Crown Crafts op. profit up 199% in Q4
Furniture Today Staff -- Furniture Today, June 23, 2003
Boosting sales at a double-digit pace, and at the same time building margins and hacking away at costs, infants and juvenile products producer Crown Crafts Inc. recorded a $2.1 million profit in the fourth quarter ended March 30, up 4.3 percent from last year.
Profits would have climbed sharply higher as the company bounds back following a sweeping restructuring, but tugging at the bottom line is a $1.8 million reserve set aside for the shutdown of the company's manufacturing operations in Mexico.
Lifted by the sales, stronger margins and lower costs, operating profits virtually tripled, rocketing ahead by 198.9 percent, to $3.2 million from $1.1 million last year.
Driving the big improvement in operating profits, the company continued to take a scythe to costs, reducing its overhead by more than 26 percent after it shifted its corporate offices to Gonzales, LA, from Atlanta, GA, down-sizing the headquarters staff. Operating expenses were slashed by 26.1 percent, to $3.2 million from $4.4 million last year, generating a cash savings of $1.1 million. Measured as a percentage of stronger sales, costs improved by 12.1 percent form 18.4 percent a year ago.
Providing another lift to the bottom line, average gross margin improved by 110 basis points, or 1.1 percentage points, to 24.0 percent form 22.9 percent last year. Gross margin dollars jumped up by 18.3 percent, to $6.4 million from $5.4 million.
Wall Street clearly relished the news — it hasn't had much good news out of textiles producers lately — and drove Crown Crafts stock higher by 14.3 percent, or 10 cents a share, to a recent high of 80 cents.
Crown Crafts Inc.
|Qtr. 3/30 (x000)||2003||2002||% change|
|a-12-month results in 2003 include a restructuring of charge of $1.8 million; and income-tax expense of $264,000. Compared income-tax benefit of $1.9 million in 2002. 2002 earnings include a one-time gain of $25.0 million gain on the retirement of debt as part of an out-of-court financial restructuring in which the company surrendered an equity position to creditors in return for debt forgiveness.
|Oper. income (EBIT)||3,192||1,068||198.9|
|Average gross margin||24.0%||22.9%||—|
|Oper. income (EBIT)||8,734||5,056||72.7|
|Per share (diluted)||0.12||1.37||-91.2|
|Average gross margin||22.6%||22.0%||—|
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