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): June 10, 2020  

 

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. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

CRWS

Nasdaq Capital Market

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On June 10, 2020, Crown Crafts, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and full year of fiscal year 2020, which ended March 29, 2020. 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 June 10, 2020.

 

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: June 10, 2020 /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 June 10, 2020.

 

 
ex_188661.htm

Exhibit 99.1

 

 

For immediate release June 10, 2020

 

Crown Crafts Reports Fiscal 2020 Fourth Quarter and Full Year Results

 

 

Gross margin increased for the fiscal year

 

Net income increased for the quarter and fiscal year

 

Returned $5.8 million in cash dividends to shareholders during past 12 months

 

Gonzales, Louisiana – Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported results for the fourth quarter and fiscal year 2020, which ended March 29, 2020.

 

“We are very proud of our strong financial results in fiscal year 2020, which included increased gross margin and net income,” said E. Randall Chestnut, Chairman, President and Chief Executive Officer. “Because of the conservative way in which we operate and the hard work and dedication of our employees, we were able to continue to return long-term value to our stockholders.”

 

Financial Results

 

Net income for the fourth quarter of fiscal 2020 was $1.6 million, or $0.16 per diluted share, on net sales of $20.3 million, compared with net income of $1.4 million, or $0.14 per diluted share, on net sales of $21.7 million for the fourth quarter of fiscal 2019. Gross profit for the current-year quarter was 26.3% of net sales, down from 28.6% in the prior-year quarter.

 

For the fiscal year, net income was $6.6 million, or $0.65 per diluted share, on net sales of $73.4 million, compared with net income of $5.0 million, or $0.50 per diluted share, on net sales of $76.4 million for fiscal 2019. Gross profit for the current year was 29.4% of net sales, up from 29.2% in the prior year.

 

The current year quarter and year-to-date periods were impacted favorably by $276,000, or $0.03 per diluted share, and $568,000, or $0.06 per diluted share, respectively, due to the reversal of a portion of reserves for unrecognized tax benefits and the related interest and penalties that had been previously accrued. Current year net income for the year-to-date period was also impacted favorably by $273,000, or $0.03 per share, due to the effect of certain tax credits. Net income for the year-to-date period of the prior year was unfavorably impacted when the Company incurred $210,000 in pre-tax expenses to transfer its Sassy-branded inventory from Grand Rapids, Michigan to the Company’s facility in Compton, California. On an after-tax basis, these costs negatively affected the year-to-date period in the prior year by $156,000.

 

 

 

Quarterly Cash Dividend

 

In light of the uncertainty of the global effects of COVID-19, the Company’s Board of Directors is not declaring a dividend with respect to the first quarter (which, if declared, would have been paid in July 2020). “We are confident that our stockholders will agree that a temporary suspension of dividends in order to conserve cash during these turbulent economic times is in the best interests of the Company,” Chestnut said.

 

Conference Call

 

The Company will host a teleconference today at 1:00 p.m. Central Daylight 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) 861-5504 and 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 Daylight Time on June 17, 2020. To access the replay, dial (877) 344-7529 in the United States or (412) 317-0088 from international locations and refer to conference number 10143940.

 

About Crown Crafts, Inc.

 

Crown Crafts, Inc. designs, markets and distributes infant, toddler and juvenile consumer products. Founded in 1957, Crown Crafts is one of America’s largest producers of infant bedding, toddler bedding, bibs and developmental toys. The Company operates through its three wholly owned subsidiaries, NoJo Baby & Kids, Inc., Sassy Baby, Inc. and Carousel Designs, LLC, which 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.

 

 

 

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 or Halliburton Investor Relations
(225) 647-9124   (972) 458-8000
oelliott@crowncrafts.com    

 

 

 

CROWN CRAFTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

SELECTED FINANCIAL DATA

In thousands, except percentages and per share data

 

   

Three-Month Periods Ended

   

Fiscal Years Ended

 
   

March 29, 2020

   

March 31, 2019

   

March 29, 2020

   

March 31, 2019

 
   

(Unaudited)

                 

Net sales

  $ 20,307     $ 21,717     $ 73,396     $ 76,381  

Gross profit

    5,350       6,212       21,590       22,307  

Gross profit percentage

    26.3 %     28.6 %     29.4 %     29.2 %

Income from operations

    1,840       1,976       7,737       7,113  

Income before income tax expense

    1,873       1,900       7,768       6,791  

Income tax expense

    265       508       1,207       1,772  

Net income

    1,608       1,392       6,561       5,019  

Basic earnings per share

  $ 0.16     $ 0.14     $ 0.65     $ 0.50  

Diluted earnings per share

  $ 0.16     $ 0.14     $ 0.65     $ 0.50  
                                 

Weighted Average Shares Outstanding:

                               

Basic

    10,167       10,117       10,149       10,092  

Diluted

    10,170       10,119       10,150       10,094  

 

 

 

CONSOLIDATED BALANCE SHEETS

SELECTED FINANCIAL DATA

In thousands

 

   

March 29, 2020

   

March 31, 2019

 

Cash and cash equivalents

  $ 282     $ 143  

Accounts receivable, net of allowances

    17,803       17,772  

Inventories

    17,732       19,534  

Total current assets

    37,041       38,679  

Operating lease right of use assets

    4,896       -  

Finite-lived intangible assets - net

    5,577       6,432  

Goodwill

    7,125       7,125  

Total assets

  $ 57,173     $ 54,779  
                 

Total current liabilities

    6,479       7,711  

Long-term debt

    2,578       4,486  

Operating lease liabilities, noncurrent

    4,959       -  
                 

Shareholders’ equity

    42,436       41,388  

Total liabilities and shareholders’ equity

  $ 57,173     $ 54,779