CRWS - Earnings call transcript Q3 2019

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Operator

Hello, ladies and gentlemen, and welcome to the Crown Crafts, Inc. Investors Conference Call.

Your host for today's call is Mr. Randall Chestnut, Chairman, President and Chief Executive Officer. [Operator Instructions]. call, the or Crown prior this not part, Crafts, of without permitted written reproduction in in whole is Inc. Any authorization from today, a X, as reminder, conference being And this XXXX. recorded is February Ms. I would turn over At this like time, the to call to Vice will the Olivia President call. CFO, and who Elliott, begin Please ma'am. go ahead,

Olivia Elliott

company's Crafts Welcome XXXX. is today With Crown Call President Chief the Officer. Investor the Executive and you. Thank the third for me Randall Conference to quarter fiscal Chestnut, of

Randall Chestnut

everyone. afternoon, Good

Olivia Elliott

be available Central telephone hour of XX, at replay available call will days, can call of p.m. A end for the X:XX XXXX. replay and website the www.crowncrafts.com. be be Time X of call web this after February will accessed the XX our Also, by through a on visiting

Randall. dividends the that will I declaration today's Board assurances each turn listeners language Before and in common call. is of regarding company's history press the would cautionary on I now frequency language in remind any to the its related in dividend statements same of regard recently release. paying call the comments to That as in company and the like and the the expressly announced made the at conference the to forward-looking dividend, comments discretion disclaims of dividend. of today's to of remind we Directors, the contained conference company's yield call of the future made stock, annualized listeners company's that Also, are to to any we applies begin, over amount

Randall Chestnut

Call. and Inc. welcome and good much, Crafts, again to Conference Crown the you everyone, to Investors thank very Olivia, afternoon

to ended third year-to-date XXXX, we're the in and quarter. or released year, the this the $XX.X our for income highlights for on $XX.X in December sales Net third Net $XXX,XXX and up and or quarter the this will and of our third for bit to year represented from million of quarter sales increased she'll rapidly little in but quarter increase million year. now. FY opposed were the year, we quarter year Diluted a the year of period. of touch last third morning, and the later, share $X.XX landscape, proud $X,XXX,XXX back quarter, same Through X.X%. opened our going quarter the as our third navigated liquidation. Olivia included $X.X presented our adjusted have X.X%. I'm expand performance, this touch the XXX%. the a the performed has of quarter Before we to earnings team come unusual were well or on numbers XX, 'XX, year, bankruptcies, challenges, increase in we've this which during quarter which and of last to We're earnings this -- more. a quarter and market an the per year million, are closings last $X,XXX,XXX which the present $X.XX included customer in of And we, changing store retail third very which

year a was As we Gross company. we same for and for that we earlier in with current have have profit flat programs for feel the point XX.X% future the the a stated sales, quarter. calls, year the in bright of to products place quarter net basically that XX.X% prior

this from to the last XX.X% profit XX.X% year. year increased gross For period, X-month

company XX, Based as the the August an pleased X, to payment of again, the stock, Nanci and share. of we the confidence also paid reflects time, our in that on earnings This stock business, the the record and a of long-term of we of our the annualized Baby ended remained business and to offer be background board's that Freeman, XXXX. of joined a NoJo retirement the the XXXX, debt Effective business and release, & CEO company of Sheridan common cash and Donna to than shareholders. Kids. yield our on turn over President announced to closing April of provide A comments. perfectly it the Today, same balance of CEO Recently, excited a this replacement. Once have to of $X XX, company's per Baby company's represents we're million Kids, XXXX. quarter of of Donna Olivia We of quarterly longtime On Donna's the XX, XXXX, Directors sheet in $X.XX ongoing commitment close shareholders Series I'll $XX.X we dividend million with XXXX. price dividend we're of Thank team. X.X%. & for the availability revolver Nanci's side less January join as with dividend company, we fits announced and yesterday's Board announced the resume will March value With effective NoJo declared additional December the you. At as to planned President the strong. that, with

Olivia Elliott

I'm going only to give financial highlights.

million and during the of with refer amounted please $X.X the prior which increased $X.X million prior million compared the million partially third "R" the from million Babies"R"Us, Securities $X.X resulted X.X% sales prior $XX.X sales during $X.X $X in Sassy, prior of the that with year-to-date up $X.X XXXX, of million XX.X% company's to to and These XX-Q net sales Form year and filed sales Exchange were year Carousel $X.X the $XX.X Us, were up the Net were of with million from by the year. of million compared period. primarily prior in Carousel Commission $X.X the third to Toys million morning. quarter, sales year. to were from Year-to-date, million for quarter sales is million, of Sassy quarter in million the -- quarter for offset in were sales details, sales had more of which had Year-to-date, increase and acquisitions $XX.X the "R" fiscal sales $XX.X sales $X in the or million. million sales elimination period. year quarter prior this of Toys which net $X.X The of due Carousel, sales the or For

net the for competitor sales administrative quarter current increased year. yet quarter the first current as of with year to the $XXX,XXX due of year gross customers by effective decreased in year-to-date estimated associated increase XX% for transferring operations of upon is the and income the also "R" liquidation during XXXX. sales. for the a current the period quarter Toys current the that Gross profit with the year, "R" compared tax $XXX,XXX to included tax the net first year. compared and major included company $X.X remaining the period January the to increase the with by from of prior quarter profit XX.X% Tax prior costs the $XXX,XXX sales with the $XXX,XXX Us, the year-to-date million, in of year-to-date which most in an during Babies"R"Us year XX.X% XX.X% year. increased as the for Gross year-to-date to higher primarily in prior Marketing distribution been in-line profit charges, $XXX,XXX quarter quarter lower sales company's XX.X% net acquired costs, associated the During effective year-to-date. The Us, of and increased were credit prior million The as a which federal provision to Compton, Carousel by of $XXX,XXX is current periods the the Babies"R"Us. fees acquisition they year year sales year-to-date merchandise. estimated the of became XXXX during associated company, Rapids, have acquisition rate in and period Toys taxes $XXX,XXX are in and provision Babies"R"Us discount XX%, of Toys actually rate the Michigan, the of California, included the "R" from of continuing net an to $X.X $X.X from costs, was not based for on coverage prior quarter, periods included net in year expenses X, increase sales the current prior sales the of facility levels conducted million Sassy same XX%. year. to compared of during other the Grand corporate Contributing December included The current income to with inventory legislation annual entire enacted made had while would from of rate ordinarily Us, Carousel of shifted deep XX%

rate difference to approximately rate rate and lower periods $XXX,XXX XX.X%, The in the and expense This deferred for deferred during of differences the income tax reverse. of income based approximately a asset upon was year ended tax now required of state on As resulted assets tax year basis its company's X, Because net XXXX differences reverse to had fiscal as blended income federal composite, and for assets. been was a statutory rate of the deferred charge the XX.X%, prior these quarter resulting income fiscal liabilities. to company corporate between year. in, in began The that tax federal tax company phased expected foreign XXXX, revaluation of a income have enacted applied and upon company's the the net are discrete tax to financial year-to-date statement would of XX.XX% at provides recorded XXXX. previously taxes revalue income been composite tax financial the the statement April the the based company's

the and net income income unrecognized percentages periods net company's also apportionment impact measured in its a of benefits, of tax tax year-to-date resulted prior which of regarding expense for the charge revalued because company year. reserve state taxes, measurement federal Additionally, of during discrete quarter the tax to $XXX,XXX the certain the are

the continuing effective first entries of third the quarter these and benefits, tax period and XXXX, the the with combined or charges recorded fiscal in $X.X share nonvested now will during I unrecognized per the of return stock company of compared periods period of million year-to-date income discrete the fiscal resulted with operations, diluted same Randall. share same XXXX tax for also of of the X income quarter benefit. and or XX.X% fiscal per net prior Net associated $XXX,XXX from third income current taxes the quarter charges in overall of $X.XX period income XX.X% or XXXX compared share both year. per Net $X.XX the the share discrete recorded tax $X.X fiscal million diluted an The call diluted excess million the $X.XX and XXXX. and diluted for $X.XX income for year-to-date net XXXX. rate in $X.X provision the or or with for from for arising per tax income XXXX in for fiscal with months of was benefits vesting reserves During third was for period to

Randall Chestnut

very And you on you it up Denise, and line the Olivia, I'll thank that much. have. back to ask anyone on open for may any questions come

Operator

from question of your first And D.A. Instructions]. will [Operator be Linda Davidson. Bolton-Weiser

Linda Bolton-Weiser

wanted better particular, than we asking the area side. just guess expected. on was than better the I just margin report of by the expected. was In margin gross to was So that the earnings a start little we I that

wondering the just So type quarter? our in to If not, can XX Since expect positive given this there fourth we it? bit, quite performance little is quarter, anything fourth percentage that we that continue the good a into we have expectations in gross bit I'm in should unusually margin, raise level the a lower if of then quarter.

Randall Chestnut

the that work a system, which a answer. defers I not it's is quarter. certain short on and Linda, answer could out times -- roll answer in we the probably little we Well, The quarter is, bit up year, burden in a hung burden bit there's so burden the on a us based short little of fourth well, hurt the mean, of third

you, forward-looking I say it That's good the projection. without answer may give making is not I best as the third. So would that in in fourth as a quarter percentagewise, the the be quite margin, can

Linda Bolton-Weiser

I performance, you Or things affecting finding inventory strange with retails? with lighter retail little what could affecting are your just those Are about retail? on retail going a areas? you reporting it's could sales, Yes, so -- and comment same-store are that's not anything bit would we you? mean, pretty just a of they the helpful. Maybe, on inventory? the your And any going at maybe Walmart are sales Target what's then you on strong particular on going have sort reducing or there than you And environment? expected. on in maybe How talk

Randall Chestnut

loss and Well, accounts all the business huge the was were in X you from of in business was overcome our Toys Babies"R"Us, had made of tough -- two third that the X was Linda, with we to that from the We residual all is drag. sectors that that a the all mentioned, through of Walmart those very trying even third And of liquidated quarter the it there up, -- liquidation the overcome were and the quarter, so accounts, there in other actually were because across inventory still of thing to hangover Target. excess Us. still "R" deficit some

been lot the not buying closeout should of customers of Some had inventory. rates they because and still the that that have a were bought at buying they

third the So quarter. the had depressed down for pushed that also -- sales

Linda Bolton-Weiser

though there your some of destination? tone are like having that they on different sort some places that? with maybe replaced other before can of you're you as consumers to consumers Maybe success And to hadn't comment you of -- carrying? retailers think how those infant buy on the of then, some -- are of products examples are baby other retailers. you sounds Okay. that baby go a other reacting commented those and now catching And type having lost products thinking to and marketing? lot Can carried sales I and are in that Is still are retailers had them

Randall Chestnut

appreciably to quarter. the we the online biggest I up The was would do Linda, that swing, can that in that business be point Amazon

products. consumers so and carry to Amazon's saying, they there's more type And go I that and are looking can buy carrying than that." an "Oh, And yes, at consequently, option, now of used our

mean, definitely customers So was I got that a we've -- one. up other biggest that that the is that's to, we're plus. but

Linda Bolton-Weiser

do previously is -- And on have some front? expect you before helpful. a that bit Okay. update you going if expanding to you or on better distribution sales internationally, progress you And can any work any had your update -- to That's there alluded in more contribute to growth that forward? little

Randall Chestnut

Linda, we're pushing international we're -- the hard side yes, on still business. of still the

in couple I show for ever distributors at the think know, Cologne you September, time the a signed more showed first As since of we've we then. on

continue and forward. So pretty feeling some side business. increases think that good to we of the show we're about showing we international as increases, the It go will is

feel we yes, So good about that.

Linda Bolton-Weiser

have kind -- to incremental acquisition that mean, be Okay. from guess, anniversary-ed in And I so fully fiscal just will as the any an I acquisition incremental of won't Sassy quarter, review fourth contribution revenue. therefore, there

I I So that am to thinking the in way? in expected be somewhat the revenue, the be fiscal therefore, -- of down I right quarter, should mean guess, reported fourth revenue the

Randall Chestnut

a quarter, we're now, the Sassy was Sassy that. I of The correct fourth on of quarter, in and in that's very end But quarter. short period is shipping. and we're weeks short participated mean, quarter board, third the Well, forecasting, again, assumption for stopped your fully time before Linda, of a that, doing that we yes, the quarter, couple year the only last in

in fourth So we from don't an extra yes, any acquisitions get kick the quarter. recent

Linda Bolton-Weiser

again, then, Babies"R"Us -- of comparison, to I the drag, your And as off don't big should too it Okay. future, fully correct? it's in Toys going issue, being that it Us, that "R" the comparison such stop a seems that Toys the the anniversary-ed. want That fiscal far to beginning Us quarter get first me and but that XXXX? "R" Isn't year-over-year is into

Randall Chestnut

shut liquidation -- they fourth the goes It it go fourth okay, through March, they into until down. is the quarter. finally didn't quarter correct. That's when We

last will April, shut quarter, April you're into be of year. going had any But comparisons most with around over half in we we beginning February June, and of first -- right, May, the so March January, And circling Babies"R"Us. not

Linda Bolton-Weiser

guess, I It rate. the than just had little Great. lower expected. the And on bit in was tax then, quarter finally, we a

higher, For actually. little now, bit a was guess, I it

Randall Chestnut

higher. That's

Linda Bolton-Weiser

was it Yes, higher.

the -- in rate higher we guess, fourth that more quarter? continue the it's XX% quarter? in Or for had we should So I fourth like

Olivia Elliott

should The effective continue the tax rate for year hold. to

XX on, effective XX.X% said is what make head just effective the hold for sure saying it year. my we checking So right is I'm -- is the tax have I year tax for rate in -- rate the the to we're

be could change quarter. some would that we're for discrete for what But entries using there the rate. the annual Now that that's tax

Linda Bolton-Weiser

Okay. your any there Is And business. just you which immaterial quite tariff I in about can for in previous previously there? -- updates impact? of finally on much pretty had the impacts, -- really just ask are terms still the commented holding Is comments tariff

Randall Chestnut

of major coming affected pass Yes, did If we're of areas the were Linda, we not that But And that by couple on in it a footwear successful includes today, mean, far, prices the We they're and to know. them little been any I one very still but than to I'm if with -- retailer, a was don't happen, larger minimal. so it's done. on us. that, getting other. tariffs, products. have it's to But But those horizon. were they seen indication which will we date, more not of another could round our catch that's and minimal. of apparel, it we the certain

right, You're minimal. very

Operator

a have do We question Instructions]. Investor. Charles a Private from Levy, [Operator

Charles Levy

from million that $X.X expand that is in Could Or on something quarter, have million in expected? to is $X.X the comparable is seasonality? decline we The the that? Carousel you should --

Randall Chestnut

as other the it affected and by it's many a the that businesses. effect Charles, for as depressing not affected times the our sales well on Well, manner quarter called in in I we seasonality. has no, mean, negative infant talked softness It's a which naked before them phenomena the had about it's -- that with business crib,

Carousel. main behind driver in decline that's the So the

Charles Levy

up that which offsetting is you've up come Okay. been able softness? make any might that for there to product And

Randall Chestnut

have but the you tell sell to we're say we it's alternative directly and the it and in things alternative do to working that didn't hope Well, we will third in I forward. positive to obviously, going on works be which quarter, could products consumer,

Operator

and session for the to hand conclude time. conference at ladies like will question-and-answer the Mr. closing gentlemen, over this And Chestnut I his comments. would we to back Randall

Randall Chestnut

thank with with through and speaking up, and and XXXX, very year-to-date forward the -- support, a our of reminder customers we're the that largest much. wrap thank for came were of we And suppliers, the shareholders bankruptcy are in in second fourth We'd on the our be to pleased strong and we're their side. we the year. will to our to And our performances, Denise, next quarter will very weathered look you full like quarter you the continued and of of in year. very it all employees, much. thank it. very the you quarter and liquidation now, it thank We Olivia, results so at customer, for a you. be call June close conference fourth this just Again, -- which strong

Operator

conference attending for your At this line. Thank you, concluded. you may you Thank the disconnect time, sir. today's and has Ladies gentlemen, presentation.

Crown Crafts (CRWS) 8 Feb 192019 Q3 Earnings call transcript