Hello, ladies and gentlemen and welcome to the Crown Crafts Incorporated Investors Conference Call. Your host for today’s call is Mr. Randall Chestnut, Chairman, President and Chief Executive Officer. At this time, all participants are in a listen-only mode. [Operator Instructions] Any reproduction of this call, in whole or in part, is not permitted without prior written authorization from Crown Crafts Incorporated. And as a reminder, this conference is being recorded today, August 12, 2015. At this time, I would like to turn the call over to Ms. Olivia Elliott, Vice President and CFO, who will begin the call. Please go ahead.

Thank you. Welcome to the Crown Crafts investor conference call for the first quarter of fiscal 2016. With me today is Randall Chestnut, the company’s President and Chief Executive Officer.

Good afternoon.

A telephone replay of this call will be available 1 hour after the end of the call through 8:00 a.m. Central Time on August 19, 2015. Also, a web replay of this call will be available for 90 days and can be accessed by visiting our website at www.crowncrafts.com. Before we begin, I would like to remind everyone of the cautionary language regarding forward-looking statements contained in the press release. That same language applies to comments made in today’s conference call. Also, in regard to comments made in today’s conference call that are related to the company’s recently announced dividend, history of paying dividends and the annualized yield on the company’s common stock, we would like to remind everyone that the declaration of each dividend is at the discretion of the company’s Board of Directors and the company expressly disclaims any assurances as to the frequency and amount of any future dividends. I will now turn the call over to Randall.

Olivia, again thank you very much and welcome to everyone and thanks for attending the conference call today. Before the market opened this morning, we released the earnings of our first quarter FY ‘16, which ended on June 28, 2015 and for those that are not familiar, we are a March ending fiscal year. I will touch on a few of the numbers, I will talk about some of the highlights, and then we will give it back to Olivia, then we will at the end will open it up to any questions that anyone on the line may have. For the quarter that ended June 28, net sales were $17.9 million as opposed to $15.7 million in the same quarter of the previous year, are up $2.2 million or 13.7%. Net income was $927,000 as opposed to $703,000, in the same quarter last year are up $224,000, or 31.9%. I will come back in a moment to touch on that. Diluted earnings per share were $0.09 per share, up from $0.07 or an increase of $0.02 per share in the current year quarter. As most everyone knows, the first quarter of our fiscal year has the start, have been our weakest quarter and we are pleased that we are able to continue the sales increase that we have had into the first quarter, which we began several quarters ago. The year-over-year sales increase was up 13.7% for the first quarter. Turning to the margins and the profits, our gross margin – excuse me, the first quarter of FY ‘15 included – the previous year, last year, included $146,000 of legal expense related to patent litigation, which did not reoccur in the current year. This affected net income by $91,000 on an after-tax basis. If you restate the numbers I gave you a moment ago, excluding these one-time legal fees, the FY ‘15 net income still would have been up 16.8% as opposed to the number I gave you earlier of 31.9%, but still a very nice increase. Our gross margin did decline slightly to 26.8% from 27.3% in the same quarter of the previous year and this is a continuation of a decline that we have talked about previous quarters for business that we have picked up from a former competitor. Turning to the balance sheet, we are very pleased that we have finished the quarter at debt free again and we ended the quarter with a cash balance of $8.2 million. We also today announced our 23rd consecutive quarterly dividend. We paid $0.08 per share on October 2, 2015 to shareholders of record as of the close of business on September 11, 2015. This represents a 3.96% annualized yield based on yesterday’s stock closing price. Let me turn it over to Olivia to make a few more comments on the financials before we open it up for questions.

I am only going to give financial highlights. For more detailed analysis, please refer to the company’s Form 10-Q filed with the Securities and Exchange Commission this morning. Net sales were $17.9 million for the first quarter of fiscal 2016 compared with $15.7 million in the first quarter of the prior year, an increase of $2.2 million or 13.7%. The sales increase is largely related to initial shipments of new collections to a major customer as well as higher replenishment for ongoing programs. Gross profit for the first quarter increased in amount by $499,000, but decreased as a percentage of net sales from 27.3% to 26.8%. The increase in amount was associated with the increase in sales, while the decrease as a percentage of net sales was a result of the assumption of new business from a former competitor with lower preset prices beginning in the third quarter of fiscal 2015. Legal expense for the first quarter of fiscal 2016 was $158,000 lower than the first quarter of fiscal 2015. The prior year quarter included $146,000 of legal fees associated with the lawsuit that was settled in the third quarter of fiscal 2015. Other marketing and administrative expenses increased in amount from $3 million for the prior year quarter to $3.2 million for the current year quarter, but decreased as a percentage of net sales from 18.9% to 18.1%. The increase was primarily due to higher overall compensation cost and advertising costs. The company’s provision for income taxes is based upon an estimated annual effective tax rate of 39.5% for fiscal year 2016 and 37.6% for fiscal 2015. The increase in the current year is primarily due to an increase in the amount of certain expenses that are not deductible for tax purposes. Net income for the first quarter of fiscal 2016 was $927,000 or $0.09 per diluted share compared to net income of $703,000 or $0.07 per diluted share in the first quarter of fiscal 2016. I will now return the call to Randall.

Olivia, thank you very much. And before we open it up for any questions, let me just say that we are very pleased with the results that we were able to post this morning for the first quarter of FY ‘16. It was a good quarter. Alright. So, Carey, we will bring you back and you can open it up to any questions that anyone may have.

Thank you, sir. [Operator Instructions] Our first question comes from Dave King of ROTH Capital. Please go ahead.

Good afternoon, Randall and Olivia.

Hi, Dave.

Hi, Dave. How are you?

Good. And first before I start, I just want to let you know I am sitting next to Bob, [indiscernible]. You also want me to tell you how well, Randall? I hope she will.

Okay.

And then maybe starting off in terms of the strong revenue growth this quarter, I guess my question is to do with some of the bedding, it looks to me like that may have slowed a bit, I mean, still very strong, but if I remember correctly, I think last quarter, you may have benefited from some initial shipments or some of the new programs you have. So, was it slowing a bit? I would assume maybe this is a better indicator of sort of the reorder rate end demand for that business? And then on the bed and bath side, if I remember, I think there might have been actually some slippage last quarter, timing of shipments that then benefited this quarter. Is this that 14% growth you saw this quarter? Is that a good way to be thinking about that this business as we look out going forward?

It is, Dave. I mean you are reading it correctly, that on the bedding side of the business, last year we had a lot of initial steps. We have new shipments. We had new steps. So, when you circle around year-over-year, when you get it as good news, but when we circle around the next-year, the difficult part of it is of anniversary those numbers it makes it a little harder. Okay. So you are looking at that correctly. On the other flip side of the coin, the bed and bath and the disposable product side of the business had a very strong quarter and we are very pleased with that. So you are reading of those numbers correctly.

Okay. So these are sort of good run rate to be thinking about because of how the business trending and from an end demand perspective as best you can tell in terms of sell-through what you are hearing from the retailers, is that a fair statement?

Expect for our run rate, Dave you have got to keep in mind the first quarter is our weakest quarter from a sales standpoint, okay. It has been for many, many years and will continue to be the weakest quarter again this year, we think.

Okay, that’s very helpful. And then maybe switching gears to legal costs, those come down a fair bit, which is nice, I think the last quarters they were down and kind of even more so this quarter. In terms of those costs, should we be thinking about this sort of now being run rate there, are there any ongoing fees we should be worried about going forward related to some of the stuff or is that for the most part are all behind you?

It is all behind us, Dave and its 100% behind us. And you are reading that correctly as well. We don’t have those issues and we don’t have those legal fees continuing going forward. So the rate that you are seeing in the first quarter should be indicative of what you would see in the future.

Okay, that’s great color. Congrats on a good quarter and good luck with rest of the year.

Well, thank you very much. I appreciate it. Thank you.

[Operator Instructions] I am not seeing any further questions. So this will conclude our question-and-answer session. I would like to turn the call back over to Randall Chestnut for any closing remarks.

Okay. Thank you very much, Carey. And thank you to all the investors on the call. We began another year of Crown Crafts and we are excited and optimistic about the future. And I would like to say one more time we are very pleased with the results that we were able to post in the first quarter of the current fiscal year. We would like to thank all of our employees, suppliers, customers and shareholders for their continued support and interest in the company. And we will speak to you again at the end of the next quarter. Thank you very much. Have a good day.

Thank you, sir. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect. Have a great day.