Crown Crafts ends slump with 2Q profit
Staff -- Home Textiles Today, 11/19/2001
ATLANTA — For the first time in nearly three years, Crown Crafts Inc. reported a financial quarter in the black. The company posted net income of $2.1 million in its second quarter, reversing an $11.4 million net loss in the second quarter of last year.
Crown Crafts' statement gave its actual net income for the quarter as $27.1 million. This figure includes an extraordinary gain of $25 million, which the company realized from refinancing its debt.
Net sales dropped 62 percent for the quarter, to slightly more than $31.3 million. The sales decrease was due to Crown Crafts' sale of its adult bedding and bath business to Design Works (the company formed and headed by former Crown Crafts chief Michael Bernstein) at the end of July, and the subsequent sale of its woven-products division to Mohawk Industries in November of last year. Those two deals transformed Crown Crafts into primarily an infant- and juvenile-products business.
Keying in on Crown Crafts' first profitable quarter since 1998, Randall Chestnut, its chairman, president and ceo, said, "This proves that the restructuring, which reduced the company's debt from $125.6 million on April 2, 2000, to $44.8 million on Sept. 30, 2001, has been successful. Although we face a challenging retail environment due to the slowing economy, we are optimistic that the improvements are sustainable."
| QTR 9/30 (x000) | 2001 | 2000 | % CHG |
| Sales | $31,338 | $82,175 | -61.9 |
| Oper. income (EBIT) | 2,975 | (501) | — |
| Net income | 27,119 | (11,408) | — |
| Per share (diluted) | 1.21 | (1.33) | — |
| Average gross margin | 24.7% | 12.4% | — |
| SG&A percentage | 15.2% | 13.0% | — |
| Six months | |||
| Sales | 70,037 | 140,369 | -50.1 |
| Oper. income (EBIT) | 2,531 | (8,030) | — |
| Net income | 24,260 | (22,294) | — |
| Per share (diluted) | 2.72 | (2.59) | — |
| Average gross margin | 21.8% | 10.4% | — |
| SG&A percentage | 18.2% | 16.1% | — |
| ( ): Denotes loss |
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