Company: CRWS
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001437749-25-034222
Chunk: 15

Company: CROWN CRAFTS INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 2
Chunk 15
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2024 to the six-month period ended September 29, 2025. The Company’s estimated annual effective tax rate (“ETR”) was 23.0% and 21.9% for the three-month periods ended September 28, 2025 and September 29, 2024, respectively, and was 25.1% and 21.4% for the six-month periods ended September 28, 2025 and September 29, 2024, respectively. Our effective rate was impacted by discrete items such as the effects of tax shortfalls and excess tax benefits arising from the forfeiture and expiration of stock options and the vesting of non-vested stock.
 
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 $7.0 million for the six-month period ended September 29, 2024 to $4.4 million for the six-month period ended September 28, 2025. The decrease in the current year was partially the result of an increase in inventories in the current year that was $3.1 million higher than the increase in the prior year and a decrease of $3.2 million in accrued liabilities from the prior year to the current year. This decrease was partially offset by a decrease in accounts receivable in the current year that was $4.3 million higher than the decrease in the prior year.
 
Net cash used in investing activities decreased from $16.8 million in the prior year to $260 thousand in the current year which were primarily associated with capital expenditures for property, plant and equipment. Prior year capital expenditures included $16.4 million for the Acquisition.
 
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, was $3.9 million compared to net cash provided by financing activities in the prior year of $11.0 million. This decrease was due to the issuance of an $8.0 million term loan in the prior year as well as the Company paying down debt in the current year.
 
As of September 28, 2025, the balance on