<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _____________
Commission file number 033-64499
A. Full title of the plan and address of the plan, if different from
that of the insurer named below:
Crown Crafts, Inc. 401(k) Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Crown Crafts, Inc.
1600 RiverEdge Parkway
Suite 200
Atlanta, Georgia 30328
<PAGE> 2
THE CROWN CRAFTS, INC. 401(k)
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND AUDIT REPORT
DECEMBER 31, 1998
<PAGE> 3
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
REPORT OF INDEPENDENT ACCOUNTANTS 1
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION 2/6
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION 7/10
NOTES TO FINANCIAL STATEMENTS 11/15
SUPPLEMENTAL SCHEDULES
Schedule of Assets Held for Investment Purposes 17
Schedule of Reportable Transactions 18/20
</TABLE>
<PAGE> 4
A GEORGIA LIMITED LIABILITY COMPANY
<TABLE>
<S> <C> <C>
PRIVATE COMPANIES PRACTICE SECTION MEMBER AICPA DIVISION FOR CPA FIRMS SEC PRACTICE SECTION
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Administrative Committee
The Crown Crafts, Inc. 401(k) Retirement Savings Plan
Atlanta, Georgia
We have audited the statements of net assets available for benefits with fund
information of The Crown Crafts, Inc. 401(k) Retirement Savings Plan (the Plan)
as of December 31, 1998 and 1997, and the related statement of changes in net
assets available for benefits with fund information for the year ended December
31, 1998. These financial statements are the responsibility of the
Administrative Committee. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and of reportable transactions are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
JOSEPH DECOSIMO AND COMPANY, LLP
A GEORGIA LIMITED LIABILITY COMPANY
Atlanta, Georgia
July 9, 1999
1
<PAGE> 5
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ASSET ASSET
DIVERSIFIED ALLOCATION ALLOCATION ALLOCATION
INCOME CONSERVATIVE BALANCED GROWTH
TRUST PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value -
Short-Term Investments $ -- $ -- $ -- $ --
Crown Crafts, Inc.
Common Stock -- -- -- --
Mutual Funds 10,884 427,902 823,540 2,383,466
Participant Loans -- -- -- --
-------- -------- ---------- ----------
10,884 427,902 823,540 2,383,466
Receivables -
Sponsor's Contributions -- -- -- --
Participants' Contributions -- -- -- --
-------- -------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 10,884 $427,902 $ 823,540 $2,383,466
======== ======== ========== ==========
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
INTERNATIONAL NEW STABLE CROWN CRAFTS,
GROWTH VOYAGER OPPORTUNITIES VALUE INC.
FUND FUND FUND FUND COMMON STOCK
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value -
Short-Term Investments $ -- $ -- $ -- $ -- $ 22,672
Crown Crafts, Inc.
Common Stock -- -- -- -- 159,548
Mutual Funds 30,400 70,863 2,070,803 652,203 --
Participant Loans -- -- -- -- --
------- -------- ---------- -------- --------
30,400 70,863 2,070,803 652,203 182,220
Receivables -
Sponsor's Contributions -- -- -- -- --
Participants' Contributions -- -- -- -- --
------- -------- ---------- -------- --------
NET ASSETS AVAILABLE
FOR BENEFITS $30,400 $ 70,863 $2,070,803 $652,203 $182,220
======= ======== ========== ======== ========
</TABLE>
3
<PAGE> 7
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PARTICIPANT
LOANS OTHER TOTAL
<S> <C> <C> <C>
ASSETS
Investments, at fair value -
Short-Term Investments $ -- $ -- $ 22,672
Crown Crafts, Inc.
Common Stock -- -- 159,548
Mutual Funds -- -- 6,470,061
Participant Loans 59,947 -- 59,947
------- -------- ----------
59,947 -- 6,712,228
Receivables -
Sponsor's Contributions -- 295,099 295,099
Participants' Contributions -- 236,046 236,046
------- -------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $59,947 $531,145 $7,243,373
======= ======== ==========
</TABLE>
4
<PAGE> 8
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE CROWN CRAFTS LIFE LIFE
GROWTH INC. STAGE I STAGE II
PORTFOLIO COMMON STOCK PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value -
Short-Term Investments $ 770 $ 2,581 $ 3,174 $ 3,701
Crown Crafts, Inc.
Common Stock -- 189,703 -- --
Mutual Funds 893,931 -- 621,729 608,304
Participant Loans -- -- -- --
---------- -------- -------- --------
894,701 192,284 624,903 612,005
Receivables -
Sponsor's Contributions 29,269 5,532 27,028 24,957
Participants' Contributions 22,851 7,428 28,429 24,532
Accrued Interest and
Dividends 184,336 20 30,463 28,478
---------- -------- -------- --------
Total Assets 1,131,157 205,264 710,823 689,972
LIABILITIES
Due to Brokers 183,306 -- 30,426 28,444
---------- -------- -------- --------
NET ASSETS AVAILABLE
FOR BENEFITS $ 947,851 $205,264 $680,397 $661,528
========== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 9
<TABLE>
<CAPTION>
LIFE LIFE STABLE
STAGE III STAGE IV VALUE PARTICIPANT
PORTFOLIO PORTFOLIO PORTFOLIO LOANS TOTAL
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value -
Short-Term Investments $ 461 $ 2,665 $ 2,710 $ 4 $ 16,066
Crown Crafts, Inc.
Common Stock -- -- -- -- 189,703
Mutual Funds 420,942 261,802 519,135 -- 3,325,843
Participant Loans -- -- -- 17,655 17,655
-------- -------- -------- ------- ----------
421,403 264,467 521,845 17,659 3,549,267
Receivables -
Sponsor's Contributions 12,674 9,514 7,871 -- 116,845
Participants' Contributions 14,391 4,209 7,005 -- 108,845
Accrued Interest and
Dividends 18,813 10,904 12 -- 273,026
-------- -------- -------- ------- ----------
Total Assets 467,281 289,094 536,733 17,659 4,047,983
LIABILITIES
Due to Brokers 18,793 10,889 -- -- 271,858
-------- -------- -------- ------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $448,488 $278,205 $536,733 $17,659 $3,776,125
======== ======== ======== ======= ==========
</TABLE>
6
<PAGE> 10
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ASSET ASSET
DIVERSIFIED ALLOCATION ALLOCATION ALLOCATION
INCOME CONSERVATIVE BALANCED GROWTH
TRUST PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
ADDITIONS
Investment Income -
Net Appreciation
(Depreciation) in Fair
Value of Investments $ (25) $ 21,760 $ 89,988 $ 314,101
Interest and Dividends 24 10,358 14,643 54,302
-------- -------- -------- ----------
(1) 32,118 104,631 368,403
-------- -------- -------- ----------
Contributions -
Sponsor's -- 15,303 52,480 161,558
Rollovers 3,725 7,802 8,357 3,803
Participants' 7,160 28,319 58,696 125,836
-------- -------- -------- ----------
10,885 51,424 119,533 291,197
-------- -------- -------- ----------
Total Additions 10,884 83,542 224,164 659,600
-------- -------- -------- ----------
DEDUCTIONS
Benefits Paid to Participants -- -- -- --
Administrative Expenses -- -- -- --
-------- -------- -------- ----------
Total Deductions -- -- -- --
-------- -------- -------- ----------
NET INCREASE BEFORE
INTERFUND TRANSFERS 10,884 83,542 224,164 659,600
Interfund Transfers -- 344,360 599,376 1,723,866
-------- -------- -------- ----------
NET INCREASE (DECREASE) 10,884 427,902 823,540 2,383,466
NET ASSETS AVAILABLE
FOR BENEFITS
BEGINNING OF YEAR -- -- -- --
-------- -------- -------- ----------
END OF YEAR $ 10,884 $427,902 $823,540 $2,383,466
======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 11
<TABLE>
<CAPTION>
INTERNATIONAL NEW STABLE AGGRESSIVE
GROWTH VOYAGER OPPORTUNITIES VALUE GROWTH
FUND FUND FUND FUND PORTFOLIO
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment Income -
Net Appreciation
(Depreciation) in Fair
Value of Investments $ 948 $ 2,496 $ 429,333 $ -- $ 41,064
Interest and Dividends 487 4,860 64,171 2,179 866
------- -------- ---------- -------- -----------
1,435 7,356 493,504 2,179 41,930
------- -------- ---------- -------- -----------
Contributions -
Sponsor's -- -- 89,404 43,473 52,589
Rollovers 6,942 3,640 7,136 6,647 63,788
Participants' 22,023 59,867 86,543 48,671 330,776
------- -------- ---------- -------- -----------
28,965 63,507 183,083 98,791 447,153
------- -------- ---------- -------- -----------
Total Additions 30,400 70,863 676,587 100,970 489,083
------- -------- ---------- -------- -----------
DEDUCTIONS
Benefits Paid to Participants -- -- 3 -- 120,929
Administrative Expenses -- -- -- -- 9,029
------- -------- ---------- -------- -----------
Total Deductions -- -- 3 -- 129,958
------- -------- ---------- -------- -----------
NET INCREASE BEFORE
INTERFUND TRANSFERS 30,400 70,863 676,584 100,970 359,125
Interfund Transfers -- -- 1,394,219 551,233 (1,306,976)
------- -------- ---------- -------- -----------
NET INCREASE (DECREASE) 30,400 70,863 2,070,803 652,203 (947,851)
NET ASSETS AVAILABLE
FOR BENEFITS
BEGINNING OF YEAR -- -- -- -- 947,851
------- -------- ---------- -------- -----------
END OF YEAR $30,400 $ 70,863 $2,070,803 $652,203 $ --
======= ======== ========== ======== ===========
</TABLE>
8
<PAGE> 12
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CROWN CRAFTS, LIFE LIFE LIFE
INC. STAGE I STAGE II STAGE III
COMMON STOCK PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
ADDITIONS
Investment Income -
Net Appreciation
(Depreciation) in Fair
Value of Investments $(118,992) $ 45,209 $ 49,233 $ 28,849
Interest and Dividends 2,188 8,870 15,758 14,128
--------- --------- --------- ---------
(116,804) 54,079 64,991 42,977
--------- --------- --------- ---------
Contributions -
Sponsor's 7,261 33,929 28,533 22,228
Rollovers 14,678 26,393 35,914 15,468
Participants' 88,760 196,755 183,394 138,580
--------- --------- --------- ---------
110,699 257,077 247,841 176,276
--------- --------- --------- ---------
Total Additions (6,105) 311,156 312,832 219,253
--------- --------- --------- ---------
DEDUCTIONS
Benefits Paid to Participants 37,822 68,323 41,560 26,047
Administrative Expenses 1,676 5,930 5,805 3,932
--------- --------- --------- ---------
Total Deductions 39,498 74,253 47,365 29,979
--------- --------- --------- ---------
NET INCREASE BEFORE
INTERFUND TRANSFERS (45,603) 236,903 265,467 189,274
Interfund Transfers 22,559 (917,300) (926,995) (637,762)
--------- --------- --------- ---------
NET INCREASE (DECREASE) (23,044) (680,397) (661,528) (448,488)
NET ASSETS AVAILABLE
FOR BENEFITS
BEGINNING OF YEAR 205,264 680,397 661,528 448,488
--------- --------- --------- ---------
END OF YEAR $ 182,220 $ -- $ -- $ --
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 13
<TABLE>
<CAPTION>
LIFE STABLE
STAGE IV VALUE PARTICIPANT
PORTFOLIO PORTFOLIO LOANS OTHER TOTAL
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment Income -
Net Appreciation
(Depreciation) in Fair
Value of Investments $ 15,242 $ 11,071 $ -- $ -- $ 930,277
Interest and Dividends 10,972 1,314 -- -- 205,120
--------- --------- ------- -------- ----------
26,214 12,385 -- -- 1,135,397
--------- --------- ------- -------- ----------
Contributions -
Sponsor's 10,329 23,152 -- 295,099 835,338
Rollovers 15,263 518 -- -- 220,074
Participants' 75,348 97,138 -- 236,046 1,783,912
--------- --------- ------- -------- ----------
100,940 120,808 -- 531,145 2,839,324
--------- --------- ------- -------- ----------
Total Additions 127,154 133,193 -- 531,145 3,974,721
--------- --------- ------- -------- ----------
DEDUCTIONS
Benefits Paid to Participants 43,428 136,293 -- -- 474,405
Administrative Expenses 2,415 4,281 -- -- 33,068
--------- --------- ------- -------- ----------
Total Deductions 45,843 140,574 -- -- 507,473
--------- --------- ------- -------- ----------
NET INCREASE BEFORE
INTERFUND TRANSFERS 81,311 (7,381) -- 531,145 3,467,248
Interfund Transfers (359,516) (529,352) 42,288 -- --
--------- --------- ------- -------- ----------
NET INCREASE (DECREASE) (278,205) (536,733) 42,288 531,145 3,467,248
NET ASSETS AVAILABLE
FOR BENEFITS
BEGINNING OF YEAR 278,205 536,733 17,659 -- 3,776,125
--------- --------- ------- -------- ----------
END OF YEAR $ -- $ -- $59,947 $531,145 $7,243,373
========= ========= ======= ======== ==========
</TABLE>
10
<PAGE> 14
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
PLAN DESCRIPTION
The following description of The Crown Crafts, Inc. 401(k) Retirement Savings
Plan provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
The Plan is a defined contribution retirement savings plan with a cash or
deferred arrangement covering substantially all employees of Crown Crafts, Inc.
and affiliates (the sponsor) meeting minimum age and service requirements. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA). The Plan was established effective January 1, 1996, and initial
contributions were made into the trust fund in January, 1996. The Plan was
amended on September 22, 1997, to provide for the entry of employees of acquired
and affiliated companies.
The Plan allows contributions by participating employees of an amount equal to
not less than 1% and not greater than 15% of their eligible compensation.
Matching contributions are made at the discretion of the sponsor. The sponsor
matches participants' elective contributions at the rate of 100% of the first 2%
and 50% of the next 1% of compensation deferred by each participant. The
participants direct their elective contributions and related matching
contributions to several investment options. All contributions are limited to
the maximum amount deductible under the applicable provisions of the Internal
Revenue Code of 1986 (the Code).
Each participant's account is credited with the participant's contribution, the
sponsor's matching contribution, and earnings thereon less administrative
expenses. Each participant has a fully vested, nonforfeitable right to all
amounts credited to his account under the elective salary reduction portion of
the Plan. Each participant's right in sponsor contributions vests ratably over a
five year period. Forfeitures are applied to reduce the sponsor's matching
contribution.
Upon service or disability retirement, death or termination, the participant or
beneficiary will receive a lump-sum amount equal to the value of the
participant's vested account.
Although it has not expressed any intent to do so, the sponsor has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
On October 1, 1998, the Plan changed trustees and as of December 31, 1998, it
offers participants nine investment options which consist of shares of the
sponsor's common stock and eight portfolios of mutual funds managed by Putnam
Investments:
CROWN CRAFTS, INC. COMMON STOCK - Funds are invested in common stock of Crown
Crafts, Inc.
PUTNAM DIVERSIFIED INCOME TRUST - Invests in bonds of U.S. and foreign
governments and the bonds of U.S. and foreign companies to seek the highest
level of current income while preserving capital.
PUTNAM ASSET ALLOCATION: CONSERVATIVE PORTFOLIO - The Fund seeks to maximize
investment return while preserving capital by investing approximately 35% of
total assets in common stocks of U.S. and foreign companies and the remaining
assets in both U.S. and foreign government bonds and corporate bonds.
11
<PAGE> 15
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
PLAN DESCRIPTION - continued
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO - The Fund seeks to maximize
investment return by investing approximately 65% of total assets in common
stocks of U.S. and foreign companies and the remaining assets in both U.S. and
foreign government bonds and corporate bonds.
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO - The Fund seeks capital appreciation
by investing approximately 80% of total assets in common stocks of U.S. and
foreign companies and the remaining assets in both U.S. and foreign government
bonds and corporate bonds.
PUTNAM INTERNATIONAL GROWTH FUND - The Fund seeks capital appreciation by
investing total assets mainly in the common stocks of medium and large-sized
companies in developed countries.
PUTNAM VOYAGER FUND - The Fund seeks capital appreciation by investing total
assets in the common stocks of U.S. and foreign companies.
PUTNAM NEW OPPORTUNITIES FUND - Invests primarily in common stocks of companies
in particular sectors of the economy and seeks long-term capital appreciation.
PUTNAM STABLE VALUE FUND - The Fund seeks high current income while preserving
capital and liquidity by investing total assets primarily in guaranteed
investment contracts issued by insurance companies, banks and other financial
institutions.
Prior to October 1, 1998, the plan offered participants seven investment options
consisting of shares of the sponsor's common stock and six portfolios of mutual
funds managed by an investment advisor:
AGGRESSIVE GROWTH PORTFOLIO - Diverse growth-oriented portfolio invested in the
stocks of large U.S. companies, small-medium companies and international
companies.
LIFE STAGE I PORTFOLIO - Invests in common stock of large U.S. companies,
small-medium companies and international companies.
LIFE STAGE II PORTFOLIO - Invests in common stocks and bonds of small, medium
and large U.S. and international companies.
LIFE STAGE III PORTFOLIO - Invests in common stock of large U.S. companies,
small-medium companies and international companies.
LIFE STAGE IV PORTFOLIO - Invests in medium term bonds and the common stocks of
small, medium and large U.S. and international companies.
STABLE VALUE PORTFOLIO - Invests in a mixture of contracts with major banks and
insurance companies which, in turn, invest in high grade bonds.
12
<PAGE> 16
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies and practices followed by the Plan are as
follows:
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared under
the accrual method of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are stated
at fair value. Shares of registered investment companies are valued at quoted
market prices which represent the net asset value of shares held by the Plan at
year end. The company stock is valued at its quoted market price. Participant
loans are valued at cost which approximates par value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
NET APPRECIATION (DEPRECIATION) IN THE FAIR VALUE OF INVESTMENTS - The Plan
presents in the statements of changes in net assets available for benefits the
net appreciation (depreciation) in the fair value of its investments, which
consists of the realized gains (losses) and the unrealized appreciation
(depreciation) on those investments.
PARTICIPANT LOANS - Participants may borrow from their fund accounts a minimum
of $1,000, or such lesser amount as established by the Administrative Committee,
up to a maximum equal to the lesser of $50,000 or 50% of their account balance.
Loan transactions are treated as a transfer to (from) the investment funds from
(to) Participant Loans. Loan terms range up to 5 years or up to 10 years for the
purchase of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined by the Administrative Committee. Principal and
interest are paid ratably through monthly payroll deductions.
RISKS AND UNCERTAINTIES - The Plan provides for various investment options in a
combination of mutual funds and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in the near
term would materially affect participants' account balances and the amounts
reported in the statement of net assets available for benefits and the statement
of changes in net assets available for benefits.
PAYMENT OF BENEFITS - Benefits are recorded when paid. As of December 31, 1998,
$175,890 has been allocated to participants who have elected to withdraw from
the Plan but have not been paid.
FORFEITED ACCOUNTS - As of December 31, 1998, forfeited nonvested accounts
totaled $0. These accounts are used to reduce future sponsor contributions.
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires the Administrative Committee to make
estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
13
<PAGE> 17
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
TAX STATUS
The Administrative Committee for the sponsor believes the Plan meets the
requirements for tax qualification described in Section 401(a) of the Internal
Revenue Code of 1986 (the Code). Accordingly, the Plan's related trust is exempt
from tax under Section 501(a) of the Code. A favorable determination letter has
been received from the Internal Revenue Service on the tax qualification of the
Plan as amended through September 22, 1997. Continued qualification of the Plan
will depend upon its operation in accordance with applicable requirements of the
Code.
INVESTMENTS
The following table presents the fair value of investments as of December 31,
1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
NUMBER OF NUMBER OF
SHARES/UNITS FAIR VALUE SHARES/UNITS FAIR VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS
Atlanta Money Market -- $ -- 16,066 $ 16,066
TBC Inc. Daily Liquidity Fund 22,672 22,672 -- --
---------- --------
22,672 16,066
---------- --------
COMMON STOCKS
Crown Crafts, Inc. 25,786 159,548 12,141 189,703
---------- --------
MUTUAL FUNDS
Diversified Income Trust 950 10,884 -- --
Asset Allocation Conservative
Portfolio 41,343 427,902 -- --
Asset Allocation Balanced
Portfolio 68,686 823,540 -- --
Asset Allocation Growth
Portfolio 176,684 2,383,466 -- --
International Growth Fund 1,590 30,400 -- --
Voyager Fund 3,311 70,863 -- --
</TABLE>
14
<PAGE> 18
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
INVESTMENTS - continued
<TABLE>
<S> <C> <C> <C> <C>
New Opportunities Fund 36,203 $2,070,803 -- $ --
Stable Value Fund 652,203 652,203 -- --
EuroPacific Growth Fund -- -- 10,899 283,584
Federated Max-Cap Fund -- -- 40,879 825,750
Federated Mini-Cap Fund -- -- 11,934 181,875
Stable Value Fund -- -- 27,592 519,135
Dreyfus MidCap Index Fund -- -- 7,375 189,085
PIMCO Total Return -- -- 40,800 432,484
Twentieth Century Ultra -- -- 32,745 893,930
---------- ----------
6,470,061 3,325,843
---------- ----------
PARTICIPANT LOANS 59,947 17,655
---------- ----------
$6,712,228 $3,549,267
========== ==========
</TABLE>
RELATED PARTY TRANSACTIONS
The Plan sponsor paid $56,824 and $74,315 of administrative expenses incurred by
the Plan during 1998 and 1997, respectively.
15
<PAGE> 19
SUPPLEMENTAL SCHEDULES
<PAGE> 20
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
ITEM 27a OF FORM 5500
DECEMBER 31, 1998
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 334
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST VALUE
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Putnam Investments TCB Inc. Daily Liquidity Fund $ 22,672 $ 22,672
---------- ----------
COMMON STOCKS
Crown Crafts, Inc. Common Stock 158,443 159,548
---------- ----------
MUTUAL FUNDS
Putnam Investments Putnam Diversified Income Trust 10,900 10,884
Putnam Investments Putnam Asset Allocation:
Conservative Portfolio 404,946 427,902
Putnam Investments Putnam Asset Allocation:
Balanced Portfolio 732,355 823,540
Putnam Investments Putnam Asset Allocation:
Growth Portfolio 2,179,340 2,383,466
Putnam Investments Putnam International Growth Fund 29,452 30,400
Putnam Investments Putnam Voyager Fund 68,367 70,863
Putnam Investments Putnam New Opportunities Fund 1,751,448 2,070,803
Putnam Investments Putnam Stable Value Fund 651,007 652,203
---------- ----------
5,827,815 6,470,061
---------- ----------
PARTICIPANT LOANS
Participant Loans 9.5% Notes Receivable
from Participants -- 59,947
---------- ----------
TOTAL INVESTMENTS $6,008,930 $6,712,228
========== ==========
</TABLE>
17
<PAGE> 21
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
ITEM 27d OF FORM 5500
YEAR ENDED DECEMBER 31, 1998
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 334
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET NET
IDENTITY OF PURCHASE SELLING COST OF ON TRANSACTION GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
American Century
Investments Twentieth Century Ultra $ 452,000 $ 452,000 $ 452,000
American Century
Investments Twentieth Century Ultra $1,398,822 $1,362,737 $1,398,822 $ 36,085
American Century
Investments Twentieth Century Ultra $ 51,000 $ 46,021 $ 51,000 $ 4,979
The American Funds
Group EuroPacific Growth Fund $ 134,577 $ 134,577 $ 134,577
The American Funds
Group EuroPacific Growth Fund $ 374,018 $ 422,554 $ 374,018 $(48,536)
Federated Investors Federated Mini-Cap Fund $ 134,903 $ 134,903 $ 134,903
Federated Investors Federated Mini-Cap Fund $ 264,033 $ 310,885 $ 264,033 $(46,852)
Federated Investors Federated Max-Cap Fund $ 353,301 $ 353,301 $ 353,301
Federated Investors Federated Max-Cap Fund $ 520,136 $ 440,693 $ 520,136 $ 79,443
Federated Investors Federated Max-Cap Fund $ 397,032 $ 331,480 $ 397,032 $ 65,552
Federated Investors Federated Max-Cap Fund $ 320,899 $ 268,980 $ 320,899 $ 51,919
</TABLE>
18
<PAGE> 22
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
ITEM 27d OF FORM 5500
YEAR ENDED DECEMBER 31, 1998
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 334
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET NET
IDENTITY OF PURCHASE SELLING COST OF ON TRANSACTION GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
PIMCO PIMCO Total Return $ 231,982 $ 231,982 $ 231,982
PIMCO PIMCO Total Return $ 259,208 $ 247,386 $ 259,208 $ 11,822
PIMCO PIMCO Total Return $ 226,711 $ 216,684 $ 226,711 $ 10,027
PIMCO PIMCO Total Return $ 203,423 $ 194,958 $ 203,423 $ 8,465
Peoples S&P Midcap Fund $ 57,000 $ 57,000 $ 57,000
Peoples S&P Midcap Fund $ 230,331 $ 223,637 $ 230,331 $ 6,694
Putnam Investments Putnam Asset Allocation:
Balanced Portfolio $ 227,518 $ 227,518 $ 227,518
Putnam Investments Putnam Asset Allocation:
Balanced Portfolio $ 335,408 $ 335,408 $ 335,408
Putnam Investments Putnam Asset Allocation:
Conservative Portfolio $ 266,136 $ 266,136 $ 266,136
Putnam Investments Putnam Asset Allocation:
Growth Portfolio $ 1,246,963 $ 1,246,963 $ 1,246,963
Putnam Investments Putnam Asset Allocation:
Growth Portfolio $ 434,426 $ 434,426 $ 434,426
</TABLE>
19
<PAGE> 23
THE CROWN CRAFTS, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
ITEM 27d OF FORM 5500
YEAR ENDED DECEMBER 31, 1998
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 334
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET NET
IDENTITY OF PURCHASE SELLING COST OF ON TRANSACTION GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
Putnam Investments Putnam Asset Allocation:
Growth Portfolio $ 332,979 $ 332,979 $ 323,979
Putnam Investments Putnam New Opportunities Fund $ 1,348,012 $ 1,348,012 $ 1,348,012
Putnam Investments Putnam New Opportunities Fund $ 247,641 $ 247,641 $ 247,641
Putnam Investments Stable Value Fund $ 524,983 $ 524,983 $ 524,983
</TABLE>
20
<PAGE> 24
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROWN CRAFT, INC. 401(k)
RETIREMENT SAVINGS PLAN
By: /s/ DAVID S. FRASER
-----------------------------------
David S. Fraser
By: /s/ ROGER D. CHITTUM
-----------------------------------
Roger D. Chittum
By: /s/ BONNIE WASDIN
-----------------------------------
Bonnie Wasdin
Date: July 30, 1999 (Each Member of the Administrative
------------------------- Committee appointed under and
Pursuant to the Crown Crafts, Inc.
401(k) Retirement Savings Plan)
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-64499) pertaining to The Crown Crafts, Inc. 401(k) Retirement Savings
Plan of our report dated July 9, 1999, with respect to the financial statements
and schedules of The Crown Crafts, Inc. 401(k) Retirement Savings Plan included
in this Annual Report (Form 11-K) for the year ended December 31, 1998.
July 30, 1999 JOSEPH DECOSIMO AND COMPANY
A GEORGIA LIMITED LIABILITY PARTNERSHIP
