Core Viewpoint - Crown Crafts, Inc. reported a mixed financial performance for the fourth quarter and fiscal year 2025, with increased sales but significant net losses due to various challenges including tariffs and goodwill impairment charges [5][11]. Fourth Quarter Summary - Net sales for the fourth quarter of fiscal 2025 increased by 2.9% to $23.2 million compared to the prior year quarter, driven by the Baby Boom acquisition [6][8]. - Gross margin decreased to 18.3%, a decline of 4.9% from the prior year quarter, attributed to a higher mix of close-out sales and $324,000 in increased tariffs on imports from China [6][8]. - Marketing and administrative expenses rose by 17.0% to $4.6 million, including $77,000 in acquisition costs related to Baby Boom [7][8]. - The company recorded a GAAP net loss of $(10.8) million, or $(1.04) per diluted share, and an adjusted net loss of $(429,000), or $(0.04) per adjusted diluted share, which excludes a goodwill impairment charge of $13.8 million [10][12]. Fiscal 2025 Summary - Total net sales for fiscal 2025 were $87.3 million, essentially flat compared to fiscal 2024 [11][12]. - Gross margin for the year was 24.4%, down 1.8% from fiscal 2024, primarily due to higher rent and increased tariffs [11][12]. - Marketing and administrative expenses increased by 16% to $18.7 million, which included costs associated with the Baby Boom acquisition and the closure of a subsidiary in the UK [12]. - The company reported a GAAP net loss of $(9.4) million, or $(0.90) per diluted share, while adjusted net income was $1.0 million, or $0.10 per adjusted diluted share [12][11]. Goodwill Impairment - A goodwill impairment charge of $13.8 million was recorded due to a decline in the company's market capitalization and the fair values of its reporting units being lower than their carrying values [9][10]. Cash and Inventory Position - At the end of fiscal 2025, the company had $521,000 in cash and cash equivalents, with total inventory at $27.8 million, reflecting a 6.4% decrease compared to the end of fiscal 2024 [13]. Dividend Declaration - The company declared a quarterly cash dividend of $0.08 per share of Series A common stock, to be paid on July 3, 2025 [14]. Company Overview - Crown Crafts, Inc. designs, markets, and distributes a variety of infant, toddler, and juvenile consumer products, and is one of America's largest producers in this sector [16].

Core Viewpoint - Crown Crafts, Inc. is set to release its fourth quarter and full year results for fiscal 2025 on June 25, 2025, before market opening, with a teleconference scheduled for discussion [1] 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 the U.S. for items such as infant bedding, diaper bags, and toys [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] Teleconference Details - Interested parties can join the teleconference by calling (844) 861-5504 or by accessing it in listen-only mode via the company's website [2] - A replay of the teleconference will be available one hour after the call until September 25, 2025, at 4:00 p.m. Central Daylight Time [3]

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]