Crown Crafts(US:CRWS)2022-02-09 20:11Financial Data and Key Metrics Changes - Third quarter net sales were $22.7 million, an increase of 16.8% compared to $19.5 million in the prior year [15][21] - Net income for the third quarter was $2.4 million or $0.24 per diluted share, compared to $2.1 million or $0.21 per diluted share in the same quarter last year [29] - For the first nine months of fiscal year 2022, net sales were $61.7 million, up 7.6% from $57.3 million in the prior year [22][29] Business Line Data and Key Metrics Changes - Sales of bedding, blankets, and accessories increased by $349,000, net of a $1.1 million decrease due to the closure of Carousel [21] - Sales of bibs, toys, and disposables increased by $2.9 million over the same period [21] - Internet-based sales represented more than 25% of current year sales, with international sales accounting for almost 5% of year-to-date sales [17] Market Data and Key Metrics Changes - The company faced rising product and freight costs, impacting gross margin [19][24] - Labor shortages and higher turnover in warehouse operations were noted, exacerbated by COVID-19 [9][34] Company Strategy and Development Direction - The company is focusing on expanding its product offerings into adjacent categories to gain market share, particularly in nursery decor and accessories [53] - Management is addressing labor market challenges by utilizing temporary workers and hiring them as needed [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from water damage at facilities and supply chain disruptions due to increased freight costs and delays [7][9] - The transition of Olivia Elliott to CEO was highlighted as a positive step for the company's future [11] Other Important Information - The board declared a quarterly cash dividend of $0.08 per share, to be paid on April 8, 2022 [10] - The company finished the quarter with $2.1 million in cash and no debt [20] Q&A Session Summary Question: Can you comment on freight price fluctuations during the quarter? - Management noted that freight costs have increased across the board, impacting gross margin [32] Question: Were you able to recapture retailer orders canceled last quarter? - Management confirmed that they were able to catch up with most of those orders during the third quarter [33] Question: How are you mitigating labor turnover? - Management is combating labor turnover by hiring temporary workers and addressing COVID-related absences [34] Question: What is the current state of consumer demand in your industry? - Management indicated that consumer demand is strong, driven by product designs and a shift back to brick-and-mortar sales [36][37] Question: Are there any unusual expenses during the quarter? - Management stated that aside from Carousel, there were no unusual expenses in the current quarter [41] Question: How would you characterize the large order from a major retailer? - Management described the order as larger than normal but typical in terms of order patterns [44] Question: Were there any lost sales due to product availability from Asia? - Management confirmed that they are filling orders as best as they can despite some delays [55]