Crown Crafts Happy with Flat Earnings
Don Hogsett -- Home Textiles Today, June 25, 2007
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.
|Qtr. 4/1 (x000)||2007||2006||% change|
|a. Results all of 2006 include a $4.1 million one-time gain stemming from a refinancing of the company's debt.
b. Results in the fourth quarter and all of 2006 include a $4.0 million tax benefit arising out of prior-year losses.
c. Earnings per share for all of 2007 climbed, in comparison with 2006, because of a reduction in the number of shares outstanding that followed the company's refinancing.
|Oper. income (EBIT)||1,721||2,682||-35.8|
|Per share (diluted)||0.07||0.28||-75.0|
|Average gross margin||23.3%||26.2%||—|
|Oper. income (EBIT)||7,874||7,041||11.8|
|Per share (diluted)||0.76c||0.37||105.4|
|Average gross margin||25.1%||23.5%||—|