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.
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.
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 http://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 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.
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 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 Outstanding: 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) Unaudited 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) (Unaudited) 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.
Released June 11, 2008