Crown Crafts, Inc. Reports Results for Second Quarter of Fiscal Year 2010
Net income for the quarter was $803,000, or $0.08 per diluted share, on net sales of $21.7 million, compared to net income for the second quarter of fiscal year 2009 of $1,035,000, or $0.11 per diluted share, on net sales of $23.8 million.
"We are responding to the challenging economic environment by aggressively managing our cash flow," commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. "For example, we are keeping a tight control on our inventory levels, which declined by $2.9 million during the second quarter. We are also pleased with the success of our efforts directed at the integration of the product development, sourcing and distribution operations of Neat Solutions, which we purchased early in the quarter. However, weakness in retail demand in our core business persists, and our customers remain reluctant to rebuild their inventory levels. We are confident that we are well positioned to benefit as the economy recovers. The Company's EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $2.0 million, compared to EBITDA of $2.5 million for the second quarter of fiscal year 2009," Mr. Chestnut continued.
Conference Call
The Company will host a teleconference at 1:00 p.m. Central Standard Time on Wednesday, November 11, 2009 to discuss the Company's results and answer appropriate questions. Interested individuals may join the teleconference by dialing (800) 288-8975. Please refer to confirmation number 117978. 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 from 2:30 p.m. Central Standard Time on November 11, 2009 through 11:59 p.m. Central Standard Time on November 18, 2009. To access the replay, dial (800) 475-6701 in the United States or (320) 365-3844 from international locations. The access code for the replay is 117978.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and distributes infant and toddler consumer products, including bedding, blankets, bibs, bath items and the recently-acquired portfolio of the mess protection products of Neat Solutions. Its operating subsidiaries include Hamco, Inc. in Louisiana and Crown Crafts Infant Products, Inc. in California. Crown Crafts is America's largest distributor of infant bedding, bibs and bath items. The Company's products include licensed and branded collections as well as exclusive private label programs for certain of its customers.
Forward-Looking Statements
This release 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 Months Ended__ Six Months Ended
--------------------------__ ---------------------------
September 27,__ September 28,__ September 27,__ September 28,
2009__ 2008__ 2009__ 2008
------------- ------------__ ------------- -------------
Net sales__ $21,713__ $23,759__ $39,448__ $43,514
Gross profit__ 4,508__ 4,855__ 8,483__ 9,093
Gross profit
percentage__ 20.8%__ 20.4%__ 21.5%__ 20.9%
Income from
operations__ 1,515__ 1,882__ 2,604__ 3,214
Income from continuing
operations before
income
taxes__ 1,266__ 1,612__ 2,165__ 2,629
Income tax expense__ 471__ 614__ 811__ 1,006
Income from continuing
operations after income
taxes__ 795__ 998__ 1,354__ 1,623
Income (loss) from
discontinued operations
- net of income taxes__ 8__ 37__ (13)__ 31
Net income__ 803__ 1,035__ 1,341__ 1,654
Basic earnings per
share__ $0.09__ $0.11__ $0.15__ $0.18
Diluted earnings per
share__ $0.08__ $0.11__ $0.14__ $0.17
Weighted Average
Shares
Outstanding:
Basic__ 9,182__ 9,379__ 9,196__ 9,397
Diluted__ 9,384__ 9,650__ 9,381__ 9,670
CONSOLIDATED BALANCE SHEETS
SELECTED FINANCIAL DATA
In thousands
September 27, 2009
(Unaudited)__ March 29, 2009
-----------__ --------------
Cash and cash equivalents__ $11,967__ $15,249
Accounts receivable, net of allowances__ 14,890__ 18,954
Inventories__ 13,428__ 11,751
Total current assets__ 43,070__ 48,495
Intangible assets, net__ 7,096__ 5,515
Total assets__ $53,579__ $56,527
Current maturities of long-term debt__ $21,320__ $1,667
Total current liabilities__ 27,870__ 10,548
Long-term debt__ 1,752__ 23,568
Shareholders' equity__ 23,957__ 22,411
Total liabilities and shareholders'
equity__ $53,579__ $56,527
CROWN CRAFTS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA
In thousands, except percentages
(Unaudited)
Three Months Ended__ Six Months Ended
--------------------------- ---------------------------
September 27, September 28, September 27, September 28,
2009__ 2008__ 2009__ 2008
------------- ------------- ------------- -------------
Net income__ $803__ $1,035__ $1,341__ $1,654
Interest expense__ 204__ 308__ 400__ 635
Interest income__ (4)__ (34)__ (11)__ (88)
Income tax expense on
continuing operations__ 471__ 614__ 811__ 1,006
Income tax expense
(benefit) on
discontinued
operations__ 4__ 20__ (7)__ 17
Depreciation__ 75__ 73__ 148__ 161
Amortization__ 485__ 443__ 919__ 877
---__ ---__ ---__ ---
EBITDA__ 2,038__ 2,459__ 3,601__ 4,262
-----__ -----__ -----__ -----
Net Sales__ 21,713__ 23,759__ 39,448__ 43,514
------__ ------__ ------__ ------
EBITDA as a
percentage of
net sales__ 9.4%__ 10.3%__ 9.1%__ 9.8%
===__ ====__ ===__ ===
In addition to the Company's presentation of its results of operations in
conformity with accounting principles generally accepted in the
United States of America ("GAAP"), the Company is also presenting
EBITDA, which is a measure of the Company's performance that is not
determined in accordance with GAAP. The Company uses EBITDA as an
internal measure to monitor the Company's operating results and cash
flow and to evaluate the performance of its businesses. The Company
believes that the presentation of EBITDA provides useful information to
readers and is an important indicator of the Company's ability to generate
cash sufficient to reduce debt, make strategic investments, meet capital
expenditures and working capital requirements and otherwise meet
its obligations as they become due. The items excluded from EBITDA are
significant components in understanding and assessing the Company's
financial performance. EBITDA is provided as supplemental information
and should be considered in addition to, and not as a substitute for, such
GAAP measures as net income, cash flow provided by or used in operating,
investing or financing activities, and other measures of financial
performance and liquidity reported in accordance with GAAP. Because
EBITDA is not a measure determined in accordance with GAAP, companies are
free to calculate it in varying ways. Therefore, EBITDA, as presented by
the Company, may not be comparable to similarly titled measures of other
companies.
SOURCE__ Crown Crafts, Inc.
Originally published by Crown Crafts, Inc..
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