Crown Crafts Inc (CRWS, Financial) filed Quarterly Report for the period ended 2010-09-26.
Crown Crafts Inc has a market cap of $51.24 million; its shares were traded at around $5.54 with a P/E ratio of 10.26 and P/S ratio of 0.6. The dividend yield of Crown Crafts Inc stocks is 1.44%. Crown Crafts Inc had an annual average earning growth of 6.8% over the past 5 years.CRWS is in the portfolios of Jim Simons of Renaissance Technologies LLC, John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
Sales of bib, bath and disposable products increased for the six-month period of fiscal year 2011 as compared to the same period in fiscal year 2010. Sales increased by $2.2 million due in the aggregate to the Neat Solutions Acquisition and the Bibsters® Acquisition. Sales also increased by $2.7 million due to sales of new designs and promotions. Offsetting these increases were decreases of $2.5 million related to programs that were discontinued and lower replenishment orders.
Net cash used in investing activities was $1.7 million in the current year compared to $5.0 million in the prior year. Cash used in investing activities in the current included $2.1 million associated with the Bibsters® Acquisition, offset by proceeds of $505,000 from the maturity of a certificate of deposit purchased in the prior year in connection with the issuance on behalf of the Company of a standby letter of credit to guarantee the payment of certain of the Companys royalty obligations. Cash used in investing activities in the prior year included $4.4 million associated with the Neat Solutions Acquisition.
Net cash provided by financing activities in the current year was $1.7 million compared to cash of $2.6 million used in financing activities in the prior year. The increase in net cash provided by financing activities in the current year was primarily due to $5.5 million in higher net borrowings on the Companys revolving line of credit, offset by $750,000 in higher repayments of the Companys term debt obligations and $378,000 in higher treasury stock purchases.
Total debt outstanding under the Companys credit facilities before the reduction for the original issue discount on the non-interest bearing notes decreased from $23.4 million at September 27, 2009 to $7.9 million at September 26, 2010. The decrease is due primarily to net repayments on the revolving line of credit, the largest portion of which came from a reduction of the Companys cash reserves in December 2009, which were $12.0 million at September 27, 2009. The Company had built up its cash reserves in the prior year by drawing upon its revolving line of credit in order to preserve the Companys ability to meet its working capital needs in the event that the Companys primary lender should suffer an adverse liquidity event that would jeopardize the Companys ability to draw upon its revolving line of credit. At September 26, 2010, there was a balance due on the revolving line of credit of $5.8 million, there was a $500,000 letter of credit outstanding and the Company had $17.2 million available under the revolving line of credit based on its eligible accounts receivable and inventory balances.
To reduce its exposure to credit losses and to enhance the predictability of its cash flow, the Company assigns the majority of its trade accounts receivable to CIT pursuant to factoring agreements. CIT approves customer accounts and credit lines and collects the Companys accounts receivable balances. Under the terms of the factoring agreements, which expire in July 2013, CIT remits payments to the Company on the average due date of each group of invoices assigned. If a customer fails to pay CIT on the due date, the Company is charged interest on the unpaid balance at prime plus 1.0%, which was 4.25% at September 26, 2010, until payment is received. The Company incurred interest expense of $18,000 and $19,000 for the three-month periods ended September 26, 2010 and September 27, 2009, respectively, and $35,000 for each of the six-month periods ended September 26, 2010 and September 27, 2009, as a result of the failure of the Companys customers to pay CIT by the due date. CIT bears credit losses with respect to assigned accounts receivable from approved customers that are within approved credit limits. The Company bears the responsibility for adjustments related to returns, allowances, claims and discounts. CIT may at any time terminate or limit its approval of shipments to a particular customer. If such a termination were to occur, the Company must either assume the credit risk for shipments after the date of such termination or cease shipments to such customer.
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Crown Crafts Inc has a market cap of $51.24 million; its shares were traded at around $5.54 with a P/E ratio of 10.26 and P/S ratio of 0.6. The dividend yield of Crown Crafts Inc stocks is 1.44%. Crown Crafts Inc had an annual average earning growth of 6.8% over the past 5 years.CRWS is in the portfolios of Jim Simons of Renaissance Technologies LLC, John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
Highlight of Business Operations:
Sales of bib, bath and disposable products increased for the three-month period of fiscal year 2011 as compared to the same period in fiscal year 2010. Sales increased by $1.8 million due to sales of new designs and promotions and increased by $646,000 due to the Bibsters® Acquisition. Offsetting these increases were decreases of $1.5 million related to programs that were discontinued and lower replenishment orders.Sales of bib, bath and disposable products increased for the six-month period of fiscal year 2011 as compared to the same period in fiscal year 2010. Sales increased by $2.2 million due in the aggregate to the Neat Solutions Acquisition and the Bibsters® Acquisition. Sales also increased by $2.7 million due to sales of new designs and promotions. Offsetting these increases were decreases of $2.5 million related to programs that were discontinued and lower replenishment orders.
Net cash used in investing activities was $1.7 million in the current year compared to $5.0 million in the prior year. Cash used in investing activities in the current included $2.1 million associated with the Bibsters® Acquisition, offset by proceeds of $505,000 from the maturity of a certificate of deposit purchased in the prior year in connection with the issuance on behalf of the Company of a standby letter of credit to guarantee the payment of certain of the Companys royalty obligations. Cash used in investing activities in the prior year included $4.4 million associated with the Neat Solutions Acquisition.
Net cash provided by financing activities in the current year was $1.7 million compared to cash of $2.6 million used in financing activities in the prior year. The increase in net cash provided by financing activities in the current year was primarily due to $5.5 million in higher net borrowings on the Companys revolving line of credit, offset by $750,000 in higher repayments of the Companys term debt obligations and $378,000 in higher treasury stock purchases.
Total debt outstanding under the Companys credit facilities before the reduction for the original issue discount on the non-interest bearing notes decreased from $23.4 million at September 27, 2009 to $7.9 million at September 26, 2010. The decrease is due primarily to net repayments on the revolving line of credit, the largest portion of which came from a reduction of the Companys cash reserves in December 2009, which were $12.0 million at September 27, 2009. The Company had built up its cash reserves in the prior year by drawing upon its revolving line of credit in order to preserve the Companys ability to meet its working capital needs in the event that the Companys primary lender should suffer an adverse liquidity event that would jeopardize the Companys ability to draw upon its revolving line of credit. At September 26, 2010, there was a balance due on the revolving line of credit of $5.8 million, there was a $500,000 letter of credit outstanding and the Company had $17.2 million available under the revolving line of credit based on its eligible accounts receivable and inventory balances.
To reduce its exposure to credit losses and to enhance the predictability of its cash flow, the Company assigns the majority of its trade accounts receivable to CIT pursuant to factoring agreements. CIT approves customer accounts and credit lines and collects the Companys accounts receivable balances. Under the terms of the factoring agreements, which expire in July 2013, CIT remits payments to the Company on the average due date of each group of invoices assigned. If a customer fails to pay CIT on the due date, the Company is charged interest on the unpaid balance at prime plus 1.0%, which was 4.25% at September 26, 2010, until payment is received. The Company incurred interest expense of $18,000 and $19,000 for the three-month periods ended September 26, 2010 and September 27, 2009, respectively, and $35,000 for each of the six-month periods ended September 26, 2010 and September 27, 2009, as a result of the failure of the Companys customers to pay CIT by the due date. CIT bears credit losses with respect to assigned accounts receivable from approved customers that are within approved credit limits. The Company bears the responsibility for adjustments related to returns, allowances, claims and discounts. CIT may at any time terminate or limit its approval of shipments to a particular customer. If such a termination were to occur, the Company must either assume the credit risk for shipments after the date of such termination or cease shipments to such customer.
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