Company: CRWS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001437749-25-026346
Chunk: 13

Company: CROWN CRAFTS INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 2
Chunk 13
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 options and the vesting of non-vested stock.
 
The ETR and the discrete income tax charges and benefits set forth above resulted in an overall provision for income taxes of 20.2% and 16.6% for the three-month periods ended June 29, 2025 and June 30, 2024, respectively.
 
Although the Company does not anticipate a material change to the ETR for the remainder of fiscal year 2026, several factors could impact the ETR, including variations from the Company’s estimates of the amount and source of its pre-tax income, and the actual ETR for the year could differ materially from the Company’s estimates.
 
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
 
Net cash provided by operating activities decreased from $8.0 million for the three-month period ended June 30, 2024 to $5.2 million for the three-month period ended June 29, 2025. The decrease in the current year was partially the result of an increase in inventories in the current year that was $2.9 million higher than the increase in the prior year and a decrease of $780,000 in net loss from the prior year to the current year. This decrease was partially offset by an increase in accounts payable in the current year that was $950,000 higher than the increase in the prior year.
 
Net cash used in investing activities, which were primarily associated with capital expenditures for property, plant and equipment, decreased from $284,000 in the prior year to $86,000 in the current year.
 
Net cash used in financing activities, which were primarily associated with net repayments under the revolving line of credit and payments of the term loan, decreased by $2.0 million from the prior to the current year.
 
As of June 29, 2025, the balance on the revolving line of credit with CIT was $7.7 million, there was no letter of credit outstanding and $12.2 million was available under the revolving line of credit with CIT based on the Company’s 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 under factoring agreements. Under the terms of the factoring agreements, CIT remits customer payments to the Company as such payments are received by CIT. As such, the Company does not take advances on the factoring agreements.