SOURCE: Crown Crafts, Inc.

November 15, 2005 08:00 ET

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

GONZALES, LA -- (MARKET WIRE) -- November 15, 2005 -- Crown Crafts, Inc. (the "Company") (OTC BB: CRWS) reported net sales for the second quarter of fiscal year 2006, which ended October 2, 2005, of $21.3 million as compared to net sales for the second quarter of fiscal year 2005 of $23.0 million. Net income for the quarter was $1.2 million, or $0.05 per diluted share, compared to net income of $844,000, or $0.04 per diluted share, for the second quarter of fiscal year 2005.

For the first six months of fiscal year 2006, the Company had net sales of $34.9 million, down from $39.9 million in the first six months of fiscal year 2005. Net income for the first six months of the current year was $883,000, or $0.04 per diluted share, compared to net income of $741,000, or $0.03 per diluted share, in the prior year.

The decrease in sales for the second quarter of fiscal year 2006 as compared to the same period in the prior year is due primarily to shipments of several new product placements to key customers in the second quarter of fiscal year 2005 which were not repeated at the same levels in fiscal year 2006, an erosion in prices due to changing shipping points on a program from FOB United States to FOB Asia and a continuing decrease in Pillow Buddies® sales.

The decrease in sales for the first six months of fiscal year 2006 as compared to the first six months of fiscal year 2005 is a result of significant customers reducing their on-hand inventory levels and thereby reducing replenishment orders, customer-driven shifting of sales between quarters, an erosion of prices due to the shipping change mentioned previously along with the continued price erosion due to the elimination of quota on goods from China effective January 1, 2005, new product placements being shipped in the prior year at levels that were not repeated in the current year, the loss of a bath program at a significant customer and a continuing decrease in Pillow Buddies® sales.

"Although the Company has experienced a decline in net sales, we are pleased that our sourcing efforts have paid off with a 140 basis point improvement in year over year gross margin," commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. "In addition, we continue to maintain a positive cash position and to strengthen our financial position," Mr. Chestnut continued.

The Company will host a teleconference today at 1:00 p.m. Central Standard Time to discuss the Company's results and answer appropriate questions from stockholders. Interested investors may join the teleconference by dialing (877) 209-0397. Please refer to confirmation number 801515. 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 3:00 p.m. Central Standard Time on November 15, 2005 through 11:59 p.m. Central Standard Time on November 21, 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 801515.

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 INCOME
                                   SELECTED FINANCIAL DATA
                             In thousands, except per share data

                           Three Months Ended      Six Months Ended
                           Oct. 2,   Sept. 26,    Oct. 2,  Sept. 26,
                            2005       2004        2005       2004
                         ---------- ----------  ---------- ----------
Net sales                $  21,285  $ 23,025    $  34,944  $  39,933
Gross profit                 4,609     4,639        7,576      8,113
Gross margin                  21.7%     20.1%        21.7%      20.3%
Income from operations       2,013     1,879        2,512      2,730
Net income                   1,151       844          883        741
Basic income per share        0.12      0.09         0.09       0.08
Diluted income per share      0.05      0.04         0.04       0.03

Weighted Average
 Shares Outstanding:
  Basic                      9,506     9,505        9,506      9,505
  Diluted                   21,441    22,260       21,386     22,250



                                 CONSOLIDATED BALANCE SHEETS
                                   SELECTED FINANCIAL DATA
                                       In thousands

                                    Oct. 2,    April 3,
                                     2005       2005
                                  ----------  ----------
Accounts receivable,
 net of allowances                $  14,270   $   14,368
Inventories, net of reserves         12,099       12,544
Total current assets                 27,799       29,317
Goodwill                             22,974       22,974
Total assets                         52,715       54,124

Current maturities of
 long-term debt                          18        2,317
Total current liabilities             7,441        8,164
Long-term debt                       23,516       25,085
Total non-current liabilities        23,516       25,085

Shareholders' equity                 21,758       20,875
Total liabilities and
 shareholders' equity                52,715       54,124

Contact Information

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

    Halliburton Investor Relations
    (972) 458-8000