Crown Crafts clears financial decks for action
by Staff -- Home Textiles Today, 7/12/2006 1:11:00 PM
Gonzales, La. -- In a move that cuts its debt in half and slashes the interest rate it pays, Crown Crafts Inc. has completed a sweeping refinancing that should substantially boost profits going forward, and at the same time free up cash to make acquisitions to broaden the company's product portfolio.
The supplier of infant and juvenile products has been in survival mode ever since a 2001 refinancing, the sale of its former core bedding businesses, and a downsizing that took the company from $357 million in sales at its height in 1999 to $84 million in its most recent fiscal year.
Now it’s poised for growth. "But not just growth for its own sake. We want highly profitable growth," said ceo E. Randall Chestnut, the architect of the company's turnaround.
Wall Street clearly liked what it heard, and stock in the jump-started company more than doubled in value after the news came out, running up by 109% in mid-day trading today, gaining $0.71 a share to $1.36, its highest level in years. More than 750,000 shares had changed hands by 1 p.m., in stark contrast to the hundreds that might be sold in a typical week.
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