SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _______________ to _______________
Commission file number 033-64499
A. Full title of the plan and address of the plan, if different
from that of the issuer named below:
Crown Crafts, Inc. 401(k) Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Crown Crafts, Inc.
916 South Burnside Avenue
Gonzales, Louisiana 70737
CROWN CRAFTS, INC.
401(k) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2001
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
CONTENTS
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REPORT OF INDEPENDENT ACCOUNTANTS 1
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3
NOTES TO FINANCIAL STATEMENTS 4/8
SUPPLEMENTAL SCHEDULE
Schedule of Assets Held for Investment Purposes at End of Year 10
Schedule of Nonexempt Transactions 11
[HENDRY & DECOSIMO LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
The Administrative Committee
The Crown Crafts, Inc. 401(k) Retirement Savings Plan
We have audited the statements of net assets available for benefits of The Crown
Crafts, Inc. 401(k) Retirement Savings Plan (the Plan) as of December 31, 2001
and 2000, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2001. These financial statements are
the responsibility of the Administrative Committee. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for purposes of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ HENDRY & DECOSIMO, LLP
Dalton, Georgia
July 11, 2002
1
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
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2001 2000
ASSETS
Investments $ 3,466,998 $ 9,380,862
Contributions Receivable -
Participants 659 81,834
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Total Assets 3,467,657 9,462,696
LIABILITIES
Payable to Sponsor 3,482 22,309
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NET ASSETS AVAILABLE FOR BENEFITS $ 3,464,175 $ 9,440,387
============ ============
The accompanying notes are an integral part of the financial statements.
2
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2001
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ADDITIONS
Investment Income
Interest and Dividends $ 139,067
Net Depreciation in Fair Value of Investments (1,222,716)
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(1,083,649)
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Contributions
Sponsor 185,366
Rollovers 6,406
Participants 572,675
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764,447
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Total Additions (319,202)
DEDUCTIONS
Benefits Paid to Participants 5,657,010
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NET DECREASE (5,976,212)
NET ASSETS AVAILABLE FOR BENEFITS
BEGINNING OF YEAR 9,440,387
------------
END OF YEAR $ 3,464,175
============
The accompanying notes are an integral part of the financial statements.
3
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - PLAN DESCRIPTION
The following description of The Crown Crafts, Inc. 401(k) Retirement Savings
Plan provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution retirement savings plan with a cash
or deferred arrangement covering substantially all employees of Crown Crafts,
Inc. and affiliates (the sponsor) meeting minimum age and service requirements.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA). The Plan was established effective January 1, 1996, and
initial contributions were made into the trust fund in January, 1996. The Plan
was amended on September 22, 1997, to provide for the entry of employees of
acquired and affiliated companies. On October 1, 1998, the Plan changed trustees
and as of December 31, 1999, it offers participants ten investment options which
consist of shares of the sponsor's common stock and nine portfolios of mutual
funds managed by Putnam Investments. As of May 15, 2001 the Administrative
Committee for the Plan has determined that Crown Crafts Stock will be closed as
an Investment Product under the Plan.
CONTRIBUTIONS - The Plan allows contributions by participating employees of an
amount equal to not less than 1% and not greater than 15% of their eligible
compensation. Matching contributions are made at the discretion of the sponsor.
The sponsor matches participants' elective contributions at the rate of 100% of
the first 2% and 50% of the next 1% of compensation deferred by each
participant. The participants direct their elective contributions and related
matching contributions to several investment options. All contributions are
limited to the maximum amount deductible under the applicable provisions of the
Internal Revenue Code of 1986 (the Code).
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution, the sponsor's matching contribution, and earnings
thereon less administrative expenses. Each participant has a fully vested,
nonforfeitable right to all amounts credited to his account under the elective
salary reduction portion of the Plan. Each participant's right in sponsor
contributions vests ratably over a five year period. Forfeitures are applied to
reduce the sponsor's matching contribution.
PARTICIPANT LOANS - Participants may borrow from their fund accounts a minimum
of $1,000, or such lesser amount as established by the Administrative Committee,
up to a maximum equal to the lesser of $50,000 or 50% of their account balance.
Loan transactions are treated as a transfer to (from) the investment funds from
(to) Participant Loans. Loan terms range up to 5 years or up to 10 years for the
purchase of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined by the Administrative Committee. Principal and
interest are paid ratably through monthly payroll deductions.
4
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - PLAN DESCRIPTION - continued
VESTING - Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the sponsor's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is based on
years of continuous service based on the following schedule:
COMPLETED NON-FORFEITABLE
YEAR OF SERVICE PERCENTAGE
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 100%
FORFEITED ACCOUNTS - As of December 31, 2001, forfeited nonvested accounts
totaled $43,507. These accounts are used to reduce future sponsor contributions.
PAYMENT OF BENEFITS - Upon service or disability retirement, death or
termination, the participant or beneficiary will receive a lump-sum amount equal
to the value of the participant's vested account.
HARDSHIP WITHDRAWALS - Participants may withdraw all their vested contributions
in the event of hardship as defined in the Plan agreement.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies and practices followed by the Plan are as
follows:
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared under
the accrual method of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are stated
at fair value. Shares of registered investment companies and units of the
collective investment trust are valued at quoted market prices which represent
the net asset value of shares held by the Plan at year end. The company stock is
valued at its quoted market price. Participant loans are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
NET APPRECIATION (DEPRECIATION) IN THE FAIR VALUE OF INVESTMENTS - The Plan
presents in the statement of changes in net assets available for benefits the
net appreciation and depreciation in the fair value of its investments, which
consists of the realized gains and losses and the unrealized appreciation and
depreciation on those investments.
5
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
RISKS AND UNCERTAINTIES - The Plan's investments consist of a combination of
investment securities which are exposed to various risks, such as interest rate,
market and credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in risks
in the near term would materially affect participants' account balances and the
amounts reported in the financial statements.
PAYMENT OF BENEFITS - Benefits are recorded when paid. As of December 31, 2001,
$637,292 has been allocated to participants who have elected to withdraw from
the Plan but have not been paid.
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
NOTE 3 - INVESTMENTS
Investments consist of the following, and those investments that represent 5% or
more of the Plan's net assets as of December 31, 2001 and 2000, are separately
identified.
2001 2000
COMMON STOCK $ -- $ 7,093
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COLLECTIVE INVESTMENT TRUST
Putnam Stable Value Fund 393,946 910,549
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MUTUAL FUNDS
Putnam Asset Allocation: Balanced Portfolio 348,426 1,107,469
Putnam Asset Allocation: Growth Portfolio 874,223 2,277,985
Putnam Asset Allocation: Conservative Portfolio 264,717 673,319
Putnam Voyager Fund 376,574 1,010,370
Putnam New Opportunities Fund 783,755 2,553,079
Other Funds 246,836 611,718
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2,894,531 8,233,940
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PARTICIPANT LOANS 178,521 229,280
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TOTAL INVESTMENTS $ 3,466,998 $ 9,380,862
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6
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 3 - INVESTMENTS - continued
During 2001, the Plan's investments (including gains and losses on investments
bought, sold and held during the year) depreciated in value as follows:
Common Stock $ 1,006
Mutual Funds 1,221,710
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$ 1,222,716
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NOTE 4 - TAX STATUS
The Plan obtained its latest determination letter on April 14, 1998, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However, the
Plan administrator and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
NOTE 5 - PLAN TERMINATION
Although it has not expressed any intent to do so, the sponsor has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Plan sponsor pays all the administrative expenses incurred by the Plan.
NOTE 7 - PARTIAL TERMINATION
On June 14, 2001 and July 17, 2001 the plan sponsor closed two of its North
Carolina manufacturing plants. On July 23, 2001, the plan sponsor sold its adult
bedding division to Design Works, Inc. Most of the employees of the adult
bedding division became employees of Design Works, Inc. as of that date. As a
result of these events, the Plan has experienced a partial termination during
the current year. Plan participants terminated as part of the events above will
become fully vested in their accounts. The remaining Plan participants will
continue to be vested according to the provisions in the Plan document.
7
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 8 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
2001 2000
Net Assets Available for Plan Benefits per the Financial Statements $ 3,464,175 $ 9,440,387
Participant Contribution Receivable (659) (81,834)
Payable to Sponsor 3,482 22,309
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Net Assets Available for Plan Benefits per Form 5500 $ 3,466,998 $ 9,380,862
============ ============
The following is a reconciliation of participant and sponsor contributions per
the financial statements to the Form 5500:
2001
Participant Contributions per the Financial Statements $ 572,675
Participant Contribution Receivable for 2000 Received in 2001 81,834
Participant Contribution Receivable for 2001 Received in 2002 (659)
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Participant Contributions per the Form 5500 $ 653,850
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Sponsor Contributions per the Financial Statements $ 185,366
Payable to Sponsor at December 31, 2000 (22,309)
Payable to Sponsor at December 31, 2001 3,482
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Sponsor Contributions per the Form 5500 $ 166,539
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8
SUPPLEMENTAL SCHEDULE
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
SCHEDULE H, PART IV, LINE 4(i) FORM 5500
DECEMBER 31, 2001
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 002
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CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST VALUE
COMMON/COLLECTIVE TRUST
* Putnam Investments Putnam Stable Value Fund ** $ 393,946
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MUTUAL FUNDS
* Putnam Investments Putnam Diversified Income Trust ** 57,840
* Putnam Investments Putnam Asset Allocation: Conservative Portfolio ** 264,717
* Putnam Investments Putnam Asset Allocation: Balanced Portfolio ** 348,426
* Putnam Investments Putnam Asset Allocation: Growth Portfolio ** 874,223
* Putnam Investments Putnam International Growth Fund ** 162,845
* Putnam Investments Putnam Voyager Fund ** 376,574
* Putnam Investments Putnam New Opportunities Fund ** 783,755
* Putnam Investments Putnam Growth and Income Fund ** 26,151
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2,894,531
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PARTICIPANT LOANS
* Participants 8.25% - 10.00% Notes Receivable from Participants ** 178,521
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TOTAL INVESTMENTS $ 3,466,998
===============
* A party-in-interest as defined by ERISA.
** Cost omitted for participant directed investments.
10
CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF NONEXEMPT TRANSACTIONS
SCHEDULE H, PART IV, LINE 4(d) TO FORM 5500
YEAR ENDED DECEMBER 31, 2001
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 002
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DESCRIPTION OF
TRANSACTIONS
INCLUDING MATURITY
RELATIONSHIP OF PLAN, DATE, RATE OF INTEREST, CURRENT
IDENTITY OF PARTY EMPLOYEE OR OTHER COLLATERAL, PAR OR PURCHASE VALUE OF
INVOLVED PARTY-IN-INTEREST MATURITY VALUE PRICE ASSET
Crown Crafts, Inc. Plan Sponsor Overdue employee $ 20,322 * $ 20,322
contributions not
timely remitted to
the Plan
* This represents a total loss of earnings on the contributions that were
withheld from employees, but not remitted timely into the trust by the Plan
sponsor. Sponsor remitted loss of earnings on May 3, 2001.
11
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the administrative committee members have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
CROWN CRAFTS, INC.
401(k) RETIREMENT SAVINGS PLAN
By: /s/ AMY VIDRINE SAMSON
----------------------------------
Amy Vidrine Samson, VP & CFO
Date: July 15, 2002