GONZALES, La., June 18, 2025 (GLOBE NEWSWIRE) -- Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today announced that it intends to release the results of its operations for the fourth quarter and full year of fiscal 2025 before the market opens on Wednesday, June 25, 2025. Olivia W. Elliott, President and Chief Executive Officer, Craig J. Demarest, Vice President and Chief Financial Officer, and Claire K. Spencer, Vice President, will host a teleconference at 8:00 a.m. Central Daylight Time on that da ...

Group 1 - Crown Crafts, Inc. announced the retirement of Craig J. Demarest as Chief Financial Officer effective June 30, 2025, and the appointment of Claire K. Spencer as the new CFO [1][2] - Olivia Elliott, President and CEO, expressed excitement about Claire K. Spencer joining the company and acknowledged Craig J. Demarest's leadership over the past four years [2] - Claire K. Spencer has a strong background in financial reporting, having served as Director of SEC Reporting for H&E Equipment Services and held various roles at KPMG [3] Group 2 - Crown Crafts, Inc. designs, markets, and distributes a range of infant, toddler, and juvenile consumer products, and is one of America's largest producers in this sector [4] - The company operates through subsidiaries NoJo Baby & Kids, Inc. and Sassy Baby, Inc., marketing products under company-owned trademarks and licensed collections [4]

Core Viewpoint - Crown Crafts, Inc. reported a decline in net sales and profitability for the third quarter of fiscal 2025, primarily due to lower online toy sales and the loss of a major retailer's bid program, despite a positive contribution from the Baby Boom acquisition Financial Performance Overview - For Q3 fiscal 2025, net sales were $23.4 million, down 1.9% from $23.8 million in the prior year, driven by lower online toy sales and the loss of a major retailer's bid program [2] - Gross profit decreased 5.2% year over year to $6.1 million, with gross margin contracting to 26.1% from 27% due to changes in product mix and higher warehouse lease costs [3] - Operating income fell 26.9% to $1.7 million from $2.3 million, while net income was $0.9 million, or $0.09 per diluted share, a 47.5% decrease from $1.7 million, or $0.17 per diluted share, a year ago [4] Segment Performance - Sales of bedding and diaper bags grew 24.3% to $11.2 million, driven by the Baby Boom acquisition, which contributed $3.8 million [5] - However, sales of bibs, toys, and disposable products declined 17.8% to $12.2 million, primarily due to lower toy sales and the loss of a program at a major retailer [5] Key Business Metrics - Interest expense rose 87.9% year over year to $0.4 million due to increased borrowings for the Baby Boom acquisition [6] - Cash and cash equivalents increased to $1.1 million from $0.8 million, while total debt rose significantly to $20.9 million from $8.1 million [6] - Inventory stood at $32.4 million, up from $29.7 million, and operating cash flow increased to $6.9 million year to date compared to $4.1 million in the same period last year [7] Management Commentary - CEO Olivia Elliott highlighted the company's ability to maintain profitability amid economic uncertainty, focusing on expanding product offerings in diaper bags and high-end toys [8] - Management acknowledged constraints on consumer discretionary income impacting overall sales [8] Cost Management and Strategic Initiatives - The company is addressing rising costs due to new 10% tariffs on Chinese imports, negotiating with suppliers to absorb some costs while considering selective price increases [9] - Management is evaluating warehouse relocation options to reduce long-term leasing costs [9] - While no specific forward-looking guidance was provided, management emphasized maintaining cost discipline and driving top-line growth through product refresh initiatives and potential new retail placements in 2026 [12] Other Developments - Crown Crafts completed the integration of Baby Boom, acquired for $18 million, which expanded its product offerings in the diaper bag category [13] - The company declared a quarterly dividend of $0.08 per share, payable on April 4, 2025 [13]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $23.3 million, a decrease from $23.8 million in the prior year quarter, primarily due to lower online toy sales [4] - Gross profit margin decreased to 26.1% from 27% in Q3 2024, attributed to changes in product mix and higher lease costs [5] - Net income for the quarter was $893,000 or $0.09 per diluted share, down from $1.7 million or $0.17 per diluted share in the prior year [7] - Cash flow from operations year-to-date was $7 million, compared to $4.1 million in the same period last year [7] - Cash and cash equivalents at the end of Q3 were $1.1 million, up from $829,000 at the end of fiscal 2024 [7] Business Line Data and Key Metrics Changes - The acquisition of Baby Boom contributed $3.8 million in net sales this quarter, partially offsetting declines in other areas [4][5] - Marketing and administrative expenses increased to $4.4 million from $4.1 million in the prior year, mainly due to acquisition-related costs [6] Market Data and Key Metrics Changes - The decline in sales was primarily seen in the Manhattan Toy brand, with disappointing holiday sales attributed to consumers trading down to less expensive toy lines [27][28] - The loss of the Target bib program in November 2023 also contributed to the decline in sales [71] Company Strategy and Development Direction - The company is focused on refreshing high-end toy and diaper bag lines while developing new products to complement existing categories [10] - The management is evaluating warehouse locations to reduce costs, with a preference for a West Coast location due to overall logistics [20][22] - The company is monitoring tariff updates and is optimistic about managing costs with suppliers to minimize consumer impact [11][78] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities, particularly in diaper bags and new product placements [22][24] - The company remains well-positioned to navigate economic challenges while preparing for improved market conditions [12] Other Important Information - The company paid a regular quarterly dividend of $0.08 per share and declared the next dividend to be paid in April [9] - The company is considering price increases to offset potential tariff impacts but aims to minimize the effect on consumers [78] Q&A Session Summary Question: Warehouse location decision-making process - Management is considering cost, lead times, and logistics in deciding between two potential warehouse locations [17][20] Question: Update on diaper bag business initiatives - Positive meetings with potential licensors and retailers have occurred, with expectations for new placements in 2026 [22][24] Question: Status of Manhattan Toy brand and holiday sales - Holiday sales were disappointing, with a noted decline in the Manhattan Toy brand, but new product developments received positive feedback [27][28] Question: Effectiveness of overseas distributor for Manhattan Toy - The shift to a distributor system has been effective, with distributors picking up sales for the Manhattan Toy brand [30] Question: Tariff impact and supplier negotiations - Initial conversations with suppliers indicate potential for price rollbacks to offset tariff increases, with adjustments expected to be implemented immediately [78][80]

Financial Performance - Net sales for Q3 fiscal 2025 were $23.3 million, a decrease of 2.1% from $23.8 million in the prior-year quarter[5] - Gross margin decreased to 26.1% compared to 27.0% in Q3 fiscal 2024[5] - Net income for the quarter was $893,000, or $0.09 per diluted share, down from $1.7 million, or $0.17 per diluted share in the prior-year quarter[5] - Marketing and administrative expenses increased to $4.4 million from $4.1 million in Q3 fiscal 2024[5] Dividend Information - The company declared a quarterly cash dividend of $0.08 per share, payable on April 4, 2025[7] Asset Management - Total assets increased to $98.7 million as of December 29, 2024, compared to $82.7 million on March 31, 2024[15] - The company reported a strong balance sheet while managing borrowings effectively[4] Strategic Focus - The company is focused on developing new products to drive top-line growth despite ongoing economic uncertainty[4] - The company anticipates being well positioned for long-term growth when economic conditions improve[4] - Inventory levels are being efficiently lowered from the prior year, even with the acquisition of Baby Boom[4]

Financial Performance - Net sales decreased to $23.3 million for the three months ended December 29, 2024, compared to $23.8 million for the same period in 2023, a decrease of $450,000 or 1.9%[62] - For the nine months ended December 29, 2024, net sales were $64.0 million, down from $65.1 million in the same period in 2023, a decrease of $1.0 million or 1.6%[63] - Net income for the three months ended December 29, 2024, was $893,000, a decrease of $809,000 or 47.5% compared to $1.7 million in Q3 2023[62] - Gross profit decreased by $336,000, from 27.0% of net sales in Q3 2023 to 26.1% in Q3 2024[64] Expenses - Marketing and administrative expenses increased by $290,000, rising from 17.3% of net sales in Q3 2023 to 18.8% in Q3 2024[67] - Factoring fees for the three-month periods ended December 29, 2024, and December 31, 2023, were $115,000 and $106,000, respectively, while for the nine-month periods, they were $283,000 and $265,000[80] Cash Flow and Investments - Net cash provided by operating activities increased from $4.1 million for the nine-month period ended December 31, 2023, to $7.0 million for the nine-month period ended December 29, 2024[75] - Net cash used in investing activities increased significantly to $17.0 million, primarily due to a $16.4 million payment for the Acquisition[76] Debt and Credit - As of December 29, 2024, the balance on the revolving line of credit was $13.7 million, with $15.3 million available based on eligible accounts receivable and inventory[78] - The Company had $20.9 million of indebtedness at a variable interest rate, with an annual net income decrease of approximately $162,000 for each one percentage point increase in interest rates[85] - The Company has modified its financing agreement with CIT to increase the Excess Availability required for its revolving credit line from $7,000,000 to $7,500,000[82] - The Company has entered into agreements with CIT to waive compliance with the fixed charge coverage ratio for the fiscal years ending March 30, 2025, and March 29, 2026[82] Customer Dependency and Product Sales - The Company's financial results are significantly dependent on its top two customers, which accounted for approximately 61% of gross sales in fiscal year 2024[87] - 40% of the Company's gross sales in fiscal year 2024 were from licensed products, including 24% from agreements with affiliated companies of the Walt Disney Company[87] - Sales of bedding and diaper bags increased by $2.2 million, while sales of bibs, toys, and disposable products decreased by $2.6 million during the three-month period[62] Operational Considerations - The Company believes its cash flow from operations and available funds under the revolving line of credit will be sufficient to meet liquidity needs[83] - The Company bears the responsibility for customer-related adjustments such as returns and discounts, while CIT bears credit losses on assigned accounts receivable[80] - The Company sources products primarily from foreign manufacturers, with significant exposure to commodity price risks in China, particularly for cotton, oil, and labor[86] - The Company acquired Baby Boom, which designs and sells licensed and unlicensed bedding and diaper bag products, since the last annual report[87]

Core Viewpoint - Crown Crafts, Inc. reported its third quarter fiscal year 2025 results, highlighting its ability to maintain cash flow and profitability despite a challenging macroeconomic environment [3]. Financial Performance - Net sales for the third quarter of fiscal 2025 were $23.3 million, a decrease from $23.8 million in the prior-year quarter [4][11]. - Gross margin was 26.1%, down from 27.0% in the third quarter of 2024 [4][11]. - Marketing and administrative expenses increased to $4.4 million from $4.1 million in the same quarter last year [4][11]. - Net income was $893,000, or $0.09 per diluted share, compared to $1.7 million, or $0.17 per diluted share in the prior-year quarter [4][11]. Dividend Announcement - The Board of Directors declared a quarterly cash dividend of $0.08 per share on the Company's Series A common stock, payable on April 4, 2025, to stockholders of record on March 14, 2025 [5]. Company Overview - Crown Crafts, Inc. designs, markets, and distributes infant, toddler, and juvenile consumer products, and is one of America's largest producers in this sector [7].

Core Viewpoint - Crown Crafts, Inc. is set to release its third quarter fiscal year 2025 operational results on February 12, 2025, before market opening, with a teleconference scheduled for the same day to discuss the results [1]. Group 1: Earnings Release Information - The Company will announce its third quarter results before the market opens on February 12, 2025 [1]. - A teleconference will be hosted by the President and CEO, Olivia W. Elliott, and the CFO, Craig J. Demarest, at 8:00 a.m. Central Standard Time on the same day [1]. Group 2: Teleconference Participation - Interested individuals can join the teleconference by dialing (844) 861-5504 or by accessing the listen-only mode on the Company's website [2]. - Financial information discussed during the teleconference will be available on the investor relations section of the Company's website after the earnings release [2]. Group 3: Company Overview - Crown Crafts, Inc. designs, markets, and distributes a range of infant, toddler, and juvenile consumer products, and is one of the largest producers in this sector in the U.S. [4]. - The Company operates through subsidiaries NoJo Baby & Kids, Inc. and Sassy Baby, Inc., offering products under Company-owned trademarks and licensed collections [4]. - Sales are directed to various retailers, including mass merchants and juvenile specialty stores [4].

Core Insights - Crown Crafts, Inc. reported a net sales increase of 1.4% year-over-year for Q2 fiscal 2025, reaching $24.5 million, primarily driven by the acquisition of Baby Boom Consumer Products, which contributed $3.4 million in sales [2][14] - The company's net income decreased by 52.8% to $0.9 million, or $0.08 per diluted share, influenced by acquisition-related costs of $0.8 million [3][14] - The stock has underperformed compared to the S&P 500, with a decline of 1.3% since the earnings report, and an 8.7% drop over the past month [1] Financial Performance - Gross profit margin improved to 28.4% of net sales from 27.3% in the previous year, attributed to product mix adjustments, despite increased rent costs [5] - Marketing and administrative expenses rose to $5.4 million, representing 22.3% of net sales, up from 16.7% the previous year, mainly due to acquisition-related expenses [6] Business Developments - The Baby Boom acquisition is expected to enhance product offerings and cross-selling opportunities, with new products like diaper bags and licensed toddler bedding sets [7] - The company plans to optimize its cost structure, including potential warehouse consolidations by fiscal 2026 [8] Strategic Direction - Crown Crafts aims to expand direct-to-consumer sales channels with new websites for its NoJo and Sassy brands, expected to launch before the holiday season [13] - The acquisition of Baby Boom was completed for a total price of $18 million, funded through an $8 million term loan and additional borrowings [14] Market Conditions - The legacy business faced challenges due to reduced orders and weak consumer demand, impacting certain product lines [10] - The company anticipates improved consumer confidence due to expected interest rate reductions and lower inflation [11]

Financial Data and Key Metrics Changes - Net sales for Q2 fiscal 2025 were $24.5 million, an increase from $24.1 million in the prior year quarter, primarily due to the Baby Boom acquisition which contributed $3.4 million [8][9] - Gross profit margin improved to 28.4% from 27.3% a year earlier, reflecting a slight change in product mix despite higher lease costs [8] - Net income for the quarter was $860,000 or $0.08 per diluted share, down from $1.8 million or $0.18 per diluted share in the prior year quarter [9] Business Line Data and Key Metrics Changes - The Baby Boom acquisition positively impacted sales, contributing $3.4 million, while legacy businesses experienced declines, particularly due to the loss of a bid program at a major retailer [8][9] - Marketing and administrative expenses rose to $5.4 million, up from $4 million in the prior year quarter, increasing as a percentage of net sales from 16.7% to 22.3% [9] Market Data and Key Metrics Changes - The acquisition of Baby Boom is expected to enhance the company's presence in the toddler segment and expand product offerings, particularly in diaper bags [6] - Consumer sentiment is improving, with the University of Michigan's Consumer Sentiment Index reaching its highest level since April, which may positively influence purchasing power [6] Company Strategy and Development Direction - The company is focused on integrating the Baby Boom brand into its operations and exploring cross-selling opportunities among its brands [13] - Strategic evaluation of warehouse options is ongoing, with plans for consolidation expected in fiscal 2026 [13] - The company is not currently looking for additional acquisitions but is focused on absorbing the recent acquisition and managing costs [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming holiday season and the potential for increased revenues due to the Baby Boom acquisition and improving macroeconomic conditions [6][13] - The company is actively managing its cost structure while aiming to capture market share as the economic environment improves [13] Other Important Information - Cash and cash equivalents at the end of Q2 were $2 million, up from $1.1 million at the end of Q1 and $829,000 at the end of fiscal 2024 [10] - The company paid a regular dividend of $0.08 per share and declared the next dividend to be paid in January [11] Q&A Session Summary Question: Status of warehouse consolidation - Management is currently considering three locations and plans to narrow it down to one or two by the end of the fiscal year [15] Question: Feedback on Manhattan Toy products in Walmart - Sell-through of Manhattan Toy products in Walmart is performing well, particularly in better-performing stores [16] Question: Improvement of Manhattan Toy margins - Margins are improving as new products are developed and manufacturers are switched [17] Question: Update on Baby Boom licenses - All licenses are performing well, with Bluey being particularly popular [23] Question: Sourcing strategy and impact of tariffs - Most products are sourced from China, with ongoing evaluations of other countries due to potential tariff impacts [38][39]