CRWS - Earnings call transcript Q1 2020

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Operator

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

Your host for today’s call is Mr. Randall Chestnut, Chairman, President and Chief Executive Officer.

[Operator Instructions] Any reproduction of this call in whole or in part is not permitted without prior written authorization from Crown Crafts, Inc.

As a reminder, this conference is being recorded today, August 14, 2019.

I Ms. like time, call turn this to over at would to now the And Vice and Elliott, Olivia President call. begin the CFO who will Ms. ahead. Elliott, go please

Olivia Elliott

Thank is Randall call the investor Company’s of you. Chief Crown Chestnut, XXXX. the Executive and Officer. fiscal today first quarter Welcome conference me With President the to for Crafts

Randall Chestnut

afternoon. Good

Olivia Elliott

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

language annualized Before recently call. today’s language we Statements to press conference to contained in to remind I same made the related We frequency Company’s history like yield dividend the the regard its in regarding to and Company’s the Company’s discretion disclaims of and Company of any of today’s to in dividend, listeners listeners future applies of Also Board is comments any comments expressly the conference remind common Forward-Looking call as would the made assurances each at the the amount of in are declaration the cautionary That announced on Directors that of and that paying begin, release. dividend. dividends the stock.

over call turn Randall. now to will the I

Randall Chestnut

first quarter June investor (Ph), [Anita] ended welcome XXXX you to very FY and thank our call and Olivia XXXX. quarter for much conference of XX that the everyone

come for at I’m those it release quarter issued before more morning open outlining of of and back going questions this up to add touch and open market it to the end. press and we on the we Olivia will Before the a

was same or last sales net XXX%. income of XXXX of an FY or X.XXX XXX,XXX the or to XXX,XXX same increase quarter were opposed of quarter million year an quarter the in in X.X%. opposed the of XX.XXX Net XXX,XXX a increase as XX.XXX an as million to million For increase

opposed Diluted year to profit earnings per increase previous as quarter same the of in share the year. from from gross year XX.X% sales in last $X.XX in sales current quarter. net quarter the share were $X.XX of net XX.X% a The

quarter pleased been we had our our weakest as quarter year year. sales quarter, last Historically in to this net has the first that are improvement compared of first

very with net pleased also income in share. are margin, per We and gross improvement earnings

year a net will adjustment diluted Current income was to tax share Olivia income a little per that later. $X.XX detail more in impacted state favorably by due discuss

liquidated that Us remaining we the since liquidation. label and R quarter, Babies private had inventory they all for During we filed have bankruptcy

are been very to that the rearview put pleased able have mirror. we in this We

of with had largest our Company We tremendous and the which The [indiscernible]. the loss storm we had impact years couple customer, naked transition came and the well second of out very and healthy. our controlled other hand cost crib a the to on a of

are current job Our getting results. with this an difficult pleased we amazing period and staff did the very through

to availability cash finished $X.X million We balance with borrowing unused million. $XX.X quarter of a the and

an will the announced common A Our the strong. of balance a dividends. pleased yesterday's shareholders Board also announcement of per very that were stock record stock very the sheet price. closing $.XX based annualized with on XXXX. shareholders remains our yield business on September continue Series to to cash of the quarterly XX, X, on of and in share, close cash at Today represents dividend its paid reward of X.X% Directors to This declared of which October XXXX Company our We be

color. any to to I add and remarks give That back will Olivia concludes it my

Olivia Elliott

give Thank you. I’m to highlights. financial only going

morning. For filed Form with Exchange this Securities the Commission XX-K more Company’s and the to detail analysis, please refer

XXXX, million primarily by of compared to increase million $XXX,XXX and fiscal sales Net sales for of prior quarter increasing an first is with quarter the were The $XXX,XXX. and blankets million toys disposable of bedding with sales in X.X $XX.X and X.X%. due by the of increase first overall $XX.X or higher of for bibs, year sales orders the replenishment decreasing

Gross increase XX.X% is in the the to profit year. of in for quarter. current of prior net higher increased due sales year by year the The an $XXX,XXX to in increase XX.X% current sales sales net amount from the primarily

further XX.X% in train net Grand distribution year. from in Michigan and this to in XXX,XXX Compton, the in California. from by year inventory Rapids, Marketing quarter to a to decreased administrative sales sales prior $XXX,XXX XX.X% included expenses expenses amount The of Company’s facility of Sassy decrease net year prior the

annual The is operations estimated effective taxes continuing in tax compared the to year based current quarter. of income year rate from provision XX.X% prior an upon XX% for

a During XXX,XXX. the quarter for a reversed reported discreet which benefit tax had previously XXXX reserves fiscal XXXX, for that year it tax of current resulted in the of Company's income unrecognized liability through recognition years

vested current recorded prior the tax quarters both discrete the unrecognized period during from non charges addition entries benefit Company the during divesting liability. also and and tax for excess stock reserves with of associated In arising year or recorded

overall The operations from of X% current tax provision the continuing year for for the these rate income combined tax XX.X% charges and resulted with year. of benefit effective in for income prior effect the discrete and an taxes

$X.XX diluted first associated tax interest income $X.XX quarter associated million $X.X quarter was Net diluted and benefit the of reversal the first fiscal per income the of included the fiscal million with Net or discrete penalty. in share. XXXX or the which was per XXXX share of for for $X.XX $XXX,XXX income

it give now will I back to Randall. And

Randall Chestnut

up Anita for it back Olivia, home, open come if much. you Q&A. you now can you very thank

Operator

Sterling today Advisers. first from Josh question Thank ahead. Zenith Please Instructions] you. with Peters comes [Operator Our go

Josh Peters

rising in Hello, congratulations thank and you year-over-year. call for taking my on the share profit increase

Randall Chestnut

you? are How Josh. Thanks

Olivia Elliott

How you? are

Josh Peters

and just the little growth year-over-year, again. what and down side. to a differences trends a about good bedding blankets and is to decline Did can up in just the the driving but bedding Yes, bib you side sales where continued bit want business color on in the little dig X.X% the toy XX% add

Randall Chestnut

some we really There shipped in that standout fixture that some nothing I is mean, the increase quarter of except degree placements. quarter have it repeat is appreciable placements spectacular it. any is the and of Josh that just of of new majority and the calls business to an that part in fill and us and for regular

Josh Peters

Okay. And the is side function make that a the toll. current still decline on taking bedding it of

Randall Chestnut

reorders of combination of bit quite more year one of of also an over it quarter. is took on a a That the our advantage up had the in and inventory quarter, that [Mojo] It a quarter first probably first into of than reduced of on carried combination fourth and the in the customers business crib and effect stocked that else. (Ph) is anything which the bedding last

Josh Peters

Okay.

the back can the So somebody notice quarters? couple But of just I going a like net on your else a down, position. normal cash then back get might all but balances great you will run expect that in and it It positive it normal off to still maybe of next variability solid here cash that from what I receivable level debt down is or sounds we question think has forward paid way on that see that let position as end the in come on is other progress One line. your profitability. you

Randall Chestnut

no statement but will but worry forward-looking can Josh that predict about the to - be cash going tell I revolver to is degree, and yes would a where be, of no bounce out appreciable that for to the year, our okay. in remainder you it, of it the

Josh Peters

Okay. again quarter. thank congratulations you much very a and solid on

Randall Chestnut

day. a have much, Thank you very good

Olivia Elliott

Thank you very much.

Operator

There to to Chestnut conference further to turn no for be I would closing Randall questions. any appears remarks. like back the over

Randall Chestnut

well got very one more Anita concludes that - and Okay on Anita. we and you thank much that.

Operator

from with go Ralph First Manhattan. comes question ahead. Please Next Marash

Ralph Marash

Good there. letting in sneak afternoon. Thanks for at the end me

quarter beat was Just order orders, that that the the was two early attempt an quick, to tariffs fourth reason. the

Randall Chestnut

really, it negative I it obviously then in a ended year a is and up about obviously but just was nothing would following end all. him Not fourth quarter. very I spectacular on There except our you and when took that in advantage customers some well, name was fourth it that do stocking the the recognize customers which related it at a the or don’t - spectacular inventory you the it quarter, and gave if was quarter think it. No about on that unusual that March effect tariffs has nothing there they to of

Ralph Marash

regarding your suppliers. so tariff I order concerns just expand kind seeing your either are Okay issues tariffs of customer from or you own with will pattern the in any question, then

Randall Chestnut

three. two, degree this our been have the to is that that Well to we of categories has was balance round product one one of of in of to okay. and The postponed two round get that round of round had were of and was going the two our only - sizable affected, four XXXX is December in okay. and be now point some to our announced first the most September effective XX% in that

before have are had are rates have the we on, it and through pre the and and we are and accepting warehouse we we we pass have philosophy some done we passing meaning have understand to it are has prices repeated been we enlarge they over we that if people is put again our it back, the and work by going the in new And over through but in. facing push inventory will and most tariff and that it we on got raise going it tariffs to at

with pass of But by a most but form it, but to bit We the a and that it are people we stand work pushback, have going firm retailer taken fashion. have and we on. that accepted had have pretty will little in we large,

Ralph Marash

thanks the and you questions. other Thank answering for

Randall Chestnut

Thank being on. you for very Thanks much.

Olivia Elliott

Thank you.

Operator

comes Please from with Foulkes go question next Fred ahead. Boston University. The

Fred Foulkes

a quarter; my is it answered really on tariffs. Hi, great questions you

cost. some customers with your to larger wondering are willing accept of was are to I passing your - additional able So been they still on you

Randall Chestnut

it has that that just on the they have been far, it. have only had we and not item out So Fred performing or out resistance. and the and That is where sitting retailer sizable one well discontinue had was cash let's have not that was said may we okay, okay, just may item it anyway one continued bubble an we have been had

a that price We say answer the have and six you “oh had tariffs we increase” on our pass a months six to notice to through got didn’t so is months some get give notice to sorry. people

on with work you the existing we are passing but will inventory, it. We

major on. been that pass of to Walmart lot a it And going in has they particular are retailers one very vocal

inflationary are passing it. And a very so is there and taken its stand it and firm question are we And no we about on.

not see are to Our healthy, they those healthy eat are but margins as increases. of enough kind you

Fred Foulkes

you. thank Alright,

Randall Chestnut

probably You Thank welcome. are you.

Olivia Elliott

Thank you.

Operator

ahead. go next question Please comes [Denis] The from (Ph) [indiscernible].

Unidentified Analyst

Olivia. and Randall afternoon good Yes,

Just for basis? one a you that out from Sassy are sales to willing the actually previous calls Carousel, me. called a contributions you quick and do In is have continued something on

Olivia Elliott

we of then full in didn’t been you a in it We the had that and had other it one because reason partial because years was between doing last major a The year year-over-year, couple primary do through so swing. differences caused year it year the that.

So we really year. didn’t call out specifically this those

Unidentified Analyst

of we Okay just commentary Carousel any basis where up, flat, a than on curiosity year-over-year on bedding saw basis, performed a out was how it year-over-year down down? on

Randall Chestnut

it down affects was little, a was of is basically and in bedding it a the quail. too by okay. affected netted for Denis, It

it slightly, yes. down So was

Unidentified Analyst

lot. all thank Excellent, That it. a me, for thanks Got you. is

Olivia Elliott

Thank you.

Randall Chestnut

Welcome.

Operator

Randall the turn to This closing would to our like session. concludes conference over for remarks. back question-and-answer I Chestnut now any

Randall Chestnut

in another Anita, and emphasize thank we your support company so. to company very optimistic employees, continued would a or you like speak the good thank and Thank pleased would and the excited we is repeat day. I very like begin suppliers, future is that closing we year last their very Okay three solid. will very you remarks, much. I I to again you. as Have your and and shareholders are just you And customers Thank will for to months all our solid. about

Operator

is you for conference Thank today’s This concluded. attending now presentation.

You disconnect. now may

Crown Crafts (CRWS) 14 Aug 192020 Q1 Earnings call transcript