Wed, Jun 25, 11:02 AM (18 days ago)
### Summary of Crown Crafts, Inc. (CRWS) 10-K Annual Report **Financial Performance:** - **Revenue:** $87.3 million for fiscal year 2025, a slight decrease of $0.4 million (0.4%) from fiscal year 2024. - **Gross Profit:** $21.3 million, a decrease of $1.7 million (7.5%) from fiscal year 2024. - **Net Income:** $(9.4) million, a significant decrease from $4.9 million in fiscal year 2024. - **Earnings Per Share:** $(0.90) for fiscal year 2025, compared to $0.48 in fiscal year 2024. **Strategic Overview:** - **Acquisition:** On July 19, 2024, NoJo acquired substantially all assets of Baby Boom Consumer Products, Inc. for $18.0 million, funded by an $8.0 million term loan and additional borrowings under the revolving line of credit with CIT. - **Market Position:** Crown Crafts operates in the infant, toddler, and juvenile products segment, with products including bedding, diaper bags, bibs, toys, and feeding products. The company markets its products under various trademarks and licenses. **Future Outlook:** - **Tariffs and Sourcing:** The company faces challenges due to U.S. tariffs on imports from China, which have increased costs and affected shipments. The company is evaluating the impact and potential mitigation strategies. - **Customer Concentration:** Walmart and Amazon represented 66% of gross sales in fiscal year 2025, indicating a significant reliance on these two customers. **Risk Factors:** - **Customer and License Risks:** The loss of key customers or licenses could materially impact revenue. - **Tariffs and Sourcing Risks:** Tariffs on imports from China pose risks to cost and sourcing. - **Economic Conditions:** Inflation and macroeconomic conditions could affect consumer purchases and the company's financial results. **Financial Condition:** - **Cash Flow:** Net cash provided by operating activities increased to $9.8 million in fiscal year 2025 from $7.1 million in fiscal year 2024. - **Debt:** The company has a revolving line of credit and a term loan with CIT, with a total debt of $18.3 million as of March 30, 2025. **Market Position Changes:** - **Customer Base:** Walmart and Amazon are the top customers, representing a significant portion of sales. - **Licensed Products:** 50% of gross sales in fiscal year 2025 were from licensed products, with key licenses expiring in 2025. **Amendment Details (if applicable):** - **Subsequent Events:** On June 23, 2025, the company amended its financing agreement with CIT to maintain Excess Availability and reinstate the fixed charge coverage ratio. **Conclusion:** Crown Crafts, Inc. faces challenges related to tariffs, customer concentration, and economic conditions. The company's financial performance has declined, with a significant decrease in net income. The acquisition of Baby Boom Consumer Products, Inc. and strategic initiatives are part of the company's efforts to mitigate risks and maintain market position.