<PAGE>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2001


              ( ) 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
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

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

            1600 RiverEdge Parkway, Suite 200, Atlanta, Georgia 30328
            ---------------------------------------------------------
                    (Address of principal executive offices)

                                 (770) 644-6400
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes [X] No [ ]

The number of shares of common stock, $1.00 par value, of the Registrant
outstanding as of October 31, 2001 was 9,421,437.


                                       1

<PAGE>

                                   FORM 10-Q

                       CROWN CRAFTS, INC. AND SUBSIDIARIES

                         PART 1 - FINANCIAL INFORMATION
                   ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS

                           CONSOLIDATED BALANCE SHEETS
                September 30, 2001 (UNAUDITED) and April 1, 2001

<TABLE>
<CAPTION>
                                                                                         September 30,       April 1,
dollar amounts in thousands, except share and per share amounts                              2001              2001
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                 <C>
ASSETS
----------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents                                                                   $   528          $   588
Restricted cash                                                                                  --              508
Accounts receivable (net of allowances of $4,036 at September 30
      and $1,937 at April 1):
      Due from factor                                                                        15,808           15,588
      Other                                                                                   1,975            2,213
Inventories, net                                                                             16,646           19,564
Other current assets                                                                          1,827            2,233
Assets held for sale                                                                             --           21,661
----------------------------------------------------------------------------------------------------------------------
Total current assets                                                                         36,784           62,355
----------------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT - AT COST:
Land, buildings and improvements                                                              2,845            2,736
Machinery and equipment                                                                       3,988            3,873
Furniture and fixtures                                                                          646              489
----------------------------------------------------------------------------------------------------------------------
                                                                                              7,479            7,098
Less accumulated depreciation                                                                 3,801            3,184
----------------------------------------------------------------------------------------------------------------------
Property, plant and equipment - net                                                           3,678            3,914
----------------------------------------------------------------------------------------------------------------------
OTHER ASSETS:
Goodwill (net of amortization of $5,734 at September 30 and $5,207 at April 1)               23,561           24,088
Other                                                                                            11              321
----------------------------------------------------------------------------------------------------------------------
Total other assets                                                                           23,572           24,409
----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                                $64,034          $90,678
======================================================================================================================
</TABLE>

See notes to interim consolidated financial statements.


                                       2

<PAGE>

                       Crown Crafts, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                September 30, 2001 (UNAUDITED) and April 1, 2001

<TABLE>
<CAPTION>
                                                                                   September 30,        April 1,
dollar amounts in thousands, except share and per share amounts                        2001               2001
------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                  <C>
CURRENT LIABILITIES:
Accounts payable                                                                    $  4,295           $  8,470
Accrued wages and benefits                                                             1,866              2,144
Accrued royalties                                                                      1,376              1,086
Other accrued liabilities                                                              1,606              3,316
Current maturities of long-term debt                                                   1,250             44,016
------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                             10,393             59,032
------------------------------------------------------------------------------------------------------------------
NON-CURRENT LIABILITIES:
Long-term debt                                                                        43,540             47,650
Deferred income taxes                                                                     24                 24
Other                                                                                     --                745
------------------------------------------------------------------------------------------------------------------
Total non-current liabilities                                                         43,564             48,419
------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (DEFICIT):
Common stock - par value $1.00 per share, 50,000,000 shares authorized
   Outstanding: 9,421,437 at September 30 and 8,608,843 at April 1                     9,421              8,609
Additional paid-in capital                                                            28,857             27,161
Accumulated deficit                                                                  (28,217)           (52,477)
Cumulative currency translation adjustment                                                16                (66)
------------------------------------------------------------------------------------------------------------------
Total shareholders' equity (deficit)                                                  10,077            (16,773)
------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                                $ 64,034           $ 90,678
==================================================================================================================
</TABLE>

See notes to interim consolidated financial statements.


                                       3

<PAGE>

                       Crown Crafts, Inc. and Subsidiaries
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                     SEPTEMBER 30, 2001 AND OCTOBER 1, 2000

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                 SIX MONTHS ENDED
dollar amounts in thousands, except share                      September 30,      October 1,     September 30,      October 1,
  and per share amounts                                            2001             2000             2001             2000
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                <C>            <C>                 <C>
Net sales                                                        $ 31,338         $ 82,175         $ 70,037         $ 140,369
Cost of products sold                                              23,604           71,995           54,779           125,742
-----------------------------------------------------------------------------------------------------------------------------------
Gross profit                                                        7,734           10,180           15,258            14,627
Marketing and administrative expenses                               4,759           10,681           12,727            22,657
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations                                       2,975             (501)           2,531            (8,030)
Other income (expense):
      Interest expense                                             (1,080)          (4,012)          (4,380)           (7,946)
      Other - net                                                     212           (6,757)           1,139            (6,180)
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                                   2,107          (11,270)            (710)          (22,156)
Income tax (benefit) expense                                           (4)             138               38               138
-----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) before extraordinary gain                         2,111          (11,408)            (748)          (22,294)
-----------------------------------------------------------------------------------------------------------------------------------
Extraordinary gain, net of tax                                    (25,008)              --          (25,008)               --
-----------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                  27,119          (11,408)          24,260           (22,294)
-----------------------------------------------------------------------------------------------------------------------------------
Other comprehensive income (loss), net of tax:
       Foreign currency translation adjustment                        (54)              (5)              82                26
-----------------------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                      $ 27,065         $(11,413)        $ 24,342         $ (22,268)
-----------------------------------------------------------------------------------------------------------------------------------

Basic income (loss) per share before extraordinary item          $   0.23         $  (1.33)        $  (0.08)        $   (2.59)
-----------------------------------------------------------------------------------------------------------------------------------
Basic income (loss) per share                                        2.94            (1.33)            2.72             (2.59)
-----------------------------------------------------------------------------------------------------------------------------------

Diluted income (loss) per share before extraordinary item        $   0.09         $  (1.33)        $  (0.08)        $   (2.59)
-----------------------------------------------------------------------------------------------------------------------------------
Diluted income (loss) per share                                      1.21            (1.33)            2.72             (2.59)
-----------------------------------------------------------------------------------------------------------------------------------

Weighted average shares outstanding - basic                         9,222            8,609            8,913             8,609
-----------------------------------------------------------------------------------------------------------------------------------

Weighted average shares outstanding - diluted                      22,437            8,609            8,913             8,609
===================================================================================================================================
</TABLE>

See notes to interim consolidated financial statements.


                                       4

<PAGE>

                       Crown Crafts, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             Six months ended September 30, 2001 and October 1, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              September 30,        October 1,
in thousands                                                                      2001                2000
----------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                  <C>
OPERATING ACTIVITIES:
Net income (loss)                                                               $ 24,260           $(22,294)
Adjustments to reconcile net income (loss) to net cash provided by
     (used for) operating activities:
     Extraordinary gain on debt refinancing                                      (25,008)                --
     Depreciation of property, plant and equipment                                   410              6,086
     Amortization of goodwill                                                        527                529
     (Gain) loss on sale of property, plant, and equipment                            (4)             2,551
     Changes in assets and liabilities
          Accounts receivable                                                       (281)             1,494
          Inventories, net                                                         2,918             32,409
          Other current assets                                                       406                155
          Inventories transferred to assets held for sale                             --            (18,303)
          Other assets                                                               310                115
          Accounts payable                                                        (4,175)            (7,922)
          Accrued liabilities                                                     (1,698)             3,358
          Other long term liabilities                                               (745)                --
          Liabilities assumed by purchaser of adult bedding                        3,372                 --
          Assets held for sale                                                        73                 --
----------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) operating activities                                 365             (1,822)
----------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Capital expenditures                                                                (163)            (1,232)
Proceeds from disposition of assets                                               18,216              1,062
Other                                                                                 75                 26
----------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) investing activities                              18,128               (144)
----------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Payment of long-term debt                                                        (63,769)              (874)
Long term borrowing                                                               44,790                 --
Increase in advances from factor                                                     299              3,359
Issuance of common stock                                                             127                 --
----------------------------------------------------------------------------------------------------------------
Net cash (used for) provided by financing activities                             (18,553)             2,485
----------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                 (60)               519
Cash and cash equivalents at beginning of year                                       588              1,453
----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $    528           $  1,972
----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid                                                               $     89           $    268
Interest paid                                                                      4,759              8,586
SUPPLEMENTAL DISCLOSURE OF NON CASH
 INVESTING AND FINANCING ACTIVITIES
   Disposition escrow account                                                         --                500
   Property, plant and equipment held for sale                                        --             23,383
   Forgiveness of indebtedness                                                    25,008                 --
   Issuance of warrants                                                            2,381                 --
================================================================================================================
</TABLE>

See notes to interim consolidated financial statements.


                                       5

<PAGE>

                                    FORM 10-Q

                       CROWN CRAFTS, INC. AND SUBSIDIARIES

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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 Company's financial
         position as of September 30, 2001 and the results of its operations and
         its cash flows for the three and six-month periods ended September 30,
         2001 and October 1, 2000. Such adjustments include normal recurring
         accruals and a pro rata portion of certain estimated annual expenses.
         Operating results for the six-month period ended September 30, 2001 are
         not necessarily indicative of the results that may be expected for the
         year ending March 31, 2002. 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 1, 2001 of Crown
         Crafts, Inc. (the "Company").

         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. Actual results could differ from those estimates.

         Recently Issued Accounting Standards: In June 1998, the Financial
         Accounting Standards Board ("FASB") issued Statement of Financial
         Accounting Standards ("SFAS") 133, Accounting for Derivative Financial
         Instruments and Hedging Activities. SFAS 133, effective for the Company
         on April 2, 2001, establishes accounting and reporting standards for
         derivative instruments, including certain derivative instruments
         embedded in other contracts (collectively referred to as derivatives),
         and for hedging activities. The Company has no contracts or other
         instruments to which SFAS 133 is applicable and the adoption of this
         standard, as amended, did not have a material impact on the Company's
         results of operations, financial position or cash flow.

         In June 2001 the FASB approved SFAS 142, Goodwill and Other Intangible
         Assets. This statement prescribes that goodwill should no longer be
         amortized upon adoption of the standard. Instead, goodwill will be
         tested annually for impairment, and on an interim basis if certain
         impairment indicators are present. Additionally, intangible assets with
         an indefinite useful life may not be amortized. The Company will adopt
         SFAS 142 on April 1, 2002.

         In October 2001 the FASB issued SFAS 144, Accounting for the Impairment
         or Disposal of Long-Lived Assets, that replaces FASB 121, Accounting
         for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
         Disposed Of. The statement develops one accounting model, based on the
         framework established in Statement 121, for long-lived assets to be
         disposed of by sale and to address significant implementation issues.
         The Company will adopt SFAS 144 on April 1, 2002.

         Reclassifications: Certain prior period financial statement balances
         have been reclassified to conform to the current period's presentation.

2.       In 1999, the Company adopted SFAS 131, Disclosures about Segments of an
         Enterprise and Related Information. At the date of adoption, the
         Company's principal segments included adult home furnishing and
         juvenile products, consisting of bedroom and bath products (adult
         comforters, sheets and towels), throws and juvenile products (primarily
         Pillow Buddies(R)). An additional segment was infant products,
         consisting of infant bedding, bibs, and infant soft goods. Following
         the sale of the Adult Bedding and Bath business as of July 23, 2001 as
         described in Note 5 below, the Company is primarily in the infant and
         juvenile products business.

         Financial information attributable to the Company's business segments
         for the quarters ended and six months ended September 30, 2001 and
         October 1, 2000, was as follows (in thousands):


                                       6

<PAGE>

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED                 SIX MONTHS ENDED
                                  September 30,      October 1,      September 30,      October 1,
Net sales:                            2001              2000             2001              2000
----------                        -------------      ----------      -------------      ----------
<S>                               <C>                <C>             <C>                <C>
Adult home furnishing
  and juvenile products              $ 3,340          $54,114          $22,628          $ 92,067
Infant products                       27,998           28,061           47,409            48,302
                                     -------          -------          -------          --------
       Total                         $31,338          $82,175          $70,037          $140,369
                                     =======          =======          =======          ========
</TABLE>

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED                   SIX MONTHS ENDED
                                        September 30,     October 1,       September 30,      October 1,
Income (loss) from operations               2001             2000              2001              2000
-----------------------------           -------------     ----------       -------------      ----------
<S>                                     <C>               <C>              <C>                <C>
Adult home furnishing
  and juvenile products                    $  693          $(3,325)          $(1,421)          $(12,908)
Infant products                             2,282            2,824             3,952              4,878
                                           ------          -------           -------           --------
       Total                               $2,975          $  (501)          $ 2,531           $ (8,030)
                                           ======          =======           =======           ========
</TABLE>

Net sales by individual product groups within these business segments were as
follows (in thousands):

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED                 SIX MONTHS ENDED
                                September 30,      October 1,     September 30,      October 1,
                                    2001             2000             2001              2000
                                -------------      ----------     -------------      ----------
<S>                             <C>                <C>            <C>                <C>
Bedroom products                     1,826           28,446           19,937            55,131
Throws and decorative
  home accessories                 $ 1,110          $24,174          $ 1,650          $ 34,537
Infant and juvenile
  products                          28,402           29,521           48,450            50,637
Other                                    0               34                0                64
                                   -------          -------          -------          --------
       Total                       $31,338          $82,175          $70,037          $140,369
                                   =======          =======          =======          ========
</TABLE>

3.       No interest costs were capitalized during the six months periods ended
         September 30, 2001, and October 1, 2000.

4.       Major classes of inventory were as follows (in thousands):

<TABLE>
<CAPTION>
                                                     September 30,      April 1,
                                                         2001             2001
                                                     -------------      --------
                           <S>                       <C>                <C>
                           Raw materials                $ 3,290          $ 3,501
                           Work in process                1,241            1,545
                           Finished goods                12,115           14,518
                                                        -------          -------
                                                        $16,646          $19,564
                                                        =======          =======
</TABLE>


                                       7

<PAGE>

         Inventory is net of reserves for inventories classified as irregular or
         discontinued of $2.1 million and $2.2 million at September 30, 2001 and
         April 1, 2001, respectively.

5.       During the quarter ended July 1, 2001, the Company sold property, plant
         and equipment (primarily at Timberlake, North Carolina) with net
         proceeds of $9.2 million and a gain on sale of $802,000. The net
         proceeds were used to reduce debt.

         As part of the plan to reduce debt and restore profitability, the
         Company made a decision to exit the Adult Bedding and Bath Business,
         and its net assets related to that business of $12.4 million were sold
         effective July 23, 2001. Proceeds of the sale were $9.0 million cash
         plus assumption of liabilities of $3.4 million as well as assumption of
         certain contingent liabilities. Cash from the sale was used to reduce
         debt. The sale included inventory, buildings, machinery and equipment
         located at Roxboro, North Carolina as well as various sales offices.
         The Adult Bedding and Bath Business had annual sales of approximately
         $76.5 million in fiscal 2001 and was included in the adult home
         furnishing and juvenile products segment. The Adult Bedding and Bath
         Business includes the remainder of the bedroom products group following
         the sale of the Wovens division.

6.       At September 30, 2001 and April 1, 2001, long term debt consisted of:

<TABLE>
<CAPTION>
               (in thousands)                            Sept 30           April 1
               -----------------------------------------------------------------------
                <S>                                      <C>                <C>
               Bank credit lines                        $     --           $30,249
               Revolving credit facilities                10,804            30,000
               Senior notes                               14,000            31,417
               Senior subordinated notes                  16,000                --
               Non-interest bearing notes                  8,000                --
               Original issue discount                    (4,014)               --
                                                        --------           -------
                                                          44,790            91,666
               Less current maturities                     1,250            44,016
               -----------------------------------------------------------------------
                                                        $ 43,540           $47,650
               -----------------------------------------------------------------------
</TABLE>

         On July 23, 2001 the Company completed a refinancing of its debt. The
         new credit facilities include the following:

         A Revolving Credit Facility of up to $19 million including a $3 million
         sub-limit for letters of credit, with $14.0 million drawn at closing.
         The interest rate is equal to LIBOR plus 2.75% with a maturity date of
         June 30, 2004. The facility is secured by a first lien on all assets.

         Senior Notes of $14 million with an interest rate of 10% plus
         additional interest contingent upon cash flow availability of 3%. The
         maturity date is June 30, 2006 and the notes are secured by a first
         lien on all assets. Minimum principal payments of $250,000 due March
         31, 2002 and $500,000 at the end of each calendar quarter thereafter.

         Senior Subordinated Notes of $16 million with an interest rate of 10%
         plus an additional 1.65% payable by delivery of a promissory note due
         July 23, 2007. Maturity July 23, 2007, secured by a second lien on all
         assets.

         In addition to principal and interest, a payment of $8 million is due
         on the earliest of (i) maturity of the Senior Subordinated Notes, (ii)
         prepayment of the Senior Subordinated Notes, or (iii) sale of the
         Company. The original issue discount of $4.1 million on this
         non-interest bearing note at a market interest rate of 12% will be
         amortized over the life of the Senior Subordinated Notes.

The new credit facilities contain covenants regarding minimum levels of Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), maximum total
debt to EBITDA, maximum senior debt to EBITDA, minimum EBITDA to cash interest,
and minimum shareholders' equity. The covenants also include restrictions on
capital expenditures, dividends, and stock repurchases.


                                       8

<PAGE>

Minimum annual maturities adjusted to reflect the July 23, 2001 refinancing are
as follows: (in thousands)

<TABLE>
<CAPTION>
                 FISCAL              REVOLVER       SENIOR NOTES      SUB NOTES           TOTAL
                                     --------       ------------      ---------          -------
                 
                 <C>            <C>               <C>                <C>
                 2002                     --          $   250               --           $   250
                 2003                     --            2,000               --             2,000
                 2004                     --            2,000               --             2,000
                 2005                $10,804            2,000               --            12,804
                 2006                     --            2,000               --             2,000
                 2007                     --            5,750               --             5,750
                 2008                     --               --          $24,000*           24,000
                                     -------          -------          -------           -------
                 Total               $10,804          $14,000          $24,000           $48,804
                                     =======          =======          =======           =======
</TABLE>

                  *includes $8.0 million non-interest bearing note with
                  unamortized original issue discount of $4.1 million.

In the event that required debt service exceeds 70% of free cash flow (EBITDA
less capital expenditures and cash taxes paid), the excess of contingent
interest and principal amortization over 70% will be deferred until maturity of
the Senior Notes in June 2006. Contingent interest plus additional principal
payments will be due annually up to 70% of free cash flow.

As part of the refinancing, the Company issued to the Lenders 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 in six years. 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.
Also in the second quarter of fiscal 2002, the Company recognized an
extraordinary gain of $25.0 million representing forgiveness of indebtedness
income (net of $2.9 million of expenses incurred) in connection with the
refinancing.

The Company's notes and the credit facilities contain similar restrictive
covenants requiring the Company to maintain certain ratios of earnings to fixed
charges and of total debt to total capitalization. In addition, the bank
revolving credit facilities contain certain covenants requiring the Company to
maintain minimum levels of shareholders' equity and certain ratios of total debt
to cash flow. The bank facilities also place restrictions on the amounts the
Company may expend on acquisitions and purchases of treasury stock and currently
prohibit the payment of dividends. Other covenants of these revolving credit
facilities require the Company to maintain certain financial ratios and place
restrictions on the amounts the Company may expend on acquisitions.


                                       9

<PAGE>

                ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE THREE MONTHS ENDED OCTOBER
1, 2000

Net sales decreased $50.8 million or 61.9% to $31.3 million in the current year
quarter compared to $82.2 million in the prior year quarter. This was
attributable to a decrease of $26.6 million, or 93.6%, in bedroom products, a
$23.1 million, or 95.4% decrease in throws and a decrease of $1.1 million, or
3.8%, in sales of infant and juvenile products. The decrease in bedroom products
resulted from the sale of the adult bedding and bath business effective July 23,
2001, the phase out of the Studio bedding line during fiscal 2001 and the sale
of the Wovens division on November 14, 2000. The disposition of the Wovens
division resulted in lower sales of throws. Lower sales of infant and juvenile
products were due to changes in buying patterns by major retailers.

For the quarter ended September 30, 2001, gross profit as a percentage of net
sales increased to 24.7% from 12.4% for the quarter ended October 1, 2000. The
increased margin relates primarily to changes in product mix as a result of the
divestments mentioned above. In addition, the Company incurred lower
manufacturing costs as a result of outsourcing.

Marketing and administrative expenses decreased by $5.9 million or 55.4% in the
current year quarter compared to the same quarter in the prior fiscal year and
were 15.2% of net sales for the current quarter compared to 13.0% in the
corresponding quarter of the prior year. The decrease is a result of the
divestments mentioned above as well as the Company's cost reduction initiatives
and restructuring.

Interest expense for the quarter decreased by $2.9 million because of lower debt
and reduced interest rates.

Due to the accumulated losses, no federal income tax provision has been included
for the quarter ended September 30, 2001 or the prior year quarter. A benefit
for estimated state and local taxes of $4,000 was included for the quarter ended
September 30, 2001 compared to a provision of $138,000 in the quarter ended
October 1, 2000.

In the second quarter of fiscal 2002, the Company recognized an extraordinary
gain of $25.0 million representing forgiveness of indebtedness income (net of
$2.9 million of expenses incurred) in connection with the refinancing.

SIX MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE SIX MONTHS ENDED OCTOBER 1,
2000

For the six months ended September 30, 2001, net sales decreased $70.3 million,
or 50.1%, to $70.0 million compared to $140.4 million in the prior year period.
This was attributable to a decrease of $35.2 million, or 63.8%, in bedroom
products, a $32.9 million decrease, or 95.2%, in throws and a decrease of $2.2
million, or 4.3%, in sales of infant and juvenile products. The decrease in
bedroom products resulted from the sale of the adult bedding and bath business
effective July 23, 2001, the phase out of the Studio bedding line during fiscal
2001 and the sale of the Wovens division on November 14, 2000. The disposition
of the Wovens division resulted in lower sales of throws. Lower sales of infant
and juvenile products were due to changes in buying patterns by major retailers.

For the six months ended September 30, 2001, gross profit as a percentage of net
sales increased to 21.8% from 10.4% for the corresponding period ended October
1, 2000. The increased margin relates primarily to changes in product mix as a
result of the divestments mentioned above. In addition, the Company incurred
lower manufacturing costs as a result of outsourcing.

Marketing and administrative expenses decreased by $9.9 million, or 43.8%, in
the six months ended September 30, 2001 compared to the same period in the prior
fiscal year and were 18.2% of net sales for the six months compared to 16.1% in
the corresponding period of the prior year. The decrease is a result of the
divestments mentioned above as well as the Company's cost reduction and
restructuring.


                                       10

<PAGE>

Interest expense for the six months ended September 30, 2001 decreased by $3.6
million because of lower debt and reduced interest rates.

Due to the accumulated losses, no federal income tax provision has been included
for the six months ended September 30, 2001 and the prior year period. A
provision for estimated state and local taxes of $38,000 was included for the
six months ended September 30, 2001 compared to a provision of $138,000 in the
six months ended October 1, 2000.

In the six months ended September 30, 2001, the Company recognized an
extraordinary gain of $25.0 million representing forgiveness of indebtedness
income (net of $2.9 million of expenses incurred) in connection with the
refinancing.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $365,000 for the six months ended
September 30, 2001 compared to cash used for operating activities of $1.8
million for the six months ended October 1, 2000. Net cash provided by investing
activities was $18.1 million compared to net cash used for investing activities
of $144,000 in the prior year period. Net cash used for financing activities was
$19.1 million compared to net cash provided by financing activities of $2.5
million in the prior year period. Total debt outstanding decreased to $44.8
million at September 30, 2001 from $91.7 million at April 1, 2001. This decrease
resulted from the repayment of debt from the sale of fixed assets as well as the
forgiveness of indebtedness. As of September 30, 2001, a $1.7 million letter of
credit for minimum royalties is secured by accounts receivable due from factor.
As of October 26, 2001, the Company had revolving credit availability of $8.2
million.

The Company's ability to make scheduled payments of principal, to pay the
interest on, or to refinance its maturing indebtedness, to fund capital
expenditures, or to comply with its debt covenants will depend upon future
performance. The Company's future performance is, to a certain extent, subject
to general economic, financial, competitive, legislative, regulatory and other
factors beyond its control. Based upon the current level of operations, the
Company believes that cash flow from operations together with revolving credit
availability will be adequate to meet liquidity needs for the next year.

To reduce its exposure to credit losses and to enhance its cash flow forecasts,
the Company factors the majority of its trade accounts receivable. The Company's
factor establishes customer credit lines, and accounts for and collects
receivable balances. The factor remits payment to the Company on the due dates
of the factored invoices. The factor assumes all responsibility for credit
losses on sales within approved credit lines, but may deduct from its
remittances to the Company the amounts of customer deductions for returns,
allowances, disputes and discounts. The Company's factor may at any time
terminate or limit its approval of shipments to a particular customer. If such a
termination occurs, the Company may either assume the credit risks for shipments
after the date of such termination or cease shipments to such customer.


                                       11

<PAGE>

FORWARD-LOOKING INFORMATION

This Form 10-Q contains forward-looking statements within the meaning of the
federal securities law. Such statements are based upon management's current
expectations, projections, estimates and assumptions. Words such as "expects,"
"believes," "anticipates" and variations of such words and similar expressions
are intended to identify such forward-looking statements. Forward-looking
statements involve known and unknown risks and uncertainties that may cause
future results to differ materially from those anticipated. These risks include,
among others, general economic conditions, changing competition, the level and
pricing of future orders from the Company's customers, the Company's dependence
upon third-party suppliers, including some located in foreign countries with
unstable political situations, the Company's ability to successfully implement
new information technologies, the Company's ability to integrate its
acquisitions and new licenses, and the Company's ability to implement
improvements in its acquired businesses.

                      ITEM 3 - QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates on debt,
commodity prices and foreign exchange rates.

The Company's earnings and cash flow exposure to interest rate risk relates to
its floating rate debt, $10.8 million of which was outstanding at September 30,
2001. Each 1.0 percentage point increase in interest rates would impact pretax
earnings by $0.1 million at the debt level of September 30, 2001.

The Company's exposure to changes in the fair value of its debt relates to its
fixed rate debt, $34.0 million of which was outstanding at September 30, 2001.

The Company's exposure to commodity price risk primarily relates to changes in
the price of cotton, which is a principal raw material in a substantial number
of the Company's products.

The Company's exposure to foreign exchange rates relates to its Mexican
manufacturing subsidiary. During the fiscal year ended April 1, 2001, this
subsidiary manufactured products for the Company with a value of approximately
$4.4 million. The Company's investment in the subsidiary was approximately $3.2
million at September 30, 2001.


                                       12

<PAGE>

                                    FORM 10-Q

                       CROWN CRAFTS, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

         From time to time, the Company is involved in various legal proceedings
         relating to claims arising in the ordinary course of its business.
         Neither the Company nor any of its subsidiaries is a party to any such
         legal proceeding the outcome of which, individually or in the
         aggregate, is expected to have a material adverse effect on the
         Company's financial condition or results of operations.

Item 2 - Changes in Securities

         None

Item 3 - Defaults Upon Senior Securities

         None

Item 4 - Submission of Matters to Vote of Security Holders

         None

Item 5 - Other Information

         None

Item 6 - Exhibits and Reports on Form 8-K

(a)      Exhibits

         10.1     Crown Crafts, Inc. Key Employee Retention Payment Trust
                  Agreement dated as of November 14, 2000 between the Company
                  and Branch Banking & Trust Co.

(b)      Reports on Form 8-K

         The Company filed the following Current Report on Form 8-K during the
         quarter ended September 30, 2001:

         The Company's Current Report on Form 8-K filed with the SEC on August
         7, 2001, setting forth (i) under Item 2 of such report (A) the
         Company's disposition of its adult bedding business, (B) the employment
         agreements of the Company with E. Randall Chestnut and Amy Vidrine
         Samson, (C) restricted stock agreements between the Company and various
         senior managers of the Company, and (D) the resignation of Michael H.
         Bernstein as President, Chief Executive Officer and a director of the
         Company, and (ii) under Item 5 of such report the restructuring of the
         Company's financing.


                                       13

<PAGE>

                                    FORM 10-Q

                       CROWN CRAFTS, INC. AND SUBSIDIARIES

                               SEPTEMBER 30, 2001

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                       CROWN CRAFTS, INC.



Date: November 13, 2001                /s/  Carl A. Texter
     --------------------------        -----------------------------------------
                                       CARL A. TEXTER
                                       (Chief Accounting Officer)


                                       14

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.                     Exhibit Description                  Sequential Page No.
-----------                     -------------------                  -------------------
<S>               <C>                                                <C>
   10.1           Crown Crafts, Inc. Key Employee Retention              16
                  Payment Trust Agreement dated as of
                  November 14, 2000 between the Company
                  and Branch Banking & Trust Co.
</TABLE>


                                       15