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What changed in CROWN CRAFTS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CROWN CRAFTS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+122 added−109 removedSource: 10-K (2025-06-25) vs 10-K (2024-06-28)

Top changes in CROWN CRAFTS INC's 2025 10-K

122 paragraphs added · 109 removed · 87 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeFiscal Year 2024 2023 Walmart Inc. 42% 51% Amazon.com, Inc. 19% 20% 5 Table of Contents Products The Company’s primary focus is on infant, toddler and juvenile products, including the following: ● developmental toys ● dolls and plush toys ● reusable and disposable bibs ● infant and toddler bedding ● blankets and swaddle blankets ● nursery and toddler accessories ● room décor ● burp cloths ● reusable and disposable placemats and floor mats ● disposable toilet seat covers and changing mats ● feeding and care goods ● other infant, toddler and juvenile soft goods Seasonality and Inventory Management Approximately 20% of the Company’s annual gross sales typically occur during the first fiscal quarter (April through June).
Biggest changeThe table below sets forth those customers that represented at least 10% of the Company’s gross sales in fiscal years 2025 and 2024. 2025 2024 Walmart Inc. 47% 42% Amazon.com, Inc. 19% 19% Products The Company’s primary focus is on infant, toddler and juvenile products, including the following: ● developmental toys ● dolls and plush toys ● reusable and disposable bibs ● infant and toddler bedding ● diaper bags ● blankets and swaddle blankets ● nursery and toddler accessories ● room décor ● burp cloths ● reusable and disposable placemats and floor mats ● disposable toilet seat covers and changing mats ● feeding and care goods ● other infant, toddler and juvenile soft goods Seasonality and Inventory Management There are no significant variations in the seasonal demand for the Company’s products from year to year.
The Company’s ability to compete depends principally on styling, price, service to the retailer and continued high regard for the Company’s products and trade names. 4 Table of Contents Human Capital Resources As of May 31, 2024, the Company had 162 employees, all of whom are full-time and none of whom is represented by a labor union or is otherwise a party to a collective bargaining agreement.
The Company’s ability to compete depends principally on styling, price, service to the retailer and continued high regard for the Company’s products and trade names. 4 Table of Contents Human Capital Resources As of May 31, 2025, the Company had 168 employees, all of whom are full-time and none of whom is represented by a labor union or is otherwise a party to a collective bargaining agreement.
These reports are also available without charge on the SEC’s website at www.sec.gov . International Sales Sales to customers in countries other than the U.S. represented 8% and 5% of the Company’s total gross sales during fiscal years 2024 and 2023, respectively.
These reports are also available without charge on the SEC’s website at www.sec.gov . International Sales Sales to customers in countries other than the U.S. represented 8% of the Company’s total gross sales during fiscal years 2025 and 2024, respectively.
Sales and Marketing The Company’s products are marketed through a national sales force consisting of salaried sales executives and employees located in Gonzales, Louisiana; Compton, California; Minneapolis, Minnesota; Grand Rapids, Michigan; Bentonville, Arkansas; and London, United Kingdom; and by independent commissioned sales representatives located throughout the United States.
Sales and Marketing The Company’s products are marketed through a national sales force consisting of salaried sales executives and employees located in Gonzales, Louisiana; Compton, California; Minneapolis, Minnesota; Grand Rapids, Michigan; Bentonville, Arkansas; and by independent commissioned sales representatives located throughout the United States. 7 Table of Contents
Sales of licensed products represented 40% of the Company’s gross sales in fiscal year 2024, which included 24% of sales under the Company’s license agreements with affiliated companies of The Walt Disney Company (“Disney”), which expire as set forth below: License Agreement Expiration Infant Bedding December 31, 2025 Infant Feeding and Bath December 31, 2024 Toddler Bedding December 31, 2024 Marvel December 31, 2024 STAR WARS Toddler Bedding December 31, 2024 STAR WARS - Lego Plush December 31, 2025 Customers The Company’s customers consist principally of mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts and wholesale clubs.
Sales of licensed products represented 50% of the Company’s gross sales in fiscal year 2025, which included 21% of sales under the Company’s license agreements with affiliated companies of The Walt Disney Company (“Disney”), which expire as set forth below: License Agreement Expiration Infant Bedding September 30, 2025 Infant Feeding and Bath December 31, 2025 Toddler Bedding September 30, 2025 Marvel September 30, 2025 STAR WARS Toddler Bedding September 30, 2025 STAR WARS - Lego Plush December 31, 2025 5 Table of Contents Customers The Company’s customers consist principally of mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts and wholesale clubs.
Sales of products marketed under the Company’s trademarks, including Sassy®, Manhattan Toy®, NoJo® and Neat Solutions® accounted for 38% and 35% of the Company’s total gross sales during fiscal years 2024 and 2023, respectively. Protection for these trademarks is obtained through domestic and foreign registrations.
Sales of products marketed under the Company’s trademarks, including Sassy®, Manhattan Toy®, NoJo®, Baby Boom® and Neat Solutions® accounted for 39% and 38% of the Company’s total gross sales during fiscal years 2025 and 2024, respectively. Protection for these trademarks is obtained through domestic and foreign registrations.
The Company maintains a foreign representative office located in Shanghai, China, which is responsible for the coordination of production, purchases and shipments, seeking out new vendors and overseeing inspections for social compliance and quality.
The Company maintains foreign representative offices located in Shanghai and Shenzhen, China, which are responsible for the coordination of production, purchases and shipments, seeking out new vendors and overseeing inspections for social compliance and quality.
The Company operates indirectly through three of its wholly-owned subsidiaries, NoJo Baby & Kids, Inc. (“NoJo”), Sassy Baby, Inc. (“Sassy”) and Manhattan Toy Europe Limited (“MTE”) in the infant, toddler and juvenile products segment within the consumer products industry.
The Company operates indirectly through three wholly-owned subsidiaries, NoJo Baby & Kids, Inc. (“NoJo”), Sassy Baby, Inc. (“Sassy”) and Manhattan Toy Europe Limited (“MTE”) in the infant, toddler and juvenile products segment within the consumer products industry. The infant, toddler and juvenile products segment consists of infant and toddler bedding, diaper bags, bibs, disposables, toys and feeding products.
There are otherwise no significant variations in the seasonal demand for the Company’s products from year to year. Sales are generally higher in periods when customers take initial shipments of new products, as these orders typically include enough products for initial sets for each store and additional quantities for the customer’s distribution centers.
Sales are generally higher in periods when customers take initial shipments of new products, as these orders typically include enough products for initial sets for each store and additional quantities for the customer’s distribution centers.
The Company's fiscal year ends on the Sunday nearest to or on March 31. References herein to “fiscal year 2024” or “2024” represent the 52-week period ended March 31, 2024, and references herein to “fiscal year 2023” or “2023” represent the 52-week period ended April 2, 2023.
The Company's fiscal year ends on the Sunday nearest to or on March 31. References herein to “fiscal year 2025” or “2025” represent the 52-week period ended March 30, 2025, and references herein to “fiscal year 2024” or “2024” represent the 52-week period ended March 31, 2024.
When designing products under the Company’s various licensed brands, the Company’s designers coordinate their efforts with the licensors’ design teams to provide for a more fluid design approval process and to effectively incorporate the image of the licensed brand into the product.
When designing products under the Company’s various licensed brands, the Company’s designers coordinate their efforts with the licensors’ design teams to provide for a more fluid design approval process and to effectively incorporate the image of the licensed brand into the product. The Company’s designs include traditional, contemporary, textured and whimsical patterns across a broad spectrum of retail price points.
Also, many of the designs used by the Company are copyrighted by other parties, including trademark licensors, and are available to the Company through copyright license agreements. The licensing agreements are generally for an initial term of one to three years and may or may not be subject to renewal or extension.
The licensing agreements are generally for an initial term of one to three years and may or may not be subject to renewal or extension.
This continual development cycle affords the Company design flexibility, multiple opportunities to present new products to customers and the ability to provide timely responses to customer demands and changing market trends. The Company also creates designs for exclusive sale by certain of its customers under the Company’s brands, as well as the customers’ private label brands.
Utilizing state of the art computer technology, the Company continually develops new designs throughout the year for all of its product groups. This continual development cycle affords the Company design flexibility, multiple opportunities to present new products to customers and the ability to provide timely responses to customer demands and changing market trends.
The Company’s products are warehoused and distributed domestically from leased facilities located in Compton, California and Eden Valley, Minnesota and internationally from third-party logistics warehouses in Belgium and the United Kingdom. Licensed Products Certain products are manufactured and sold pursuant to licensing agreements for trademarks.
The Company’s products are warehoused and distributed domestically from leased facilities located in Compton, California and Eden Valley, Minnesota and internationally from third-party logistics warehouses in Belgium and the United Kingdom. The current U.S. administration has issued executive orders directing the United States to impose new tariffs on imports from several nations, including China.
However, there is no assurance that such requirements will not become more stringent in the future or that the Company will not have to incur significant costs to comply with such requirements. Product Design and Styling The Company believes that its creative team is one of its key strengths.
However, there is no assurance that such requirements will not become more stringent in the future or that the Company will not have to incur significant costs to comply with such requirements. The current U.S. administration has issued executive orders directing the United States to impose new tariffs on imports from several nations.
The Company does not enter into long-term or other purchase agreements with its customers. The table below sets forth those customers that represented at least 10% of the Company’s gross sales in fiscal years 2024 and 2023.
The Company does not enter into long-term or other purchase agreements with its customers.
Removed
The infant, toddler and juvenile products segment consists of infant and toddler bedding and blankets, bibs, soft bath products, disposable products, developmental toys and accessories.
Added
On July 19, 2024 , NoJo acquired substantially all of the assets, and assumed certain specified liabilities, of Baby Boom Consumer Products, Inc.
Removed
On March 17, 2023 (the “Closing Date”), the Company acquired Manhattan Group, LLC (“Manhattan”) and MTE, Manhattan’s then wholly-owned subsidiary (the “Manhattan Acquisition”), for a purchase price of $17.0 million, subject to adjustments for cash as of the Closing Date and to the extent that actual net working capital as of the Closing Date differed from target net working capital of $13.75 million.
Added
(the “Acquisition”), for a purchase price of $18.0 million in cash, subject to a dollar-for-dollar adjustment to the extent that the working capital at closing was greater or less than the target working capital of approximately $6.5 million. The Acquisition was funded by the Company using the proceeds of an $8.0 million term loan from the CIT Group/Commercial Services, Inc.
Removed
The Manhattan Acquisition was funded with available cash and borrowings under the Company’s revolving line of credit with The CIT Group/Commercial Services (“CIT”). From the Closing Date through the fiscal year ended March 31, 2024, the Company operated Manhattan as a wholly-owned subsidiary that manufactured and marketed developmental toys. On April 1, 2024, the Company merged Manhattan into Sassy.
Added
(“CIT”) and additional borrowings under the Company’s revolving line of credit with CIT.
Removed
The Company’s designs include traditional, contemporary, textured and whimsical patterns across a broad spectrum of retail price points. 6 Table of Contents Utilizing state of the art computer technology, the Company continually develops new designs throughout the year for all of its product groups.
Added
The new tariffs have increased the cost of the products the Company sources from China and has affected shipments from the Company’s Chinese-based suppliers.
Added
See “ Risk Factors – The imposition of tariffs on imports from China have adversely affected the cost and sourcing of the Company ’ s products among other things ” and “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations – Known Trends and Uncertainties ”.
Added
Licensed Products Certain products are manufactured and sold pursuant to licensing agreements for trademarks. Also, many of the designs used by the Company are copyrighted by other parties, including trademark licensors, and are available to the Company through copyright license agreements.
Added
The new tariffs have increased the cost of products and have affected shipments from the Company’s suppliers. The Company may not be able to pass along all increases in tariffs and freight charges to its customers.
Added
See “ Risk Factors – The imposition of tariffs on imports from China have adversely affected the cost and sourcing of the Company ’ s products among other things ” and “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations – Known Trends and Uncertainties ”. 6 Table of Contents Product Design and Styling The Company believes that its creative team is one of its key strengths.
Added
The Company also creates designs for exclusive sale by certain of its customers under the Company’s brands, as well as the customers’ private label brands.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe strength of the Company ’ s competitors may impact the Company ’ s ability to maintain and grow its sales, which could decrease the Company ’ s revenues. The infant and toddler consumer products industry is highly competitive. The Company competes with a variety of distributors and manufacturers, both branded and private label.
Biggest changeThe infant and toddler consumer products industry is highly competitive. The Company competes with a variety of distributors and manufacturers, both branded and private label. The Company’s ability to compete successfully depends principally on styling, price, service to the retailer and continued high regard for the Company’s products and trade names.
The Company’s provision for income taxes is based on its effective tax rate, which in any given financial statement period could fluctuate based on changes in tax laws or regulations, changes in the mix and level of earnings by taxing jurisdiction, changes in the amount of certain expenses within the consolidated statements of income that will never be deductible on the Company’s income tax returns and certain charges deducted on the Company’s income tax returns that are not included within the consolidated statements of income.
The Company’s provision for income taxes is based on its effective tax rate, which in any given financial statement period could fluctuate based on changes in tax laws or regulations, changes in the mix and level of earnings by taxing jurisdiction, changes in the amount of certain expenses within the consolidated statements of operations that will never be deductible on the Company’s income tax returns and certain charges deducted on the Company’s income tax returns that are not included within the consolidated statements of operations.
Climate change has the potential to result in a material adverse effect on the Company’s business, cash flow, results of operations and financial condition. 7 Table of Contents The Company ’ s inability to anticipate and respond to consumers ’ tastes and preferences could adversely affect the Company ’ s revenues.
Climate change has the potential to result in a material adverse effect on the Company’s business, cash flow, results of operations and financial condition. 8 Table of Contents The Company ’ s inability to anticipate and respond to consumers ’ tastes and preferences could adversely affect the Company ’ s revenues.
If a default was to occur and such a demand was to be made, there can be no assurance that the Company’s assets would be sufficient to repay the indebtedness in full. A stockholder could lose all or a portion of his or her investment in the Company.
If a default was to occur and such a demand was to be made, there can be no assurance that the Company’s assets would be sufficient to repay the indebtedness in full. 12 Table of Contents A stockholder could lose all or a portion of his or her investment in the Company.
Risks Associated with the Company, Business and Industry The loss of one or more of the Company ’ s key customers could result in a material loss of revenues. The Company’s top two customers represented approximately 61% of gross sales in fiscal year 2024.
Risks Associated with the Company, Business and Industry The loss of one or more of the Company ’ s key customers could result in a material loss of revenues. The Company’s top two customers represented approximately 66% of gross sales in fiscal year 2025.
The loss of one or more of the Company ’ s licenses could result in a material loss of revenues. Sales of licensed products represented 40% of the Company’s gross sales in fiscal year 2024, which included 24% of sales associated with the Company’s license agreements with Disney.
The loss of one or more of the Company ’ s licenses could result in a material loss of revenues. Sales of licensed products represented 50% of the Company’s gross sales in fiscal year 2025, which included 21% of sales associated with the Company’s license agreements with Disney.
Difficulties encountered by these suppliers, such as fires, accidents, natural disasters, outbreaks of infectious diseases (including the COVID-19 pandemic) and the instability inherent in operating within an authoritarian political structure, could halt or disrupt production and shipment of the Company’s products.
Difficulties encountered by these suppliers, such as fires, accidents, natural disasters and the instability inherent in operating within an authoritarian political structure, could halt or disrupt production and shipment of the Company’s products.
These changes could cause fluctuations in the Company’s effective tax rate either on an absolute basis, or in relation to varying levels of the Company’s pre-tax income. Such fluctuations in the Company’s effective tax rate could adversely affect its results of operations.
These changes could cause fluctuations in the Company’s effective tax rate either on an absolute basis, or in relation to varying levels of the Company’s pre-tax income.
In addition, changes in U.S. customs procedures or delays in the clearance of goods through customs could result in the Company being unable to deliver goods to customers in a timely manner or the potential loss of sales altogether.
In addition, changes in U.S. customs procedures or delays in the clearance of goods through customs could result in the Company being unable to deliver goods to customers in a timely manner or the potential loss of sales altogether. The occurrence of any of these events could adversely affect the Company’s profitability.
The Company also employs third-party systems and software that are integral to its operations. These systems are vulnerable to cybersecurity incidents, including disruptions and security breaches, which can result from unintentional events or deliberate attacks by insiders or third parties, such as cybercriminals, competitors, nation-states, computer hackers and other cyber terrorists.
These systems are vulnerable to cybersecurity incidents, including disruptions and security breaches, which can result from unintentional events or deliberate attacks by insiders or third parties, such as cybercriminals, competitors, nation-states, computer hackers and other cyber terrorists.
The Company faces an evolving landscape of cybersecurity threats in which evildoers use a complex array of means to perpetrate attacks, including the use of stolen access credentials, malware, ransomware, phishing, structured query language injection attacks and distributed denial-of-service attacks.
The Company faces an evolving landscape of cybersecurity threats in which evildoers use a complex array of means to perpetrate attacks, including the use of stolen access credentials, malware, ransomware, phishing, structured query language injection attacks and distributed denial-of-service attacks. The use of AI technologies are in the early stages of wide spread adoption and continue to evolve rapidly.
The failure by the Company to achieve the sales envisioned by the license agreements could result in the payment by the Company of shortfalls in the minimum guaranteed royalty payments, which would adversely impact the Company’s operating results. Growing geopolitical tensions could adversely affect the Company ’ s operations and profitability.
The failure by the Company to achieve the sales envisioned by the license agreements could result in the payment by the Company of shortfalls in the minimum guaranteed royalty payments, which would adversely impact the Company’s operating results.
Recalls or product liability claims could result in decreased consumer demand for the Company’s products, damage to the Company’s reputation, a diversion of management’s attention from its business and increased customer service and support costs, any or all of which could adversely affect the Company’s operating results. 9 Table of Contents The Company could experience adjustments to its effective tax rate or its prior tax obligations, either of which could adversely affect its results of operations.
Recalls or product liability claims could result in decreased consumer demand for the Company’s products, damage to the Company’s reputation, a diversion of management’s attention from its business and increased customer service and support costs, any or all of which could adversely affect the Company’s operating results.
An unfavorable outcome in litigation involving intellectual property could result in any or all of the following: (i) civil judgments against the Company, which could require the payment of royalties on both past and future sales of certain products, as well as plaintiff’s attorneys’ fees and other litigation costs; (ii) impairment charges of up to the carrying value of the Company’s intellectual property rights; (iii) restrictions on the ability of the Company to sell certain of its products; (iv) legal and other costs associated with investigations and litigation; and (v) adverse effects on the Company’s competitive position. 8 Table of Contents Widespread outbreaks of contagious disease may adversely affect the Company ’ s business operations, employee availability, financial condition, liquidity and cash flow.
An unfavorable outcome in litigation involving intellectual property could result in any or all of the following: (i) civil judgments against the Company, which could require the payment of royalties on both past and future sales of certain products, as well as plaintiff’s attorneys’ fees and other litigation costs; (ii) impairment charges of up to the carrying value of the Company’s intellectual property rights; (iii) restrictions on the ability of the Company to sell certain of its products; (iv) legal and other costs associated with investigations and litigation; and (v) adverse effects on the Company’s competitive position. 9 Table of Contents The strength of the Company ’ s competitors may impact the Company ’ s ability to maintain and grow its sales, which could decrease the Company ’ s revenues.
The breach of any of the debt covenants could result in a default under the Company’s credit facility. Upon the occurrence of an event of default, the Company’s lender could make an immediate demand of the amount outstanding under the credit facility.
Upon the occurrence of an event of default, the Company’s lender could make an immediate demand of the amount outstanding under the credit facility.
Changes in international trade regulations and other risks associated with foreign trade could adversely affect the Company ’ s sourcing. The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China.
Such fluctuations in the Company’s effective tax rate could adversely affect its results of operations. 10 Table of Contents Changes in international trade regulations and other risks associated with foreign trade could adversely affect the Company ’ s sourcing. The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China.
Unless waived by the Company’s lender, these covenants could limit the Company’s ability to pursue opportunities to expand its business operations, respond to changes in business and economic conditions and obtain additional financing, or otherwise engage in transactions that the Company considers beneficial. 11 Table of Contents The Company ’ s ability to comply with its credit facility is subject to future performance and other factors.
Unless waived by the Company’s lender, these covenants could limit the Company’s ability to pursue opportunities to expand its business operations, respond to changes in business and economic conditions and obtain additional financing, or otherwise engage in transactions that the Company considers beneficial.
The Company’s ability to make required payments of principal and interest on its debts, to refinance its maturing indebtedness, to fund capital expenditures or to comply with its debt covenants will depend upon future performance. The Company’s future performance is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors beyond its control.
The Company ’ s ability to comply with its credit facility is subject to future performance and other factors. The Company’s ability to make required payments of principal and interest on its debts, to refinance its maturing indebtedness, to fund capital expenditures or to comply with its debt covenants will depend upon future performance.
The Company has implemented both passive and active cybersecurity measures to securely maintain confidential and proprietary information stored on the Company’s information systems and continually invests in maintaining and upgrading the systems and applications to mitigate these risks.
The risks to AI include operational risks and the rapidly evolving and uncertain legal and regulatory environment relating to AI. 11 Table of Contents The Company has implemented both passive and active cybersecurity measures to securely maintain confidential and proprietary information stored on the Company’s information systems and continually invests in maintaining and upgrading the systems and applications to mitigate these risks.
The Company could experience losses associated with its intellectual property. The Company relies upon the fair interpretation and enforcement of patent, copyright, trademark and trade secret laws in the U.S., similar laws in other countries, and agreements with employees, customers, suppliers, licensors and other parties.
The Company relies upon the fair interpretation and enforcement of patent, copyright, trademark and trade secret laws in the U.S., similar laws in other countries, and agreements with employees, customers, suppliers, licensors and other parties. Such reliance serves to establish and maintain the intellectual property rights associated with the products that the Company develops and sells.
The occurrence of any of these events could adversely affect the Company’s profitability. 10 Table of Contents Disruptions to the Company ’ s information technology systems could negatively affect the Company ’ s results of operations. The Company’s operations are highly dependent upon computer hardware and software systems, including customized information technology systems and cloud-based applications.
Disruptions to the Company ’ s information technology systems could negatively affect the Company ’ s results of operations. The Company’s operations are highly dependent upon computer hardware and software systems, including customized information technology systems and cloud-based applications. The Company also employs third-party systems and software that are integral to its operations.
The Company is subject to income taxes in the many jurisdictions in which it operates, including the U.S., several U.S. states and China. At any particular point in time, several tax years are subject to general examination or other adjustment by these various jurisdictions.
At any particular point in time, several tax years are subject to general examination or other adjustment by these various jurisdictions.
In response to Russia’s invasion of Ukraine, the U.S. government and other allied countries across the world have levied coordinated and wide-ranging economic sanctions against Russia.
See “Risk Factors – The imposition of tariffs on imports from China could adversely affect the cost and sourcing of the Company’s products, among other things.” In response to Russia’s invasion of Ukraine, the U.S. government and other allied countries across the world have levied coordinated and wide-ranging economic sanctions against Russia.
Therefore, in certain jurisdictions the Company may not be able to protect its intellectual property rights against counterfeiting or enforce its contractual agreements with other parties. Finally, a party could claim that the Company is infringing upon such party’s intellectual property rights, and claims of this type could lead to a civil complaint.
Finally, a party could claim that the Company is infringing upon such party’s intellectual property rights, and claims of this type could lead to a civil complaint.
Such reliance serves to establish and maintain the intellectual property rights associated with the products that the Company develops and sells. However, the laws and courts of certain countries at times do not protect intellectual property rights or respect contractual agreements to the same extent as the laws of the U.S.
However, the laws and courts of certain countries at times do not protect intellectual property rights or respect contractual agreements to the same extent as the laws of the U.S. Therefore, in certain jurisdictions the Company may not be able to protect its intellectual property rights against counterfeiting or enforce its contractual agreements with other parties.
Significant increases in freight costs and the price of raw materials that are components of the Company’s products, including cotton, oil and labor, could adversely affect the amounts that the Company must pay its suppliers for its finished goods. If the Company is unable to pass these cost increases along to its customers, its profitability could be adversely affected.
Significant increases in freight costs and the price of raw materials that are components of the Company’s products, including cotton, oil and labor, could adversely affect the amounts that the Company must pay its suppliers for its finished goods. Additionally, U.S. government imposed tariffs on certain countries, including China, from which we source products.
The effects of increased competition could result in a material decrease in the Company’s revenues. The Company ’ s success is dependent upon retaining key management personnel. Certain of the Company’s executive management and other key personnel have been integral to the Company’s operations and the execution of its growth strategy.
Certain of the Company’s executive management and other key personnel have been integral to the Company’s operations and the execution of its growth strategy.
The Company’s ability to compete successfully depends principally on styling, price, service to the retailer and continued high regard for the Company’s products and trade names. Several of these competitors are larger than the Company and have greater financial resources than the Company, and some have experienced financial challenges from time to time, including servicing significant levels of debt.
Several of these competitors are larger than the Company and have greater financial resources than the Company, and some have experienced financial challenges from time to time, including servicing significant levels of debt. Those facing financial pressures could choose to make particularly aggressive pricing decisions in an attempt to increase revenue.
Those facing financial pressures could choose to make particularly aggressive pricing decisions in an attempt to increase revenue. Competitors based in China have begun to sell and ship directly to customers without having to rely on distributors in the destination country, making their products more affordable.
Competitors based in China have begun to sell and ship directly to customers without having to rely on distributors in the destination country, making their products more affordable. The effects of increased competition could result in a material decrease in the Company’s revenues. The Company ’ s success is dependent upon retaining key management personnel.
Removed
Significant outbreaks of contagious diseases could have adverse effects on the overall economy and impact the Company’s supply chain, manufacturing and distribution operations, transportation services, customers and employees, as well as consumer sentiment in general and traffic within the retail stores that carry the Company’s products.
Added
The imposition of tariffs on imports from China have adversely affected the cost and sourcing of the Company ’ s products, among other things. The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China.
Removed
A pandemic could adversely affect the Company’s revenues, earnings, liquidity and cash flows and require significant actions in response, including employee furloughs, closings of Company facilities, expense reductions or discounts of the pricing of the Company’s products, all in an effort to mitigate such effects.
Added
The current U.S. administration has issued executive orders directing the United States to impose new tariffs on imports from several nations, including China. The new tariffs have increased the cost of the products the Company sources from China and are affecting future shipments from the Company’s Chinese-based suppliers.
Removed
During fiscal years 2022 and 2021, the COVID-19 pandemic led global government authorities to implement numerous public health measures, including quarantines, business closures, travel bans and lockdowns to confront the pandemic. China’s efforts to control the spread of the COVID-19 virus by locking down its largest cities placed a strain on already-stressed global supply chains.
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The Company may not be able to pass along all increases in tariffs and freight charges to its customers, and any alterations the Company may make to its business strategy or operations to adapt to the foregoing, including sourcing products from suppliers in other countries, will be time consuming and expensive.
Removed
Several of the Company’s customers experienced financial difficulties as a result of the COVID-19 pandemic.
Added
The full impact of the new tariffs is uncertain because it is subject to a number of factors, including the duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that China may take and any mitigating actions that may become available.
Removed
A resurgence of the COVID-19 pandemic, or any other outbreak of a contagious disease, could adversely affect the Company’s revenues, earnings, liquidity and cash flows and may require significant actions in response, including employee furloughs, closings of Company facilities, expense reductions or discounts of the pricing of the Company’s products, all in an effort to mitigate such effects.
Added
The full impact of the new tariffs may have a material adverse effect on the Company’s business, cash flow, results of operations and financial condition. Growing geopolitical tensions could adversely affect the Company ’ s operations and profitability.
Added
The actual impact of the new tariffs is uncertain because it is subject to a number of factors, including the duration of such tariffs, changes in the amount, scope and nature of the tariffs in future, any countermeasures that China may take and any mitigating actions that may become available.
Added
If the Company is unable to pass these cost increases along to its customers, its profitability could be adversely affected. The Company could experience losses associated with its intellectual property.
Added
The Company could experience adjustments to its effective tax rate or its prior tax obligations, either of which could adversely affect its results of operations. The Company is subject to income taxes in the many jurisdictions in which it operates, including the U.S., several U.S. states and China.
Added
The Company could also be affected by the United States imposition or increase of import duties, tariffs and other import regulations and deteriorating diplomatic relations with China, which could have a material adverse effect on the Company’s business, cash flow, results of operations and financial condition.
Added
With the implementation of tariffs on imports from China, there can be no assurance the Company could respond to increases in tariffs and freight charges by passing them along to its customers.
Added
The Company’s future performance is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors beyond its control. The breach of any of the debt covenants could result in a default under the Company’s credit facility.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Use Approximate Square Feet Owned/ Leased Gonzales, Louisiana Administrative and sales office 15,598 Leased Compton, California Offices, warehouse and distribution center 157,400 Leased Minneapolis, Minnesota Product design and sales office 16,837 Leased Eden Valley, Minnesota Warehouse and distribution center 128,074 Leased Grand Rapids, Michigan Product design office 5,711 Leased London, United Kingdom Sales office 1,800 Leased Shanghai, People’s Republic of China Office 1,912 Leased
Biggest changeLocation Use Approximate Square Feet Owned/ Leased Gonzales, Louisiana Administrative and sales office 15,598 Leased Compton, California Offices, warehouse and distribution center 157,400 Leased Minneapolis, Minnesota Product design and sales office 16,837 Leased Eden Valley, Minnesota Warehouse and distribution center 128,074 Leased Grand Rapids, Michigan Product design office 9,100 Leased Newark, New Jersey Product design office 2,048 Leased Shanghai, People’s Republic of China Office 1,912 Leased Shenzhen, People’s Republic of China Office 4,205 Leased
The table below sets forth certain information regarding the Company's principal real property as of the close of business on May 31, 2024.
The table below sets forth certain information regarding the Company's principal real property as of the close of business on May 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNeither 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 position, results of operations or cash flows. ITEM 4. Mine Safety Disclosures Not applicable. 13 Table of Contents PART II
Biggest changeNeither 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 position, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is traded on the Nasdaq Capital Market under the symbol “CRWS”. As of May 31, 2024, there were 155 record holders of the Company’s common stock. The Company has historically paid cash dividends.
Biggest changeITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is traded on the Nasdaq Capital Market under the symbol “CRWS”. As of May 31, 2025, there were 160 record holders of the Company’s common stock. The Company has historically paid cash dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

33 edited+13 added−13 removed28 unchanged
Biggest changeChange 2024 2023 $ % Net sales by category: Bedding, blankets and accessories $ 32,036 $ 36,747 $ (4,711 ) -12.8 % Bibs, toys and disposable products 55,596 38,306 17,290 45.1 % Total net sales 87,632 75,053 12,579 16.8 % Cost of products sold 64,632 55,225 9,407 17.0 % Gross profit 23,000 19,828 3,172 16.0 % % of net sales 26.2 % 26.4 % Marketing and administrative expenses 16,105 12,655 3,450 27.3 % % of net sales 18.4 % 16.9 % Interest (expense) income - net (734 ) 81 (815 ) -1006.2 % Other (expense) income - net 67 172 (105 ) -61.0 % Income tax expense 1,334 1,776 (442 ) -24.9 % Net income 4,894 5,650 (756 ) -13.4 % % of net sales 5.6 % 7.5 % 14 Table of Contents Net Sales: Sales increased to $87.6 million for the fiscal year ended March 31, 2024, compared with $75.1 million in the fiscal year ended April 2, 2023, an increase of $12.6 million, or 16.8%.
Biggest changeChange 2025 2024 $ % Net sales by category: Bedding and diaper bags $ 41,083 $ 32,036 $ 9,047 28.2 % Bibs, toys and disposable products 46,167 55,596 (9,429 ) -17.0 % Total net sales 87,250 87,632 (382 ) -0.4 % Cost of products sold 65,985 64,632 1,353 2.1 % Gross profit 21,265 23,000 (1,735 ) -7.5 % % of net sales 24.4 % 26.2 % Marketing and administrative expenses 18,690 16,105 2,585 16.1 % % of net sales 21.4 % 18.4 % Interest (expense) income - net (1,173 ) (734 ) (439 ) 59.8 % Other (expense) income - net (49 ) 67 (116 ) -173.1 % Income tax (benefit) expense (3,057 ) 1,334 (4,391 ) -329.2 % Net (loss) income (9,356 ) 4,894 (14,250 ) -291.2 % % of net sales -10.7 % 5.6 % 15 Table of Contents Net Sales: Sales decreased to $87.3 million for the fiscal year ended March 30, 2025, compared with $87.6 million in the fiscal year ended March 31, 2024, a decrease of $382,000, or 0.4%.
The financing agreement also provides for the payment by CIT to the Company of interest on daily negative balances, if any, held by CIT at the rate of prime as of the beginning of the calendar month minus 2.0%.
The financing agreement also provides for the payment by CIT to the Company of interest at prime as of the beginning of the calendar month minus 2.0% on daily negative balances, if any, held at CIT.
In the development of this estimate, the Company makes a number of judgements utilizing the Current Expected Credit Losses (“CECL”) methodology, which requires the Company to estimate lifetime expected credit losses by specifically analyzing the receivables.
In the development of this estimate, the Company makes a number of judgements utilizing the Current Expected Credit Losses methodology, which requires the Company to estimate lifetime expected credit losses by specifically analyzing the receivables.
Since allowances associated with cooperative advertising are accrued commensurate with sales activity or using the straight-line method, as appropriate, the timing of funding requests for cooperative advertising may result in fluctuations in the allowance from period to period, although such timing should not have a material impact on the consolidated statements of income.
Since allowances associated with cooperative advertising are accrued commensurate with sales activity or using the straight-line method, as appropriate, the timing of funding requests for cooperative advertising may result in fluctuations in the allowance from period to period, although such timing should not have a material impact on the consolidated statements of operations.
To the extent that this allowance is established or increased during an accounting period, an expense is recorded in cost of products sold in the Company's consolidated statements of income. Only when inventory for which an allowance has been established is later sold or is otherwise disposed is the allowance reduced accordingly.
To the extent that this allowance is established or increased during an accounting period, an expense is recorded in cost of products sold in the Company's consolidated statements of operations. Only when inventory for which an allowance has been established is later sold or is otherwise disposed is the allowance reduced accordingly.
During fiscal year 2024, consumers responded to macroeconomic conditions by trading down to lower priced items, buying fewer items, or foregoing some items altogether due to inflationary concerns.
During fiscal year 2025, consumers responded to macroeconomic conditions by trading down to lower priced items, buying fewer items, or foregoing some items altogether due to inflationary concerns.
Known Trends and Uncertainties The Company’s financial results are closely tied to sales to the Company’s top two customers, which represented approximately 61% of the Company’s gross sales in fiscal year 2024. A significant downturn experienced by either or both of these customers could lead to decreased sales.
Known Trends and Uncertainties The Company’s financial results are closely tied to sales to the Company’s top two customers, which represented approximately 66% of the Company’s gross sales in fiscal year 2025. A significant downturn experienced by either or both of these customers could lead to decreased sales.
The Company in the current year experienced a decrease in its accounts receivable balances that was $3.1 million lower than the decrease in the prior year, and the Company in the current year experienced a decrease in its accounts payable balances that was $2.3 million higher than the decrease in the prior year.
The Company in the current year experienced a decrease in its accounts receivable balances that was $1.2 million higher than the decrease in the prior year, and the Company in the current year experienced an increase in its accounts payable balances that was $3.3 million higher than the decrease in the prior year.
Factoring fees, which are included in marketing and administrative expenses in the accompanying consolidated statements of income, were $353,000 and $287,000 during fiscal years 2024 and 2023, respectively. Critical Accounting Policies and Estimates The Company prepares its financial statements to conform with accounting principles generally accepted in the U.S. (“GAAP”) as promulgated by the Financial Accounting Standards Board (“FASB”).
Factoring fees, which are included in marketing and administrative expenses in the accompanying consolidated statements of operations, were $386,000 and $353,000 during fiscal years 2025 and 2024, respectively. Critical Accounting Policies and Estimates The Company prepares its financial statements to conform with accounting principles generally accepted in the U.S. (“GAAP”) as promulgated by the Financial Accounting Standards Board (“FASB”).
Results of Operations The following table contains results of operations for the fiscal years ended March 31, 2024 and April 2, 2023 and the dollar and percentage changes for those periods (in thousands, except percentages).
Results of Operations The following table contains results of operations for the fiscal years ended March 30, 2025 and March 31, 2024 and the dollar and percentage changes for those periods (in thousands, except percentages).
The allowance for expected credit losses is included in marketing and administrative expenses in the accompanying consolidated statements of income. The allowance for chargebacks related to negotiated customer terms and discounts, cooperative advertising, warehouse allowances, placement fees, volume rebates, coupons, discounts and other allowances is recorded commensurate with sales activity or using the straight-line method, as appropriate.
The allowance for expected credit losses is included in marketing and administrative expenses in the accompanying consolidated statements of operations. The allowance for cooperative advertising, warehouse allowances, placement fees, volume rebates, coupons and discounts is recorded commensurate with sales activity or using the straight-line method, as appropriate.
At March 31, 2024, the Company had elected to pay interest on balances owed under the revolving line of credit, if any, under the SOFR option, which was 6.9%.
At March 30, 2025, the Company had elected to pay interest on balances owed under the revolving line of credit, if any, under the SOFR option, which was 5.9%.
The ETR on continuing operations combined with certain discrete income tax charges and benefits resulted in an overall provision for income taxes of 21.4% and 23.9% for the fiscal years ended March 31, 2024 and April 2, 2023, respectively.
The ETR on continuing operations combined with certain discrete income tax charges and benefits resulted in an overall provision for income taxes of 24.6% and 21.4% for the fiscal years ended March 30, 2025 and March 31, 2024, respectively.
Thus, the Company’s allowances against accounts receivable at any point in time may be over-funded or under-funded. Inventory Valuation: On a periodic basis, management reviews its inventory quantities on hand for obsolescence, physical deterioration, changes in price levels and the existence of quantities on hand which may not reasonably be expected to be sold within the Company’s normal operating cycle.
Inventory Valuation: On a periodic basis, management reviews its inventory quantities on hand for obsolescence, physical deterioration, changes in price levels and the existence of quantities on hand which may not reasonably be expected to be sold within the Company’s normal operating cycle.
These allowances include anticipated returns and claims, expected credit losses, chargebacks related to negotiated customer terms and discounts, cooperative advertising allowances, warehouse allowances, placement fees, volume rebates, coupons, discounts and other allowances.
These allowances include anticipated returns and claims, expected credit losses, cooperative advertising allowances, warehouse allowances, placement fees, volume rebates, coupons, and discounts.
The Company believes it was in compliance with these covenants as of March 31, 2024. To reduce its exposure to credit losses, the Company assigns substantially all of its trade accounts receivable to CIT pursuant to factoring agreements, which have expiration dates that are coterminous with that of the financing agreement described below.
As of March 30, 2025, the Company has complied with the Excess Availability requirements. To reduce its exposure to credit losses, the Company assigns substantially all of its trade accounts receivable to CIT pursuant to factoring agreements, which have expiration dates that are coterminous with that of the financing agreement described below.
The listing below, while not inclusive of all of the Company's accounting policies, sets forth those accounting policies which the Company's management believes embody the most significant judgments due to the uncertainties affecting their application and the likelihood that materially different amounts would be reported under different conditions or using different assumptions.
The policies below, while not inclusive of all of the Company's accounting policies, set forth those accounting policies which the Company's management believes embody the most significant judgments due to the uncertainties affecting their application and the likelihood that materially different amounts would be reported under different conditions or using different assumptions. 17 Table of Contents Revenue Recognition: Revenue is recognized upon the satisfaction of all contractual performance obligations and the transfer of control of the products sold to the customer.
Income Tax Expense: The Company’s provision for income taxes is based upon an annual effective tax rate (“ETR”) on continuing operations, which was 21.4% and 23.2% for the fiscal years ended March 31, 2024 and April 2, 2023, respectively.
Advertising costs increased $342,000 from the prior year. Income Tax Expense: The Company’s provision for income taxes is based upon an annual effective tax rate (“ETR”) on continuing operations, which was 25.1% and 21.4% for the fiscal years ended March 30, 2025 and March 31, 2024, respectively.
As of April 2, 2023, there was a balance of $12.7 million owed on the revolving line of credit, there was no letter of credit outstanding and $20.0 million was available under the revolving line of credit based on the Company’s eligible accounts receivable and inventory balances.
As of March 30, 2025, there was a balance of $11.9 million owed on the revolving line of credit, there was no letter of credit outstanding and $13.8 million was available under the revolving line of credit based on the Company’s eligible accounts receivable and inventory balances.
The Company analyzes the components of the allowances for customer chargebacks monthly and adjusts the allowances to appropriate levels.
The majority of the Company’s allowances for such chargebacks occurs on a per invoice basis. The Company analyzes the components of the allowances for customer chargebacks monthly and adjusts the allowances to appropriate levels.
In the event that actual results differ from management's estimates or these estimates and judgments are revised in future periods, the Company may not fully realize the carrying value of its inventory or may need to establish additional allowances, either of which could materially impact the Company's financial position and results of operations.
In the event that actual results differ from management's estimates or these estimates and judgments are revised in future periods, the Company may not fully realize the carrying value of its inventory or may need to establish additional allowances, either of which could materially impact the Company's financial position and results of operations. 18 Table of Contents Valuation of Long-Lived Assets and Identifiable Intangible Assets: In addition to the systematic annual depreciation and amortization of the Company’s fixed assets and identifiable intangible assets, the Company reviews for impairment long-lived assets and identifiable intangible assets whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable.
Sales of bedding, blankets and accessories decreased by $4.7 million, and sales of bibs, toys and disposable products increased by $17.3 million.
Sales of bedding and diaper bags increased by $9.0 million, and sales of bibs, toys and disposable products decreased by $9.4 million.
Gross Profit: Gross profit increased by $3.2 million and decreased from 26.4% of net sales for the fiscal year ended April 2, 2023 to 26.2% of net sales for the fiscal year ended March 31, 2024. The gross profit from Manhattan was $4.3 million in the current year, which was $4.1 million higher than the prior year.
Gross Profit: Gross profit decreased by $1.7 million and decreased from 26.2% of net sales for the fiscal year ended March 31, 2024 to 24.4% of net sales for the fiscal year ended March 30, 2025.
The financing agreement matures on July 11, 2028, bears interest at the rate of prime minus 0.5% or the Secured Overnight Financing Rate (“SOFR”) plus 1.6%, and which is secured by a first lien on all assets of the Company.
The Company may borrow up to $40 million under the revolving line of credit, which includes a $1.5 million sub-limit for letters of credit, bearing interest at prime minus 0.5% or the Secured Overnight Financing Rate (“SOFR”) plus 1.6%, and is secured by a first lien on all assets of the Company.
Net cash used in financing activities was $7.8 million in the fiscal year ended March 31, 2024 compared with $9.3 million in cash provided by financing activities in the fiscal year ended April 2, 2023.
The increase in the current year was primarily due to the $16.3 million payment that was made in the current year to complete the Acquisition. Net cash used in financing activities was $7.8 million in the fiscal year ended March 31, 2024 compared with $7.1 million in cash provided by financing activities in the fiscal year ended March 30, 2025.
References herein to GAAP are to topics within the FASB Accounting Standards Codification (the “FASB ASC”), which the FASB periodically revises through the issuance of an Accounting Standards Update (“ASU”) and which has been established by the FASB as the authoritative source for GAAP recognized by the FASB to be applied by nongovernmental entities. 16 Table of Contents Use of Estimates: The preparation of financial statements in conformity with GAAP 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 consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period.
References herein to GAAP are to topics within the FASB Accounting Standards Codification (the “FASB ASC”), which the FASB periodically revises through the issuance of an Accounting Standards Update (“ASU”) and which has been established by the FASB as the authoritative source for GAAP recognized by the FASB to be applied by nongovernmental entities.
The Company incurred net borrowings under its revolving line of credit of $12.7 million in the prior year, such borrowings primarily being required to fund the Manhattan Acquisition, compared with $4.6 million in net repayments under its revolving line of credit in the current year.
The Company incurred net borrowings under its revolving line of credit of $3.8 million and a term loan of $8.0 million that did not occur in the prior year, such borrowings primarily being required to fund the Acquisition.
Offsetting these decreases in cash provided by operating activities was a decrease in inventory in the current year that was $4.6 million higher than the increase in the prior year. Net cash used in investing activities was $193,000 in the fiscal year ended March 31, 2024 compared with $16.9 million in the fiscal year ended April 2, 2023.
The Company in the current year experienced an increase in its accrued liabilities balances that was $2.5 million higher than the decrease in the prior year. 16 Table of Contents Net cash used in investing activities was $17.2 million in the fiscal year ended March 30, 2025 compared with $193,000 in the fiscal year ended March 31, 2024.
The Company’s credit facility at March 31, 2024 consisted of a revolving line of credit under a financing agreement with CIT of up to $35.0 million, which includes a $1.5 million sub-limit for letters of credit.
The Company’s credit facility at March 30, 2025 includes a revolving line of credit and a term loan of $8.0 million under a financing agreement with CIT.
For an additional discussion of trends, uncertainties and other factors that could impact the Company’s operating results, refer to “Risk Factors” in Item 1A, Part I. of this Annual Report. 15 Table of Contents Financial Position, Liquidity and Capital Resources Net cash provided by operating activities decreased from $7.7 million for the fiscal year ended April 2, 2023 to $7.1 million for the fiscal year ended March 31, 2024.
The full impact of the new tariffs may have a material adverse effect on the Company’s business, cash flow, results of operations and financial condition. For an additional discussion of trends, uncertainties and other factors that could impact the Company’s operating results, refer to “Risk Factors” in Item 1A, Part I. of this Annual Report.
All other allowances for chargebacks related to negotiated customer terms and discounts, warehouse allowances, placement fees, volume rebates, coupons and discounts are recorded as a reduction of net sales in the reporting period within which the related sales are recorded. 17 Table of Contents The Company’s actual experience associated with its allowances against accounts receivable in a future period may differ from the judgements, estimates, analysis and considerations employed in the development of these allowances.
The allowance for cooperative advertising is included in marketing and administrative expenses in the consolidated statements of operations. All other allowances for chargebacks related to warehouse allowances, placement fees, volume rebates, coupons and discounts are recorded as a reduction of net sales in the reporting period within which the related sales are recorded.
Additionally, the impact of inflation on input and other operational costs could adversely affect the Company's financial results.
Additionally, the impact of inflation on input and other operational costs could adversely affect the Company's financial results. The U.S. government has implemented tariffs on imports from certain countries, including China. The Company primarily sources products from foreign contract manufacturers, with the largest concentration being in China.
Marketing and Administrative Expenses: Marketing and administrative expenses increased by $3.5 million and increased from 16.9% of net sales for fiscal year 2023 to 18.4% of net sales for fiscal year 2024.
Marketing and Administrative Expenses: Marketing and administrative expenses increased by $2.6 million and increased from 18.4% of net sales for fiscal year 2024 to 21.4% of net sales for fiscal year 2025. The current year period includes $244,000 associated with the closure of the Company’s subsidiary in the United Kingdom and $1.2 million in costs associated with the Acquisition.
Removed
Although Manhattan generated net sales of $18.5 million of developmental toy, feeding and baby care products during the fiscal year ended March 31, 2024, sales of bedding, blankets and accessories were lower due to the continued overall softness of that market, the impact of retailers that have been managing inventory levels and consumers that have lowered their spending due to inflationary pressures.
Added
The increase in sales of bedding and diaper bags is due to the impact of the Acquisition, which added $11.9 million net sales for the fiscal year ended March 30, 2025, and sales of bibs, toys and disposable products decreased primarily due to a major retailer reducing inventory levels and the loss of a program at another major retailer.
Removed
This increase in the gross profit amount for the current year was partially offset by an increase in operating lease costs in the current year, which were $2.5 million higher than the prior year, and which included $615,000 in higher operating lease costs of Manhattan.
Added
This decrease in the gross profit amount for the current year was due to an increase in royalty expense primarily resulting from the Baby Boom Acquisition, a $600,000 increase in rent at our Compton facility, and increased tariffs of $324,000 associated with products imported from China.
Removed
The increase in the current year was primarily due to costs incurred by Manhattan and MTE, which were $3.9 million higher than the prior year, and which included credit losses and advertising costs that were $360,000 and $213,000 higher than the prior year, respectively.
Added
The new tariffs have increased the cost of the products the Company sources from China and are affecting future shipments from the Company’s Chinese-based suppliers.
Removed
Significant outbreaks of contagious diseases have had adverse effects on the overall economy and impact the Company’s supply chain, manufacturing and distribution operations, transportation services, customers and employees, as well as consumer sentiment in general and traffic within the retail stores that carry the Company’s products.
Added
The Company may not be able to pass along all increases in tariffs and freight charges to its customers, and any alterations the Company may make to its business strategy or operations to adapt to the foregoing, including sourcing products from suppliers in other countries, will be time-consuming and expensive.
Removed
Specifically, the COVID-19 pandemic led global government authorities to implement numerous public health measures, including quarantines, business closures and lockdowns to confront the pandemic. China’s efforts to control the spread of the COVID-19 virus by locking down its largest cities placed a strain on already-stressed global supply chains.
Added
Financial Position, Liquidity and Capital Resources Net cash provided by operating activities increased from $7.1 million for the fiscal year ended March 31, 2024 to $9.8 million for the fiscal year ended March 30, 2025.
Removed
Several of the Company’s customers experienced financial difficulties as a result of the COVID-19 pandemic.
Added
On June 23, 2025, the Company and CIT amended the Company’s financing agreement with CIT to: (i) provide that, until the Company’s term loan is paid in full, the Company shall maintain at all times Excess Availability (as defined in the financing agreement) equal to or the greater of (a) the sum of the balance outstanding under the Company’s term loan plus $1,000,000 or (b) $4,000,000 (the “Availability Covenant”); and (ii) reinstate the fixed charge coverage ratio; provided however, that the fixed charge coverage ratio shall not be tested at any fiscal quarter end in which, during the immediately preceding fiscal quarter, the Company at all times has been in compliance with the Availability Covenant.
Removed
A resurgence of the COVID-19 pandemic, or any other outbreak of a contagious disease, could adversely affect the Company’s revenues, earnings, liquidity and cash flows and may require significant actions in response, including employee furloughs, closings of Company facilities, expense reductions or discounts of the pricing of the Company’s products, all in an effort to mitigate such effects.
Added
Use of Estimates: The preparation of financial statements in conformity with GAAP 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 consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period.
Removed
The decrease in the current year was primarily due to the $16.1 million payment that was made in the prior year to complete the Manhattan Acquisition, net of cash acquired of $1.3 million.
Added
The Company’s actual experience associated with its allowances against accounts receivable in a future period may differ from the judgements, estimates, analysis and considerations employed in the development of these allowances. Thus, the Company’s allowances against accounts receivable at any point in time may be over-funded or under-funded.
Removed
The financing agreement contains usual and customary covenants for agreements of that type, including limitations on other indebtedness, liens, transfers of assets, investments and acquisitions, merger or consolidation transactions, transactions with affiliates, and changes in or amendments to the organizational documents for the Company and its subsidiaries.
Added
Goodwill: The Company measures for impairment of goodwill within its reporting units annually as of the first day of the Company’s fiscal year.
Removed
Revenue Recognition: Revenue is recognized upon the satisfaction of all contractual performance obligations and the transfer of control of the products sold to the customer.
Added
An additional interim measurement for impairment is performed during the year whenever an event or change in circumstances occurs that suggests that the fair value of either of the reporting units of the Company has more likely than not (defined as having a likelihood of greater than 50%) fallen below its carrying value.
Removed
The majority of the Company’s allowances for such chargebacks occurs on a per-invoice basis. When a customer requests to have an agreed-upon deduction applied against the customer’s outstanding balance due to the Company, the allowances are correspondingly reduced to reflect such payments or credits issued against the customer’s account balance.
Added
The annual or interim measurement for impairment is performed by first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
Removed
The allowance for cooperative advertising is included in marketing and administrative expenses in the consolidated statements of income.
Added
If such qualitative factors so indicate, then the measurement for impairment is continued by calculating an estimate of the fair value of each reporting unit and comparing the estimated fair value to the carrying value of the reporting unit.
Removed
Valuation of Long-Lived Assets and Identifiable Intangible Assets: In addition to the systematic annual depreciation and amortization of the Company’s fixed assets and identifiable intangible assets, the Company reviews for impairment long-lived assets and identifiable intangible assets whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable.
Added
If the carrying value exceeds the estimated fair value of the reporting unit, then an impairment charge is calculated as the difference between the carrying value of the reporting unit and its estimated fair value, not to exceed the goodwill of the reporting unit.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk As of March 31, 2024, the Company had $8.1 million of indebtedness that bears interest at a variable rate, comprised of borrowings under the revolving line of credit.
Biggest changeInterest Rate Risk As of March 30, 2025, the Company had $18.5 million of indebtedness that bears interest at a variable rate, comprised of borrowings under the revolving line of credit and a term loan.
Based upon this level of outstanding debt, the Company’s annual net income would decrease by approximately $64,000 for each increase of one percentage point in the interest rate applicable to the debt. Commodity Rate Risk The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China.
Based upon this level of outstanding debt, the Company’s annual net income would decrease by approximately $139,000 for each increase of one percentage point in the interest rate applicable to the debt. Commodity Rate Risk The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China.
Financial Statements and Supplementary Data See pages 23 and F-1 through F-22 of this Annual Report. ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
Financial Statements and Supplementary Data See pages 23 and F-1 through F-22 of this Annual Report. ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
There is no assurance that the Company could timely respond to such increases by proportionately increasing the prices at which its products are sold to the Company’s customers. 18 Table of Contents Market Concentration Risk The Company’s financial results are closely tied to sales to its top two customers, which represented approximately 61% of the Company’s gross sales in fiscal year 2024.
There is no assurance that the Company could timely respond to such increases by proportionately increasing the prices at which its products are sold to the Company’s customers. 19 Table of Contents Market Concentration Risk The Company’s financial results are closely tied to sales to its top two customers, which represented approximately 66% of the Company’s gross sales in fiscal year 2025.
In addition, 40% of the Company’s gross sales in fiscal year 2024 consisted of licensed products, which included 24% of sales associated with the Company’s license agreements with affiliated companies of Disney. The Company’s results could be materially impacted by the loss of one or more of these licenses. ITEM 8.
In addition, 50% of the Company’s gross sales in fiscal year 2025 consisted of licensed products, which included 21% of sales associated with the Company’s license agreements with affiliated companies of Disney. The Company’s results could be materially impacted by the loss of one or more of these licenses.
Added
The current U.S. administration has implemented tariffs on imports from certain countries, including China. The new tariffs have increased the cost of the products the Company sources from China and have affected shipments from the Company’s Chinese-based suppliers.
Added
The Company is may not be able to pass along all increases in tariffs and freight charges to its customers, and any alterations the Company may make to its business strategy or operations to adapt to the foregoing, including sourcing products from suppliers in other countries, will be time consuming and expensive. ITEM 8.

Other CRWS 10-K year-over-year comparisons