Crown Crafts(CRWS) - 2025 Q4 - Annual Results

Financial Results Announcement Crown Crafts reported Q4 and full-year fiscal 2025 results, significantly impacted by a goodwill impairment charge Fourth Quarter Fiscal 2025 Highlights Q4 fiscal 2025 saw net sales of $23.2 million, a 18.3% gross margin, and a GAAP net loss of $10.8 million due to goodwill impairment Q4 Fiscal 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Sales | $23.2 million | | Gross Profit | $4.2 million | | Gross Margin | 18.3% | | GAAP Net Loss | $(10.8) million | | GAAP Diluted Loss per Share | $(1.04) | | Adjusted Net Loss | $(429,000) | | Adjusted Diluted Loss per Share | $(0.04) | | Quarterly Dividend | $0.08 per share | - The reported results include a significant goodwill impairment charge of $13.8 million ($10.4 million after tax), which heavily impacted the GAAP net loss[6] Full Year Fiscal 2025 Highlights Fiscal 2025 net sales were $87.3 million with a 24.4% gross margin, resulting in a GAAP net loss of $9.4 million after impairment Fiscal Year 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Sales | $87.3 million | | Gross Profit | $21.3 million | | Gross Margin | 24.4% | | GAAP Net Loss | $(9.4) million | | GAAP Diluted Loss per Share | $(0.90) | | Adjusted Net Income | $1.0 million | | Adjusted Diluted EPS | $0.10 | - Full-year results were adjusted for a goodwill impairment charge of $13.8 million ($10.4 million after tax), which was the primary driver of the GAAP net loss[6] Financial Performance Analysis Management discusses Q4 profitability challenges and full-year strategic initiatives, detailing performance drivers and impacts Management Commentary CEO highlights Q4 sales growth offset by margin pressures and outlines key strategic initiatives for long-term growth - Q4 sales increased by 2.9% year-over-year, but adjusted net income was negatively impacted by close-out sales at lower margins and tariffs[5] - Key strategic initiatives for the year included: acquiring Baby Boom Consumer Products, integrating Manhattan Toy, reducing operational costs, expanding e-commerce, and planning for warehouse consolidation[5] Fourth Quarter Fiscal 2025 Performance Details Q4 net sales increased 2.9% to $23.2 million, but gross margin declined to 18.3% due to close-out sales and tariffs - Net sales rose 2.9% to $23.2 million, primarily due to the Baby Boom acquisition[7] - Gross margin fell by 4.9 percentage points to 18.3%, impacted by close-out sales and $324,000 in higher tariffs from China[7] - A $13.8 million non-cash goodwill impairment charge was recorded after a triggering event related to the company's depressed stock price and market capitalization[9] - Marketing and administrative expenses increased by 17.0% to $4.6 million, including costs from the Baby Boom business[8] Full Year Fiscal 2025 Performance Details Fiscal 2025 net sales were flat at $87.3 million, with gross margin decreasing to 24.4% and inventory reduced by 6.4% - Net sales were essentially flat at $87.3 million compared to fiscal 2024[11] - Gross margin decreased by 1.8 percentage points to 24.4%, primarily due to higher rent, closeout sales, and increased tariffs[11] - Marketing and administrative expenses rose 16% to $18.7 million, including $1.2 million in costs for the Baby Boom acquisition and $244,000 for a UK subsidiary closure[12] - Total inventory at year-end was $27.8 million, a 6.4% decrease from the end of fiscal 2024[13] Shareholder Information Details on the declared quarterly cash dividend and access information for the upcoming financial results conference call Quarterly Cash Dividend The Board declared a $0.08 per share quarterly cash dividend payable on July 3, 2025 - The Board of Directors declared a quarterly cash dividend of $0.08 per share[14] - The dividend is payable on July 3, 2025, to stockholders of record at the close of business on June 13, 2025[14] Conference Call Information A conference call is scheduled for 8:00 a.m. CDT to discuss financial results, with a replay available - A conference call to discuss results is scheduled for 8:00 a.m. CDT[15] - A telephone replay will be available until 4:00 p.m. CDT on September 25, 2025[15] Company Overview and Disclosures Provides background on Crown Crafts, Inc. as a juvenile products producer and outlines forward-looking statement risks About Crown Crafts, Inc. Crown Crafts, Inc. is a leading American producer and distributor of infant, toddler, and juvenile consumer products - The company designs, markets, and distributes infant, toddler, and juvenile consumer products, including bedding, diaper bags, bibs, and toys[16] - It operates through wholly-owned subsidiaries like NoJo Baby & Kids, Inc. and Sassy Baby, Inc., and sells directly to major retailers[16] Forward-Looking Statements The report contains forward-looking statements subject to various risks, including economic conditions and supply chain dependencies - The report includes forward-looking statements that are subject to known and unknown risks and uncertainties[17] - Identified risks include general economic conditions, changing competition, ability to integrate acquisitions, customer concentration, and dependence on foreign suppliers[17] Consolidated Financial Statements Presents the company's consolidated statements of operations, balance sheets, and non-GAAP reconciliations Consolidated Statements of Operations Fiscal 2025 saw a net loss of $9.4 million due to a $13.8 million goodwill impairment charge Consolidated Statements of Operations (in thousands, except per share amounts) | | Fiscal Year Ended March 30, 2025 | Fiscal Year Ended March 31, 2024 | Three-Month Period Ended March 30, 2025 | Three-Month Period Ended March 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $87,250 | $87,632 | $23,227 | $22,579 | | Gross profit | $21,265 | $23,000 | $4,244 | $5,228 | | (Loss) income from operations | $(11,191) | $6,895 | $(14,104) | $1,312 | | Net (loss) income | $(9,356) | $4,894 | $(10,787) | $1,004 | | Diluted (loss) earnings per share | $(0.90) | $0.48 | $(1.04) | $0.10 | Consolidated Balance Sheets Total assets were $81.2 million as of March 30, 2025, with shareholders' equity decreasing to $39.6 million Selected Balance Sheet Data (in thousands) | | March 30, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total current assets | $55,303 | $54,824 | | Goodwill | $0 | $7,926 | | Total assets | $81,154 | $82,706 | | Total current liabilities | $15,505 | $10,461 | | Long-term debt | $16,512 | $8,112 | | Total liabilities | $41,535 | $31,095 | | Shareholders' equity | $39,619 | $51,601 | Non-GAAP Financial Measures Reconciliation Reconciles GAAP net loss to adjusted non-GAAP figures by excluding the $13.8 million goodwill impairment charge Reconciliation of GAAP to Non-GAAP Net (Loss) Income (in thousands) | | Fiscal Year 2025 | Q4 2025 | | :--- | :--- | :--- | | Net (loss) income (GAAP) | $(9,356) | $(10,787) | | Goodwill impairment charge | 13,766 | 13,766 | | Tax impact of adjustments | (3,408) | (3,408) | | Adjusted net (loss) income (Non-GAAP) | $1,002 | $(429) | - Management believes adjusted net income provides useful information by removing the impact of impairment charges that are not reflective of the core business, allowing for better period-to-period comparison[25]