Loss Widens At Crown Crafts
August 22, 2005-- Home Textiles Today,
Crown Crafts, Inc. reported a net loss for its 2006 first fiscal quarter of $269,000 on net sales of $13.7 million compared with a net loss last year of $102,000 on net sales of $16.9 million.
Operating income also plummeted, 41.4 percent, to $499,000 from $851,000 last year.
The company stated that it attributes the decline in sales to customer-driven shifting of sales between quarters, a customer’s reducing its on-hand inventory levels and thereby lowering replenishment orders, and the loss of a $3 million bath program at Target to Internet auctions in fiscal year 2005.
In addition, the elimination of quota on goods from China effective Jan. 1 led to a reduction in the company’s top line sales volume, Crown Crafts stated. But it is currently focusing on becoming more diversified and aggressive in its sourcing efforts.
“Historically the first quarter is our weakest, and this year it was further impacted by a retail customer’s adjusting its inventory levels significantly downward. In addition, the loss of a bath program at another major retailer in fiscal year 2005 impacted the top line revenue,” commented E. Randall Chestnut, chairman, president and CEO. “We are pleased that we had such a positive cash position during the quarter that we were able to retire the company’s $4.5 million term loan more than a year early, which further improved our balance sheet and will lower our interest costs for the remainder of the year.”
In addition, Crown Crafts has completed the consolidation of its Gonzales-based distribution center to its West Coast facility in Compton, Calif.
Crown Crafts, Inc.
|Qtr. ended 7/30 (x000)||2005||2004||%change|
|Oper. Income (EBIT)||499||851||-41.4|
|Per Share (diluted)||-0.03||-0.01||—|
|Average Gross Margin||21.7%||20.5%||—|