (NASDAQ:CRWS) (the “Company”) today reported
results for the fiscal 2017 third quarter, which ended January 1,
2017.
“We maintained our strong profitability in the
third quarter, and our cash balance of $14.4 million increased from
both the prior quarter and the prior-year quarter,” said E. Randall
Chestnut, Chairman, President and Chief Executive Officer.
“Our gross profit margin benefited from continued favorable
currency exchange rates and our ongoing focus on controlling costs.
Net sales in the quarter were impacted most significantly by
a customer’s Black Friday sales promotion in the prior year that
was not repeated this year and a credit issue with a major
retailer.”
Financial Results
Net income for the third quarter of fiscal 2017 was
$1.9 million, or $0.19 per diluted share, on net sales of $17.3
million, compared with net income of $2.1 million, or $0.21 per
diluted share, on net sales of $20.7 million for the third quarter
of fiscal 2016. Gross profit for the current-year quarter was
32.7% of net sales, up from 30.2% in the prior-year
quarter.
For the nine-month period, net income was $4.0
million, or $0.39 per diluted share, on net sales of $48.7 million,
compared with net income of $4.6 million, or $0.46 per diluted
share, on net sales of $59.3 million for the first nine months of
fiscal 2016. Gross profit for the nine-month period of the
current year was 29.2% of net sales, up from 28.2% in the
prior-year period.
Net income for both the third quarter and
nine-month periods of the prior fiscal year was favorably affected
by $315,000, or $0.03 per diluted share, due to a change in the
Company’s calculation of the state portion of its income tax
provision.
Quarterly Cash Dividend
The Company also announced that its 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
April 7, 2017, to shareholders of record at the close of business
on March 17, 2017. “The Board remains confident in the
long-term profitability and financial strength of the Company, and
we are pleased to return value to shareholders through this
quarterly dividend,” Chestnut said.
Conference Call
The Company will host a teleconference today at
1:00 p.m. Central Standard 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 Standard Time on February 22, 2017. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10099126.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and distributes
infant, toddler and juvenile consumer products, including crib and
toddler bedding; blankets; nursery accessories; room décor; burp
cloths; bathing accessories; reusable and disposable bibs; and
disposable placemats, floor mats, toilet seat covers and changing
mats. The Company’s operating subsidiaries consist of Crown
Crafts Infant Products, Inc. in California and Hamco, Inc. in
Louisiana. Crown Crafts is among America’s largest producers
of infant bedding, toddler bedding and bibs. The Company’s
products include licensed and branded collections, as well as
exclusive private label programs for certain of its customers.
The Company’s website is 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 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.
CROWN CRAFTS, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
SELECTED FINANCIAL DATA |
In thousands, except percentages and per share
data |
(Unaudited) |
|
|
|
Three-Month Periods Ended |
|
Nine-Month Periods Ended |
|
|
January 1, 2017 |
December 27, 2015 |
|
January 1, 2017 |
December 27, 2015 |
Net sales |
|
$ |
17,262 |
|
$ |
20,691 |
|
|
$ |
48,670 |
|
$ |
59,265 |
|
Gross profit |
|
|
5,639 |
|
|
6,252 |
|
|
|
14,235 |
|
|
16,739 |
|
Gross profit
percentage |
|
|
32.7 |
% |
|
30.2 |
% |
|
|
29.2 |
% |
|
28.2 |
% |
Income from
operations |
|
|
3,063 |
|
|
3,070 |
|
|
|
6,059 |
|
|
7,188 |
|
Income before income
tax expense |
|
|
3,088 |
|
|
3,022 |
|
|
|
6,136 |
|
|
7,140 |
|
Income tax expense |
|
|
1,227 |
|
|
879 |
|
|
|
2,173 |
|
|
2,505 |
|
Net income |
|
|
1,861 |
|
|
2,143 |
|
|
|
3,963 |
|
|
4,635 |
|
Basic earnings per
share |
|
$ |
0.19 |
|
$ |
0.21 |
|
|
$ |
0.40 |
|
$ |
0.46 |
|
Diluted earnings per
share |
|
$ |
0.19 |
|
$ |
0.21 |
|
|
$ |
0.39 |
|
$ |
0.46 |
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
Basic |
|
|
10,031 |
|
|
9,996 |
|
|
|
10,007 |
|
|
10,024 |
|
Diluted |
|
|
10,058 |
|
|
10,038 |
|
|
|
10,040 |
|
|
10,063 |
|
CONSOLIDATED BALANCE SHEETS |
SELECTED FINANCIAL DATA |
In thousands |
|
|
|
January 1, 2017 |
|
|
|
(Unaudited) |
April 3, 2016 |
Cash and cash
equivalents |
|
$ |
14,394 |
$ |
7,574 |
Accounts receivable,
net of allowances |
|
|
14,453 |
|
20,796 |
Inventories |
|
|
16,375 |
|
14,785 |
Total current
assets |
|
|
48,430 |
|
45,732 |
Finite-lived intangible
assets - net |
|
|
3,316 |
|
3,882 |
Goodwill |
|
|
1,126 |
|
1,126 |
Total assets |
|
$ |
54,823 |
$ |
52,415 |
|
|
|
|
Total current
liabilities |
|
|
16,113 |
|
12,185 |
|
|
|
|
Shareholders’
equity |
|
|
38,054 |
|
40,019 |
Total liabilities and
shareholders’ equity |
|
$ |
54,823 |
$ |
52,415 |
|
|
|
|
|
|
Contact:
Olivia W. Elliott
Vice President and Chief Financial Officer
(225) 647-9124
oelliott@crowncrafts.com
or
Halliburton Investor Relations
(972) 458-8000
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