SOURCE: Crown Crafts, Inc.

August 16, 2005 07:55 ET

Crown Crafts, Inc. Reports First Quarter of Fiscal Year 2006 Results

GONZALES, LA -- (MARKET WIRE) -- August 16, 2005 -- Crown Crafts, Inc. (the "Company") (OTC BB: CRWS) today reported a net loss for the first quarter of fiscal year 2006 of $269,000, or $0.03 per diluted share, on net sales of $13.7 million compared to a net loss for the first quarter of fiscal year 2005 of $102,000, or $0.01 per diluted share, on net sales of $16.9 million.

The Company attributes the decline in sales to customer-driven shifting of sales between quarters, a customer's reducing its on-hand inventory levels and thereby lowering replenishment orders and the loss of a bath program with another customer in fiscal year 2005. In addition, the elimination of quota on goods from China effective January 1, 2005 led to a reduction in the Company's top line sales volume.

"Historically the first quarter is our weakest, and this year it was further impacted by a retail customer's adjusting its inventory levels significantly downward. In addition, the loss of a bath program at another major retailer in fiscal year 2005 impacted the top line revenue," commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. "We are pleased that we had such a positive cash position during the quarter that we were able to retire the Company's $4.5 million term loan more than a year early, which further improved our balance sheet and will lower our interest costs for the remainder of the year," Mr. Chestnut continued.

The Company will host a teleconference today at 1:00 p.m. Central Daylight Time to discuss the Company's results and answer appropriate questions from stockholders. Interested investors may join the teleconference by dialing (888) 428-4478. Please refer to confirmation number 791468. 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 found prior to the call on the investor relations portion of the Company's website.

A telephone replay of the teleconference will be available from 3:45 p.m. Central Daylight Time on August 16, 2005 through 11:59 p.m. Central Daylight Time on August 23, 2005. 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 791468.

Crown Crafts, Inc. designs, markets and distributes infant and juvenile consumer products, including bedding, blankets, bibs, bath items, diaper bags and accessories, and luxury hand-woven home décor. Its subsidiaries include Hamco, Inc. in Louisiana, Crown Crafts Infant Products, Inc. in California and Churchill Weavers, Inc. in Kentucky. Crown Crafts is America's largest producer 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.

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 Company's dependence upon third-party suppliers, including some located in foreign countries with unstable political situations, the Company's ability to successfully implement new information technologies, 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.

                    CONSOLIDATED STATEMENTS OF OPERATIONS
                          SELECTED FINANCIAL DATA
                     In thousands, except per share data

                                            Three Months Ended
                                       July 3, 2005   June 27, 2004
                                       ------------   -------------
Net sales                               $  13,659       $  16,908
Gross profit                                2,967           3,474
Gross margin                                 21.7%           20.5%
Income from operations                        499             852
Net (loss)                                   (269)           (102)
Basic (loss) per share                      (0.03)          (0.01)
Diluted (loss) per share                    (0.03)          (0.01)

Weighted Average Shares Outstanding:
   Basic                                    9,506           9,505
   Diluted                                  9,506           9,505




                           CONSOLIDATED BALANCE SHEETS
                             SELECTED FINANCIAL DATA
                                  In thousands

                                       July 3, 2005    April 3, 2005
                                       ------------    -------------
Accounts receivable, net of allowances  $   9,257       $  14,368
Inventories, net of reserves               15,739          12,544
Total current assets                       26,729          29,317
Goodwill                                   22,974          22,974
Total assets                               51,628          54,124

Current maturities of long-term debt           18           2,317
Total current liabilities                   7,958           8,164
Long-term debt                             23,064          25,085
Total non-current liabilities              23,064          25,085

Stockholders' equity                       20,606          20,875
Total liabilities and stockholders'
 equity                                    51,628          54,124

Contact Information

  • Contact:
    Investor Relations Department
    (225) 647-9146

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    Halliburton Investor Relations
    (972) 458-8000