8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):   November 9, 2017

Crown Crafts, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-7604	58-0678148
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

916 South Burnside Avenue, Gonzales, LA	70737
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:   (225) 647-9100

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.         Results of Operations and Financial Condition.

On November 9, 2017, Crown Crafts, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter of fiscal year 2018, which ended October 1, 2017. A copy of that press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 and in Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The information in this Item 2.02 and in Exhibit 99.1 attached hereto shall not be incorporated by reference into any registration statement or document pursuant to the Securities Act of 1933, as amended.

Item 9.01.         Financial Statements and Exhibits.

(d)         Exhibits

99.1 Press Release dated November 9, 2017.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CROWN CRAFTS, INC.
Date: November 9, 2017	/s/ Olivia W. Elliott
	Olivia W. Elliott
	Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description of Exhibit
99.1	Press Release dated November 9, 2017.

EX-99.1

Exhibit 99.1

For immediate release November 9, 2017

Crown Crafts Reports Fiscal 2018 Second Quarter Results

● Company remains debt-free with a $3.2 million cash balance

● Sales for the quarter increase 4.1%

● Gross margin improves for the quarter and year-to-date

● Board declares a quarterly dividend of $0.08 per share

Gonzales, Louisiana – Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported results for the fiscal 2018 second quarter, which ended October 1, 2017.

“We are pleased that our second quarter performance included a 4.1% increase in net sales, along with increases in gross margin and net income when you exclude the costs to acquire Carousel Designs and credit fees associated with the bankruptcy of a major customer,” said E. Randall Chestnut, Chairman, President and Chief Executive Officer. “Despite the current retail market challenges, we feel that we are in a solid financial position going forward. We are excited about both our innovative new product designs that appeal to millennial parents and the addition of Carousel Designs as a key direct-to-consumer sales channel.”

Financial Results

Net income for the second quarter of fiscal 2018 was $725,000, or $0.07 per diluted share, on net sales of $16.5 million, compared with net income of $999,000, or $0.10 per diluted share, on net sales of $15.8 million for the second quarter of fiscal 2017. Gross profit for the current-year quarter was 30.5% of net sales, up from 27.3% in the prior-year quarter.

For the six-month period, net income was $1.2 million, or $0.12 per diluted share, on net sales of $30.1 million, compared with net income of $2.1 million, or $0.21 per diluted share, on net sales of $31.4 million for the first six months of fiscal 2017. Gross profit for the six-month period was 28.6% of net sales, up from 27.4% in the prior-year period.

The Company recorded certain pre-tax expenses totaling $639,000 and $845,000 in the three and six-month periods of fiscal year 2018, respectively, which did not occur in fiscal year 2017. For the quarter, these expenses included $427,000 in credit coverage fees on a retailer that filed for bankruptcy during the quarter and $212,000 in costs associated with the Company’s acquisition of Carousel Designs. For the six-month period, these expenses included $491,000 in credit coverage fees, $264,000 in costs associated with the Company’s acquisition of Carousel Designs, and $90,000 in audit fees associated with the Company’s transition from a smaller reporting company to an accelerated filer. On an after-tax basis, these expenses totaled $405,000 and $541,000 for the three and six-month periods of fiscal year 2018, respectively. Excluding these expenses, net income and diluted earnings per share for the three-month period of fiscal year 2018 would have been $1.1 million and $0.11, respectively, and net income and diluted earnings per share for the six-month period of fiscal year 2018 would have been $1.8 million and $0.18, respectively.

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 January 5, 2018 to shareholders of record at the close of business on December 15, 2017. “Once again, Crown Crafts is pleased to offer a dividend payment that reflects the Board’s confidence in the business and our ongoing commitment to providing value to stockholders,” 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) 861-5504and 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 November 16, 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 10113775.

About Crown Crafts, Inc.

Crown Crafts, Inc., founded in 1957, is one of America’s largest producers of infant bedding, toddler bedding and bibs. Crown Crafts, Inc. operates through its three wholly owned subsidiaries, Crown Crafts Infant Products, Inc., Hamco, Inc. and Carousel Designs, LLC. The Company’s subsidiaries market a variety of infant, toddler and juvenile products under Company-owned trademarks as well as licensed collections and exclusive private label programs. Sales are made directly to retailers such as mass merchants, large chain stores and juvenile specialty stores, as well as directly to consumers through www.babybedding.com. For more information, visit the Company’s website at 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 Company’s ability to successfully integrate newly acquired businesses, 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:

Olivia W. Elliott

Vice President and Chief Financial Officer

(225) 647-9124

oelliott@crowncrafts.com

or

Halliburton Investor Relations

(972) 458-8000

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						Six-Month Periods Ended
	October 1, 2017			October 2, 2016			October 1, 2017			October 2, 2016
Net sales	$	16,461		$	15,809		$	30,108		$	31,408
Gross profit		5,022			4,309			8,624			8,596
Gross profit percentage		30.5	%		27.3	%		28.6	%		27.4	%
Income from operations		1,215			1,548			1,916			2,996
Income before income tax expense		1,225			1,558			1,946			3,048
Income tax expense		500			559			703			946
Net income		725			999			1,243			2,102
Basic earnings per share	$	0.07		$	0.10		$	0.12		$	0.21
Diluted earnings per share	$	0.07		$	0.10		$	0.12		$	0.21
Weighted Average Shares Outstanding:
Basic		10,074			10,011			10,059			9,995
Diluted		10,078			10,056			10,067			10,036

CONSOLIDATED BALANCE SHEETS

SELECTED FINANCIAL DATA

In thousands

	October 1, 2017
	(Unaudited)		April 2, 2017
Cash and cash equivalents	$	3,242	$	7,892
Accounts receivable, net of allowances		12,817		15,614
Inventories		16,771		15,821
Total current assets		33,886		41,110
Finite-lived intangible assets - net		5,559		3,128
Goodwill		6,505		1,126
Total assets	$	48,738	$	47,184
Total current liabilities		9,095		7,573
Shareholders’ equity		38,891		38,923
Total liabilities and shareholders’ equity	$	48,738	$	47,184