Crown Crafts, Inc. Reports Results for Fourth Quarter and Fiscal Year 2008; Provides Revenue and Earnings Guidance for Fiscal Year 2009

GONZALES, La., June 11 /PRNewswire-FirstCall/ -- Crown Crafts, Inc. (the "Company") (Nasdaq: CRWS) today reported net income for the fourth quarter of fiscal year 2008 and for the full fiscal year and provided revenue and earnings guidance for fiscal year 2009.

Historical Results

Net income for fiscal 2008 was $4.4 million, or $0.43 per diluted share, on net sales of $74.9 million compared to net income for fiscal year 2007 of $3.9 million (excluding a gain on refinancing, net of taxes, of $3.7 million), or $0.39 per diluted share, on net sales of $69.2 million.

Net income for the fourth quarter of fiscal year 2008 was $1.6 million, or $0.16 per diluted share, on net sales of $24.0 million compared to net income for the fourth quarter of fiscal year 2007 of $0.7 million, or $0.07 per diluted share, on net sales of $17.2 million, increases of 39% in net sales and 122% in net income.

"Fiscal year 2008 has been a very rewarding year. Net sales increased $5.6 million, or 8.1%, over fiscal year 2007. Much of this increase is related to the acquisition of the baby product line from Springs Global in November 2007, which we are proud to say has proven to be a great strategic addition," commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. "Although the year had its challenges, the Company has met them head on and prospered. Adjusted for non-recurring charges, the Company's EBITDA (income before interest and taxes plus depreciation and amortization) as a percentage of net sales for the past two years has been the highest in this decade -- an impressive 12.0%," Mr. Chestnut continued.

During the fourth quarter of fiscal year 2008, the Company repurchased 337,439 shares of common stock for approximately $1.2 million, including broker fees, at an average price per share, excluding fees, of $3.59. Year-to-date the Company has repurchased 562,647 shares, or 5.6% of its outstanding common stock, for approximately $2.1 million including broker fees at an average price per share, excluding fees, of $3.66.

FY 2009 Guidance

The Company also provided 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 3:00 p.m. Central Daylight Time to discuss the Company's results and answer appropriate questions. Interested individuals may join the teleconference by dialing (888) 428-4479. Please refer to confirmation number 921848. 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 4:00 p.m. Central Daylight Time on June 11, 2008 through 11:59 p.m. Central Daylight Time on June 18, 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 921848.

Annual Meeting of Stockholders

The Company also announced that its Annual Meeting of Stockholders will be held on August 12, 2008.

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.

                           SELECTED FINANCIAL DATA
                     In thousands, except per share data

                               Three Months Ended         Twelve Months Ended
                              March 30,    April 1,       March 30,   April 1,
                                2008         2007           2008       2007
    Net sales                  23,985       17,209         74,887     69,250
    Gross profit                5,759        4,071         18,606     18,080
    Gross margin                24.0%        23.7%          24.8%      26.1%
    Income from operations      3,021        1,763          7,908      8,887
    Gain on debt refinancing        -            -              -      4,069
    Income before income taxes  2,693        1,439          7,259     11,589
    Income tax expense          1,123          882          2,828      3,640
    Income from continuing
     operations after income
     taxes                      1,570          557          4,431      7,949
    Loss from discontinued
     operations - net of
     income taxes                  32          166            (78)      (348)
    Net income                  1,602          723          4,353      7,601
    Basic income per share      $0.16        $0.07          $0.44      $0.78
    Diluted income per share    $0.16        $0.07          $0.43      $0.76

    Weighted Average Shares
       Basic                    9,957        9,978          9,888      9,782
       Diluted                  9,913       10,278         10,165     10,038

                         CONSOLIDATED BALANCE SHEETS
                           SELECTED FINANCIAL DATA
                                 In thousands

                                               March 30, 2008    April 1, 2007
    Cash and cash equivalents                        7,930                33
    Accounts receivable, net of allowances          18,278            12,885
    Inventories                                     13,777             7,145
    Total current assets                            42,597            23,784
    Goodwill                                        22,884            22,884
    Intangible assets, net                           7,276               617
    Total assets                                    73,477            48,916

    Current maturities of long-term debt             2,504                19
    Total current liabilities                       11,031             5,615
    Long-term debt                                  22,311             5,780
    Total non-current liabilities                   22,713             6,478

    Shareholders' equity                            39,733            36,823
    Total liabilities and shareholders' equity      73,477            48,916

                     Crown Crafts, Inc. and Subsidiaries
                           Non-GAAP Reconciliations

     Fiscal Years 2008 and 2007 EBITDA Adjusted for Non-Recurring Charges
                                (In thousands)

                                                 Fiscal Year       Fiscal Year
                                                     2008               2007

    Net income                                     $4,353             $7,601
    Gain on refinancing                                 -             (4,069)
    Interest expense                                  775              1,362
    Interest income                                   (12)              (108)
    Taxes on continuing operations                  2,828              3,640
    Taxes on discontinued operations                  (82)              (322)
    Depreciation                                      349                452
    Amortization, including goodwill write-off        784                107
      EBITDA                                        8,995              8,663

    Net Sales
    Net sales from continuing operations           74,887             69,250
    Net sales from discontinued operations             52              2,738
      Net sales                                    74,939             71,988

      EBITDA as a percentage of net sales           12.0%              12.0%

                      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.