<PAGE>   1

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ---------------------

                                   FORM 10-K
(MARK ONE)

    [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
             EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED APRIL 2, 2000

                                       OR

    [  ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
              SECURITIES EXCHANGE ACT OF 1934

                           COMMISSION FILE NO. 1-7604

                               CROWN CRAFTS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                        <C>
                 GEORGIA                                   58-0678148
         (State of Incorporation)             (I.R.S. Employer Identification No.)
         1600 RIVEREDGE PARKWAY,                             30328
                SUITE 200                                  (Zip Code)
             ATLANTA, GEORGIA
 (Address of principal executive offices)
</TABLE>

       Registrant's Telephone Number, including area code: (770) 644-6400

          Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<S>                                        <C>
      COMMON STOCK, $1.00 PAR VALUE                 NEW YORK STOCK EXCHANGE
       COMMON SHARE PURCHASE RIGHTS                 NEW YORK STOCK EXCHANGE
             (Title of class)                (Name of exchange on which registered)
</TABLE>

          Securities registered pursuant to Section 12(g) of the Act:
                                      NONE

     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]  [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  Yes [X]  [ ]

     As of July 28, 2000, 8,608,843 shares of Common Stock were outstanding, and
the aggregate market value of the Common Stock (based upon the NYSE closing
price of these shares on that date) held by persons other than Officers,
Directors, the Company's Employee Stock Option Plan, and 5% shareholders was
approximately $2,725,000.

                      DOCUMENTS INCORPORATED BY REFERENCE:

     Crown Crafts, Inc., Proxy Statement in connection with its Annual Meeting
of Shareholders on October 18, 2000 (Part III).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2

                                     PART I

ITEM 1.  BUSINESS

     Crown Crafts, Inc., a Georgia corporation founded in 1957, operates, both
directly and indirectly through its subsidiaries, in two principal business
segments within the textile industry: Adult Home Furnishing and Juvenile
Products, and Infant Products. Adult Home Furnishing and Juvenile Products
consists of Bedroom Products (adult comforters and accessories), Throws and
Decorative Home Accessories (primarily jacquard-woven throws in cotton, acrylic,
rayon or chenille), and Juvenile Products (primarily Pillow Buddies(R)). The
Infant Products segment consists of infant bedding, bibs, infant soft goods and
accessories. Sales are generally made directly to retailers, primarily
department and specialty stores, mass merchants, large chain stores and gift
stores.

     These products are marketed under a variety of Company-owned trademarks,
under trademarks licensed from others, without trademarks as unbranded
merchandise and with customers' private labels in three product groups: bedroom
products, throws and decorative home accessories, and infant and juvenile
products.

     During the fiscal year ended March 29, 1998, the Company completed four
acquisitions. Three of the acquired entities, Hamco, Inc., Noel Joanna, Inc. and
Pinky Baby Products, are engaged in the design, manufacture, marketing and
distribution of Infant Products. The fourth acquisition, Burgundy
Interamericana, S.A. de C.V., operates in Mexico as a contract manufacturer of
consumer textile products. The Company utilizes all of Burgundy's productive
capacity in the manufacture of its own infant and other products, moving
production from independent domestic and foreign manufacturers into Burgundy.

PRODUCTS

     The Company's products fall into three groups: 1) bedroom products, 2)
throws and decorative home accessories, and 3) infant and juvenile products.

     The Company's bedroom products include comforters, comforter sets, sheets,
pillowcases, sheet sets, pillow shams, bed skirts, duvets, daybed sets, window
treatments, decorative pillows, coverlets and jacquard-woven bedspreads. These
products are made from a variety of natural and man-made fibers.

     The Company offers its bedroom products in a wide variety of styles and
patterns, from comforters to woven bedspreads and from solid colors to designer
prints. The Company believes the trend toward coordination of the bedroom will
remain strong and expects to continue its emphasis on comforters and duvets with
coordinated sheets and accessories. During the fiscal year ended March 28, 1999,
the Company began manufacturing and selling bedroom products under the Calvin
Klein trademark under a license agreement with Calvin Klein, Inc.

     Throws are manufactured and imported in a variety of colors, designs and
fabrics, including cotton, acrylic, cotton/acrylic blends, rayon, wool, fleece
and chenille. Coordinated decorative home accessories include pillows, bell
pulls and other items.

     Infant products include crib bedding, diaper stackers, mobiles, bibs,
receiving blankets, burp cloths, bathing accessories and other infant soft goods
and accessories.

     During the fiscal years ended April 2, 2000, March 28, 1999 and March 29,
1998, bedroom products represented 43%, 40% and 40% of consolidated net sales;
throws and decorative home accessories represented 22%, 27% and 30% of
consolidated net sales; and infant and juvenile products represented 35%, 33%
and 30%, respectively, of consolidated net sales.

PRODUCT DESIGN AND STYLING

     The Company's research and development expenditures focus primarily on
product design and styling. The Company believes styling and design are key
components to its success. The Company's designs include traditional,
contemporary, textured and whimsical patterns. The Company designs and
manufactures products
<PAGE>   3

across a broad spectrum of retail price points and is continually developing new
designs for all of its product groups.

     The Company's designers and stylists work closely with the marketing staff
to develop new designs. The Company develops internally and obtains designs from
numerous sources, including graphic artists, decorative fabric manufacturers,
apparel designers, its employees and museums. The Company utilizes computer
aided design systems to increase its design flexibility and reduce costs. In
addition, these systems significantly shorten the time for responding to
customer demands and changing market trends. The Company also creates designs
for exclusive sale by certain of its customers.

SALES AND MARKETING, CUSTOMERS

     The Company markets its products through a national sales force consisting
of salaried sales executives and employees and independent commissioned sales
representatives. Independent representatives are used most significantly in
sales to the gift trade through Goodwin Weavers and Churchill Weavers, and to
the infant markets. Sales outside the United States and Canada are made
primarily through distributors.

     The Company's customers consist principally of department stores, chain
stores, mass merchants, specialty home furnishings stores, wholesale clubs, gift
stores and catalogue and direct mail houses. During the fiscal years ended April
2, 2000, March 28, 1999, and March 29, 1998, sales to Wal-Mart Stores, Inc.
accounted for 13%, 18% and 19% of net sales, respectively. Sales to Federated
Department Stores were 14% in 2000 and sales to Toys R Us and Target Stores were
each 11% in 2000 whereas in prior years each of these three companies
represented less than 10% of total net sales. In June 1998, Wal-Mart informed
the Company that, effective February 1, 1999, it would discontinue the Company's
"Signature Series" line of bedding and accessories. Sales of all products in
this line represented 9% of the Company's net sales in the fiscal year ended
March 29, 1998. Because Wal-Mart continued to purchase these products from the
Company during most of the fiscal year ended March 28, 1999, the full impact on
net sales of this decision was not felt until the fiscal year that ended April
2, 2000.

     The Company's primary showroom and sales office is located in New York
City, where there is also a showroom at the Calvin Klein building. Sales offices
are also maintained in Chicago, Atlanta, Dallas, Huntington Beach, California
and Rogers, Arkansas.

     The Company sells substantially all of its products to retailers for resale
to consumers. The Company generally introduces new products to the retail trade
during the industry's April and October home textile markets. Substantial
shipments of successful new designs generally occur at least six months after
the product introduction as more conservative buyers follow the lead of market
innovators. New product introductions for the gift trade are concentrated in
January-March and June-August when Goodwin Weavers and Churchill Weavers
participate in numerous local and regional gift shows. The Company's infant
product subsidiaries generally introduce new products once each year during the
annual Juvenile Products Manufacturers' Association trade shows in October.
Private label products manufactured by the Company are introduced throughout the
year.

     The Company uses visually appealing and informative packaging,
point-of-sale displays and advertising materials for retailers. Most of these
are produced in the Company's own print shop, which offers design, typesetting
and finishing services. The Company also regularly advertises its products in
publications directed to the trade.

     The Company also markets primarily close-out and irregular products through
its own retail "outlet" stores located in Calhoun, Georgia, Roxboro, North
Carolina, Berea, Kentucky and Rancho Santa Margarita, California. In fiscal
2000, approximately 1.3% of the Company's sales were made through its outlet
stores.

MANUFACTURING

     The Company has made significant investments in modernization and expansion
to lower manufacturing costs, maximize design flexibility, improve quality and
service, and increase productive capacity.

                                        2
<PAGE>   4

     The Company produces adult comforters and accessories at its owned facility
in Roxboro, North Carolina. The Roxboro Plant utilizes an automated warehouse
and distribution system which allows the Company to improve physical control
over inventories, reduce order fulfillment lead times, and provide enhanced
levels of service.

     The Company produces jacquard-woven bedspreads and throws at its weaving
mills in Dalton, Georgia. These products are then finished, packed and shipped
from the Calhoun, Georgia facilities. The Company also utilizes a warehouse and
distribution center in Chatsworth, Georgia.

     The Company's infant products are produced primarily by domestic and
foreign contract manufacturers. These products are then warehoused and shipped
from facilities in Compton, California and Prairieville, Louisiana.

RAW MATERIALS

     The principal raw materials used in the manufacture of adult and infant
comforters, sheets and accessories are printed and solid color cotton and
polycotton fabrics, and polyester fibers used as filling material. The principal
raw materials used in the manufacture of jacquard-woven bedspreads, throws and
other products are natural-color and pre-dyed 100% cotton yarns and acrylic
yarns. The principal raw materials used in the production of infant bibs are
knit-terry polycotton, woven polycotton and vinyl fabrics. Although the Company
usually maintains supply relationships with only a limited number of suppliers,
the Company believes these raw materials presently are available from several
sources in quantities sufficient to meet the Company's requirements.

     The Company uses significant quantities of cotton, either in the form of
cotton yarn, cotton fabric or polycotton fabric. Cotton is subject to ongoing
price fluctuations. The price fluctuations are a result of cotton being an
agricultural product subject to weather patterns, disease and other factors as
well as supply and demand considerations, both domestically and internationally.
To reduce the effect of potential price fluctuations, the Company makes
commitments for future purchases of cotton yarns and fabrics up to a year before
delivery. Nonetheless, significant increases in the price of cotton could
adversely affect the Company's operations.

SEASONALITY, INVENTORY MANAGEMENT

     Historically, the Company has experienced a seasonal sales pattern, which
in the last two years has become more pronounced. Sales are lowest in the first
fiscal quarter and peak in the third fiscal quarter.

     The Company carries normal inventory levels to meet delivery requirements
of customers. Customer returns of merchandise shipped are approximately 2% of
net sales.

ORDER BACKLOG

     The Company's backlogs of unfilled customer orders believed by management
to be firm were $40.1 million and $58.0 million at July 28, 2000 and July 25,
1999, respectively. The majority of these unfilled orders are shipped within
approximately eight weeks, and none is expected to be shipped beyond the
completion of the current fiscal year ending April 1, 2001. Due to the
prevalence of quick-ship programs adopted by its customers, the Company does not
believe that its backlogs are a meaningful indicator of future business.

TRADEMARKS, COPYRIGHTS AND PATENTS

     The Company's products are marketed in part under well-known trademarks.
The Company considers its trademarks to be of material importance to its
business. Adult comforters and accessories primarily carry the trademark Crown
Crafts(R). The majority of throws carry the trademarks Crown Crafts(R) or
Goodwin Weavers(R). Infant products carry the trademarks Red Calliope(R), Little
Bedding(R), NoJo(R), Hamco(R) and Pinky Baby(R). Protection for these marks is
obtained through domestic and foreign registrations. Also important to the
Company is the trademark Royal Sateen(R), which was developed in a joint effort
with Kitan Textile Industries

                                        3
<PAGE>   5

Ltd. of Israel. Kitan is the registered owner of the mark, and the Company is
the exclusive marketer of Royal Sateen products in North America.

     In addition, certain products are manufactured and sold pursuant to
licensing agreements for trademarks that include, among others: Calvin Klein(R),
Disney(R), Tracy Porter(R), Colonial Williamsburg(R), Warner Bros.(R), and
Thomas Kinkade(R). The licensing agreements for the Company's designer brands
generally are for a term of 2 to 6 years, and may or may not be subject to
renewal or extension. Sales of product under the Company's licenses with Calvin
Klein, Inc. and The Walt Disney Company accounted for 15% and 13%, respectively,
of the Company's total sales volume during fiscal 2000. Although revenue has not
been material, pursuant to its license agreements, the Company has licensed and
has sold fabric for certain of its more successful designs to manufacturers of
other products such as bath accessories, table linens, wallpaper borders and
rugs. The Company believes that its licensing activities, both as a licensee and
licensor, will continue to increase in importance as the Company grows.

     Many of the designs used by the Company are copyrighted by other parties,
including trademark licensors, and are available to the Company through
copyright licenses. Other designs are the subject of copyrights and design
patents owned by the Company.

     During the fiscal year ended March 28, 1999, the Company entered into
licensing agreements with Calvin Klein, Inc. and Disney Enterprises, Inc. The
Calvin Klein license grants the Company the right to produce and sell bedroom
products under the Calvin Klein brand. The Disney license expands the Company's
right to produce and sell products featuring Disney characters.

     The Company's aggregate commitment for minimum guaranteed royalty payments
under all of its license agreements is $8.2 million, $3.2 million, $2.3 million,
$2.3 million and $0 for fiscal 2001, 2002, 2003, 2004 and 2005 and thereafter,
respectively. The Company believes that future sales of royalty products will
exceed amounts required to cover the minimum royalty guarantees. The Company's
total royalty expense, net of royalty income, was $15.8 million, $13.4 million
and $8.7 million, for fiscal 2000, 1999, and 1998, respectively.

COMPETITION

     The textile industry, including the market for home furnishings products,
is highly competitive. The Company competes with a variety of manufacturers,
many of which are vertically integrated textile companies with substantially
greater resources than the Company, and many of which are of similar size to the
Company. Competitors may have customer relationships that may be superior to
those of the Company and may have substantially greater resources. The Company
believes that it is the sixth largest domestic manufacturer of bed coverings,
including comforters, comforter sets and jacquard-woven bedspreads, with a total
market share of less than 10%. The Company also believes that it is one of the
largest domestic manufacturer of throws enjoying approximately one-quarter of
this segment and that it is the largest producer of infant bed coverings and
bibs, enjoying approximately one-third of these segments.

     The Company competes on the basis of quality, design, price, service and
packaging. The Company's products face significant competition from imports,
especially in matelasse coverlets and throws. The availability of imports at low
prices has increased importing at the expense of the domestic textile industry
and this trend will continue. The Company believes that its ability to implement
future price increases for its products may be limited by current or future
overcapacity in the domestic textile industry.

GOVERNMENT REGULATION; ENVIRONMENTAL CONTROL

     The Company is subject to various federal, state and local environmental
laws and regulations which regulate, among other things, the discharge, storage,
handling and disposal of a variety of substances and wastes. The Company's
operations are also governed by laws and regulations relating to employee safety
and health, principally the Occupational Safety and Health Administration Act
and regulations thereunder.

     The Company believes that it currently complies in all material respects
with applicable environmental, health and safety laws and regulations. Although
the Company believes that future compliance with such existing laws or
regulations will not have a material adverse effect on its capital expenditures,
earnings or
                                        4
<PAGE>   6

competitive position, there can be no assurances that such requirements will not
become more stringent in the future or that the Company will not incur
significant costs in the future to comply with such requirements.

EMPLOYEES

     At July 28, 2000, the Company had approximately 1,850 employees. None of
the Company's employees is represented by a labor union, and the Company
considers its relationship with its employees to be good. The Company attracts
and maintains qualified personnel by paying competitive salaries and benefits
and offering opportunities for advancement.

INTERNATIONAL SALES

     Sales to customers in foreign countries other than the United States are
not currently material to the Company's business.

ITEM 2.  PROPERTIES

     The Company's headquarters are located in executive offices in Atlanta,
Georgia. The Company occupies approximately 41,200 square feet at this location
under leases that expire June 29, 2002 and September 30, 2000, with renewal
options for two five-year periods.

     The following table summarizes certain information regarding the Company's
principal properties.

<TABLE>
<CAPTION>
                                                                        APPROXIMATE    OWNED/
LOCATION                                           USE                  SQUARE FEET    LEASED
--------                                           ---                  -----------   ---------
<S>                                 <C>                                 <C>           <C>
Atlanta, Georgia..................  Administrative and sales office        41,200     Leased(1)
Aguascalientes, Mexico............  Offices, warehouse, and                82,000     Leased(2)
                                    distribution center
Berea, Kentucky...................  Offices, manufacturing, warehouse,     38,000     Owned
                                    and distribution facilities and
                                    retail store
Blowing Rock, North Carolina......  Three buildings, housing               25,000     Owned
                                    administrative and sales offices,
                                    and factory outlet store
Calhoun, Georgia..................  Two buildings, housing offices,       274,000     Owned
                                    manufacturing facilities, sample
                                    department, print shop and factory
                                    outlet store
Calhoun, Georgia..................  Warehouse and distribution center     234,000     Owned
Calhoun, Georgia..................  Two warehouses                        120,000     Leased(3)
Chatsworth, Georgia...............  Manufacturing facility, warehouse     115,000     Owned
                                    and distribution center
Compton, California...............  Offices, warehouse and                157,400     Leased(4)
                                    distribution center
Compton, California...............  Warehouse                             100,000     Leased(5)
Dalton, Georgia...................  Two buildings, housing                150,000     Owned
                                    manufacturing facilities
Gonzales, Louisiana...............  Warehouse                              60,000     Leased(6)
Manchester, New Hampshire.........  Offices, warehouse, and                18,900     Leased(7)
                                    distribution center
New York, New York................  Sales and design offices and           41,600     Leased(8)
                                    showroom
Prairieville, Louisiana...........  Offices, warehouse, and                23,175     Leased(9)
                                    distribution center
</TABLE>

                                        5
<PAGE>   7

<TABLE>
<CAPTION>
                                                                        APPROXIMATE    OWNED/
LOCATION                                           USE                  SQUARE FEET    LEASED
--------                                           ---                  -----------   ---------
<S>                                 <C>                                 <C>           <C>
Rancho Santa Margarita,
  California......................  Offices, warehouse, and                51,900     Leased(10)
                                    distribution center
Roxboro, North Carolina...........  Five buildings, housing               362,200     Leased(11)
                                    manufacturing facilities,
                                    warehouses and distribution
Roxboro, North Carolina...........  Warehouse and Outlet Store             36,500     Owned
Timberlake, North Carolina........  Two buildings, housing                420,000     Owned
                                    manufacturing facilities,
                                    warehouse and distribution
                                    centers, and administrative
                                    offices
</TABLE>

---------------

 (1) Leases expire June 29, 2002 and September 30, 2000 (renewable for two
     five-year periods).
 (2) Leases expire January 15, 2001 and February 1, 2001 (renewable for one
     two-year period).
 (3) Leases expire as follows: (a) 40,000 square feet on April 1, 2001 and (b)
     80,000 square feet on April 30, 2002.
 (4) Lease expires May 31, 2001 (renewable for one two-year period and one
     three-year period).
 (5) Lease expires May 31, 2004.
 (6) Lease expires March 31, 2001.
 (7) Leases expire December 31, 2001.
 (8) Lease expires April 30, 2007 (renewable for up to two additional five-year
     periods).
 (9) Leases expire March 31, 2003.
(10) Lease expires July 31, 2001.
(11) Leases expire as follows: (a) 76,500 square feet on February 28, 2005; (b)
     285,700 square feet on month to month leases.

     The Company also leases space for its various sales offices, retail stores,
and showrooms around the country.

     Management believes that its properties are suitable for the purposes for
which they are used, are in generally good condition and provide adequate
production capacity for current and anticipated future operations. The Company's
business is somewhat seasonal so that during the late summer and fall months
these facilities are fully utilized, while at other times of the year the
Company has excess capacity.

ITEM 3.  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 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth
quarter of the year ended April 2, 2000.

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

     The Company is authorized by its Articles of Incorporation to issue up to
50,000,000 shares of capital stock, all of which are designated Common Stock,
par value $1.00 per share.

                                        6
<PAGE>   8

COMMON STOCK

     The Company's common stock (the "Common Stock") is traded on the New York
Stock Exchange ("NYSE") under the symbol "CRW". The Company is currently below
the minimum standards of market capitalization for continued listing by the
NYSE. The Company has submitted to the NYSE a confidential plan to improve
profitability and increase its market capitalization. If the NYSE accepts the
Company's plan, the Company will have 18 months to attain the minimum standards
for continued listing. The following table presents quarterly information on the
price range of the Company's Common Stock for the fiscal years ended April 2,
2000 and March 28, 1999. This information indicates the high and low sale prices
as reported by the NYSE.

<TABLE>
<CAPTION>
                          QUARTER                              HIGH      LOW
                          -------                             ------    -----
                                                              (IN THOUSANDS,
                                                                EXCEPT PER
                                                                SHARE DATA)
<S>                                                           <C>       <C>
FISCAL 2000
First Quarter...............................................    $ 5 7/8  $ 4 3/8
Second Quarter..............................................      4 1/2    3 3/4
Third Quarter...............................................      3 1/4    2 3/8
Fourth Quarter..............................................      3        1 5/16

FISCAL 1999
First Quarter...............................................    $22 1/4  $13 7/16
Second Quarter..............................................     16 1/2    7 3/8
Third Quarter...............................................      8        5 1/2
Fourth Quarter..............................................      7 1/2    5 1/8
</TABLE>

     As of July 28, 2000 there were issued and outstanding 8,608,843 shares of
the Company's Common Stock held by approximately 498 registered holders. The
estimated number of beneficial holders does not reflect the approximately 2,000
individual employee accounts in the Company's Employee Stock Ownership Plan. At
July 28, 2000, the Company's Common Stock closed at $0.625 (5/8).

     In fiscal 2000, the Company paid a dividend of $0.03 per share on its
Common Stock on June 27, 1999, September 26, 1999, and December 26, 1999. As
part of the conditions under the amendment of its loan agreements and to
conserve liquidity, the Company did not pay a dividend in the fourth quarter of
fiscal 2000. Any dividends paid by the Company on its Common Stock in the future
will depend upon the earnings and financial condition of the Company as well as
restrictions in the loan agreements which currently prohibit the payment of
dividends.

ITEM 6.  SELECTED FINANCIAL DATA

     The selected financial data presented below for the five years ended April
2, 2000 is from the Company's financial statements. The data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the financial statements and related notes
included elsewhere in this Annual Report.

                                        7
<PAGE>   9

<TABLE>
<CAPTION>
                                                                  FISCAL YEAR
                                              ----------------------------------------------------
                                                2000       1999       1998       1997       1996
                                              --------   --------   --------   --------   --------
                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                           <C>        <C>        <C>        <C>        <C>
FOR THE YEAR
Net sales...................................  $319,893   $362,071   $319,238   $256,385   $219,002
Gross profit................................    35,156     51,259     71,089     51,737     42,452
(Loss) earnings from operations.............   (19,558)    (5,221)    18,993     11,641     10,625
Net (loss) earnings.........................   (29,148)   (11,772)     7,806      3,631      3,947
Basic (loss) earnings per share.............     (3.39)     (1.37)      0.97       0.46       0.49
Diluted (loss) earnings per share...........     (3.39)     (1.37)      0.92       0.45       0.48
Cash dividends per share....................      0.09       0.12       0.12       0.12       0.12
AT YEAR END
Total assets................................  $215,004   $264,851   $241,666   $189,556   $185,698
Long-term debt..............................   106,593     72,857     50,100     71,200     69,300
Shareholders' equity........................    56,815     86,779     97,323     85,695     83,017
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

ACQUISITIONS AND DISPOSITIONS

     During the fiscal year ended March 28, 1999, the Company acquired inventory
and certain other assets associated with the Calvin Klein Home business from DHA
Home, Inc., the former Calvin Klein Home licensee, and began integrating this
business into its Roxboro, North Carolina facilities. In the fourth quarter of
the fiscal year ended March 28, 1999, the Company sold its wholly-owned
subsidiary, Textile, Inc., located in Ronda, North Carolina. Textile, Inc.
manufactured woven throws and decorative home products. The effect of these
transactions on fiscal 1999 operating results is discussed below in the section
"Results of Operations: Fiscal 1999 Compared to Fiscal 1998."

     During the fiscal year ended March 29, 1998, the Company acquired four
companies: Hamco, Inc., Pinky Baby Products, Noel Joanna, Inc. and Burgundy
Interamericana, S.A. de C.V. Hamco and Pinky design, manufacture, market and
distribute bibs and other infant soft goods. Noel Joanna designs, markets and
distributes infant bedding and accessories. Burgundy, located in Aguascalientes,
Mexico, was a contract manufacturer of consumer textile products.
Post-acquisition, Burgundy's production capacity has been utilized exclusively
for the manufacture of the Company's products.

ERP SOFTWARE

     From October through December 1997, the Company conducted an assessment of
its computer applications and systems in order to determine whether existing
systems were sufficient to meet the Company's future business information needs.
As a result, the Company decided to install an Enterprise Resource Planning
(ERP) software program. The ERP program was expected to replace substantially
all of the Company's existing business applications software and to result in
significant improvements in the functionality and efficiency of the Company's
business processes. From January through March 1998, the Company developed a
more detailed assessment of its current business processes and systems,
identified potentially appropriate software packages, prepared requests for
proposals, interviewed software vendors and evaluated alternatives. All costs
and expenses associated with this process were expensed as incurred.

     During fiscal 1999, the Company, together with its consultants, completed
the design of its ERP program, selected certain vendors, began testing of the
system and established plans for implementation. The implementation in fiscal
2000 converted the home office, certain sales offices and the Company's Georgia
operations to the new ERP system in July 1999. Conversion of the North Carolina
operations was planned for December 1999 but was postponed following
difficulties in the Georgia implementation. The Company has not yet established
plans or begun design for converting its infant product companies to the ERP
system. During fiscal years 1999 and 2000, the Company incurred capitalized
expenditures of approximately $11 million and $5 million, respectively,
pertaining to this project. In the fiscal year ended April 2, 2000, the
Company's

                                        8
<PAGE>   10

operating expenses increased compared to fiscal year 1999 due to costs of the
new ERP system in addition to continued legacy system costs.

RESULTS OF OPERATIONS: FISCAL 2000 COMPARED TO FISCAL 1999

     Total net sales for fiscal 2000 decreased $42.2 million, or 11.6%, to $320
million. Net sales of bedroom products decreased $10 million to $135.6 million,
net sales of throws and decorative home accessories decreased $26.9 million to
$71.3 million, and net sales of infant and juvenile products decreased $4.7
million to $112.9 million.

     The decrease in sales of bedroom products was the result of decreased sales
in the Studio bedding line, partly offset by strong growth in the sales of
Calvin Klein Home products. The decrease in sales of throws and decorative home
accessories was primarily attributable to decreased sales of woven bedspreads
and imported fleece throws. Sales of woven products were adversely affected by
problems in the ERP implementation starting in July 1999 that prevented timely
shipment and billing of product.

     As a result of shipping delays, the Company experienced continued increases
in customer claims and closeout inventory. Despite the decrease in sales, sales
deductions and allowances increased by $6.4 million, or 2% of net sales. The
decrease in sales of infant and juvenile products was primarily attributable to
decreased sales of Pillow Buddies(R) as the product matured and to decreased
sales of infant bedding, partly offset by an increase in sales of infant bibs
and bath.

     In fiscal 2000, cost of sales increased to 89.0% of net sales from 85.8% in
fiscal 1999. Reasons for the increase include the lower level of sales compared
to certain fixed costs, continuing decline in the utilization of the Roxboro,
North Carolina facilities and increased royalty expense of $2.4 million.

     Marketing and administrative expenses decreased by $1.8 million, or 3.1%
for fiscal 2000 as the Company responded to the decline in sales by reducing
expenses.

     Interest expense increased by $3.6 million as a result of both higher
borrowings and higher interest rates. Other expense declined by $1.8 million as
prior year expenses included the loss on the sale of Textile, Inc.

     In fiscal 2000, the effective tax rate declined to 12.2% from 30.8% in
fiscal 1999. Due to the losses incurred, the Company has a net operating loss
carryforward of $42 million that is available to offset future taxable income,
although a valuation reserve has been established for some of the benefit of the
carryforward due to uncertainty regarding realization.

RESULTS OF OPERATIONS: FISCAL 1999 COMPARED TO FISCAL 1998

     Total net sales for fiscal 1999 increased $42.8 million, or 13.4%, to
$362.1 million. Net sales of bedroom products increased $17.5 million to $145.5
million, net sales of throws and decorative home accessories increased $4
million to $98.2 million, and net sales of infant and juvenile products
increased $23.3 million to $117.6 million.

     The increase in sales of bedroom products was primarily attributable to
increased sales of imported sheets and Calvin Klein Home products. The increase
in sales of throws and decorative home accessories was primarily attributable to
increased sales of woven bedspreads and imported fleece throws.

     The increase in sales of infant and juvenile products was primarily
attributable to increased sales of Pillow Buddies(R) and to the full year
operation of Noel Joanna, Inc. and Pinky Baby Products acquired during the prior
fiscal year on August 18, 1997 and January 2, 1998, respectively.

     During the fiscal year ended March 28, 1999, and particularly during the
fourth quarter, the Company experienced increasing levels of deductions from
payments for products shipped to its customers, particularly large retailers.
These deductions were claimed for promotional programs, product placements,
shipping errors, and other penalties, some of which were undocumented. Compared
to fiscal year 1998, these deductions increased by approximately 34% and had the
effect of reducing both net sales and gross profits. Because of this

                                        9
<PAGE>   11

experience, in the fourth quarter of the fiscal year ended March 28, 1999, the
Company increased its reserves against its accounts receivable, further reducing
results for the quarter and the fiscal year.

     In fiscal 1999, cost of sales increased to 85.8% of net sales from 77.8% in
fiscal 1998. There were four principal reasons for the increase in cost of sales
as a percent of net sales. First was the reduction in net sales because of
higher sales deductions, described above. Second, the Company experienced a
decline in the utilization of its Roxboro, North Carolina facilities because of
the phase-out of a bedding program manufactured for a major retailer, discussed
in Item 1, and delays in the start-up of the Calvin Klein Home product line.
Third, in the fourth quarter, the Company established pre-tax reserves of
approximately $6.2 million against certain inventories classified as irregular
or discontinued. Lastly, and also in the fourth quarter, as a result of a
routine physical count, the Company discovered certain discrepancies in its
inventory accounts, primarily at its Roxboro, North Carolina operations. This
resulted in a pre-tax increase to cost of sales of approximately $2.6 million.

     Marketing and administrative expenses increased by $4.4 million, or 8.4%,
for fiscal 1999, primarily because of the full year effect of companies acquired
during the prior fiscal year and because of higher marketing expenses associated
with the Calvin Klein Home line of products. As a percent of net sales, however,
operating expenses declined to 15.6% in fiscal 1999 from 16.3% in fiscal 1998.

     Interest expense increased by approximately $3.4 million in fiscal 1999
because of higher borrowings and higher effective interest rates. Other expense
increased in fiscal year 1999 primarily because of a loss on the sale of
Textile, Inc.

     In fiscal 1999, the effective tax rate declined to 30.8% from 37.6% in
fiscal 1998. This decline resulted from losses incurred by the Company's Mexican
subsidiary, Burgundy Interamericana, S.A. de C.V., not includable for United
States tax purposes, and a capital loss from the sale of Textile, Inc. without
off-setting capital income.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by operating activities was $3.2 million for the year
ended April 2, 2000 compared to net cash used of $3.7 million for the year ended
March 28, 1999. Cash of approximately $23.1 million from decreased working
capital more than offset the increased loss of $17.4 million. Net cash used in
investing activities was $6.5 million for the year ended April 2, 2000 compared
to $28.8 million for the year ended March 28, 1999. The decrease in cash used
for investing activities reflects the absence of acquisitions as well as a
decline in expenditures for new equipment following a decrease in sales growth.
Cash provided by financing activities was $4.0 million for the year ended April
2, 2000 compared to $32.4 million for the year ended March 28, 1999. The
decrease in cash provided by financing activities was partly due to changes in
the Company's business plans as well as limits on available credit.

     The Company's ability to make scheduled payments of principal, to pay the
interest on, or to refinance its maturing indebtedness by April 2, 2001 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 and
anticipated increases in cash flow from improved inventory management, cost
reduction initiatives, as well as the planned withdrawal from under-performing
product lines, the Company believes that cash flow from operations together with
advances available from factored accounts receivable will be adequate to meet
liquidity needs through April 1, 2001.

     The Company's notes in the amount of $42.9 million placed with an insurance
company and the revolving 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

                                       10
<PAGE>   12

financial ratios and place restriction on the amounts the Company may expend on
acquisitions and purchases of treasury stock.

     On August 11, 1999, the Company executed agreements with its two commercial
banks and with the holder of its notes to restructure certain provisions of its
borrowing arrangements. Among other things, the agreement extended the maturity
of the $30 million revolving credit facilities to April 3, 2000, and of the
additional revolving credit facility, in the reduced amount of $15 million, to
March 31, 2000, and adjusted financial and other covenants based on the
Company's projections. In exchange, the Company has granted security interests
in substantially all of its assets and adjusted the interest rate on its bank
facilities to each bank's Base Rate plus 1%. These agreements were subsequently
amended to extend the maturity of the loans to August 31, 2000 and revise
certain of the covenants.

     On August 31, 2000, the Company concluded a restructuring of its debt. The
agreements extend the maturity of the debt to April 3, 2001 and adjust financial
and other covenants based on the Company's projections. The restructured loan
covenants limit capital expenditures for fiscal 2001 to $4.4 million, limit the
level of advances on factored accounts receivable to $36 million, require
certain levels of borrowing base assets relative to the debt, and require
certain levels of cash flow on a monthly basis, totaling $14.5 million for
fiscal 2001. Compliance and reporting to the lenders is daily with respect to
the level of factor advances and borrowing base assets, and monthly with respect
to other covenants. In exchange, the Company has agreed to issue to the lenders
warrants exercisable for 10% of the Company's issued and outstanding stock
exercisable not later than December 31, 2005. The warrants will be extinguished
at the rate of 2% for each 1% reduction in the Company's debt. The interest rate
on the credit facilities was increased by 1% to each bank's Base Rate plus 2%
and on the notes placed with an insurance company to 11.77%. The margin over
Base Rate is subject to change after January 1, 2001 depending upon the level of
debt. The principal payment on the notes was deferred until April 3, 2001, but
the Company is required to make repayments of $19 million on its debt between
December 8, 2000 and April 1, 2001. The Company believes that it has adequate
cash flow from operations and factor advances to make these payments. The
available factor advance was $8 million at September 1, 2000.

     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 at any time may
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.

     The agreement with its lenders, described above, provides for the Company
to finance its seasonal working capital needs by taking advances against its
factored receivables of up to $36 million.

RECENTLY ISSUED ACCOUNTING STANDARDS

     In 1998, the Financial Accounting Standards Board (FASB) issued Statement
No. 133, "Accounting for Derivative Financial Instruments and Hedging
Activities" ("SFAS No. 133"). This statement requires that all derivatives be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. In addition, all hedging relationships
must be designated, reassessed and documented pursuant to the provisions of SFAS
No. 133. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133," which amends the effective date of SFAS No. 133 to all
fiscal quarters of fiscal years beginning after June 15, 2000. In June 2000, the
FASB issued SFAS No. 138, which amends SFAS No. 133 and addresses a limited
number of issues causing implementation difficulties for a large number of
entities preparing to implement SFAS No. 133. The effect on the Company's
financial statements upon adoption of SFAS No. 133 has not been determined. SFAS
133 and its amendments are effective for the Company beginning in the first
quarter of fiscal 2002.

                                       11
<PAGE>   13

     The SEC recently issued Staff Accounting Bulletin 101 ("SAB 101"), Revenue
Recognition. The Company is currently evaluating the effect of this
pronouncement on its financial statements.

FORWARD-LOOKING INFORMATION

     This annual report 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, such as Indonesia, 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 operational improvements in its acquired
businesses.

ITEM 7A.  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 exposure to interest rate risk relates to its floating rate
debt, $82.7 million of which was outstanding at April 2, 2000.

     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. To manage this risk, from time to time the
Company enters into commodity future contracts and forward purchase contracts.
No such contracts were outstanding at April 2, 2000.

     The Company's exposure to foreign exchange rates relates to its Mexican
manufacturing subsidiary. During the fiscal year ended April 2, 2000, this
subsidiary manufactured products for the Company with a value of approximately
$7.5 million. The Company's investment in the subsidiary was approximately $4.4
million at April 2, 2000.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See pages F-1 through F-16 herein.

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     The Company has neither changed its independent accountants nor had any
disagreements on accounting or financial disclosure with such accountants.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information with respect to the Company's directors and executive
officers is set forth in the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held on October 18, 2000 (the "Proxy Statement") under the
captions "Election of Directors" and "Executive Officers" and is incorporated
herein by reference. The information with respect to Item 405 of Registration
S-K is set forth in the Proxy Statement under the caption "Section 16(a)
Beneficial Ownership Reporting Compliance" and is incorporated herein by
reference.

                                       12
<PAGE>   14

ITEM 11.  EXECUTIVE COMPENSATION

     The information set forth under the caption "Executive Compensation" in the
Proxy Statement is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information set forth under the caption "Voting Rights and Principal
Shareholders" in the Proxy Statement is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information set forth under the caption "Compensation Committee
Interlocks and Insider Participation" in the Proxy Statement is incorporated
herein by reference.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULE, AND REPORTS ON FORM 8-K

(A)1. FINANCIAL STATEMENTS

     The following consolidated financial statements of Registrant are filed
with this report and included in Part II, Item 8:

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Independent Auditors' Report................................  F-2
Consolidated Balance Sheets as of April 2, 2000 and March
  28, 1999..................................................  F-3
Consolidated Statements of Operations and Comprehensive
  (Loss) Income for the Three Fiscal Years in the Period
  Ended April 2, 2000.......................................  F-4
Consolidated Statements of Changes in Shareholders' Equity
  for the Three Fiscal Years in the Period Ended April 2,
  2000......................................................  F-5
Consolidated Statements of Cash Flows for the Three Fiscal
  Years in the Period Ended April 2, 2000...................  F-6
Notes to Consolidated Financial Statements..................  F-7
</TABLE>

(A)2. FINANCIAL STATEMENT SCHEDULE

     The following financial statement schedule of Registrant is filed with this
report:

<TABLE>
<S>                                                           <C>
Schedule II -- Valuation and Qualifying Accounts............  Page 14
</TABLE>

     All other schedules not listed above have been omitted because they are not
applicable or the required information is included in the financial statements
or notes thereto.

                                       13
<PAGE>   15

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

                           ANNUAL REPORT ON FORM 10-K

SCHEDULE II                                    VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
COLUMN A                                                COLUMN B     COLUMN C     COLUMN D      COLUMN E
--------                                               ----------   ----------   -----------   ----------
                                                                    CHARGED TO
                                                                    COSTS AND
                                                       BALANCE AT   (REVERSED                  BALANCE AT
                                                       BEGINNING      FROM)                      END OF
                                                       OF PERIOD     EXPENSES    DEDUCTIONS*     PERIOD
                                                       ----------   ----------   -----------   ----------
                                                                         (IN THOUSANDS)
<S>                                                    <C>          <C>          <C>           <C>
Accounts Receivable Valuation Accounts:
Year Ended March 29, 1998
  Reserve for doubtful accounts......................    $1,220       $  951       $1,472        $  699
  Reserve for customer deductions....................     2,282          426                      2,708
Year Ended March 28, 1999
  Reserve for doubtful accounts......................    $  699       $  740       $  710        $  729
  Reserve for customer deductions....................     2,708        1,801                      4,509
Year Ended April 2, 2000
  Reserve for doubtful accounts......................    $  729       $  541       $  661        $  609
  Reserve for customer deductions....................    $4,509       $  653                     $5,162

Inventory Valuation Accounts:
Year Ended March 29, 1998
  Reserve for discontinued and irregulars............    $2,398       $  677                     $3,075
Year Ended March 28, 1999
  Reserve for discontinued and irregulars............    $3,075       $2,927                     $6,002
Year Ended April 2, 2000
  Reserve for discontinued and irregulars............    $6,002       $  174                     $6,176
</TABLE>

---------------

* Deductions from the reserve for doubtful accounts represent the amount of
  accounts written off reduced by any subsequent recoveries.

                                       14
<PAGE>   16

(A)3. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS

     The following Executive Compensation Plans and Arrangements are filed with
this Form 10-K or have been previously filed as indicated below:

          1. Crown Crafts, Inc. 1976 Non-Qualified Stock Option Plan.
     (6)(Exhibit 10(b)(i))

          2. Philip Bernstein Death Benefits Agreement dated March 30, 1992 (5)
     (Exhibit 10(b)(ii))

          3. Description of Crown Crafts, Inc. Executive Incentive Bonus Plan
     (5) (Exhibit 10(b)(iii))

          4. Crown Crafts, Inc. 1995 Stock Option Plan (1) (Exhibit 10(b)(iv))

          5. Form of Nonstatutory Stock Option Agreement (pursuant to 1995 Stock
     Option Plan) (1) (Exhibit 10(b)(v))

          6. Form of Nonstatutory Stock Option Agreement for Nonemployee
     Directors (pursuant to 1995 Stock Option Plan) (1) (Exhibit 10 (b)(vi))

(A)5. EXHIBITS

     Exhibits required to be filed by Item 601 of Regulation S-K are included as
Exhibits to this report as follows:

<TABLE>
<CAPTION>
 EXHIBIT
  NUMBER                          DESCRIPTION OF EXHIBITS
 -------                          -----------------------
<S>        <C>  <C>
2(a)        --  Merger Agreement dated as of October 8, 1995 between and
                among Registrant and CC Acquisition Corp, and Neal Fohrman
                and Stanley Glickman and The Red Calliope and Associates,
                Inc.(7)
3(a)        --  Restated Articles of Incorporation of Registrant.(1)
3(b)        --  Bylaws of Registrant.(1)
4(a)        --  Instruments defining the rights of security holders are
                contained in the Restated Articles of Incorporation of
                Registrant, and Article I of the Restated Bylaws of
                Registrant.(1)
4(b)        --  Form of Rights Agreement dated as of August 11, 1995 between
                the Registrant and Trust Company Bank, including Form of
                Right Certificate and Summary of Rights to Purchase Common
                Shares.(2)
10(a)(i)    --  9.22% Note Agreement with The Prudential Insurance Company
                of America.(3)
10(a)(ii)   --  Letter Agreement with The Prudential Insurance Company of
                America dated July 23, 1991.(4)
10(a)(iii)  --  Letter Agreement with The Prudential Insurance Company of
                America dated April 9, 1992.(4)
10(a)(iv)   --  Letter Agreement with The Prudential Insurance Company of
                America dated May 21, 1993.(5)
10(a)(v)    --  Letter Agreement with The Prudential Insurance Company of
                America dated July 14, 1994.(8)
10(a)(vi)   --  Letter Agreement with The Prudential Insurance Company of
                America dated July 29, 1994(8)
10(a)(vii)  --  Letter Agreement with The Prudential Insurance Company of
                America dated March 31, 1995.(8)
10(a)(viii)  -- Letter Agreement with The Prudential Insurance Company of
                America dated October 12, 1995.(1)
10(b)(i)    --  Crown Crafts, Inc. Non-Qualified Stock Option Plan.(6)
10(b)(ii)   --  Philip Bernstein Death Benefits Agreement dated March 30,
                1992.(5)
10(b)(iii)  --  Description of Crown Crafts, Inc. Executive Incentive Bonus
                Plan.(5)
</TABLE>

                                       15
<PAGE>   17

<TABLE>
<CAPTION>
 EXHIBIT
  NUMBER                          DESCRIPTION OF EXHIBITS
 -------                          -----------------------
<S>        <C>  <C>
10(b)(iv)   --  Crown Crafts, Inc. 1995 Stock Option Plan.(1)
10(b)(v)    --  Form of Nonstatutory Stock Option Agreement (pursuant to
                1995 Stock Option Plan).(1)
10(b)(vi)   --  Form of Nonstatutory Stock Option Agreement for Nonemployee
                Directors (pursuant to 1995 Stock Option Plan).(1)
10(c)(i)    --  Revolving Credit Agreement dated August 25, 1995 with
                NationsBank, National Association (Carolinas).(1)
10(c)(ii)   --  Amendment No. 1 to Revolving Credit Agreement dated May 1,
                1996 with NationsBank, National Association (Carolinas).(9)
10(c)(iii)  --  Amendment No. 2 to Revolving Credit Agreement dated June 28,
                1996 with NationsBank, National Association (Carolinas).(10)
10(c)(iv)   --  Letter Agreement with NationsBank, N.A. dated December 23,
                1996.(10)
10(c)(v)    --  Letter Agreement with NationsBank, N.A. dated January 23,
                1997.(10)
10(c)(vi)   --  Letter Agreement with NationsBank, N.A. dated May 22,
                1997.(10)
10(c)(vii)  --  Letter Agreement with NationsBank, N.A. dated November 6,
                1997.(11)
10(c)(viii)  -- Letter Agreement with NationsBank, N.A. dated January 14,
                1998.(11)
10(d)(i)    --  Revolving Credit Agreement dated August 25, 1995 with
                Wachovia Bank of Georgia, N.A.(1)
10(d)(ii)   --  Amendment No. 1 to Revolving Credit Agreement dated May 1,
                1996 with Wachovia Bank of Georgia, N.A.(9)
10(d)(iii)  --  Amendment No. 2 to Revolving Credit Agreement dated June 28,
                1996 with Wachovia Bank of Georgia, N.A.(10)
10(d)(iv)   --  Letter Agreement with Wachovia Bank of Georgia, N.A. dated
                December 24, 1996.(10)
10(d)(v)    --  Letter Agreement with Wachovia Bank of Georgia, N.A. dated
                January 22, 1997.(10)
10(d)(vi)   --  Letter Agreement with Wachovia Bank of Georgia, N.A. dated
                May 22, 1997.(10)
10(d)(vii)  --  Letter Agreement with Wachovia Bank of Georgia, N.A. dated
                November 7, 1997. (11)
10(d)(viii)  -- Letter Agreement with Wachovia Bank of Georgia, N.A. dated
                January 22, 1998. (11)
10(e)(i)    --  Note Purchase and Private Shelf Facility dated October 12,
                1995 with The Prudential Insurance Company of America.(1)
10(e)(ii)   --  Letter Agreement dated April 4, 1996 with The Prudential
                Insurance Company of America.(9)
10(f)       --  Lease Agreement dated June 28, 1996 between 1185 Avenue of
                the Americas Associates as Lessor and Crown Crafts Home
                Furnishings, Inc. as Lessee.(9)
10(g)       --  License Agreement dated January 1, 1998 between Disney
                Enterprises, Inc. as Licensor and Crown Crafts, Inc. as
                Licensee(11)
10(h)       --  License Agreement dated May 11, 1998 between Calvin Klein,
                Inc. as Licensor, Crown Crafts Designer, Inc. (a
                wholly-owned subsidiary of the Registrant), and Crown
                Crafts, Inc. as Guarantor.(11)
10(i)(i)    --  Bank of America Revolving Credit Agreement(12)
10(i)(ii)   --  Wachovia Revolving Credit Agreement(12)
10(i)(iii)  --  Amendment to Note Agreement dated August 4, 1999(12)
</TABLE>

                                       16
<PAGE>   18

<TABLE>
<CAPTION>
 EXHIBIT
  NUMBER                          DESCRIPTION OF EXHIBITS
 -------                          -----------------------
<S>        <C>  <C>
10(i)(iv)   --  Amendment to Note Agreement dated August 11, 1999(12)
10(i)(v)    --  Crown Crafts Security Agreement(12)
10(i)(vi)   --  Crown Crafts Stock Pledge Agreement(12)
10(i)(vii)  --  Form of Subsidiary Security Agreement(12)
10(i)(viii)  -- Form of Subsidiary Guaranty Agreement(12)
10(j)(i)    --  Amendment No. 1 to Bank of America Revolving Credit
                Agreement(13)
10(j)(ii)   --  Amendment No. 1 to Wachovia Bank Revolving Credit
                Agreement(13)
10(j)(iii)  --  Waiver of The Prudential Insurance Company of America(13)
10(k)(i)    --  Amendment No. 2 to Bank of America Revolving Credit
                Agreement(14)
10(k)(ii)   --  Amendment No. 2 to Wachovia Bank Revolving Credit
                Agreement(14)
10(k)(iii)  --  Waiver of The Prudential Insurance Company of America(14)
21          --  Subsidiaries of the Registrant(11)
23          --  Consent of Deloitte & Touche LLP
27.1        --  Financial Data Schedule (for SEC use only)
</TABLE>

---------------

 (1) Incorporated herein by reference to exhibit of same number to Registrant's
     Quarterly Report on Form 10-Q for the quarter ended October 1, 1995.
 (2) Incorporated herein by reference to exhibit of same number to Registrant's
     Report on Current Form 8-K dated August 22, 1995.
 (3) Incorporated herein by reference to exhibit of same number to Registrant's
     Annual Report on Form 10-K for the fiscal year ended March 31, 1991.
 (4) Incorporated herein by reference to exhibit of same number to Registrant's
     Annual Report on Form 10-K for the fiscal year ended March 29, 1992.
 (5) Incorporated herein by reference to exhibit of same number to Registrant's
     Annual Report on Form 10-K for the fiscal year ended March 28, 1993.
 (6) Incorporated herein by reference to exhibit of same number to Registrant's
     Registration Statement on Form S-8, filed April 8, 1994. (Reg. No.
     33-77558).
 (7) Incorporated herein by reference to exhibit of same number to Registrant's
     Report on Current Form 8-K dated November 13, 1995.
 (8) Incorporated herein by reference to exhibit of same number to Registrant's
     Annual Report on Form 10-K for the fiscal year ended April 2, 1995.
 (9) Incorporated herein by reference to exhibit of the same number to
     Registrant's Annual Report on Form 10-K for the fiscal year ended March 31,
     1996.
(10) Incorporated herein by reference to exhibit of the same number to
     Registrant's Annual Report on Form 10-K for the fiscal year ended March 30,
     1997.
(11) Incorporated herein by reference to exhibit of the same number to
     Registrant's Annual Report on Form 10-K for the fiscal year ended March 29,
     1998.
(12) Incorporated herein by reference to exhibit of same number to Registrant's
     Report on Current Form 8-K dated August 4, 1999.
(13) Incorporated herein by reference to exhibit of same number to Registrant's
     Report on Current Form 8-K dated February 23, 2000.
(14) Incorporated herein by reference to exhibit of same number to Registrant's
     Report on Current Form 8-K dated March 13, 2000.

                                       17
<PAGE>   19

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                          By:   /s/ MICHAEL H. BERNSTEIN
                                            ------------------------------------
                                                    Michael H. Bernstein
                                                  Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
                     SIGNATURES                                        TITLE                   DATE
                     ----------                                        -----                   ----
<C>                                                    <S>                                    <C>

              /s/ MICHAEL H. BERNSTEIN                 Chief Executive Officer, Director      8/31/00
-----------------------------------------------------
                Michael H. Bernstein

               /s/ E. RANDALL CHESTNUT                 Executive Vice President, Director     8/31/00
-----------------------------------------------------
                 E. Randall Chestnut

                 /s/ MARVIN A. DAVIS                   Director                               8/31/00
-----------------------------------------------------
                   Marvin A. Davis

                 /s/ JANE E. SHIVERS                   Director                               8/31/00
-----------------------------------------------------
                   Jane E. Shivers

                /s/ ALFRED M. SWIREN                   Director                               8/31/00
-----------------------------------------------------
                  Alfred M. Swiren

                 /s/ RICHARD N. TOUB                   Director                               8/31/00
-----------------------------------------------------
                   Richard N. Toub

                 /s/ CARL A. TEXTER                    Chief Accounting Officer               8/31/00
-----------------------------------------------------
                   Carl A. Texter
</TABLE>

                                       18
<PAGE>   20

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Audited Financial Statements:
  Independent Auditors' Report..............................   F-2
  Consolidated Balance Sheets as of April 2, 2000 and March
     28, 1999...............................................   F-3
  Consolidated Statements of Operations and Comprehensive
     (Loss) Income for the Three Fiscal Years in the Period
     Ended April 2, 2000....................................   F-4
  Consolidated Statements of Changes in Shareholders' Equity
     for the Three Fiscal Years in the Period Ended April 2,
     2000...................................................   F-5
  Consolidated Statements of Cash Flows for the Three Fiscal
     Years in the Period Ended April 2, 2000................   F-6
  Notes to Consolidated Financial Statements................   F-7
     Note #  1 -- DESCRIPTION OF BUSINESS
     Note #  2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     Note #  3 -- ACQUISITIONS
     Note #  4 -- DISCONTINUANCE OF CERTAIN BUSINESSES
     Note #  5 -- INVENTORIES
     Note #  6 -- FINANCING ARRANGEMENTS
     Note #  7 -- INCOME TAXES
     Note #  8 -- RETIREMENT PLANS
     Note #  9 -- STOCK OPTIONS
     Note # 10 -- EARNINGS PER SHARE
     Note # 11 -- MAJOR CUSTOMERS
     Note # 12 -- COMMITMENTS AND CONTINGENCIES
     Note # 13 -- SEGMENT AND RELATED INFORMATION
     Note # 14 -- SUBSEQUENT EVENTS
Supplemental Financial Information:
  Selected Quarterly Financial Information (unaudited)......  F-16
</TABLE>

                                       F-1
<PAGE>   21

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
Crown Crafts, Inc.

     We have audited the accompanying consolidated balance sheets of Crown
Crafts, Inc. and subsidiaries as of April 2, 2000 and March 28, 1999 and the
related consolidated statements of operations and comprehensive (loss) income,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended April 2, 2000. Our audits also included the financial statement
schedule listed at Item 14. These financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and financial statement
schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Crown Crafts, Inc. and
subsidiaries as of April 2, 2000 and March 28, 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
April 2, 2000 in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

Deloitte & Touche LLP

Atlanta, Georgia
August 15, 2000
(August 31, 2000
as to Note 6)

                                       F-2
<PAGE>   22

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                        APRIL 2, 2000 AND MARCH 28, 1999

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
                                                              (DOLLAR AMOUNTS IN
                                                               THOUSANDS, EXCEPT
                                                              SHARE AND PAR VALUE
                                                                  PER SHARE)
<S>                                                           <C>        <C>
                                     ASSETS
CURRENT ASSETS:
Cash........................................................  $  1,453   $    744
Accounts receivable (less allowances of $5,771 in 2000 and
  $5,238 in 1999):
  Due from factor...........................................    25,432     48,042
  Other.....................................................     3,580      7,355
Inventories, net............................................    73,269     87,287
Deferred income taxes.......................................     1,770        776
Income tax recoverable......................................        47      4,422
Other current assets........................................     6,938      7,258
                                                              --------   --------
         Total current assets...............................   112,489    155,884
                                                              --------   --------
PROPERTY, PLANT AND EQUIPMENT -- at cost:
Land, buildings and improvements............................    45,613     45,190
Machinery and equipment.....................................    97,972     92,689
Furniture and fixtures......................................     2,142      2,100
                                                              --------   --------
                                                               145,727    139,979
Less accumulated depreciation...............................    72,705     60,858
                                                              --------   --------
         Property, plant and equipment -- net...............    73,022     79,121
                                                              --------   --------
OTHER ASSETS:
Goodwill (net of amortization of $4,067 in 2000 and $3,036
  in 1999)..................................................    25,228     25,558
Other.......................................................     4,265      4,288
                                                              --------   --------
         Total other assets.................................    29,493     29,846
                                                              --------   --------
         Total Assets.......................................  $215,004   $264,851
                                                              ========   ========
                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable...............................................             $ 56,150
Accounts payable............................................  $ 17,997     25,339
Accrued wages and benefits..................................     5,022      5,017
Accrued royalties...........................................     3,538        833
Other accrued liabilities...................................     3,444      5,112
Current maturities of long-term debt........................    19,000      7,243
                                                              --------   --------
         Total current liabilities..........................    49,001     99,694
                                                              --------   --------
NON-CURRENT LIABILITIES:
Long-term debt..............................................   106,593     72,857
Deferred income taxes.......................................     1,850      4,776
Other.......................................................       745        745
                                                              --------   --------
         Total non-current liabilities......................   109,188     78,378
                                                              --------   --------
COMMITMENTS AND CONTINGENCIES (Note 12)
SHAREHOLDERS' EQUITY:
Common stock -- par value $1.00 per share 50,000,000 shares
  authorized, 9,983,305 issued..............................     9,983      9,983
Additional paid-in capital..................................    46,096     46,096
Retained earnings...........................................    21,110     51,032
Cumulative currency translation adjustment..................       (65)       (23)
Common stock held in treasury -- 1,374,462 shares at cost...   (20,309)   (20,309)
                                                              --------   --------
         Total shareholders' equity.........................    56,815     86,779
                                                              --------   --------
         Total Liabilities and Shareholders' Equity.........  $215,004   $264,851
                                                              ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                       F-3
<PAGE>   23

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
      FISCAL YEARS ENDED APRIL 2, 2000, MARCH 28, 1999 AND MARCH 29, 1998

<TABLE>
<CAPTION>
                                                                2000       1999       1998
                                                              --------   --------   --------
                                                               (IN THOUSANDS, EXCEPT (LOSS)
                                                                   EARNINGS PER SHARE)
<S>                                                           <C>        <C>        <C>
Net sales...................................................  $319,893   $362,071   $319,238
Cost of products sold.......................................   284,737    310,812    248,149
                                                              --------   --------   --------
Gross profit................................................    35,156     51,259     71,089
Marketing and administrative expenses.......................    54,714     56,480     52,096
Loss on sale of Textile, Inc................................                1,805
                                                              --------   --------   --------
(Loss) earnings from operations.............................   (19,558)    (7,026)    18,993
Other income (expense):
  Interest expense..........................................   (13,572)    (9,945)    (6,562)
  Other -- net..............................................       (65)       (31)        84
                                                              --------   --------   --------
(Loss) earnings before income taxes.........................   (33,195)   (17,002)    12,515
Income tax (benefit) expense................................    (4,047)    (5,230)     4,709
                                                              --------   --------   --------
Net (loss) earnings.........................................   (29,148)   (11,772)     7,806
                                                              --------   --------   --------
Other comprehensive loss, net of tax:
  Foreign currency translation adjustment...................       (42)       (19)        (4)
                                                              --------   --------   --------
Comprehensive (loss) income, net of tax.....................  $(29,190)  $(11,791)  $  7,802
                                                              --------   --------   --------
Basic (loss) earnings per share.............................  $  (3.39)  $  (1.37)  $   0.97
                                                              --------   --------   --------
Diluted (loss) earnings per share...........................  $  (3.39)  $  (1.37)  $   0.92
                                                              --------   --------   --------
Weighted average shares outstanding -- basic................     8,609      8,593      8,065
                                                              --------   --------   --------
Weighted average shares outstanding -- diluted..............     8,609      8,593      8,495
                                                              ========   ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                       F-4
<PAGE>   24

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
      FISCAL YEARS ENDED APRIL 2, 2000, MARCH 28, 1999 AND MARCH 29, 1998

<TABLE>
<CAPTION>
                                                                         CUMULATIVE      TREASURY STOCK
                                                 ADDITIONAL               CURRENCY     -------------------
                                        COMMON    PAID-IN     RETAINED   TRANSLATION    NUMBER
                                        STOCK     CAPITAL     EARNINGS   ADJUSTMENT    OF SHARES    COST
                                        ------   ----------   --------   -----------   ---------   -------
                                        (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S>                                     <C>      <C>          <C>        <C>           <C>         <C>
BALANCES -- MARCH 30, 1997............  $9,051    $34,438     $57,005       $ --       1,106,435   $14,799
                                        ------    -------     -------       ----       ---------   -------
Net earnings..........................                          7,806
Cash dividends ($0.12 per share)......                           (973)
Exercises of stock options............     536      4,612
Treasury stock acquired in conjunction
  with exercises of stock options.....                                                   154,504     3,170
Tax benefits realized from exercises
  of stock options....................              1,821
Stock issued in connection with an
  acquisition.........................      67        933
Currency translation adjustment.......                                        (4)
                                        ------    -------     -------       ----       ---------   -------
BALANCES -- MARCH 29, 1998............   9,654     41,804      63,838         (4)      1,260,939    17,969
                                        ------    -------     -------       ----       ---------   -------
Net loss..............................                        (11,772)
Cash dividends ($0.12 per share)......                         (1,034)
Exercises of stock options............     329      3,025
Treasury stock acquired in conjunction
  with exercises of stock options.....                                                   113,523     2,340
Tax benefits realized from exercises
  of stock options....................              1,267
Currency translation adjustment.......                                       (19)
                                        ------    -------     -------       ----       ---------   -------
BALANCES -- MARCH 28, 1999............   9,983     46,096      51,032        (23)      1,374,462    20,309
                                        ------    -------     -------       ----       ---------   -------
Net loss..............................                        (29,148)
Cash dividends ($0.09 per share)......                           (774)
Currency translation adjustment.......                                       (42)
                                        ------    -------     -------       ----       ---------   -------
BALANCES -- APRIL 2, 2000.............  $9,983    $46,096     $21,110       $(65)      1,374,462   $20,309
                                        ======    =======     =======       ====       =========   =======
</TABLE>

Number of shares of common stock issued: 9,983,305 at April 2, 2000 and March
28, 1999.

                See notes to consolidated financial statements.

                                       F-5
<PAGE>   25

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
      FISCAL YEARS ENDED APRIL 2, 2000, MARCH 28, 1999 AND MARCH 29, 1998

<TABLE>
<CAPTION>
                                                                2000       1999       1998
                                                              --------   --------   --------
                                                                      (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
OPERATING ACTIVITIES:
Net (loss) earnings.........................................  $(29,148)  $(11,772)  $  7,806
Adjustments to reconcile net (loss) earnings to net cash
  provided by (used for) operating activities:
  Depreciation of property, plant and equipment.............    12,304     11,421     10,193
  Amortization of goodwill..................................     1,030      1,229        998
  Deferred income tax provisions............................    (3,920)    (1,909)       629
  Loss (Gain) on sale of property, plant and equipment......      (439)       271         51
  Loss on sale of Textile, Inc..............................                1,805
  Changes in assets and liabilities, net of effects of
     acquisitions of businesses:
     Accounts receivable....................................    15,350    (11,392)    (5,230)
     Inventories............................................    14,018      2,720    (18,471)
     Other current assets...................................       320     (1,771)    (1,067)
     Other assets...........................................        23      1,084       (454)
     Accounts payable.......................................    (7,342)     3,765      4,750
     Income taxes payable...................................                  (95)    (1,662)
     Accrued liabilities....................................     1,041        915       (664)
     Other liabilities......................................                            (281)
                                                              --------   --------   --------
Net cash provided by (used for) operating activities........     3,237     (3,729)    (3,402)
                                                              --------   --------   --------
INVESTING ACTIVITIES:
Capital expenditures........................................    (7,263)   (21,052)    (8,300)
Acquisitions, net of cash acquired..........................      (700)   (10,072)   (19,611)
Proceeds from sale of property, plant and equipment.........     1,496        351        200
Net proceeds from the sale of Textile, Inc..................                2,280
Other.......................................................       (40)      (272)
                                                              --------   --------   --------
Net cash used for investing activities......................    (6,507)   (28,765)   (27,711)
                                                              --------   --------   --------
FINANCING ACTIVITIES:
Payment of long-term debt...................................    (7,243)      (100)      (775)
Increase in bank revolving credit...........................                           9,000
(Decrease) increase in notes payable........................    (3,414)    31,300     20,273
Increase in advances from factor............................    15,410
Stock options exercised.....................................                2,281      3,795
Cash dividends..............................................      (774)    (1,033)      (973)
Other.......................................................                  (19)
                                                              --------   --------   --------
Net cash provided by financing activities...................     3,979     32,429     31,320
                                                              --------   --------   --------
NET INCREASE (DECREASE) IN CASH.............................       709        (65)       207
Cash at beginning of year...................................       744        809        602
                                                              --------   --------   --------
CASH AT END OF YEAR.........................................  $  1,453   $    744   $    809
                                                              ========   ========   ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid...........................................  $    147   $    190   $  5,368
                                                              ========   ========   ========
Interest paid...............................................  $ 13,186   $  9,675   $  6,452
                                                              ========   ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                       F-6
<PAGE>   26

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      FISCAL YEARS ENDED APRIL 2, 2000, MARCH 28, 1999 AND MARCH 29, 1998

1. DESCRIPTION OF BUSINESS

     Crown Crafts, Inc. and its subsidiaries (collectively, the "Company")
operate in two principal business segments within the textile industry, which
are adult home furnishing and juvenile products, and infant products. Adult home
furnishing and juvenile products consists of bedroom products (adult comforters
and accessories), throws and decorative home accessories (primarily
jacquard-woven throws in cotton, acrylic, rayon or chenille), and juvenile
products (primarily Pillow Buddies(R)). The infant products segment consists of
infant bedding, bibs, and infant soft goods. Sales are generally made directly
to retailers, primarily department and specialty stores, mass merchants, large
chain stores and gift stores.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation:  The consolidated financial statements include the
accounts of Crown Crafts, Inc. and its subsidiaries. All significant
intercompany balances and transactions are eliminated in consolidation.

     The Company's fiscal year ends on the Sunday nearest March 31. Fiscal years
are designated in the consolidated financial statements and notes thereto by
reference to the calendar year within which the fiscal year ends. The
consolidated financial statements encompass 53 weeks of operations for fiscal
year 2000 and 52 weeks for fiscal years 1999 and 1998.

     Use of Estimates:  The preparation of financial statements in conformity
with generally accepted accounting principles 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.

     Revenue Recognition:  Sales are recorded when goods are shipped to
customers, and are reported net of returns and allowances in the consolidated
statements of operations and comprehensive (loss) income.

     Inventory Valuation:  Inventories are valued at the lower of first-in,
first-out cost or market.

     Depreciation and Amortization:  Depreciation of property, plant and
equipment is computed using the straight-line method over the estimated useful
lives of the respective assets. Estimated useful lives are 15 to 40 years for
buildings, 3 to 7 1/2 years for machinery and equipment, and 8 years for
furniture and fixtures. The cost of improvements to leased premises is amortized
over the shorter of the estimated life of the improvement or the term of the
lease.

     Goodwill, which represents the unamortized excess of purchase price over
fair value of net identifiable assets acquired in business combinations, is
amortized using the straight-line method over periods of up to 30 years. The
Company reviews the carrying values and useful lives of goodwill and other
long-lived assets if the facts and circumstances suggest that their
recoverability may have been impaired. Goodwill is stated net of accumulated
amortization of $4.1 million and $3.0 million at April 2, 2000 and March 28,
1999, respectively. The Company believes that no material impairment of goodwill
or other long-lived assets exists at April 2, 2000.

     Provisions 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.

     Earnings Per Share:  In 1998, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"). SFAS 128
replaced previously reported primary and fully-diluted earnings per share
amounts with basic and diluted earnings per share.

                                       F-7
<PAGE>   27
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Stock-Based Compensation:  The Company accounts for stock option grants
using the intrinsic value method and only issues stock options that have an
exercise price that is equal to or more than the fair value of the underlying
shares at the date of grant. Accordingly, no compensation expense is recorded in
the accompanying statements of earnings with respect to stock option grants.

     Segments and Related Information:  In 1999, the Company adopted SFAS 131,
"Disclosures about Segments of an Enterprise and Related Information." This
statement requires certain information to be reported about operating segments
on a basis consistent with the Company's internal organizational structure.
Management's analysis concluded that the Company operates in two operating
segments, adult home furnishings and juvenile products, and infant products.
Required disclosures have been made in Note 13. This statement expands and
modifies disclosures and, accordingly, had no impact on the Company's reported
financial position, results of operations, or cash flows.

     Recently Issued Accounting Standards:  In 1998, the Financial Accounting
Standards Board (FASB) issued Statement No. 133, "Accounting for Derivative
Financial Instruments and Hedging Activities" ("SFAS No. 133"). This statement
requires that all derivatives be recognized in the statement of financial
position as either assets or liabilities and measured at fair value. In
addition, all hedging relationships must be designated, reassessed and
documented pursuant to the provisions of SFAS No. 133. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133," which
amends the effective date of SFAS No. 133 to all fiscal quarters of fiscal years
beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138, which
amends SFAS No. 133 and addresses a limited number of issues causing
implementation difficulties for a large number of entities preparing to
implement SFAS No. 133. The effect on the Company's financial statements upon
adoption of SFAS No. 133 has not been determined. SFAS 133 and its amendments
are effective for the Company beginning in the first quarter of fiscal 2002.

     The SEC recently issued Staff Accounting Bulletin 101 ("SAB 101"), Revenue
Recognition. The Company is currently evaluating the effect of this
pronouncement on its financial statements.

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

3. ACQUISITIONS

     In May 1998, the Company entered into a license agreement with Calvin
Klein, Inc. which gives the Company the right to manufacture and distribute
Calvin Klein Home bed, bath and table top collections. In August 1998, the
Company purchased inventory and certain other assets from the previous licensee
and in December 1998, purchased additional inventory and assets. The total
consideration for these transactions, including transaction costs, was $10.1
million.

     During 1998, the Company acquired four businesses:  Hamco, Inc. ("Hamco")
on March 31, 1997; Noel Joanna, Inc. ("NoJo") on August 18, 1997; Pinky Baby
Products ("Pinky") on January 2, 1998; and Burgundy Interamericana, S.A. de C.V.
("Burgundy") on January 30, 1998. NoJo designs and markets infant bedding and
accessories. Hamco and Pinky manufacture infant soft goods such as bibs, hooded
towels and burp cloths. Burgundy is a Mexican contract manufacturer of consumer
textile products. The total consideration for these four acquisitions, including
transaction costs, was $20.6 million, of which $19.6 million was paid in cash
with the balance paid through the issuance of approximately 67,000 shares of the
Company's common stock.

     All four 1998 acquisitions were accounted for as purchases. Accordingly,
the net purchase price was allocated based upon the respective acquisition-

                                       F-8
<PAGE>   28
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

date fair market values of assets acquired and liabilities assumed, as follows:

<TABLE>
<CAPTION>
                               (IN THOUSANDS)
                               --------------
<S>                            <C>
Assets acquired, other than
  cash.......................     $14,181
Goodwill.....................      16,324
                                  -------
                                   30,505
Less liabilities assumed.....      10,121
                                  -------
Purchase price, net of cash
  acquired...................     $20,384
                                  =======
</TABLE>

     The consolidated statement of operations for 1998 includes the revenues,
expenses and operating results for each of these four companies commencing with
its respective acquisition date. The following unaudited pro forma information
presents the Company's consolidated results of operations as though the
acquisitions of Hamco, Pinky, NoJo and Burgundy had occurred on the first day of
fiscal 1998. These pro forma results do not purport to be indicative of the
results which would have been achieved had the acquisitions been made on that
date, or of future results of operations.

<TABLE>
<CAPTION>
                                      1998
                                 --------------
                                 (IN THOUSANDS)
<S>                              <C>
Net sales......................     $331,805
Net earnings...................        7,436
Basic earnings per share.......         0.92
Diluted earnings per share.....         0.88
</TABLE>

4. DISCONTINUANCE OF CERTAIN BUSINESSES

     In March 1999, the Company completed the sale of Textile, Inc. a weaving
facility located in Ronda, North Carolina. The sale, which generated $2.3
million in cash, resulted in a $1.8 million pre-tax loss relating to the
write-off of goodwill.

5. INVENTORIES

     Major classes of inventory were as follows:

<TABLE>
<CAPTION>
                        2000      1999
                       -------   -------
                        (IN THOUSANDS)
<S>                    <C>       <C>
Raw materials and
  supplies...........  $27,822   $34,300
Work in process......    4,925     4,738
Finished goods.......   40,522    48,249
                       -------   -------
                       $73,269   $87,287
                       =======   =======
</TABLE>

     Inventory is net of reserves for inventories classified as irregular or
discontinued of $6.2 million and $6.0 million in 2000 and 1999, respectively.

6. FINANCING ARRANGEMENTS

     Factoring 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. Factoring
fees, which are included in marketing and administrative expenses in the
consolidated statements of operations, were $2.8 million, $2.5 million, and $1.9
million, respectively, in 2000, 1999 and 1998. Factor advances were $15.4
million at April 2, 2000 and $0 at the end of 1999 and 1998, respectively.

     Notes Payable and Other Credit Facilities:  At April 2, 2000, the Company
had committed lines of credit totaling $52.7 million with two banks at floating
rates of interest. No fees or compensating balances are required under these
arrangements, and the lines are fully drawn. Annual average borrowings and
weighted average interest rates under these arrangements were $52.9 million at
8.95% in 2000 and $27 million at 7.60% in 1999. Borrowings of $52.7 million were
outstanding under these arrangements at April 2, 2000 at an interest rate of
10%. In addition, the Company had outstanding letters of credit, primarily for
purchases of inven-

                                       F-9
<PAGE>   29
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tory, aggregating $1.4 million which reduced the available credit under these
arrangements.

     At April 2, 2000 and March 28, 1999, long term debt consisted of:

<TABLE>
<CAPTION>
                          2000      1999
                        --------   -------
                          (IN THOUSANDS)
<S>                     <C>        <C>     <C>
Bank credit lines.....  $ 52,737
Promissory notes......    42,856   $50,000
Floating rate
  revolving credit
  facilities..........    30,000    30,000
Other.................                 100
                        --------   -------
                         125,593    80,100
Less current
  maturities..........    19,000     7,243
                        --------   -------
                        $106,593   $72,857
                        ========   =======
</TABLE>

     Annual maturities of long term debt are:

<TABLE>
<S>                                 <C>
2000..............................  $ 19,000
2001..............................   106,593
                                    --------
Total.............................  $125,593
                                    ========
</TABLE>

     The Company's notes in the amount of $42.9 million are placed with an
insurance company. Effective April 9, 1999, the interest rate on the notes was
increased from 6.92% to 10.42%. The interest rate was increased to 11.77%
effective August 31, 2000 as discussed below. These notes contain restrictive
covenants requiring the Company to maintain certain ratios of earnings to fixed
charges and of total debt to total capitalization.

     On August 11, 1999 the Company executed agreements extending the maturity
of its $30 million revolving credit facilities to April 3, 2000. Pursuant to the
agreements the Company granted security interests in substantially all of its
assets to the lenders and adjusted the interest rate on the commercial bank
facilities to each bank's Base Rate plus 1%.

     At April 2, 2000, the Company was not in compliance with certain provisions
of its revolving credit facilities and notes which require certain levels of net
worth, cash flow, and fixed charge coverage, and limit the level of debt to
total capitalization. Subsequent to April 2, 2000, the lenders waived compliance
with these provisions through August 31, 2000.

     On August 31, 2000, the Company concluded a restructuring of its Senior
Debt. Among other things, the agreements extend the maturity of its debt to
April 3, 2001 and adjust financial and other covenants based on the Company's
projections. The restructured loan covenants limit capital expenditures for
fiscal 2001 to $4.4 million, limit the level of advances on factored accounts
receivable to $36 million, require certain levels of borrowing base assets
relative to debt, and require certain levels of cash flow on a monthly basis,
totaling $14.5 million for fiscal 2001. Compliance and reporting to the lenders
is daily with respect to the level of factor advances and borrowing base assets
and monthly with respect to other covenants. In exchange, the Company has agreed
to issue to the lenders warrants exercisable for 10% of the Company's issued and
outstanding stock exercisable not later than December 31, 2005. The warrants
will be extinguished at the rate of 2% for each 1% reduction in the company's
debt. The interest rate on the credit facilities was increased by 1% to each
bank's Base Rate plus 2% and on the notes placed with an insurance company to
11.77%. The margin over Base Rate is subject to change after January 1, 2001
depending upon the level of debt. The principal payment on the notes was
deferred until April 3, 2001, but the Company is required to make repayments of
$19 million on the debt between December 8, 2000 and April 1, 2001.

     The Company's ability to make scheduled payments of principal, to pay the
interest on, or to refinance its maturing indebtedness by April 2, 2001, 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 and
anticipated increases in cash flow from improved inventory management, cost
reduction initiatives, as well as the planned withdrawal from under-performing
product lines, the Company believes that cash flow from operations together with
advances available from factored accounts receivable will be adequate to meet
liquidity needs for the next year.

     The agreement with its lenders, described above, provides for the Company
to finance its seasonal working capital needs by taking advances against its
factored receivables of up to $36 million.

                                      F-10
<PAGE>   30
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES

     The (benefits) provisions for income taxes are summarized as follows:

<TABLE>
<CAPTION>
                           2000      1999      1998
                          -------   -------   ------
                                (IN THOUSANDS)
<S>                       <C>       <C>       <C>
Current:
  Federal...............  $  (362)  $(2,866)  $3,870
  State and local.......      235      (455)     210
                          -------   -------   ------
         Total
           current......     (127)   (3,321)   4,080
                          -------   -------   ------
Deferred:
  Federal...............   (3,264)   (1,379)     404
  State and local.......     (656)     (530)     225
                          -------   -------   ------
         Total
           deferred.....   (3,920)   (1,909)     629
                          -------   -------   ------
         Total (benefit)
           provision....  $(4,047)  $(5,230)  $4,709
                          =======   =======   ======
</TABLE>

     The tax effects of temporary differences that comprise the deferred tax
liabilities and assets are as follows:

<TABLE>
<CAPTION>
                                    2000      1999
                                   -------   ------
                                    (IN THOUSANDS)
<S>                                <C>       <C>
Gross deferred income tax
  liabilities:
Property, plant and equipment....  $ 9,821   $5,692
DISC earnings deferral...........      570      872
Other............................      932    1,707
                                   -------   ------
         Total gross deferred
           income tax
           liabilities...........   11,323    8,271
                                   -------   ------
Gross deferred income tax assets:
Employee benefit accruals........    1,533    1,952
Accounts receivable reserves.....    1,394    1,517
Net operating loss
  carryforward...................   16,657
Other............................    2,096    2,304
                                   -------   ------
         Total gross deferred
           income tax assets.....   21,680    5,773
                                   -------   ------
Deferred tax asset valuation
  allowance......................   10,437    1,502
                                   -------   ------
Net deferred income tax
  liability......................  $    80   $4,000
                                   =======   ======
</TABLE>

     The net operating loss carryforward expires in 20 years.

     The following reconciles the income tax provision at the U.S. federal
income tax statutory rate to that in the financial statements (in thousands).

<TABLE>
<CAPTION>
                         2000      1999      1998
                       --------   -------   ------
<S>                    <C>        <C>       <C>
Statutory rate.......  $(11,389)  $(5,473)  $4,380
Nondeductible
  amortization of
  goodwill...........       275       343      278
State income taxes,
  net of federal
  income tax
  benefit............      (277)     (650)     283
Valuation allowance..     7,724
Other................      (380)      550     (232)
                       --------   -------   ------
Provisions for income
  taxes..............  $ (4,047)  $(5,230)  $4,709
                       ========   =======   ======
</TABLE>

8. RETIREMENT PLANS

     The Company maintains an Employee Stock Ownership Plan, which provides for
annual contributions by the Company at the discretion of the Board of Directors
for the benefit of eligible employees. Contributions can be made either in cash
or in shares of the Company's common stock. Participation in the Plan is open to
all Company employees who are at least twenty-one years of age and who have been
employed by the Company for at least one year. The Company recognized expense of
$500,000, $480,000, and $520,000, respectively, for its cash contributions to
the Plan in 2000, 1999, and 1998.

     Effective January 1, 1996, the Company established an Employee Savings Plan
under Section 401(k) of the Internal Revenue Code. The plan covers substantially
all employees. Under the Plan, employees generally may elect to exclude up to
15% of their compensation from amounts subject to income tax as a salary
deferral contribution. The Board of Directors determines each calendar year the
portion, if any, of employee contributions that will be matched by the Company.
Beginning in calendar 1998, the Company has made or will make a matching
contribution to each employee in an amount equal to 100% of the first 2% and 50%
of the next 1% contributed by the employee. The Company's matching contributions
to the Plan were approximately $814,000, $855,000 and $577,000, respectively,
for 2000, 1999 and 1998.

                                      F-11
<PAGE>   31
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. STOCK OPTIONS

     The Company accounts for its stock option plans using the intrinsic value
method established by Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and its related interpretations. Accordingly, no
compensation cost has been recognized in the Company's financial statements for
its stock based compensation plans. The Company complies with the disclosure
requirements of SFAS No. 123, Accounting for Stock Based Compensation, which
requires pro forma disclosure regarding net earnings and earnings per share
determined as if the Company had accounted for employee stock options granted
after April 2, 1995 using the fair value method of that statement.

     The Company's 1976 and 1995 Stock Option Plans provide for the grant of
non-qualified stock options to officers and key employees at prices no less than
the price of the stock on the date of each grant. In addition, the 1995 Stock
Option Plan provides for the grant of incentive stock options to employees and a
fixed annual grant of 2,000 non-qualified stock options to each non-employee
director on the day after each year's annual meeting of shareholders. Through
April 2, 2000, non-qualified options covering a total of 48,000 shares have been
issued to non-employee directors and no incentive options have been issued.
One-third of the non-qualified options become exercisable on each of the first
three anniversaries of their issuance, except for the options granted in
December 1999 which vest 50% after one year and the balance after two years. The
non-qualified options expire on the fifth anniversary of their issuance except
for the December 1999 options which expire in ten years.
     A total of 5,655,000 shares of common stock has been authorized for
issuance under the Plans. At April 2, 2000, 357,999 options were reserved for
future issuance. The options outstanding at April 2, 2000 expire through
December 28, 2009, have a weighted average remaining contractual life of 3.8
years, and include 1,284,274 options exercisable at April 2, 2000 with a
weighted average exercise price of $9.91.

     The following table summarizes stock option activity during each of the
most recent three fiscal years:

<TABLE>
<CAPTION>
                                                                                          WEIGHTED
                                                                                          AVERAGE
                                                              NUMBER     EXERCISE PRICE   EXERCISE
                                                             OF SHARES     PER SHARE       PRICE
                                                             ---------  ---------------   --------
<S>                                                          <C>        <C>              <C>
Options outstanding, March 30, 1997........................  2,078,752   7.88 -- 13.25      9.60
Options granted............................................    486,800  10.25 -- 21.31    12.66
Options canceled...........................................   (138,585)  7.88 -- 15.63      9.50
Options exercised..........................................   (536,740)  7.88 -- 11.75      9.59
                                                             ---------   -------------     -----
Options outstanding, March 29, 1998........................  1,890,227   7.88 -- 21.31     10.39
Options granted............................................    504,633   5.50 -- 14.50      7.99
Options canceled...........................................   (151,407)  7.88 -- 15.63     10.65
Options exercised..........................................   (329,262)  7.88 -- 13.25     10.19
                                                             ---------   -------------     -----
Options outstanding, March 28, 1999........................  1,914,191   5.50 -- 21.31      9.77
Options granted............................................    569,100   2.31 --  5.88      2.44
Options canceled...........................................   (305,049)  2.31 -- 21.31      9.09
Options exercised..........................................        -0-
                                                             ---------   -------------     -----
Options outstanding, April 2, 2000.........................  2,178,242   2.31 -- 18.75      7.96
                                                             ---------   -------------     -----
</TABLE>

                                      F-12
<PAGE>   32
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information about stock options outstanding
and exercisable at April 2, 2000 by range of exercise price:

<TABLE>
<CAPTION>
                                                                                WEIGHTED
                               WEIGHTED AVG.  WEIGHTED AVG.                       AVG.
     RANGE        NUMBER OF      REMAINING    EXERCISE PRICE    NUMBER OF    EXERCISE PRICE
  OF EXERCISE      OPTIONS      CONTRACTUAL     OF OPTIONS       SHARES        OF SHARES
    PRICES       OUTSTANDING       LIFE        OUTSTANDING     EXERCISABLE    EXERCISABLE
---------------  -----------   -------------  --------------   -----------   --------------
<S>              <C>           <C>            <C>              <C>           <C>
$2.31 -- $6.00      568,600       8.97 years      $ 2.58           12,698        $ 5.48
 7.38 -- 12.56    1,527,260        1.9 years        9.52        1,215,376          9.67
13.25 -- 18.75       82,382        2.9 years       16.11           56,200         16.07
                  ---------                                     ---------
                  2,178,242                                     1,284,274
                  =========                                     =========
</TABLE>

     Option holders may pay the option price of options exercised by
surrendering to the Company shares of the Company's stock that the option holder
has owned for at least six months prior to the date of such exercise. Option
holders may also satisfy their required income tax withholding obligations upon
the exercise of options by requesting the Company to withhold the number of
otherwise issuable shares with a market value equal to such tax withholding
obligation.

     The weighted-average grant-date fair value of options granted in 2000, 1999
and 1998, respectively, was $2.44, $6.35 and $4.02 per share. Had compensation
cost for the Company's stock option grants been determined and recorded as
expense at the grant dates, the Company's pro forma net income and earnings per
share would have been as follows:

<TABLE>
<CAPTION>
                                2000       1999      1998
                              --------   --------   ------
                                     (IN THOUSANDS,
                                 EXCEPT PER SHARE DATA)
<S>                           <C>        <C>        <C>
Net (loss) income...........  $(29,451)  $(13,685)  $6,305
Basic (loss) earnings per
  share.....................     (3.42)     (1.59)    0.78
Diluted (loss) earnings per
  share.....................     (3.42)     (1.59)    0.74
</TABLE>

     For purposes of the pro forma disclosure, the fair value of each option was
estimated as of the date of grant using the Black-Scholes option-pricing model
and is amortized to expense ratably as the option vests. The following
assumptions were used for options granted in 2000: dividend yield of 1.59%,
expected volatility of 32%, risk-free interest rate of 5.36% and expected lives
of 4 years. The following assumptions were used for options granted in 1999:
dividend yield of 1.15%, expected volatility of 133.55%, risk-free interest rate
of 4.9%, and expected lives of 4 years. The following assumptions were used for
options granted in 1998: dividend yield of 0.9%, expected volatility of 32.2%,
risk-free interest rate of 6.1%, and expected lives of 4 years.

     Option valuation models require the use of highly subjective assumptions
including the stock price volatility. Because changes in the subjective
assumptions can materially affect the fair value estimate, in management's
opinion the existing models do not necessarily provide a reliable measure of the
fair value of its employee stock options.

10. EARNINGS PER SHARE

     The following table reconciles the numerators and denominators used in the
calculations of basic and diluted (loss) earnings per share for each of the last
three years:

<TABLE>
<CAPTION>
                                2000       1999      1998
                              --------   --------   ------
                                     (IN THOUSANDS,
                                 EXCEPT PER SHARE DATA)
<S>                           <C>        <C>        <C>
Numerators:
Numerator for both basic and
  diluted (loss) earnings
  per share, net (loss)
  income....................  $(29,148)  $(11,772)  $7,806
                              --------   --------   ------
Denominators:
Denominator for basic (loss)
  earnings per share,
  weighted average common
  shares outstanding........     8,609      8,593    8,065
Potential dilutive shares
  resulting from stock
  option plans..............         0          0      430
                              --------   --------   ------
Denominator for diluted
  (loss) earnings per
  share.....................     8,609      8,593    8,495
                              --------   --------   ------
(Loss) earnings per share:
Basic.......................  $  (3.39)  $  (1.37)  $ 0.97
Diluted.....................  $  (3.39)  $  (1.37)  $ 0.92
                              --------   --------   ------
</TABLE>

11. MAJOR CUSTOMERS

     The Company's sales to Wal-Mart Stores, Inc. constituted 13%, 18%, and 19%
of net sales, respectively, in 2000, 1999, and 1998. Sales to Federated

                                      F-13
<PAGE>   33
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Department Stores were 14% of net sales in 2000 and sales to Toys R Us and
Target Stores were each 11% of net sales in 2000.

12. COMMITMENTS AND CONTINGENCIES

     Lease Commitments:  At April 2, 2000, the Company's minimum annual rentals
under noncancelable operating leases, principally for manufacturing, warehousing
and office facilities, were as follows:

<TABLE>
<CAPTION>
FISCAL YEAR:                         (IN THOUSANDS)
------------                         --------------
<S>                                  <C>
2001...............................     $ 4,074
2002...............................       2,933
2003...............................       1,832
2004...............................       1,405
2005...............................       1,422
Thereafter.........................       2,774
                                        -------
  Total............................     $14,440
                                        =======
</TABLE>

     Total rent expense was $6.2 million, $5.7 million and $4.7 million,
respectively, for the years ended April 2, 2000, March 28, 1999 and March 29,
1998.

     Subsequent to April 2, 2000 the Company executed an agreement with the
landlord of the New York office whereby the Company is to relinquish the office
by November 1, 2000 in return for rent abatement, release from future rent
payments, and a cash payment from the landlord to the Company. This will reduce
the Company's minimum annual rentals by approximately $1.2 million per year in
2001 and thereafter.

     Certain of the Company's products are manufactured and sold pursuant to
license arrangements that include, among others: Calvin Klein(R), Disney(R),
Tracy Porter(R), Colonial Williamsburg(R), Warner Bros.(R), and Thomas
Kinkade(R). The licensing agreements for the Company's designer brands generally
are for a term of 2 to 6 years, and may or may not be subject to renewal or
extension. At April 2, 2000, the Company's minimum royalty guarantees were as
follows:

<TABLE>
<CAPTION>
FISCAL YEAR:
(IN THOUSANDS)
--------------
<S>                                       <C>
2001....................................  $ 8,247
2002....................................    3,154
2003....................................    2,260
2004....................................    2,250
2005....................................        0
Thereafter..............................        0
                                          -------
  Total.................................  $15,911
                                          =======
</TABLE>

     The Company's total royalty expense, net of royalty income, was $15.8
million, $13.4 million and $8.7 million, for fiscal 2000, 1999 and 1998,
respectively.

     The Company has outsourced certain information technology services. The
minimum annual cost is $1.9 million in fiscal year 2001 and $0 thereafter.

13. SEGMENTS AND RELATED INFORMATION

     In 1999, the Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." The Company's principal segments include
adult home furnishing and juvenile products, consisting of bedroom products
(adult comforters and accessories), throws and decorative home accessories
(primarily jacquard-woven throws in cotton, acrylic, rayon or chenille), and
juvenile products (primarily Pillow Buddies(R)). The second principal segment is
infant products, consisting of infant bedding, bibs, and infant soft goods. The
Company tracks revenues and operating profit information for these two business
segments.

     The Company's manufacturing and distribution operations are also divided
into adult home furnishing and juvenile products and infant products. The
Company's facilities in Georgia, North Carolina, New Hampshire and Kentucky
support the adult home furnishing and juvenile products. The Company's
facilities in Louisiana, California and Mexico support the infant products.
Assets, capital expenditures and depreciation and amortization are tracked for
adult home furnishing and juvenile products as a whole and for infant products.

                                      F-14
<PAGE>   34
                      CROWN CRAFTS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Financial information attributable to the Company's business segments for
the years ended April 2, 2000, March 28, 1999 and March 29, 1998, is as follows
(in thousands):

<TABLE>
<CAPTION>
      REVENUES:          2000       1999       1998
      ---------        --------   --------   --------
<S>                    <C>        <C>        <C>
Adult home furnishing
  and juvenile
  products...........  $217,998   $269,647   $243,986
Infant products......   101,895     92,424     75,252
                       --------   --------   --------
         Total.......  $319,893   $362,071   $319,238
                       ========   ========   ========
</TABLE>

<TABLE>
<CAPTION>
OPERATING (LOSS)
INCOME:                   2000      1999      1998
----------------        --------   -------   -------
<S>                     <C>        <C>       <C>
Adult home furnishing
  and juvenile
  products............  $(21,477)  $(7,650)  $16,702
Infant products.......     1,919     2,429     2,291
                        --------   -------   -------
         Total........  $(19,558)  $(5,221)  $18,993
                        ========   =======   =======
</TABLE>

<TABLE>
<CAPTION>
       ASSETS:           2000       1999       1998
       -------         --------   --------   --------
<S>                    <C>        <C>        <C>
Adult home furnishing
  and juvenile
  products...........  $143,592   $191,407   $176,370
Infant products......    71,412     73,444     65,296
                       --------   --------   --------
         Total.......  $215,004   $264,851   $241,666
                       ========   ========   ========
</TABLE>

<TABLE>
<CAPTION>
 CAPITAL EXPENDITURES:     2000     1999      1998
 ---------------------    ------   -------   -------
<S>                       <C>      <C>       <C>
Adult home furnishing
  and juvenile
  products..............  $6,692   $29,849   $ 7,351
Infant products.........   1,271     1,275    20,560
                          ------   -------   -------
         Total..........  $7,963   $31,124   $27,911
                          ======   =======   =======
</TABLE>

<TABLE>
<CAPTION>
DEPRECIATION AND
AMORTIZATION:             2000      1999      1998
----------------         -------   -------   -------
<S>                      <C>       <C>       <C>
Adult home furnishing
  and juvenile
  products.............  $11,473   $10,910   $10,006
Infant products........    1,861     1,740     1,185
                         -------   -------   -------
         Total.........  $13,334   $12,650   $11,191
                         =======   =======   =======
</TABLE>

     The key features used by decision makers are the level of operating income
relative to revenues and assets.

     Revenues for individual product groups within these business segments, as
noted in Part I, Item 1 of Form 10-K, are summarized below. The Company's
facilities in Georgia, North Carolina, New Hampshire and Kentucky support adult
home furnishing and juvenile products.

<TABLE>
<CAPTION>
(IN THOUSANDS)           2000       1999       1998
--------------         --------   --------   --------
<S>                    <C>        <C>        <C>
Bedroom products.....  $135,550   $145,500   $128,000
Throws and decorative
  home accessories...    71,281     98,200     94,200
Infant and juvenile
  products...........   112,924    117,600     94,300
Other revenues.......       138        771      2,738
                       --------   --------   --------
         Total.......  $319,893   $362,071   $319,238
                       ========   ========   ========
</TABLE>

14. SUBSEQUENT EVENTS

     Since April 2, 2000, the Company has reduced its workforce by approximately
460 through a combination of severance and attrition. Also as part of its cost
reduction efforts, the Company has negotiated the termination of a number of its
lease obligations, the most significant of which is the New York office as
described in Note 12.

                                      F-15
<PAGE>   35

                      CROWN CRAFTS, INC. AND SUBSIDIARIES

                           ANNUAL REPORT ON FORM 10-K
                    SELECTED QUARTERLY FINANCIAL INFORMATION

UNAUDITED QUARTERLY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                           FIRST    SECOND     THIRD      FOURTH
                                                          QUARTER   QUARTER   QUARTER    QUARTER
                                                          -------   -------   --------   --------
                                                          IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
<S>                                                       <C>       <C>       <C>        <C>
FISCAL YEAR ENDED APRIL 2, 2000:
Net sales...............................................   65,787    84,162     91,001     78,943
Gross profit............................................    8,945    13,665     14,592     (2,046)
Net loss................................................   (3,827)   (1,817)    (1,667)   (21,837)
Basic loss per share....................................    (0.44)    (0.21)     (0.19)     (2.55)
Diluted loss per share..................................    (0.44)    (0.21)     (0.19)     (2.55)

FISCAL YEAR ENDED MARCH 29, 1999:
Net sales...............................................  $61,708   $92,901   $120,394   $ 87,068
Gross profit............................................   10,054    16,415     22,819      1,971
Net (loss) earnings.....................................   (2,322)       14      2,512    (11,976)
Basic (loss) earnings per share.........................    (0.27)     0.00       0.29      (1.39)
Diluted (loss) earnings per share.......................    (0.27)     0.00       0.29      (1.39)
</TABLE>

     Net loss, basic loss per share and diluted loss per share for the fourth
quarter of the fiscal year ended March 28, 1999, were increased by $6.4 million,
$0.74 and $0.74, respectively, as a result of the sale of a subsidiary and the
write-down of certain inventories. In addition, during the fourth quarter of the
fiscal year ended March 28, 1999, net loss, basic loss per share and diluted
loss per share were increased by $1.7 million, $0.19 and $0.19, respectively, as
a result of certain adjustments to inventory accounts

     Net loss, basic loss per share and diluted loss per share for the fourth
quarter of the fiscal year ended April 2, 2000 were increased by $3.0 million,
$0.35 and $0.35, respectively, as a result of certain inventory adjustments,
including differences between the books and the physical inventory.

                                      F-16