EX-99.1 2 d59448exv99w1.htm PRESS RELEASE exv99w1
(LOGO)
     
For Immediate Release   August 13, 2008
Crown Crafts, Inc. Reports Results for First Quarter of Fiscal Year 2009; Reaffirms Revenue
and Earnings Guidance for Fiscal Year 2009
Gonzales, Louisiana – Crown Crafts, Inc. (the “Company”) (NASDAQ-CM: CRWS) today reported net income for the first quarter of fiscal year 2009 and reaffirmed revenue and earnings guidance for fiscal year 2009.
Historical Results
Net income for the first quarter of fiscal year 2009 was $619,000, or $0.06 per diluted share, on net sales of $19.8 million compared to net income for the first quarter of fiscal year 2008 of $985,000, or $0.10 per diluted share, on net sales of $15.4 million.
“We are very pleased with the increase in sales of 28.6%,” commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. “Profitability decreased year-over-year primarily as a result of an unfavorable change in the over-absorption of overhead of $475,000, which should reverse itself over the remaining quarters of the fiscal year. Additionally, the Company incurred approximately $425,000 of acquisition-related amortization expense in the current year associated with the Springs Global acquisition in the third quarter of fiscal year 2008. The Company’s EBITDA (earnings before interest and taxes plus depreciation and amortization) without giving effect to the change in overhead absorption was $1.8 million in both the current and prior year.” Mr. Chestnut continued.
FY 2009 Guidance
The Company also reaffirmed its 2009 revenue, EBITDA and EPS guidance. The Company expects net revenues for fiscal year 2009, which ends March 29, 2009, to be in the range of $90.0 million to $93.0 million. In addition, the Company expects EBITDA for fiscal year 2009 to be in the range of $10.2 million, or 11.3% of net sales, to $10.8 million, or 11.6% of net sales, and diluted earnings per share to be in the range of $0.41 to $0.46.
Conference Call
The Company will host a teleconference today at 10:00 a.m. Central Daylight Time to discuss the Company’s results and answer appropriate questions. Interested individuals may join the teleconference by dialing (800) 398-9386. Please refer to confirmation number 956101. 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 11:30 a.m. Central Daylight Time on August 13, 2008 through 11:59 p.m. Central Daylight Time on August 20, 2008. 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 956101.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and distributes infant and toddler consumer products, including bedding, blankets, bibs, bath items and accessories. 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.
     
Contact:
  Investor Relations Department
 
  (225) 647-9146
 
  or
 
  Halliburton Investor Relations
 
  (972) 458-8000

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CROWN CRAFTS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
SELECTED FINANCIAL DATA
In thousands, except per share data
                 
    Three Months Ended
    June 29, 2008   July 1, 2007
Net sales
     19,755       15,360  
Gross profit
     4,238       4,306  
Gross margin
     21.5 %     28.0 %
Income from operations
     1,332       1,902  
Income before income taxes
     1,017       1,755  
Income tax expense
     392       676  
Income from continuing operations after income taxes
     625       1,079  
Loss from discontinued operations – net of income taxes
     (6 )     (94 )
Net income
     619       985  
Basic income per share
   $ 0.07     $ 0.10  
Diluted income per share
   $ 0.06     $ 0.10  
 
                
Weighted Average Shares Outstanding:
                
 
                
Basic
     9,415       10,004  
Diluted
     9,677       10,297  
CONSOLIDATED BALANCE SHEETS
SELECTED FINANCIAL DATA
In thousands
                 
    June 29, 2008   March 30, 2008
Cash and cash equivalents
     10,074       7,930  
Accounts receivable, net of allowances
     15,751       18,278  
Inventories
     17,846       13,777  
Total current assets
     46,227       42,597  
Goodwill
     22,884       22,884  
Intangible assets, net
     6,847       7,276  
Total assets
     76,714       73,477  
 
                
Current maturities of long-term debt
     2,500       2,504  
Total current liabilities
     14,370       11,031  
Long-term debt
     22,010       22,311  
Total non-current liabilities
     22,249       22,713  
 
                
Shareholders’ equity
     40,095       39,733  
Total liabilities and shareholders’ equity
     76,714       73,477  

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Crown Crafts, Inc. and Subsidiaries
Non-GAAP Reconciliations
Fiscal Year 2009 and 2008 First Quarter EBITDA
(In thousands)
Unaudited
                 
    Three-months   Three-months
    Ended   Ended
    June 29, 2008   July 1, 2007
Net income
   $ 619     $ 985  
Interest expense
     327       112  
Interest income
     (54 )     —  
Taxes on continuing operations
     392       676  
Taxes on discontinued operations
     (3 )     (48 )
Depreciation
     88       83  
Amortization
     434       18  
     
EBITDA
     1,803       1,826  
     
 
                
Net Sales
                
Net sales from continuing operations
     19,755       15,360  
Net sales from discontinued operations
     —       52  
     
Net sales
     19,755       15,412  
 
                
     
EBITDA as a percentage of net sales
     9.1 %     11.8 %
     
 
                
Stock-based Compensation included in EBITDA
     165       126  
     
Burden deferral expense (income) included in EBITDA
    48       (427 )
     
Projected Fiscal Year 2009 EBITDA
(In thousands)
(Unaudited)
                 
    Low End   High End
    of Range   of Range
Net income
   $ 4,100     $ 4,600  
Interest
     1,400       1,200  
Taxes
     2,700       3,000  
Depreciation
     300       300  
Amortization
     1,700       1,700  
     
EBITDA
   $ 10,200     $ 10,800  
     
The Company uses EBITDA to monitor the Company’s operating and cash flow performance and to evaluate the performance of its businesses. The Company believes that the presentation of EBITDA provides useful information to investors 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. EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles

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(GAAP), and 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. In addition, because EBITDA is not a measure determined in accordance with GAAP and can be calculated in varying ways, EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

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