Exhibit 99.1
| For Immediate Release | June 15, 2006 |
Crown Crafts, Inc. Reports Fourth Quarter and Fiscal Year 2006 Results
Gonzales, Louisiana – Crown Crafts, Inc. (the “Company”) (OTCBB: CRWS) today reported net income
for fiscal year 2006 of $8.0 million, or $0.37 per diluted share, on net sales of $72.6 million
compared to net income for fiscal year 2005 of $2.4 million, or $0.11 per diluted share, on net
sales of $83.9 million.
Net sales for the fourth quarter of fiscal year 2006 were $19.8 million, compared to net sales of
$23.3 million for the fourth quarter of fiscal year 2005. Net
income for the quarter was $6.0
million, or $0.27 per diluted share, compared to net income of $0.8 million, or $0.04 per diluted
share, for the fourth quarter of fiscal year 2005.
Net income for both the quarter and the fiscal year benefited from the removal
of a $4.2 million deferred tax valuation allowance. The
Company’s positive taxable earnings trend indicates that there is no further need
to recognize an impairment of the deferred tax asset and that it is more likely than not that the Company will realize the benefits
of its $11.2 million NOL carryforward over the next several years prior to its expiration. Had the deferred tax valuation allowance
not been removed, net income for the year and fourth quarter would have been $3.7 million and $1.8 million respectively. This change
in estimate had no impact on income from operations or income before income taxes. In recent quarters, the Company’s income tax expense has reflected state and local
income taxes only. As a result of the removal of the deferred tax valuation allowance, the Company’s income tax expense will include federal as well as state and local income taxes.
The decrease in sales for fiscal year 2006 as compared to the prior year is a result of certain
customers changing their marketing strategies by decreasing the number of licensed products they
carried and sourcing private label merchandise directly. Additionally, the Company has experienced
price erosion due to the elimination of quotas on infant bedding items, which became effective in
January 2005, and one customer of the Company has changed shipping points from the United States to
Asia. Since the customer now takes ownership of the merchandise in Asia, the Company no longer
incurs the cost of importation. The Company has increased profitability in spite of declining
sales by controlling costs and reducing interest expense.
“We are pleased with the results for the fourth quarter and for the year. The Company has taken a
position that we will price existing and new products aggressively; however, our philosophy is to
maintain profitability in our business relationships. Although this position has negatively
impacted top line revenue, our gross margin has improved considerably
as the result of aggressive
sourcing,” commented E. Randall Chestnut, Chairman, President and Chief Executive Officer of the
Company. “We are also proud to have completed the year with a zero balance on our revolving credit
facility and a cash balance of $3.8 million,” 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 stockholders. Interested investors may
join the teleconference by dialing (877) 209-0397. Please refer to confirmation number 831238. 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 3:45 p.m. Central Daylight Time on
June 15, 2006 through 11:59 p.m. Central Daylight Time on June 22, 2006. 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 831238.
Crown Crafts, Inc. designs, markets and distributes infant and juvenile consumer products,
including bedding, blankets, bibs, bath items and accessories, and luxury hand-woven home décor.
Its subsidiaries include Hamco, Inc. in Louisiana, Crown Crafts Infant Products, Inc. in California
and Churchill Weavers, Inc. in Kentucky. 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