Crown Crafts wows investors
August 16, 2006-- Home Textiles Today,
Gonzales, La. – Boosting sales by more than 18%, and with margins gaining strength and costs coming down, Crown Crafts Inc. recorded a first fiscal quarter profit of $911,000, rebounding strongly from a year-before loss of $269,000.
Crown has routinely recorded a loss in its historically weak opening quarter. E. Randall Chestnut, Crown ceo and the architect of the company's turnaround, said, “This is the first profit we have posted in the first quarter since our restructuring in July, 2001.”
Crown managed to boost its sales by 18.3 % , to $16.2 million from $13.7 million. The big gainer was the bedding and blanket business, where sales jumped up by 21.4%, or $1.9 million, to $10.9 million from $9.0 million last year, helped by new private-label designs and timing issues.
Wall Street and investors were clearly cheered by the good news, and rewarded the company by driving its stock price up by almost 15% in mid-day trading, by $0.33 per share, or 14.7%, to a new 12-month high of $2.58 a share.
Today's upward momentum in its stock price b uilds on already strong gains since a recapitalization put in place a month ago secured the co mpany's future by slashing debt levels, reducing borrowing costs to less than the prime rate, and providing fresh access to ca pital to accelerate its growth.
Crown Crafts stock has now climbed almost six-fold, or 486.4%, from its 1 2-month low of $0.44 per share.
Adding icing to the cake during the opening quarter, Crown boosted margins, by a remarkable 660 basis points, or 6.6 percentage points, to 28.3% from 21.7% dur ing the same period a year ago.
Leveraging the sharply higher sales, Crown whittled down its operating costs by 290 basis points, or 2.9 percentage points, to 15.2% from 18.1% a year ago.
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