Exhibit 99.1
June 16, 2004
Crown Crafts, Inc. Reports Fourth Quarter and Fiscal Year 2004 Results
Gonzales, Louisiana – Crown Crafts, Inc. (OTCBB: CRWS) (the “Company”) today reported net income for fiscal year 2004 of $3.1 million, or $0.14 per diluted share, on net sales of $86.2 million compared to net income for fiscal year 2003 of $2.5 million, or $0.12 per diluted share, on net sales of $94.7 million. Fiscal year 2003 results include a $1.8 million reserve related to the decision to close the Company’s manufacturing operations in Mexico. Excluding this non-recurring event, fiscal year 2003 net income was $4.3 million.
Marketing and administrative expenses decreased by $0.5 million, or 4.1%, in the current fiscal year compared to the prior fiscal year and were 14.1% of net sales for the current fiscal year compared to 13.4% in the prior fiscal year. The Company achieved reductions in labor and commissions expenses in fiscal year 2004; however, these reductions were partially offset by costs related to the Company’s Delaware reincorporation of approximately $396,000.
Net sales for the fourth quarter of fiscal year 2004 were $25.0 million, compared to net sales of $26.8 million for the fourth quarter of fiscal year 2003. Net income for the quarter was $1.6 million, or $0.07 per diluted share, compared to net income of $2.1 million, or $0.10 per diluted share, for the fourth quarter of fiscal year 2003.
The decline in sales, which occurred primarily in the second quarter of fiscal year 2004, is attributable to changes in buying patterns by several customers, some of whom lowered on-hand inventory levels in response to the sluggish economy, and changes in internal business strategies. Also, during fiscal year 2003, the Company shipped several new product placements to key customers, which were not repeated at the same levels in the current year. The Company’s Pillow Buddies® business has been comparatively weaker in the current year because retail dollars have not been allocated to the product and increased competition for character licenses has driven royalty commitments higher than management is comfortable guaranteeing.
“Although fiscal year 2004 was disappointing in terms of sales, the Company is very proud of its many accomplishments,” commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the Company. “We are pleased to report continuing profitability, improved sourcing and a stronger balance sheet. In addition, our reincorporation into Delaware this fiscal year gives us the capital structure necessary to meet certain corporate objectives, including the protection of our net operating loss carryforwards, which represent significant value to the Company, “ Mr. Chestnut continued.
The Company will host a teleconference today at 1:00 p.m. Central Daylight Time to discuss the Company’s results and answer appropriate questions from shareholders. Interested investors may join the teleconference by dialing (888) 273-9887. Please refer to confirmation number 733049. The teleconference can also be accessed in listen-only mode by visiting the Company’s website at www.crowncrafts.com. The financial information to be discussed during the teleconference may be found prior to the call on the investor relations portion of the Company’s website.
A telephone replay of the teleconference will be available from 4:30 p.m. Central Daylight Time on June 16, 2004 through 11:59 p.m. Central Daylight Time on June 23, 2004. 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 733049.