Crown Crafts (CRWS)
Q4 2013 Earnings Call
June 19, 2013 2:00 pm ET
Olivia W. Elliott - Chief Financial Officer, Principal Accounting Officer and Vice President
E. Randall Chestnut - Chairman of The Board, Chief Executive officer, President and Member of Capital Committee
David M. King - Roth Capital Partners, LLC, Research Division
James Fronda - Sidoti & Company, LLC
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Olivia W. Elliott
Thank you. Welcome to the Crown Crafts Investor Conference Call for the fourth quarter and full fiscal year 2013. With me today is Randall Chestnut, the company's President and Chief Executive Officer.
E. Randall Chestnut
Olivia W. Elliott
A telephone replay of this call will be available 1 hour after the end of the call through 8:00 a.m. Central Daylight Time on June 27, 2013. Also, a Web replay of this call will be available for 90 days and can be accessed by visiting our website at crowncrafts.com.
Before we begin, I would like to remind everyone of the cautionary language regarding forward-looking statements contained in the press release. That same language applies to comments made in today's conference call. I will now turn the call over to Randall.
E. Randall Chestnut
Olivia, thank you, and good afternoon, again, and welcome to the Crown Crafts, Inc. investor conference call for the full year FY '13 and the fourth quarter FY '13, both ending March 31, 2013 of this year.
I will handle some of the brief details. Olivia will elaborate some, and then we'll open up to any questions that anyone on the line may have.
Net sales for the quarter were $23.6 million as opposed to $24.8 million, a $1.2 million decrease, which is 4.9%. Net income for the quarter was $1,854,000 as opposed to $1,894,000 or a decrease of $40,000 or 2.1%. Diluted earnings per share were $0.19 for last year and also the current year.
Turning to the full year, net sales were $78.4 million as opposed to $85.3 million, a decline of $6.9 million or just over 8%. Net income for the year was $5,111,000 as opposed to $5,039,000 or an increase of $72,000 or 1.4%.
Diluted earnings per share were consistent year-over-year at $0.52. Net income for fiscal 2013 was the highest that we've seen since fiscal 2002, if you exclude the one-time effects of the $3.7 million after-tax gain on debt restructuring in fiscal 2007 and $4.2 million income tax benefit in fiscal 2006.
Longtime shareholders will recall that fiscal 2002 was the year the company began the company's strategic transformation by divesting legacy businesses and reemerging as a new focused -- new focus on infant and juvenile consumer products. We're very proud of this accomplishment.
It should be noted that late in the fourth quarter, we successfully sold the Churchill Weavers property of Berea, Kentucky. We've been actively marketing the land and the building since we'd closed Churchill in 2007. We recorded an after-tax loss of $62,000 for the sale, which were recorded in the numbers that I just reported to you.
It should be noted that this loss is -- represents $62,000, almost $0.01 per share. But I must say that after holding the property for as long as we did, it was a good loss.
Sales for the fourth quarter were impacted by several factors: number one, the discontinuation of the unprofitable private label bedding program that we've been talking about for the year. The impact in the fourth quarter and full year accounted for slightly more than half of the sales decline.
The other big driver for the quarter and also for the year, for the quarter and the full year, were both impacted negatively by the initial shipment of a modular program from a major customer being shifted from Q1 FY '13 back into Q4 of FY '12.
In addition, retailers remain vigilant in controlling their inventories and sell-through, and our retailers continue to be impacted negatively by the soft economy and the lower birth rate.
Gross profit percentage improved from 23.2% in the prior year quarter to 26% in the current year quarter and improved for the full year from 22.9% to 25.2%. The improvement can be attributed to 4 factors: one, the discontinuation of the private label bedding program, which was at a loss; two, improvement of prices from our slot of suppliers as raw material prices declined from all-time highs a couple of years ago; three, the continued success of our products that we have reengineered when raw material prices had previously escalated to an all-time high; and the last is increases for prices, where -- in prices where we felt that we could without major -- making major impacts into the sales.
The balance sheet. We finished the year with no debt and a small cash balance on hand. And I've got to tell you, that feels pretty good.