##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended July 2, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
File No. 1-7604
 CROWN CRAFTS, INC.


Delaware
    
    58-0678148(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer Identification No.)








þ o
  o o þ
  o þ




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TABLE OF CONTENTS  CROWN CRAFTS, INC. AND SUBSIDIARIESCROWN CRAFTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three-Month Periods Ended July 2, 2006 and July 3, 2005 (UNAUDITED) (amounts in thousands, except per share amounts)CROWN CRAFTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three-Month Periods Ended July 2, 2006 and July 3, 2005 (UNAUDITED) (amounts in thousands)CROWN CRAFTS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTSITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4  CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONItem 1   Legal ProceedingsItem 1A   Risk FactorsItem 2   Unregistered Sales of Equity Securities and Use of ProceedsItem 3   Defaults Upon Senior SecuritiesItem 4   Submission of Matters to a Vote of Security HoldersItem 5   Other InformationItem 6   ExhibitsSIGNATURESRule 13a-14(a)/15d-14(a) Certification by the CEORule 13a-14(a)/15d-14(a) Certification by the CFOSection 1350 Certification by the CEOSection 1350 Certification by the CFO    Table of Contents  
  
 July 2, 2006
    
    
    April 2, 2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    7,578
    
    
    $
    3,790Accounts receivable (net of allowances of $983 at July 2, 2006 and $1,164 at April 2, 2006)Due from factor
    
    
    9,613
    
    
    
    12,465Other
    
    
    2,597
    
    
    
    1,992Inventories, net
    
    
    13,524
    
    
    
    9,742Prepaid expenses
    
    
    1,058
    
    
    
    1,177Deferred income taxes
    
    
    990
    
    
    
    990Total current assets
    
    
    35,360
    
    
    
    30,156Property, plant and equipment  at cost:Land, buildings and improvements
    
    
    1,375
    
    
    
    1,375Machinery and equipment
    
    
    2,447
    
    
    
    2,459Furniture and fixtures
    
    
    649
    
    
    
    6494,471
    
    
    
    4,483Less accumulated depreciation
    
    
    3,033
    
    
    
    2,945Property, plant and equipment  net
    
    
    1,438
    
    
    
    1,538Other assets:Goodwill, net
    
    
    22,884
    
    
    
    22,974Deferred income taxes
    
    
    2,926
    
    
    
    3,397Other
    
    
    197
    
    
    
    114Total other assets
    
    
    26,007
    
    
    
    26,485Total Assets
    
    $
    62,805
    
    
    $
    58,179LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    5,945
    
    
    $
    3,511Accrued wages and benefits
    
    
    1,306
    
    
    
    942Accrued royalties
    
    
    1,095
    
    
    
    559Other accrued liabilities
    
    
    550
    
    
    
    367Current maturities of long-term debt
    
    
    33
    
    
    
    36Total current liabilities
    
    
    8,929
    
    
    
    5,415Non-current liabilities:Long-term debt
    
    
    24,123
    
    
    
    23,922Total non-current liabilities
    
    
    24,123
    
    
    
    23,922Commitments and contingencies
    
    
    
    
    
    
    Shareholders equity:Common stock  par value $0.01 per share; 74,000,000 shares authorized; 9,505,937 shares
outstanding at July 2, 2006 and April 2, 2006
    
    
    95
    
    
    
    95Additional paid-in capital
    
    
    38,244
    
    
    
    38,244Accumulated deficit
    
    
    (8,586
    )
    
    
    (9,497
    )Total shareholders equity
    
    
    29,753
    
    
    
    28,842Total Liabilities and Shareholders Equity
    
    $
    62,805
    
    
    $
    58,179
 See notes to unaudited condensed consolidated financial statements.




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July 2,
    
    
    July 3,2006
    
    
    2005Net sales
    
    $
    16,164
    
    
    $
    13,659Cost of products sold
    
    
    11,584
    
    
    
    10,692Gross profit
    
    
    4,580
    
    
    
    2,967Marketing and administrative expenses
    
    
    2,450
    
    
    
    2,468Income from operations
    
    
    2,130
    
    
    
    499Other income (expense):Interest expense
    
    
    (723
    )
    
    
    (802
    )Other  net
    
    
    119
    
    
    
    42Income (loss) before income taxes
    
    
    1,526
    
    
    
    (261
    )Income tax expense
    
    
    615
    
    
    
    8Net income (loss)
    
    $
    911
    
    
    $
    (269
    )Basic income (loss) per share
    
    $
    0.10
    
    
    $
    (0.03
    )Diluted income (loss) per share
    
    $
    0.04
    
    
    $
    (0.03
    )Weighted average shares
outstanding  basic
    
    
    9,506
    
    
    
    9,506Weighted average shares
outstanding  diluted
    
    
    22,137
    
    
    
    9,506
 See notes to unaudited condensed consolidated financial statements.
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July 2,
    
    
    July 3,2006
    
    
    2005Operating activities:Net income (loss)
    
    $
    911
    
    
    $
    (269
    )Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation of property, plant and equipment
    
    
    117
    
    
    
    109Goodwill write-off
    
    
    90
    
    
    
    Deferred income taxes
    
    
    471
    
    
    
    Gain on sale of property, plant and equipment
    
    
    (11
    )
    
    
    Discount accretion
    
    
    207
    
    
    
    183Changes in assets and liabilitiesAccounts receivable
    
    
    2,247
    
    
    
    5,111Inventories, net
    
    
    (3,782
    )
    
    
    (3,195
    )Prepaid expenses
    
    
    119
    
    
    
    110Other assets
    
    
    (83
    )
    
    
    (6
    )Accounts payable
    
    
    2,434
    
    
    
    1,957Accrued liabilities
    
    
    1,083
    
    
    
    136Net cash provided by operating activities
    
    
    3,803
    
    
    
    4,136Investing activities:Capital expenditures
    
    
    (17
    )
    
    
    (195
    )Proceeds from disposition of assets
    
    
    11
    
    
    
    Net cash used in investing activities
    
    
    (6
    )
    
    
    (195
    )Financing activities:Payment of long-term borrowing
    
    
    (9
    )
    
    
    (4,503
    )Net cash used in financing activities
    
    
    (9
    )
    
    
    (4,503
    )Net increase (decrease) in cash and cash equivalents
    
    
    3,788
    
    
    
    (562
    )Cash and cash equivalents at beginning of period
    
    
    3,790
    
    
    
    955Cash and cash equivalents at end of period
    
    $
    7,578
    
    
    $
    393Supplemental cash flow information:Income taxes received
    
    $
    
    
    
    $
    (41
    )Interest paid
    
    
    389
    
    
    
    679
 See notes to unaudited condensed consolidated financial statements.
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1.
    
    Basis of Presentation:The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of
America applicable to interim financial information and the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the information
and disclosures required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, such interim
consolidated financial statements contain all adjustments necessary to present fairly the
financial position of Crown Crafts, Inc. (the Company) as of July 2, 2006 and the results of
its operations and cash flows for the periods presented. Such adjustments include normal
recurring accruals. Operating results for the three-month period ended July 2, 2006 are not
necessarily indicative of the results that may be expected for the year ending April 1, 2007.
For further information, refer to the consolidated financial statements and footnotes thereto
included in the annual report on Form 10-K for the year ended April 2, 2006 of the Company.Revenue Recognition:Sales are recorded when goods are shipped to customers and are reported net
of allowances for estimated returns and allowances in the consolidated statement of income.
Allowances for returns are estimated based on historical rates. Allowances for returns,
advertising allowances, warehouse allowances and volume rebates are netted against sales. These
allowances are recorded commensurate with sales activity and the cost of such allowances is
netted against sales in reporting the results of operations. Shipping and handling costs, net
of amounts reimbursed by customers, are relatively insignificant and are included in net sales.Use of Estimates:The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Significant estimates
are made with respect to the allowances related to accounts receivable for customer deductions
for returns, allowances, and disputes. The Company has a certain amount of discontinued and
irregular raw materials and finished goods which necessitate the establishment of inventory
reserves which are highly subjective. Actual results could differ from those estimates.Segment and Related Information:The Company operates primarily in one principal segment,
infant and juvenile products. These products consist of infant bedding, bibs and soft goods.Impairment of Long-lived Assets, Identifiable Intangibles and Goodwill:The Company reviews for
impairment of long-lived assets and certain identifiable intangibles whenever events or changes
in circumstances indicate that the carrying amount of any asset may not be recoverable. In the
event of impairment, the asset is written down to its fair market value. Assets to be disposed
of, if any, are recorded at the lower of net book value or fair market value less cost to sell
at the date management commits to a plan of disposal and are classified as assets held for sale
on the consolidated balance sheet.Goodwill, which represents the unamortized excess of purchase price over fair value of net
identifiable assets acquired in business combinations, was amortized through March 31, 2002
using the straight-line method over periods of up to 30 years. The Company discontinued
amortization of goodwill effective April 1, 2002. The Company reviews the carrying value of
goodwill annually and sooner if facts and circumstances suggest that the asset may be impaired.
Impairment of goodwill and write-downs, if any, are measured based on estimates of future cash
flows. Goodwill is stated net of accumulated amortization of $6.4 million and $6.3 million at
July 2, 2006 and April 2, 2006, respectively. The Company performed fair value based impairment
tests on its goodwill in accordance with Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets. With the exception of goodwill related to
Churchill Weavers, Inc. (Churchill), the Company determined that the fair value exceeded the
recorded value at April 4, 2005 and April 3, 2006. Churchills goodwill of $90,000 was written
off in June 2006 due to its decline in sales volume and profitability in recent years which were
indicative of an impairment.
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Provision for Income Taxes:The provisions for income taxes include all currently payable
federal, state and local taxes that are based upon the Companys taxable income and the change
during the fiscal year in net deferred income tax assets and liabilities. The Company provides
for deferred income taxes based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates that will be in effect when the differences
are expected to reverse. For the three-month period ended July 3, 2005, deferred tax assets
were offset by a valuation allowance as available evidence did not indicate that the assets
would be realized. In the fourth quarter of fiscal 2006, the Company determined that, due to
taxable earnings generated in recent years, it is more likely than not that the benefit would be
realized prior to the expiration of its $11.2 million net operating loss carryforward and
consequently the valuation account was removed.Allowances Against Accounts Receivable:The Companys allowances against accounts receivable are
primarily contractually agreed upon deductions for items such as advertising and warehouse
allowances and volume rebates. These deductions are recorded throughout the year commensurate
with sales activity. Funding of the majority of the Companys allowances occurs on a
per-invoice basis.The allowances for customer deductions, which are netted against accounts receivable in the
consolidated balance sheets, consist of agreed upon advertising support, markdowns and warehouse
and other allowances. Consistent with the guidance provided in EITF 01-9, all such allowances
are recorded as direct offsets to sales and such costs are accrued commensurate with sales
activities. When a customer requests deductions, the allowances are reduced to reflect such
payments.The Company analyzes the components of the allowances for customer deductions monthly and
adjusts the allowances to the appropriate levels. The timing of the customer initiated funding
requests for advertising support can cause the net balance in the allowance account to fluctuate
from period to period. The timing of such funding requests should have no impact on the
consolidated statements of income since such costs are accrued commensurate with sales activity.Royalty Payments:The Company has entered into agreements that provide for royalty payments
based on a percentage of sales with certain minimum guaranteed amounts. These royalty amounts
are accrued based upon historical sales rates adjusted for current sales trends by customers.
Total royalty expenses included in cost of sales amounted to $1 million in each of the three
months ended July 2, 2006 and July 3, 2005, respectively.Stock-Based Compensation:In December 2004, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123 (R), Share Based Payment.SFAS No. 123 (R) supersedes Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and amends
SFAS No. 95, Statement of Cash Flows. SFAS No. 123 (R) requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the income statement
based on their fair values. Pro forma disclosure is no longer an alternative. As permitted by
SFAS No. 123, prior to April 3, 2006, the Company accounted for share-based payments to
employees using the intrinsic value method and, as such, generally recognized no compensation
expense for employee stock options. The Company has adopted SFAS No. 123 (R) effective April 3,
2006 using the modified-prospective method. Under the modified-prospective method, the prior
periods financial statements are not restated. As no employee stock options were granted in
the current period and the amount of nonvested options outstanding were insignificant, the
adoption of SFAS No. 123 (R) had no material impact on the Companys results of operations for
the quarter ended July 2, 2006. The impact on future periods will be dependent on levels of
share based payments granted in the future.Recently Issued Accounting Standards:In May 2005, the FASB issued SFAS No. 154, Accounting
Changes and Error Corrections. This statement is a replacement of APB Opinion No. 20,
Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial
Statements, and changes the requirements for the accounting for and reporting of a change in
accounting principle. This statement applies to all voluntary changes in accounting principle
and to changes required by an accounting pronouncement in the unusual instance that the
pronouncement does not include specific transition provisions. This statement requires
retrospective application to prior periods financial statements of changes in accounting
principle, unless it is impracticable to determine period-specific effects of an accounting
change on one or more individual prior periods presented. In such circumstances the new
accounting principle would be applied to the balances of assets and liabilities as of the
beginning of the earliest period for which retrospective application is practicable with a
corresponding adjustment made to the opening balance of retained earnings for that period rather
than being reported in an income statement. Further, the accounting principle is to be applied
prospectively from the earliest date when it is impracticable to determine the effect to all
prior periods. This statement is effective for the Company as of April 3, 2006. Adoption of
this statement had no impact on the results of operations for the quarter ended July 2, 2006.
Adoption of this statement could have an impact if there are future voluntary accounting changes
and error corrections.
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In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxesan interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting
and disclosure for uncertain tax positions, as defined. FIN 48 seeks to reduce the diversity in
practice associated with certain aspects of the recognition and measurement related to
accounting for income taxes. This interpretation is effective for fiscal years beginning after
December 15, 2006. The Company has not yet determined the impact this interpretation will have
on our results from operations or financial position.2.
    
    Inventory:Major classes of inventory were as follows (in thousands):
 July 2, 2006
    
    
    April 2, 2006Raw Materials
    
    $
    379
    
    
    $
    442Work in Process
    
    
    73
    
    
    
    73Finished Goods
    
    
    13,072
    
    
    
    9,227$
    13,524
    
    
    $
    9,742
 Inventory is net of reserves for inventories classified as irregular or discontinued of $0.6
million at July 2, 2006 and $0.5 million at April 2, 2006.3.
    
    Financing ArrangementsFactoring Agreement:The Company assigns the majority of its trade accounts receivable to a
commercial factor. Under the terms of the factoring agreement, the factor remits payments to
the Company on the average due date of each group of invoices assigned. The factor bears credit
losses with respect to assigned accounts receivable that are within approved credit limits. The
Company bears losses resulting from returns, allowances, claims and discounts.Notes Payable and Other Credit Facilities: At July 2, 2006 and April 2, 2006, long-term debt
consisted of:
 July 2,
    
    
    April 2,2006
    
    
    2006Senior subordinated notes
    
    $
    16,000
    
    
    $
    16,000Non-interest bearing notes
    
    
    8,000
    
    
    
    8,000Capital leases
    
    
    50
    
    
    
    58PIK notes
    
    
    1,077
    
    
    
    1,077Original issue discount
    
    
    (971
    )
    
    
    (1,177
    )24,156
    
    
    
    23,958Less current maturities
    
    
    33
    
    
    
    36$
    24,123
    
    
    $
    23,922
  Revolving Credit
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Senior Subordinated Notes
    Fiscal
    
    Sub Notes
    
    
    
    
    
    
    PIK Notes
    
    
    Other
    
    
    Total2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    282008
    
    
    24,000
    
    
    
    *
    
    
    
    1,077
    
    
    
    19
    
    
    
    25,0962009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Total
    
    $
    24,000
    
    
    
    
    
    
    $
    1,077
    
    
    $
    50
    
    
    $
    25,127
 
 *
    
    Includes $8 million non-interest bearing note issued at an original issue discount
of $4.1 million. As part of its refinancing in July 2001, the Company issued to its lenders Common Stock Purchase
Warrants for non-voting common stock that are convertible into common stock equivalent to 65% of
the shares of the Company on a fully diluted basis at a price of 11.3 cents per share. The
warrants are non-callable and expire six years from their date of issuance. The value of the
warrants of $2.4 million using the Black-Scholes option pricing model was credited to additional
paid-in capital in the second quarter of fiscal 2002.Subsequent to July 2, 2006, the Company refinanced the credit facilities which existed on July
2, 2006. On July 11, 2006, the Company together with Crown Crafts Infant Products, Inc.,
Churchill and Hamco, Inc., each a wholly-owned subsidiary of the Company, entered into a
Financing Agreement (the Financing Agreement) with The CIT Group/Commercial Services, Inc.
(CIT) providing for revolving loans of up to an aggregate principal amount of $22,000,000.
Borrowings under the Financing Agreement accrue interest at either prime minus 1.0% per annum
or, in the case of certain LIBOR loans, LIBOR plus 2.25% per annum. The Financing Agreement
will expire on July 11, 2009.Proceeds of the initial borrowing under the Financing Agreement, along with internally-generated
cash of $7.8 million, were used by the Company to pay approximately $17.3 million to liquidate
the full amount of the the Senior Subordinated Note and the PIK Notes related to the existing
credit facilities, which agreements were terminated effective July 11, 2006. Concurrently, in
exchange for the surrender and cancellation of the Common Stock Purchase Warrants referred to
above and the settlement of the $8 million non-interest bearing note due in 2008 (reflected in
long-term debt at a net value of $7.0 million , net of unamortized original issue discount), the
Company issued to Wachovia Bank, National Association (Wachovia), Banc of America Strategic
Solutions, Inc. and The Prudential Insurance Company of America (collectively, the Existing
Lenders) Secured Subordinated Promissory Notes (the Subordinated Notes) dated July 11, 2006
in the aggregate principal amount of $4,000,000. The Subordinated Notes do not bear interest
and are payable in two equal installments of $2,000,000 each, the first of which is payable on
July 11, 2010 and the second of which is payable on July 11, 2011. As a result of the
refinancing, the Company expects to record a pre-tax gain of approximately $4.0 million in the
second quarter of fiscal 2007.
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4.
    
    Earnings per Share:The weighted average number of shares outstanding on a fully diluted
basis were 22,137,000 and 21,331,000 at July 2, 2006 and July 3, 2005, respectively, Because
the operating results for the three months ended July 3, 2005 reflected a loss, the dilutive
impact of potentially issuable shares is not considered in the computation of income (loss)
per share since it would reduce the loss per share otherwise reported.
 
 
      July 2, 2006
    
    July 3, 2005
    
    $ change
    
    % changeDollars in thousandsNet Sales by CategoryBedding, Blankets and Accessories
    
    $
    10,905
    
    
    $
    8,984
    
    
    $
    1,921
    
    
    
    21.4
    %Bibs and Bath
    
    
    4,848
    
    
    
    4,159
    
    
    
    689
    
    
    
    16.6
    %Handwoven Products
    
    
    411
    
    
    
    516
    
    
    
    (105
    )
    
    
    -20.3
    %Total Net Sales
    
    
    16,164
    
    
    
    13,659
    
    
    
    2,505
    
    
    
    18.3
    %Cost of Products Sold
    
    
    11,584
    
    
    
    10,692
    
    
    
    892
    
    
    
    8.3
    %Gross Profit
    
    
    4,580
    
    
    
    2,967
    
    
    
    1,613
    
    
    
    54.4
    %% of Net Sales
    
    
    28.3
    %
    
    
    21.7
    %Marketing and Administrative Expenses
    
    
    2,450
    
    
    
    2,468
    
    
    
    (18
    )
    
    
    -0.7
    %% of Net Sales
    
    
    15.2
    %
    
    
    18.1
    %Interest Expense
    
    
    723
    
    
    
    802
    
    
    
    (79
    )
    
    
    -9.8
    %Other income  net
    
    
    (119
    )
    
    
    (42
    )
    
    
    (77
    )
    
    
    183.3
    %Income Tax Expense
    
    
    615
    
    
    
    8
    
    
    
    607
    
    
    
    7587.5
    %Net Income
    
    
    911
    
    
    
    (269
    )
    
    
    1,180
    
    
    
    438.7
    %% of Net Sales
    
    
    5.6
    %
    
    
    -2.0
    %
 8




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Net Sales:
   Gross Profit:
 Marketing and Administrative Expenses
 Interest Expense:
 Other Income  Net:
 Income Tax Expense:
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1.
    
    Election of two members to the board of directors to hold office for a three-year
term. The results were as follows:
 Director Nominee
    
    For
    
    Authority WithheldSidney Kirschner
    
    
    8,026,702
    
    
    
    232,718Zenon S. Nie
    
    
    8,027,052
    
    
    
    232,368
 2.
    
    Approve the Companys 2006 Omnibus Incentive Plan. The results were as follows:
 For
    
    
    4,285,978Against
    
    
    272,446Abstain
    
    
    27,234
 3.
    
    Transaction of such other business as may properly come before the annual meeting
or any adjournments or postponements thereof. The results were as follows:
 For
    
    
    7,951,750Against
    
    
    216,237Abstain
    
    
    91,433
  
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Exhibit No.
    
    Exhibit4.1
    
    
    Amendment No. 1 to Amended and Restated Rights Agreement dated as of July 12,
2006 between the Company and Computershare Investor Services, LLC (1)10.1
    
    
    Financing Agreement dated as of July 11, 2006 by and among the Company,
Churchill Weavers, Inc., Hamco, Inc., Crown Crafts Infant Products, Inc. and
The CIT Group/Commercial Services, Inc. (1)10.2
    
    
    Stock Pledge Agreement dated as of July 11, 2006 by and among the Company,
Churchill Weavers, Inc., Hamco, Inc., Crown Crafts Infant Products, Inc. and
The CIT Group/Commercial Services, Inc. (1)10.3
    
    
    Mortgage, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated July 11, 2006 from Churchill Weavers, Inc. to The CIT
Group/Commercial Services, Inc. (1)10.4
    
    
    Secured Subordinated Promissory Note dated July 11, 2006 issued by the Company
to Wachovia Bank, National Association (1)10.5
    
    
    Secured Subordinated Promissory Note dated July 11, 2006 issued by the Company
to Banc of America Strategic Solutions, Inc. (1)10.6
    
    
    Secured Subordinated Promissory Note dated July 11, 2006 issued by the Company
to The Prudential Insurance Company of America (1)10.7
    
    
    Security Agreement dated as of July 11, 2006 by and among the Company,
Churchill Weavers, Inc., Hamco, Inc., Crown Crafts Infant Products, Inc. and
Wachovia Bank, National Association, as Agent (1)10.8
    
    
    Mortgage, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated July 11, 2006 from Churchill Weavers, Inc. to Wachovia Bank,
National Association, as Agent (1)31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certification by the Companys Chief Executive Officer31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certification by the Companys Chief Financial Officer32.1
    
    
    Section 1350 Certification by the Companys Chief Executive Officer32.2
    
    
    Section 1350 Certification by the Companys Chief Financial Officer
 
 (1)
    
    Incorporated herein by reference to the Companys Current Report on Form 8-K dated July 17,
2006. 13




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##### Table of Contents



CROWN CRAFTS, INC.Date: August 16, 2006
    /s/ Amy Vidrine SamsonAMY VIDRINE SAMSONChief Financial Officer
(duly authorized signatory and
Principal Financial and Accounting
Officer) 14




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##### Table of Contents



Index to Exhibits
 Exhibit No.
    
    Exhibit4.1
    
    
    Amendment No. 1 to Amended and Restated Rights Agreement dated as of July 12,
2006 between the Company and Computershare Investor Services, LLC (1)10.1
    
    
    Financing Agreement dated as of July 11, 2006 by and among the Company,
Churchill Weavers, Inc., Hamco, Inc., Crown Crafts Infant Products, Inc. and
The CIT Group/Commercial Services, Inc. (1)10.2
    
    
    Stock Pledge Agreement dated as of July 11, 2006 by and among the Company,
Churchill Weavers, Inc., Hamco, Inc., Crown Crafts Infant Products, Inc. and
The CIT Group/Commercial Services, Inc. (1)10.3
    
    
    Mortgage, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated July 11, 2006 from Churchill Weavers, Inc. to The CIT
Group/Commercial Services, Inc. (1)10.4
    
    
    Secured Subordinated Promissory Note dated July 11, 2006 issued by the Company
to Wachovia Bank, National Association (1)10.5
    
    
    Secured Subordinated Promissory Note dated July 11, 2006 issued by the Company
to Banc of America Strategic Solutions, Inc. (1)10.6
    
    
    Secured Subordinated Promissory Note dated July 11, 2006 issued by the Company
to The Prudential Insurance Company of America (1)10.7
    
    
    Security Agreement dated as of July 11, 2006 by and among the Company,
Churchill Weavers, Inc., Hamco, Inc., Crown Crafts Infant Products, Inc. and
Wachovia Bank, National Association, as Agent (1)10.8
    
    
    Mortgage, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated July 11, 2006 from Churchill Weavers, Inc. to Wachovia Bank,
National Association, as Agent (1)31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certification by the Companys Chief Executive Officer31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certification by the Companys Chief Financial Officer32.1
    
    
    Section 1350 Certification by the Companys Chief Executive Officer32.2
    
    
    Section 1350 Certification by the Companys Chief Financial Officer
 
 (1)
    
    Incorporated herein by reference to the Companys Current Report on Form 8-K dated July 17,
2006. 15