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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 1999
-----------------
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 issuer 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
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THE CROWN CRAFTS, INC. 401(K)
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND AUDIT REPORT
DECEMBER 31, 1999
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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 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS 3
NOTES TO FINANCIAL STATEMENTS 4/8
SUPPLEMENTAL SCHEDULE
Schedule of Assets Held for Investment Purposes at Year End 10
</TABLE>
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[HENDRY & DECOSIMO LETTERHEAD]
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 of The Crown
Crafts, Inc. 401(k) Retirement Savings Plan (the Plan) as of December 31, 1999
and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. 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, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, 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 schedule of assets held
for investment purposes at year end is presented for purposes of additional
analysis and is not a required part of the basic financial statements but is
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 schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Hendry & Decosimo, LLP
Dalton, Georgia
June 26, 2000
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THE CROWN CRAFTS, INC. 401(K) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ASSETS
Investments, at fair value -
Short-Term Investments $ -- $ 22,672
Crown Crafts, Inc. Common Stock 106,068 159,548
Collective Investment Trust 976,673 652,203
Mutual Funds 9,995,651 5,817,858
Participant Loans 214,829 59,947
------------ ------------
11,293,221 6,712,228
------------ ------------
Receivables -
Sponsor's Contributions 225,603 295,099
Participants' Contributions 216,303 236,046
------------ ------------
441,906 531,145
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 11,735,127 $ 7,243,373
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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THE CROWN CRAFTS, INC. 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ADDITIONS
Investment Income -
Net Appreciation in Fair Value
of Investments $ 1,780,656
Interest and Dividends 879,007
------------
2,659,663
------------
Contributions -
Sponsor's 779,163
Rollovers 75,068
Participants' 1,972,084
------------
2,826,315
------------
Total Additions 5,485,978
DEDUCTIONS
Benefits Paid to Participants 994,224
------------
NET INCREASE 4,491,754
NET ASSETS AVAILABLE FOR BENEFITS
BEGINNING OF YEAR 7,243,373
------------
END OF YEAR $ 11,735,127
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
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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.
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the sponsor's matching and discretionary contribution
portion of their accounts plus actual earnings thereon is based on years of
continuous service based on the following schedule:
<TABLE>
<CAPTION>
COMPLETED NON-FORFEITABLE
YEARS OF SERVICE PERCENTAGE
<S> <C>
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 100%
</TABLE>
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.
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THE CROWN CRAFTS, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN DESCRIPTION - continued
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, 1999, it
offers participants ten investment options which consist of shares of the
sponsor's common stock and nine 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.
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.
The Plan added one investment option during 1999 as follows:
PUTNAM GROWTH AND INCOME FUND - The Fund seeks long-term capital appreciation
and income by investing in the common stocks of large, well-established
companies with below-average valuations.
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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 and units of the
collective investment trust 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 fair 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 IN THE FAIR VALUE OF INVESTMENTS - The Plan presents in the
statement of changes in net assets available for benefits the net appreciation
in the fair value of its investments, which consists of the realized gains and
losses and the unrealized appreciation and 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, 1999,
$752,683 has been allocated to participants who have elected to withdraw from
the Plan but have not been paid.
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THE CROWN CRAFTS, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
FORFEITED ACCOUNTS - As of December 31, 1999, forfeited nonvested accounts
totaled $30,195. 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.
RECLASSIFICATIONS - Certain reclassifications have been made to the prior year's
financial statement to conform with the current year presentation.
TAX STATUS
The Plan obtained its latest determination letter on April 14, 1998, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However, the
Plan administrator and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
INVESTMENTS
The following table presents investments that represent 5% or more of the Plan's
net assets:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
SHORT-TERM INVESTMENTS $ -- $ 22,672
---------- ----------
COMMON STOCKS 106,068 159,548
---------- ----------
COLLECTIVE INVESTMENT TRUST
Putnam Stable Value Fund 976,673 652,203
---------- ----------
</TABLE>
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THE CROWN CRAFTS, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
INVESTMENTS - continued
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
MUTUAL FUNDS
Putnam Asset Allocation Conservative Portfolio $ 640,490 $ 427,902
Putnam Asset Allocation Balanced Portfolio 1,224,798 823,540
Putnam Asset Allocation Growth Portfolio 2,990,592 2,383,466
Putnam Voyager Fund 948,069 70,863
Putnam New Opportunities Fund 3,772,829 2,070,803
Other Funds 418,873 41,284
------------ ------------
9,995,651 5,817,858
------------ ------------
PARTICIPANT LOANS 214,829 59,947
------------ ------------
$ 11,293,221 $ 6,712,228
============ ============
</TABLE>
The Plan's investments (including investments bought, sold and held during the
year) appreciated (depreciated) in value as follows:
<TABLE>
<S> <C>
Common Stock $ (140,100)
Mutual Funds 1,920,756
------------
$ 1,780,656
============
</TABLE>
RELATED PARTY TRANSACTIONS
The Plan sponsor paid the administrative expenses incurred by the Plan during
1999.
8
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SUPPLEMENTAL SCHEDULE
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THE CROWN CRAFTS, INC. 401(K) RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
LINE 4, SCHEDULE H OF FORM 5500
DECEMBER 31, 1999
EMPLOYER IDENTIFICATION NUMBER: 58-0678148 PLAN NUMBER: 001
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT VALUE
<S> <C> <C>
COMMON STOCKS
* Crown Crafts, Inc. Common Stock $ 106,068
------------
COLLECTIVE INVESTMENT TRUSTS
* Putnam Investments Putnam Stable Value Fund 976,673
------------
MUTUAL FUNDS
* Putnam Investments Putnam Diversified Income Trust 63,277
* Putnam Investments Putnam Asset Allocation: Conservative Portfolio 640,490
* Putnam Investments Putnam Asset Allocation: Balanced Portfolio 1,224,798
* Putnam Investments Putnam Asset Allocation: Growth Portfolio 2,990,592
* Putnam Investments Putnam International Growth Fund 354,835
* Putnam Investments Putnam Voyager Fund 948,069
* Putnam Investments Putnam New Opportunities Fund 3,772,829
* Putnam Investments Putnam Growth and Income Fund 761
------------
9,995,651
------------
PARTICIPANT LOANS
Participant Loans 8.25% - 10.00% Notes Receivable from Participants 214,829
------------
TOTAL INVESTMENTS $ 11,293,221
============
</TABLE>
* A party-in-interest as defined by ERISA.
10
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SIGNATURES
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 CRAFTS, INC. 401(k)
RETIREMENT SAVINGS PLAN
By: /s/ Carl A. Texter
----------------------------
Carl A. Texter
By: /s/ Roger D. Chittum
----------------------------
Roger D. Chittum
By: /s/ Bonnie Wasdin
----------------------------
Bonnie Wasdin
Date: July 13, 2000 (Each Member of the Administrative
Committee appointed under and
Pursuant to the Crown Crafts,Inc.
401(k) Retirement Savings Plan)
