Kids help drive top line results

GONZALEZ, LA — Beefing up its margins while building sales, Crown Crafts Inc., slashed its first-quarter loss — its seasonally weakest quarter — by 85.1 percent, to a break-even deficit of $108,000 from a year-ago loss of $727,000.

Sales at the producer of infant and juvenile bedding edged up by 3.0 percent, to $18.5 million from $17.9 million last year.

Driving all of the top-line growth, Crown Crafts boosted its sales of infant and juvenile products, offsetting weaker sales of luxury-fiber, hand-woven throws in its Goodwin Weavers business.

Sales in the core infant's and juvenile business improved by $652,000, or 3.7 percent, to $18.0 million due to an increase in the number of skus placed with customers. But sales at Goodwin Weavers decreased by $115,000, or 21.6 percent, to $416,000, the company said, as sales of high-end luxury throws have been negatively impacted by the recent downturn in the economy.

In a big lift to the bottom line, Crown Crafts boosted its average gross margin substantially, by 230 basis points, or 2.3 percentage points, to 22.5 percent from 20.2 percent a year ago. Benefiting form the shutdown of a Mexican operation and stepped-up off-shore sourcing, gross margin dollars surged by 20.2 percent, to $4.2 million from $3.6 million last year.

Measured as a percentage of stronger sales, operating costs improved by 50 basis points, or one-half of one percentage point, to 17.1 percent from 17.6 percent in the same quarter a year ago.

Measured in absolute dollars, operating costs held steady at $3.2 million after several successive quarter of deep cost cuts, including the relocation of the company's headquarters to Gonzales, LA, from Atlanta, and the down-sizing of the headquarters staff. Savings in labor and commissions, said Crown, were offset by about $139,000 in costs as the company shut down its Burgundy Interamericana Mexican operation as it shifted manufacturing to Asian nations.