Crown Crafts, Inc. Reports Results for Second Quarter of Fiscal Year 2010

GONZALES, La., Nov. 10 /PRNewswire-FirstCall/ -- Crown Crafts, Inc. (the "Company") (Nasdaq: CRWS) today reported net income for the second quarter of fiscal year 2010, which ended September 27, 2009.

Net income for the quarter was $803,000, or $0.08 per diluted share, on net sales of $21.7 million, compared to net income for the second quarter of fiscal year 2009 of $1,035,000, or $0.11 per diluted share, on net sales of $23.8 million.

"We are responding to the challenging economic environment by aggressively managing our cash flow," commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. "For example, we are keeping a tight control on our inventory levels, which declined by $2.9 million during the second quarter. We are also pleased with the success of our efforts directed at the integration of the product development, sourcing and distribution operations of Neat Solutions, which we purchased early in the quarter. However, weakness in retail demand in our core business persists, and our customers remain reluctant to rebuild their inventory levels. We are confident that we are well positioned to benefit as the economy recovers. The Company's EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $2.0 million, compared to EBITDA of $2.5 million for the second quarter of fiscal year 2009," Mr. Chestnut continued.

Conference Call

The Company will host a teleconference at 1:00 p.m. Central Standard Time on Wednesday, November 11, 2009 to discuss the Company's results and answer appropriate questions. Interested individuals may join the teleconference by dialing (800) 288-8975. Please refer to confirmation number 117978. 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 11, 2009 through 11:59 p.m. Central Standard Time on November 18, 2009. 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 117978.

About Crown Crafts, Inc.

Crown Crafts, Inc. designs, markets and distributes infant and toddler consumer products, including bedding, blankets, bibs, bath items and the recently-acquired portfolio of the mess protection products of Neat Solutions. 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.

                            CROWN CRAFTS, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF INCOME
                                  SELECTED FINANCIAL DATA

                      In thousands, except percentages and per share data

                          Three Months Ended           Six Months Ended
                       --------------------------  ---------------------------
                       September 27, September 28, September 27, September 28,
                            2009         2008          2009          2008
                       ------------- ------------  ------------- -------------
    Net sales              $21,713      $23,759       $39,448      $43,514
    Gross profit             4,508        4,855         8,483        9,093
    Gross profit
     percentage               20.8%        20.4%         21.5%       20.9%
    Income from
     operations              1,515        1,882         2,604        3,214
    Income from continuing
     operations before
     taxes                   1,266        1,612         2,165        2,629
    Income tax expense         471          614           811        1,006
    Income from continuing
     operations after income
     taxes                     795          998         1,354        1,623
    Income (loss) from
     discontinued operations
     - net of income taxes       8           37           (13)          31
    Net income                 803        1,035         1,341        1,654
    Basic earnings per
     share                   $0.09        $0.11         $0.15        $0.18
    Diluted earnings per
     share                   $0.08        $0.11         $0.14        $0.17

    Weighted Average
       Basic                 9,182        9,379         9,196        9,397
       Diluted               9,384        9,650         9,381        9,670

                               CONSOLIDATED BALANCE SHEETS
                                 SELECTED FINANCIAL DATA
                                      In thousands

                                           September 27, 2009
                                               (Unaudited)    March 29, 2009
                                               -----------    --------------
    Cash and cash equivalents                     $11,967        $15,249
    Accounts receivable, net of allowances         14,890         18,954
    Inventories                                    13,428         11,751
    Total current assets                           43,070         48,495
    Intangible assets, net                          7,096          5,515
    Total assets                                  $53,579        $56,527

    Current maturities of long-term debt          $21,320         $1,667
    Total current liabilities                      27,870         10,548
    Long-term debt                                  1,752         23,568

    Shareholders' equity                           23,957         22,411
    Total liabilities and shareholders'
     equity                                       $53,579        $56,527

                            CROWN CRAFTS, INC. AND SUBSIDIARIES
                              In thousands, except percentages

                            Three Months Ended          Six Months Ended
                       --------------------------- ---------------------------
                       September 27, September 28, September 27, September 28,
                            2009          2008          2009          2008
                       ------------- ------------- ------------- -------------

    Net income              $803         $1,035        $1,341          $1,654
    Interest expense         204            308           400             635
    Interest income           (4)           (34)          (11)            (88)
    Income tax expense on
     continuing operations   471            614           811           1,006
    Income tax expense
     (benefit) on
     operations                4             20            (7)             17
    Depreciation              75             73           148             161
    Amortization             485            443           919             877
                             ---            ---           ---             ---
      EBITDA               2,038          2,459         3,601           4,262
                           -----          -----         -----           -----

    Net Sales             21,713         23,759        39,448          43,514
                          ------         ------        ------          ------

      EBITDA as a
       percentage of
       net sales             9.4%          10.3%          9.1%            9.8%
                             ===           ====           ===             ===

    In addition to the Company's presentation of its results of operations in
    conformity with accounting principles generally accepted in the
    United States of America ("GAAP"), the Company is also presenting
    EBITDA, which is a measure of the Company's performance that is not
    determined in accordance with GAAP.  The Company uses EBITDA as an
    internal measure to monitor the Company's operating results and cash
    flow and to evaluate the performance of its businesses. The Company
    believes that the presentation of EBITDA provides useful information to
    readers 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. 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. Because
    EBITDA is not a measure determined in accordance with GAAP, companies are
    free to calculate it in varying ways. Therefore, EBITDA, as presented by
    the Company, may not be comparable to similarly titled measures of other

SOURCE Crown Crafts, Inc.