Crown Crafts, Inc. Reports Results for Second Quarter of Fiscal Year 2009; Reaffirms Revenue and Earnings Guidance for Fiscal Year 2009

GONZALES, La., Nov. 12 /PRNewswire-FirstCall/ -- Crown Crafts, Inc. (the "Company") (Nasdaq: CRWS) today reported net income for the second quarter of fiscal year 2009 and reaffirmed revenue and earnings guidance for fiscal year 2009.

Historical Results

Net income for the second quarter of fiscal year 2009 was $1,035,000, or $0.11 per diluted share, on net sales of $23.8 million compared to net income for the second quarter of fiscal year 2008 of $541,000, or $0.05 per diluted share, on net sales of $17.1 million.

"We are very pleased that we have nearly doubled our bottom line," commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. "Our gross profit for the quarter has increased in amount, although our gross profit percentage has declined year-over-year. Amortization associated with the acquisition of the baby products line of Springs Global in the third quarter of fiscal year 2008, the costs of establishing a Foreign Representative Office in China and increased product costs from Asia contributed to this decline. Despite these added costs, we have increased our overall profitability by increasing our top-line sales and by holding the line on our marketing and administrative costs, which were nearly unchanged from the prior year. Our EBITDA (earnings before interest and taxes plus depreciation and amortization) more than doubled to $2.5 million in the current year, up from $1.1 million in the 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 1:00 p.m. Central Standard Time to discuss the Company's results and answer appropriate questions. Interested individuals may join the teleconference by dialing (866) 233-3845. Please refer to confirmation number 966258. The teleconference can also be accessed in listen-only mode by visiting the Company's website at 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 2:30 p.m. Central Standard Time on November 12, 2008 through 11:59 p.m. Central Standard Time on November 19, 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 966258.

About Crown Crafts, Inc.

Crown Crafts, Inc. designs, markets and distributes infant, toddler and juvenile 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.

                           SELECTED FINANCIAL DATA
             In thousands, except per share data and percentages

                                     Three Months Ended     Six Months Ended
                                    September  September  September  September
                                    28, 2008   30, 2007   28, 2008   30, 2007

    Net sales                       $23,759    $17,111    $43,514   $32,471
    Gross profit                      4,855      3,963      9,093     8,269
    Gross profit percentage           20.4%      23.2%      20.9%     25.5%
    Income from operations            1,882        991      3,214     2,893
    Income before income taxes        1,612        883      2,629     2,638
    Income tax expense                  614        337      1,006     1,013
    Income from continuing operations
     after income taxes                 998        546      1,623     1,625
    Loss from discontinued operations
     - net of income taxes               37         (5)        31       (98)
    Net income                        1,035        541      1,654     1,527
    Basic income per share            $0.11      $0.05      $0.18     $0.15
    Diluted income per share          $0.11      $0.05      $0.17     $0.15

    Weighted Average Shares
      Basic                           9,363      9,990      9,389     9,997
      Diluted                         9,635     10,285      9,662    10,295

                         CONSOLIDATED BALANCE SHEETS
                           SELECTED FINANCIAL DATA
                                 In thousands

                                                     September 28,   March 30,
                                                         2008          2008
    Cash and cash equivalents                           12,096         7,930
    Accounts receivable, net of allowances              18,527        18,278
    Inventories                                         14,884        13,777
    Total current assets                                47,750        42,597
    Goodwill                                            22,884        22,884
    Intangible assets, net                               6,352         7,276
    Total assets                                        77,737        73,477

    Current maturities of long-term debt                 2,500         2,504
    Total current liabilities                           11,266        11,031
    Long-term debt                                      25,018        22,311
    Total non-current liabilities                       25,119        22,713

    Shareholders' equity                                41,352        39,733
    Total liabilities and shareholders' equity          77,737        73,477

                     Crown Crafts, Inc. and Subsidiaries
                      Non-GAAP Reconciliation to EBITDA
                       In thousands, except percentages

                                     Three Months Ended      Six Months Ended
                                    September  September  September  September
                                    28, 2008   30, 2007   28, 2008   30, 2007

    Net income                       $1,035      $541       $1,654    $1,527
    Interest expense                    308       119          635       231
    Interest income                     (34)       (1)         (88)       (1)
    Taxes on continuing operations      614       337        1,006     1,013
    Taxes on discontinued operations     20        (3)          17       (51)
    Depreciation                         73        88          161       171
    Amortization                        443        19          877        37
      EBITDA                          2,459     1,100        4,262     2,927

    Net Sales
    Net sales from continuing
     operations                      23,759    17,111       43,514    32,471
    Net sales from discontinued
     operations                           -         -            -        52
      Net sales                      23,759    17,111       43,514    32,523

      EBITDA as a percentage of net
       sales                          10.3%      6.4%         9.8%      9.0%

    Stock-based Compensation included
     in EBITDA                          217       152          382       277

                      Projected Fiscal Year 2009 EBITDA
                                 In thousands

                                       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 (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.

SOURCE Crown Crafts, Inc.