Financial Data and Key Metrics Changes - Net sales for Q3 2019 were $18.7 million, an increase of $1.2 million or 6.8% from $17.5 million in Q3 2018 [7] - Net income rose from $531,000 in Q3 2018 to $1,554,000 in Q3 2019, an increase of $1,023,000 or 193% [7] - Diluted earnings per share increased from $0.05 in Q3 2018 to $0.15 in Q3 2019 [7] - Gross profit for Q3 2019 was 30.0% of net sales, nearly flat compared to 30.1% in the prior year [9] - Year-to-date net sales were $54.7 million, up $7.1 million or 14.9% from $47.6 million in the prior year [12] Business Line Data and Key Metrics Changes - Sales from the acquisition of Sassy contributed $3.6 million in Q3 2019, while Carousel contributed $1.4 million [12] - Year-to-date sales for Sassy were $8.6 million and Carousel sales were $5 million, compared to $3 million for Carousel in the prior year [12] - The elimination of sales to Toys "R" Us negatively impacted sales, with $2.4 million in the prior year quarter and $7.5 million year-to-date [12] Market Data and Key Metrics Changes - Business with Walmart and Target was up across all sectors, but overall sales were affected by the loss of Babies "R" Us [24] - Excess inventory from the liquidation of Toys "R" Us continued to impact sales negatively [24] Company Strategy and Development Direction - The company is focusing on expanding its international distribution and has signed new distributors since showcasing at the Cologne show [27] - The company is working on alternative products to address softness in the Carousel business due to market trends [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing successful navigation through a challenging retail landscape [8] - The company anticipates that comparisons with Babies "R" Us will no longer be a drag starting in the first fiscal quarter of 2020 [29] - The effective tax rate for the year is expected to hold at 24.2% [31] Other Important Information - The Board of Directors declared a quarterly cash dividend of $0.08 per share, representing an annualized yield of 5.5% [10] - The company has less than $2 million in long-term debt and $20.9 million in revolver availability [9] Q&A Session Summary Question: Comments on gross margin performance - Management indicated that the gross margin may not be as strong in Q4 due to a burden system affecting costs [22] Question: Retail environment impact on sales - Management noted that while business with Walmart and Target was up, the loss of Babies "R" Us and excess inventory from its liquidation negatively impacted sales [24] Question: Success in replacing lost sales with other retailers - Management highlighted significant growth in online sales through Amazon as a positive development [26] Question: Update on international distribution expansion - Management confirmed ongoing efforts in international markets, with positive results expected to continue [27] Question: Carousel sales decline explanation - Management attributed the decline to softness in the business and the impact of market trends [34] Question: Tax rate expectations - Management confirmed that the effective tax rate for the year is expected to remain at 24.2% [31] Question: Tariff impacts on business - Management stated that tariff impacts have been minimal so far, but future tariffs could affect more products [32]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 30, 2018 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to_____ Commission File No. 1-7604 Crown Crafts, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation) (IRS Emp ...