Crown Crafts Happy with Flat Earnings

Juvenile Supplier Logs Transitional Year

By Don Hogsett -- Home Textiles Today, 6/25/2007 12:00:00 AM

Gonzales, La. —

Fourth fiscal quarter profits tumbled, at least on paper, by almost 90% at Crown Crafts Inc., to $722,000 from $6.0 million last year.

But the drop was largely illusory since earnings for the closing quarter and all of last year were swollen by a $4.1 million one-time gain stemming from a refinancing of the company's debt. Skewing the year-over-year comparison even more, year-ago profits were also boosted by the reversal of a tax valuation allowance.

Cutting through that thicket of one-time items that obscure the bottom line, pre-tax income during the period was $1.8 million, virtually flat with last year's $1.9 million, giving a truer picture of the company's fiscal performance.

Similarly, profits for all of last year, on paper, dipped by 4.6%, to $7.6 million from $8.0 million. But pulling out all those one-time items, pre-tax profits actually jumped by 72.5%, to $6.9 million from $4.0 million last year.

Sales at the diversified producer of infant and juvenile products slipped by 10.1% during the fourth fiscal quarter, to $17.8 million from $19.8 million the preceding year.

For all of last year, sales were virtually flat, edging down by 0.8%, to $72.0 million from $72.6 million.

"We are extremely proud of all that we accomplished in fiscal year 2007," said E. Randall Chestnut, ceo. "During the very successful year, the company celebrated its 50th anniversary, completed a transformational debt and capital restructuring, and saw its stock begin trading on NASDAQ."

"In addition," Chestnut said, "pre-tax income increased by 71%, excluding the gain on debt refinancing, and the company finished the year with a strong balance sheet that included a lower debt balance of $5.8 million as compared to the prior year."

CROWN CRAFTS INC.