10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2016

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File No. 1-7604

                                Crown Crafts, Inc.                               

(Exact name of registrant as specified in its charter)

Delaware	58-0678148
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)
916 South Burnside Avenue, Gonzales, LA	70737
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (225) 647-9100

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes ☑     No ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).  Yes ☑ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer ☐	Accelerated filer ☐	Non-Accelerated filer ☐	Smaller Reporting Company ☑
	(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of common stock, $0.01 par value, of the registrant outstanding as of November 15, 2016 was 10,029,761.

           PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CROWN CRAFTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

OCTOBER 2, 2016 AND APRIL 3, 2016

	October 2, 2016
	(Unaudited)			April 3, 2016
	(amounts in thousands, except
	share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	10,219		$	7,574
Accounts receivable (net of allowances of $786 at October 2, 2016 and $745 at April 3, 2016):
Due from factor		15,278			20,125
Other		621			671
Inventories		15,532			14,785
Prepaid expenses		1,045			1,689
Deferred income taxes		-			888
Total current assets		42,695			45,732
Property, plant and equipment - at cost:
Vehicles		247			247
Leasehold improvements		242			239
Machinery and equipment		3,028			2,879
Furniture and fixtures		808			808
Property, plant and equipment - gross		4,325			4,173
Less accumulated depreciation		3,834			3,740
Property, plant and equipment - net		491			433
Finite-lived intangible assets - at cost:
Customer relationships		5,534			5,534
Other finite-lived intangible assets		3,686			3,686
Finite-lived intangible assets - gross		9,220			9,220
Less accumulated amortization		5,715			5,338
Finite-lived intangible assets - net		3,505			3,882
Goodwill		1,126			1,126
Deferred income taxes		1,258			1,049
Other		187			193
Total Assets	$	49,262		$	52,415
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,687		$	4,640
Accrued wages and benefits		675			1,988
Accrued royalties		1,412			1,172
Dividends payable		802			3,303
Income taxes payable		26			806
Other accrued liabilities		208			276
Total current liabilities		7,810			12,185
Non-current liabilities:
Reserve for unrecognized tax benefits		578			211
Shareholders' equity:
Common stock - $0.01 par value per share; Authorized 40,000,000 shares at October 2, 2016 and April 3, 2016; Issued 12,398,539 shares at October 2, 2016 and 12,251,834 shares at April 3, 2016		124			123
Additional paid-in capital		51,732			50,723
Treasury stock - at cost - 2,368,778 shares at October 2, 2016 and 2,302,191 shares at April 3, 2016		(11,884	)		(11,228	)
Retained Earnings		902			401
Total shareholders' equity		40,874			40,019
Total Liabilities and Shareholders' Equity	$	49,262		$	52,415

See notes to unaudited condensed consolidated financial statements.        

1

CROWN CRAFTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE AND SIX-MONTH PERIODS ENDED OCTOBER 2, 2016 AND SEPTEMBER 27, 2015

(amounts in thousands, except per share amounts)

	Three-Month Periods Ended						Six-Month Periods Ended
	October 2, 2016			September 27, 2015			October 2, 2016			September 27, 2015
Net sales	$	15,809		$	20,716		$	31,408		$	38,574
Cost of products sold		11,500			15,010			22,812			28,087
Gross profit		4,309			5,706			8,596			10,487
Marketing and administrative expenses		2,761			3,108			5,600			6,369
Income from operations		1,548			2,598			2,996			4,118
Other income (expense):
Interest expense		(23	)		(31	)		(42	)		(39	)
Interest income		34			15			63			30
Gain on sale of property, plant and equipment		-			15			-			15
Foreign exchange (loss) gain		(2	)		(10	)		29			(9	)
Other - net		1			(1	)		2			3
Income before income tax expense		1,558			2,586			3,048			4,118
Income tax expense		559			1,021			946			1,626
Net income	$	999		$	1,565		$	2,102		$	2,492
Weighted average shares outstanding:
Basic		10,011			10,017			9,995			10,038
Effect of dilutive securities		45			45			41			45
Diluted		10,056			10,062			10,036			10,083
Earnings per share:
Basic	$	0.10		$	0.16		$	0.21		$	0.25
Diluted	$	0.10		$	0.16		$	0.21		$	0.25
Cash dividends declared per share	$	0.08		$	0.08		$	0.16		$	0.16

See notes to unaudited condensed consolidated financial statements.

2

CROWN CRAFTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX-MONTH PERIODS ENDED OCTOBER 2, 2016 AND SEPTEMBER 27, 2015

	Six-Month Periods Ended
	October 2, 2016			September 27, 2015
	(amounts in thousands)
Operating activities:
Net income	$	2,102		$	2,492
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment		94			157
Amortization of intangibles		377			371
Deferred income taxes		679			406
Gain on sale of property, plant and equipment		-			(15	)
Reserve for unrecognized tax benefits		90			-
Stock-based compensation		307			479
Tax shortfall from stock-based compensation		-			(3	)
Changes in assets and liabilities:
Accounts receivable		4,897			4,452
Inventories		(747	)		(2,096	)
Prepaid expenses		644			721
Other assets		6			(24	)
Accounts payable		(4	)		1,909
Accrued liabilities		(1,536	)		(1,598	)
Net cash provided by operating activities		6,909			7,251
Investing activities:
Capital expenditures for property, plant and equipment		(101	)		(163	)
Proceeds from sale of property, plant and equipment		-			31
Capital expenditures for purchased intangible assets		-			(123	)
Net cash used in investing activities		(101	)		(255	)
Financing activities:
Purchase of treasury stock		(656	)		(1,467	)
Issuance of common stock		595			147
Excess tax benefit from stock-based compensation		-			267
Dividends paid		(4,102	)		(1,611	)
Net cash used in financing activities		(4,163	)		(2,664	)
Net increase in cash and cash equivalents		2,645			4,332
Cash and cash equivalents at beginning of period		7,574			1,807
Cash and cash equivalents at end of period	$	10,219		$	6,139
Supplemental cash flow information:
Income taxes paid	$	1,346		$	2,548
Interest paid		2			9
Noncash financing activities:
Property, plant and equipment purchased but unpaid		(51	)		-
Dividends declared but unpaid		(802	)		(799	)
Compensation paid as common stock		108			140

See notes to unaudited condensed consolidated financial statements.

3

CROWN CRAFTS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX-MONTH PERIODS ENDED OCTOBER 2, 2016 AND SEPTEMBER 27, 2015

Note 1 – Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements include the accounts of Crown Crafts, Inc. (the “Company”) and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information as promulgated by the Financial Accounting Standards Board (“FASB”). Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. References herein to GAAP are to topics within the FASB Accounting Standards Codification (the “FASB ASC”), which has been established by the FASB as the authoritative source for GAAP to be applied by nongovernmental entities.

In the opinion of management, the interim unaudited consolidated financial statements contained herein include all adjustments necessary to present fairly the financial position of the Company as of October 2, 2016 and the results of its operations and cash flows for the periods presented. Such adjustments include normal, recurring accruals, as well as the elimination of all significant intercompany balances and transactions. Operating results for the three and six-month periods ended October 2, 2016 are not necessarily indicative of the results that may be expected by the Company for its fiscal year ending April 2, 2017. For further information, refer to the Company’s consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 3, 2016.

Reclassifications: The Company has reclassified certain prior year information to conform to the amounts presented in the current year. None of the changes impact the Company’s previously reported financial position or results of operations.

Fiscal Year: The Company’s fiscal year ends on the Sunday that is nearest to or on March 31. References herein to “fiscal year 2017” or “2017” represent the 52-week period ending April 2, 2017 and references herein to “fiscal year 2016” or “2016” represent the 53-week period ended April 3, 2016.

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 the disclosure of contingent assets and liabilities as of the date of the accompanying condensed consolidated balance sheets and the reported amounts of revenues and expenses during the periods presented on the accompanying unaudited consolidated statements of income and cash flows. Significant estimates are made with respect to the allowances related to accounts receivable for customer deductions for returns, allowances and disputes. The Company also has a certain amount of discontinued finished products which necessitates the establishment of inventory reserves and allocates indirect costs to inventory based on an estimated percentage of the supplier purchase price, each of which is highly subjective. The Company has also established estimated reserves in connection with the uncertainty concerning the amount of income tax recognized. Actual results could differ from those estimates.

Cash and Cash Equivalents: The Company considers highly-liquid investments, if any, purchased with original maturities of three months or less to be cash equivalents.

The Company’s credit facility consists of a revolving line of credit under a financing agreement with The CIT Group/Commercial Services, Inc. (“CIT”), a subsidiary of CIT Group, Inc. The Company classifies a negative balance outstanding under this revolving line of credit as cash, as these amounts are legally owed to the Company and are immediately available to be drawn upon by the Company. There are no compensating balance requirements or other restrictions on the transfer of amounts associated with the Company’s depository accounts.

Financial Instruments: For short-term instruments such as cash and cash equivalents, accounts receivable and accounts payable, the Company uses carrying value as a reasonable estimate of the fair value.

Royalty Payments: The Company has entered into agreements that provide for royalty payments based on a percentage of sales with certain minimum guaranteed amounts. These royalties are accrued based upon historical sales rates adjusted for current sales trends by customers. Royalty expense is included in cost of products sold in the accompanying unaudited condensed consolidated statements of income and amounted to $1.6 million and $2.2 million for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $3.3 million and $4.0 million for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

4

Segment and Related Information: The Company operates primarily in one principal segment, infant, toddler and juvenile products. These products consist of infant and toddler bedding, bibs, soft bath products, disposable products and accessories. Net sales of bedding, blankets and accessories and net sales of bibs, bath and disposable products for the three and six months ended October 2, 2016 and September 27, 2015 are as follows (in thousands):

	Three-Month Periods Ended				Six-Month Periods Ended
	October 2, 2016		September 27, 2015		October 2, 2016		September 27, 2015
Bedding, blankets and accessories	$	10,090	$	14,365	$	20,402	$	26,635
Bibs, bath and disposable products		5,719		6,351		11,006		11,939
Total net sales	$	15,809	$	20,716	$	31,408	$	38,574

Revenue Recognition: Sales are recorded when products are shipped to customers and are reported net of allowances for estimated returns and allowances in the accompanying unaudited condensed consolidated statements of income. Allowances for returns are estimated based on historical rates. Allowances for returns, cooperative advertising allowances, warehouse allowances, placement fees and volume rebates are recorded commensurate with sales activity or using the straight-line method, as appropriate, and the cost of such allowances is netted against sales in reporting the results of operations. Shipping and handling costs, net of amounts reimbursed by customers, are not material and are included in net sales.

Allowances Against Accounts Receivable: The Company’s allowances against accounts receivable are primarily contractually agreed-upon deductions for items such as cooperative advertising and warehouse allowances, placement fees and volume rebates. These deductions are recorded throughout the year commensurate with sales activity or using the straight-line method, as appropriate. Funding of the majority of the Company’s allowances occurs on a per-invoice basis. The allowances for customer deductions, which are netted against accounts receivable in the condensed consolidated balance sheets, consist of agreed upon advertising support, placement fees, markdowns and warehouse and other allowances. All such allowances are recorded as direct offsets to sales, and such costs are accrued commensurate with sales activities or as a straight-line amortization charge of an agreed-upon fixed amount, as appropriate to the circumstances for each such arrangement. When a customer requests deductions, the allowances are reduced to reflect such payments or credits issued against the customer’s account balance. The Company analyzes the components of the allowances for customer deductions monthly and adjusts the allowances to the appropriate levels. The timing of funding requests for advertising support can cause the net balance in the allowance account to fluctuate from period to period. The timing of such funding requests should have no impact on the accompanying unaudited condensed consolidated statements of income since such costs are accrued commensurate with sales activity or using the straight-line method, as appropriate.

To reduce the exposure to credit losses and to enhance the predictability of its cash flows, the Company assigns the majority of its trade accounts receivable under factoring agreements with CIT. In the event a factored receivable becomes uncollectible due to creditworthiness, CIT bears the risk of loss. The Company’s management must make estimates of the uncollectibility of its non-factored accounts receivable to evaluate the adequacy of the Company’s allowance for doubtful accounts, which is accomplished by specifically analyzing accounts receivable, historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in its customers’ payment terms.

The Company’s accounts receivable as of October 2, 2016 was $15.9 million, net of allowances of $786,000. Of this amount, $15.3 million was due from CIT under the factoring agreements. An additional $9.9 million was due from CIT as a negative balance outstanding under the revolving line of credit, which is included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheet. The combined amount of $25.2 million represents the maximum loss that the Company could incur if CIT failed completely to perform its obligations under the factoring agreements and the revolving line of credit.

Depreciation and Amortization: The accompanying condensed consolidated balance sheets reflect property, plant and equipment, and intangible assets other than goodwill at cost less accumulated depreciation or amortization. The Company capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three to eight years for property, plant and equipment, and five to twenty years for intangible assets other than goodwill. The Company amortizes improvements to its leased facilities over the term of the lease or the estimated useful life of the asset, whichever is shorter.

Valuation of Long-Lived Assets and Identifiable Intangible Assets: In addition to the depreciation and amortization procedures set forth above, the Company reviews for impairment property, plant and equipment, and intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable. In the event of impairment, the asset is written down to its fair market value.

5

Patent Costs: The Company incurs certain legal and associated costs in connection with applications for patents. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or an alternative future use for the underlying product is available to the Company. The Company also capitalizes legal and other costs incurred in the protection or defense of the Company’s patents to the extent that it is believed that the future economic benefit of the patent will be maintained or increased and a successful outcome of the litigation is probable. Capitalized patent protection or defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of the future economic benefit of its patents involves considerable management judgment, and a different conclusion could result in a material impairment charge up to the carrying value of these assets.

Inventory Valuation: The preparation of the Company's financial statements requires careful determination of the appropriate value of the Company's inventory balances. Such amounts are presented as a current asset in the accompanying condensed consolidated balance sheets and are a direct determinant of cost of products sold in the unaudited consolidated statements of income and, therefore, have a significant impact on the amount of net income in the accounting periods reported. The basis of accounting for inventories is cost, which includes the direct supplier acquisition cost, duties, taxes and freight, and the indirect costs incurred to design, develop, source and store the products until they are sold. Once cost has been determined, the Company’s inventory is then stated at the lower of cost or market, with cost determined using the first-in, first-out ("FIFO") method, which assumes that inventory quantities are sold in the order in which they are acquired.

The indirect costs allocated to inventory are done so as a percentage of projected annual supplier purchases and can impact the Company’s results of operations as purchase volume fluctuates from quarter to quarter and year to year. The difference between indirect costs incurred and the indirect costs allocated to inventory creates a burden variance, which is generally favorable when actual inventory purchases exceed planned inventory purchases, and is generally unfavorable when actual inventory purchases are lower than planned inventory purchases. While the burden variance can be significant during interim periods, it is generally not material by the end of each fiscal year. The determination of the indirect charges and their allocation to the Company's finished products inventories is complex and requires significant management judgment and estimates. If management made different judgments or utilized different estimates, then differences would result in the valuation of the Company's inventories, the amount and timing of the Company's cost of products sold and the resulting net income for any accounting period.

On a periodic basis, management reviews the Company’s 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 normal operating cycle of the Company's operations. To the extent that any of these conditions is believed to exist or the market value of the inventory expected to be realized in the ordinary course of business is otherwise no longer as great as its carrying value, an allowance against the inventory value is established. 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 unaudited condensed consolidated statements of income. Only when inventory for which an allowance has been established is later sold or is otherwise disposed of is the allowance reduced accordingly. Significant management judgment is required in determining the amount and adequacy of this allowance. 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.

Advertising Costs: The Company’s advertising costs are primarily associated with cooperative advertising arrangements with certain of the Company’s customers and are recognized using the straight-line method based upon aggregate annual estimated amounts for those customers, with periodic adjustments to the actual amounts of authorized agreements. Advertising expense is included in marketing and administrative expenses in the accompanying unaudited consolidated statements of income and amounted to $243,000 and $264,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $498,000 and $569,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

Provision for Income Taxes: The Company’s provision for income taxes includes all currently payable federal, state, local and foreign taxes and is based upon the Company’s estimated annual effective tax rate, which is based on the Company’s forecasted annual pre-tax income, as adjusted for certain expenses that will never be deductible on the Company’s tax returns and certain charges expected to be deducted on the Company’s tax returns that will never be deducted on the accompanying unaudited condensed consolidated statements of income, multiplied by the statutory tax rates for the various jurisdictions in which the Company operates and reduced by certain anticipated tax credits. The Company provides for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company’s policy is to recognize the effect that a change in enacted tax rates would have on net deferred income tax assets and liabilities in the period that the tax rates are changed.

6

Management evaluates items of income, deductions and credits reported on the Company’s various federal and state income tax returns filed and recognizes the effect of positions taken on those income tax returns only if those positions are more likely than not to be sustained. The Company applies the provisions of FASB ASC Sub-topic 740-10-25, which requires a minimum recognition threshold that a tax benefit must meet before being recognized in the financial statements. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company’s policy is to accrue interest expense and penalties as appropriate on any estimated unrecognized tax benefits as a charge to interest expense. Interest expense or penalties are not accrued with respect to estimated unrecognized tax benefits that are associated with claims for income tax refunds as long as the overpayments are receivable.

The Company files income tax returns in the many jurisdictions within which it operates, including the U.S., several U.S. states and the People’s Republic of China. The statute of limitations for the Company’s filed income tax returns varies by jurisdiction; the tax years open to federal, state or Chinese examination or other adjustment as of October 2, 2016 were the fiscal years ended April 1, 2012, March 31, 2013, March 30, 2014, March 29, 2015 and April 3, 2016, as well as the fiscal year ended April 3, 2011 for California.

Earnings Per Share: The Company calculates basic earnings per share by using a weighted average of the number of shares outstanding during the reporting periods. Diluted shares outstanding are calculated in accordance with the treasury stock method, which assumes that the proceeds from the exercise of all exercisable options would be used to repurchase shares at market value. The net number of shares issued after the exercise proceeds are exhausted represents the potentially dilutive effect of the options, which are added to basic shares to arrive at diluted shares.

Recently-Issued Accounting Standards: In 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace most existing GAAP guidance on revenue recognition, and which will require the use of more estimates and judgments, as well as additional disclosures. When issued, the ASU was to become effective in the fiscal year beginning after December 15, 2016, but on August 12, 2015 the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which provides for a one-year deferral of the effective date to apply the guidance of ASU No. 2014-09. Early adoption was originally not permitted in ASU No. 2014-09, but ASU No. 2015-14 now permits early adoption in the first interim period of the fiscal year beginning after December 15, 2016. The Company is currently evaluating the effect that its adoption of ASU Nos. 2014-09 and 2015-14 on April 3, 2017 will have on its financial position, results of operations and related disclosures.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which will clarify that after an entity determines the cost of its inventory, the subsequent measurement and presentation of such inventory should be at the lower of cost or net realizable value. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2016. The ASU should be applied prospectively, and early adoption is permitted. The Company intends to adopt ASU No. 2015-11 on April 3, 2017, and is currently evaluating the effect that the adoption of the ASU will have on its financial position, results of operations and related disclosures.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, the intent of which was to simplify the presentation of deferred taxes by requiring all deferred tax assets and liabilities to be classified as noncurrent on an entity’s balance sheet. ASU No. 2015-17 was to have become effective for the first interim period of the fiscal year beginning after December 15, 2016, and early adoption is permitted. Upon adoption, the ASU may be applied prospectively or retrospectively. The Company elected to early-adopt ASU No. 2015-17 effective as of April 4, 2016 using a prospective application. As such, the condensed consolidated balance sheet presented as of April 3, 2016 in the accompanying consolidated financial statements has not been adjusted. The adoption of the ASU on April 4, 2016 resulted in the reclassification in the accompanying unaudited condensed consolidated balance sheet as of October 2, 2016 of $487,000 in deferred tax assets from current to non-current. The adoption of the ASU did not have an impact on the Company’s results of operations.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will increase transparency and comparability by requiring an entity to recognize lease assets and lease liabilities on its balance sheet and by requiring the disclosure of key information about leasing arrangements. Under the provisions of ASU No. 2016-02, the Company will be required to capitalize most of its current operating lease obligations as right-of-use assets with corresponding liabilities based upon the present value of the future cash outflows associated with such operating lease obligations. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2018. The ASU is to be applied using a modified retrospective approach, and early adoption is permitted. The Company has not yet decided whether to adopt the ASU early and is currently evaluating the effect that the adoption of the ASU will have on its financial position, results of operations and related disclosures.

7

On March 30, 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, the intent of which was to simplify the accounting for share-based compensation transactions while maintaining or improving the usefulness of the related disclosures. ASU No. 2016-09 was to have become effective for the first interim period of the fiscal year beginning after December 15, 2016, and early adoption is permitted. Upon adoption, the ASU may be applied prospectively or retrospectively. The Company elected to early-adopt ASU No. 2016-09 effective as of April 4, 2016 using a prospective application. Accordingly, the prior periods presented in the accompanying unaudited consolidated financial statements have not been adjusted.

The provisions of ASU No. 2016-09 that are applicable to the Company and the effect of the adoption of the ASU on the Company’s unaudited consolidated financial statements include the following:

*	Under previous GAAP, upon the exercise of a stock option or the vesting of non-vested stock, the Company was required to recognize the tax effect of the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes in additional paid-in capital. The provisions of the ASU require the recognition of the excess tax benefit or deficiency as an income tax benefit or expense, respectively, in the Company’s statement of income. The Company’s election to early-adopt the ASU effective as of April 4, 2016 resulted in the recognition of net excess tax benefits amounting to $43,000 and $242,000 as a reduction to the Company’s reported income tax expense for the three and six-month periods ended October 2, 2016, respectively. The effect of the adoption of the ASU on the Company’s future results of operations will depend on such factors as the timing and extent of the exercise of stock options and the vesting of non-vested stock, as well as the closing price per share of the Company’s common stock on the dates of such events. The inherent uncertainty surrounding the details of these factors dictates that the future effects of the adoption of ASU No. 2016-09 on the Company’s results of operations cannot be reasonably estimated.
*	Under previous GAAP, excess tax benefits were classified as a financing activity in the Company’s statement of cash flows. The provisions of ASU No. 2016-09 require that excess tax benefits be classified as an operating activity in the Company’s statement of cash flows. The Company’s election to early-adopt ASU No. 2016-09 effective as of April 4, 2016 resulted in the classification of excess tax benefits amounting to $244,000 as cash provided by operating activities during the six-month period ended October 2, 2016.
*	The provisions of ASU No. 2016-09 clarify that cash paid by the Company to taxing authorities on behalf of an employee to reflect the value of shares withheld from the exercise of options or the vesting of non-vested stock to satisfy the income tax withholding obligations arising from such exercise or vesting should be classified as a financing activity in the Company’s statement of cash flows. As this treatment is consistent with the Company’s long-standing practice, the Company’s adoption of ASU No. 2016-09 effective as of April 4, 2016 did not result in a difference in the reported amount of the Company’s cash used in financing activities during the six months ended October 2, 2016 as a result of this provision in the ASU.

On June 16, 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the objective of which is to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by an entity. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable that a loss has been incurred. Because this methodology restricted the recognition of credit losses that are expected, but did not yet meet the “probable” threshhold, ASU No. 2016-13 was issued to require the consideration of a broader range of reasonable and supportable information when determining estimates of credit losses. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2019. The ASU is to be applied using a modified retrospective approach, and the ASU may be early-adopted as of the first interim period of the fiscal year beginning after December 15, 2018. Although the Company has not yet decided whether to adopt ASU No. 2016-13 early or determined the full impact of the adoption of the ASU, because the Company assigns the majority of its trade accounts receivable under factoring agreements with CIT, the Company does not believe that its adoption of ASU No. 2016-13 will have a significant impact on the Company’s financial position, results of operations and related disclosures.

The Company has determined that all other ASUs which had become effective as of October 2, 2016, or which will become effective at some future date, are not expected to have a material impact on the Company’s unaudited consolidated financial statements.

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Note 2 – Financing Arrangements

Factoring Agreements:     The Company assigns the majority of its trade accounts receivable to CIT under factoring agreements whose expiration dates are coterminous with that of the financing agreement described below. Under the terms of the factoring agreements, CIT remits customer payments to the Company as such payments are received by CIT.

CIT bears credit losses with respect to assigned accounts receivable from approved customers that are within approved credit limits, while the Company bears the responsibility for adjustments from customers related to returns, allowances, claims and discounts. CIT may at any time terminate or limit its approval of shipments to a particular customer. If such a termination were to occur, the Company must either assume the credit risk for shipments after the date of such termination or limitation or cease shipments to such customer. Factoring fees, which are included in marketing and administrative expenses in the accompanying statements of income, amounted to $112,000 and $156,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $206,000 and $272,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively. There were no advances from the factor at October 2, 2016 and April 3, 2016.

Credit Facility:     The Company’s credit facility at October 2, 2016 consisted of a revolving line of credit under a financing agreement with CIT of up to $26.0 million, which includes a $1.5 million sub-limit for letters of credit, with an interest rate of prime minus 0.50% or LIBOR plus 2.00%. The financing agreement is scheduled to mature on July 11, 2019 and is secured by a first lien on all assets of the Company. As of October 2, 2016, the Company had elected to pay interest on balances owed under the revolving line of credit, if any, under the LIBOR option. The financing agreement also provides for the payment by CIT to the Company of interest at the rate of prime as of the beginning of the calendar month minus 2.00%, which was 1.25% at October 2, 2016, on daily cash balances held at CIT.

The financing agreement as in effect prior to December 28, 2015 provided for a monthly fee, which was assessed based on 0.125% of the average unused portion of the $26.0 million revolving line of credit, less any outstanding letters of credit (the “Commitment Fee”). The Commitment Fee amounted to $8,000 and $16,000 for the three and six-month periods ended September 27, 2015, respectively. The financing agreement was amended on December 28, 2015 to eliminate the Commitment Fee. At October 2, 2016 and April 3, 2016, there was no balance owed on the revolving line of credit and there was no letter of credit outstanding. As of October 2, 2016 and April 3, 2016, $21.9 million and $25.6 million, respectively, was available under the revolving line of credit based on the Company’s eligible accounts receivable and inventory balances.

The financing agreement for the revolving line of credit 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. The Company was in compliance with these covenants as of October 2, 2016.

Note 3 – Goodwill, Customer Relationships and Other Intangible Assets

Goodwill: Goodwill represents the excess of the purchase price over the fair value of net identifiable assets acquired in business combinations. The Company considers its wholly-owned subsidiaries, Crown Crafts Infant Products, Inc. (“CCIP”) and Hamco, Inc. (“Hamco”), to each be a reporting unit of the Company for the purpose of presenting and testing for the impairment of goodwill. The goodwill of the reporting units of the Company as of October 2, 2016 and April 3, 2016 amounted to $24.0 million, and is reflected in the accompanying condensed consolidated balance sheets net of accumulated impairment charges of $22.9 million, for a net reported balance of $1.1 million.

The Company tests the fair value of the goodwill, if any, within its reporting units annually as of the first day of the Company’s fiscal year. An additional interim impairment test is performed during the year whenever an event or change in circumstances occurs that suggests that the fair value of the goodwill 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. The annual or interim impairment test 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. If such qualitative factors so indicate, then the impairment test is continued in a two-step approach. The first step is the estimation of the fair value of each reporting unit to ensure that its fair value exceeds its carrying value. If step one indicates that a potential impairment exists, then the second step is performed to measure the amount of an impairment charge, if any. In the second step, these estimated fair values are used as the hypothetical purchase price for the reporting units, and an allocation of such hypothetical purchase price is made to the identifiable tangible and intangible assets and assigned liabilities of the reporting units. The impairment charge is calculated as the amount, if any, by which the carrying value of the goodwill exceeds the implied amount of goodwill that results from this hypothetical purchase price allocation.

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The annual impairment test of the fair value of the goodwill of the reporting units of the Company was performed as of April 4, 2016, and the Company concluded that the fair value of the goodwill of the Company’s reporting units substantially exceeded their carrying values as of that date.

Other Intangible Assets: Other intangible assets at October 2, 2016 and April 3, 2016 consisted primarily of the fair value of identifiable assets acquired in business combinations other than tangible assets and goodwill. The gross amount and accumulated amortization of the Company’s other intangible assets as of October 2, 2016 and April 3, 2016, the amortization expense for the three and six-month periods ended October 2, 2016 and September 27, 2015 and the classification of such amortization expense within the accompanying unaudited condensed consolidated statements of income are as follows (in thousands):

									Amortization Expense
	Gross Amount				Accumulated Amortization				Three-Month Periods Ended				Six-Month Periods Ended
	October 2,		April 3,		October 2,		April 3,		October 2,		September 27,		October 2,		September 27,
	2016		2016		2016		2016		2016		2015		2016		2015
Tradename and trademarks	$	1,987	$	1,987	$	1,000	$	933	$	33	$	33	$	67	$	66
Non-compete covenants		98		98		63		60		1		1		3		3
Patents		1,601		1,601		512		458		27		27		54		54
Customer relationships		5,534		5,534		4,140		3,887		127		128		253		248
Total other intangible assets	$	9,220	$	9,220	$	5,715	$	5,338	$	188	$	189	$	377	$	371
Classification within the accompanying unaudited condensed consolidated statements of income:
Cost of products sold									$	1	$	1	$	3	$	3
Marketing and administrative expenses										187		188		374		368
Total amortization expense									$	188	$	189	$	377	$	371

Note 4 – Inventories

Major classes of inventory were as follows (in thousands):

	October 2, 2016		April 3, 2016
Raw Materials	$	35	$	35
Finished Goods		15,497		14,750
Total inventory	$	15,532	$	14,785

Note 5 – Stock-based Compensation

The Company has two incentive stock plans, the 2006 Omnibus Incentive Plan (the “2006 Plan”) and the 2014 Omnibus Equity Compensation Plan (the “2014 Plan”). As a result of the approval of the 2014 Plan by the Company’s stockholders at the Company’s 2014 annual meeting, grants may no longer be issued under the 2006 Plan.

The Company believes that awards of long-term, equity-based incentive compensation will attract and retain directors, officers and employees of the Company and will encourage these individuals to contribute to the successful performance of the Company, which will lead to the achievement of the Company’s overall goal of increasing stockholder value. Awards granted under the 2014 Plan may be in the form of incentive stock options, non-qualified stock options, shares of restricted or unrestricted stock, stock units, stock appreciation rights or other stock-based awards. Awards may be granted subject to the achievement of performance goals or other conditions, and certain awards may be payable in stock or cash, or a combination of the two. The 2014 Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”), which selects eligible employees, non-employee directors and other individuals to participate in the 2014 Plan and determines the type, amount, duration and other terms of individual awards. Grants under the 2014 Plan are settled primarily through the issuance of new shares of the Company’s common stock, 814,000 shares of which were available for future issuance under the 2014 Plan as of October 2, 2016.

Stock-based compensation expense is calculated according to FASB ASC Topic 718, Compensation – Stock Compensation, which requires stock-based compensation expense to be accounted for using a fair-value-based measurement. The Company recorded stock-based compensation expense of $146,000 and $223,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and recorded $307,000 and $479,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively. The Company classifies the compensation expense associated with stock-based awards granted to individuals in the same classifications as the cash compensation paid to those same individuals. No stock-based compensation costs have been capitalized as part of the cost of an asset as of October 2, 2016.

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Stock Options: The following table represents stock option activity for the six-month periods ended October 2, 2016 and September 27, 2015:

	Six-Month Period Ended					Six-Month Period Ended
	October 2, 2016					September 27, 2015
	Weighted-					Weighted-
	Average		Number of			Average		Number of
	Exercise		Options			Exercise		Options
	Price		Outstanding			Price		Outstanding
Outstanding at Beginning of Period	$	7.64		305,000		$	6.83		330,000
Granted		9.60		120,000			8.38		110,000
Exercised		7.68		(77,500	)		6.57		(22,500	)
Outstanding at End of Period		8.30		347,500			7.25		417,500
Exercisable at End of Period		7.38		172,500			6.46		225,000

As of October 2, 2016, the intrinsic value of the outstanding and exercisable stock options was $659,000 and $487,000, respectively. The intrinsic value of the stock options exercised during the three and six-month periods ended October 2, 2016 was $124,000 and $169,000, respectively. The Company did not receive any cash from the exercise of stock options during the three and six-month periods ended October 2, 2016 and September 27, 2015. Upon the exercise of stock options, participants may choose to surrender to the Company those shares from the option exercise necessary to satisfy the exercise amount and their income tax withholding obligations that arise from the option exercise. The effect on the cash flow of the Company from these “cashless” option exercises is that the Company remits cash on behalf of the participant to satisfy his or her income tax withholding obligations. The Company used cash to remit the required income tax withholding amounts from “cashless” option exercises of $41,000 and $61,000 during the three and six-month periods ended October 2, 2016, respectively, and $12,000 during each of the three and six-month periods ended September 27, 2015.

To determine the estimated fair value of stock options granted, the Company uses the Black-Scholes-Merton valuation formula, which is a closed-form model that uses an equation to estimate fair value. The following table sets forth the assumptions used to determine the fair value of the non-qualified stock options which were awarded to certain employees during the six-month periods ended October 2, 2016 and September 27, 2015, which options vest over a two-year period, assuming continued service.

	Six-Month Periods Ended
	October 2, 2016			September 27, 2015
Options issued		120,000			110,000
Grant date		June 8, 2016			June 12, 2015
Dividend yield		3.33	%		3.82	%
Expected volatility		20.00	%		20.00	%
Risk free interest rate		0.93	%		1.12	%
Contractual term (years)		10.00			10.00
Expected term (years)		3.00			3.00
Forfeiture rate		5.00	%		5.00	%
Exercise price (grant-date closing price) per option	$	9.60		$	8.38
Fair value per option	$	0.94		$	0.77

For the three-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock options as follows (in thousands):

	Three-Month Period Ended October 2, 2016						Three-Month Period Ended September 27, 2015
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2015	$	-	$	-	$	-	$	12	$	11	$	23
2016		5		4		9		5		4		9
2017		8		6		14		-		-		-
Total stock option compensation	$	13	$	10	$	23	$	17	$	15	$	32

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For the six-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock options as follows (in thousands):

	Six-Month Period Ended October 2, 2016						Six-Month Period Ended September 27, 2015
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2014	$	-	$	-	$	-	$	7	$	7	$	14
2015		14		12		26		28		24		52
2016		12		10		22		6		5		11
2017		10		7		17		-		-		-
Total stock option compensation	$	36	$	29	$	65	$	41	$	36	$	77

As of October 2, 2016, total unrecognized stock option compensation expense amounted to $126,000, which will be recognized as the underlying stock options vest over a weighted-average period of 12.5 months. The amount of future stock option compensation expense could be affected by any future stock option grants and by the separation from the Company of any individual who has received stock options that are unvested as of such individual’s separation date.

Non-vested Stock Granted to Non-Employee Directors: The Board granted the following shares of non-vested stock to the Company’s non-employee directors:

Number of Shares	Fair Value per Share		Three-Month Period Ended
28,000	$	10.08	October 2, 2016
28,000	$	8.20	September 27, 2015
28,000	$	7.97	September 28, 2014
28,000	$	6.67	September 29, 2013

These shares vest over a two-year period, assuming continued service. The fair value of the non-vested stock granted to the Company’s non-employee directors was based on the closing price of the Company’s common stock on the date of each grant. In August 2016, 28,000 shares vested that had been granted to the Company’s non-employee directors, with such shares having an aggregate value of $281,000.

Non-vested Stock Granted to Employees: During the three-month period ended June 27, 2010, the Board awarded 345,000 shares of non-vested stock to certain employees in a series of grants, each of which was to vest only if (i) the closing price of the Company’s common stock was at or above certain target levels for any ten trading days out of any period of 30 consecutive trading days and (ii) the respective employees remained employed through July 29, 2015. The Company, with the assistance of an independent third party, determined that the aggregate grant date fair value of the awards amounted to $1.2 million.

With the closing price conditions having been met for these awards, the Board at various times approved amendments to provide for the immediate vesting of all or a portion of several of the grants. The vesting of these awards was accelerated in order to maximize the deductibility of the associated compensation expense by the Company for income tax purposes. During the three-month period ended September 27, 2015, the remaining 240,000 of these shares vested, with such shares having an aggregate value of $1.9 million. Each of the individuals holding shares that vested surrendered to the Company the number of shares necessary to satisfy the income tax withholding obligations that arose from the vesting of the shares, and the Company remitted $948,000 to the appropriate taxing authorities on behalf of such individuals.

Performance Bonus Plan:  The Company maintains a performance bonus plan for certain executive officers that provides for awards of shares of common stock in the event that the aggregate average market value of the common stock during the relevant fiscal year, plus the amount of cash dividends paid in respect of the common stock during such period, increases. These individuals may instead be awarded cash, if and to the extent that insufficient shares of common stock are available for issuance from all shareholder-approved, equity-based plans or programs of the Company in effect. The performance bonus plan also imposes individual limits on awards and provides that shares of common stock that may be awarded will vest over a two-year period. Compensation expense associated with performance bonus plan awards are recognized over a three-year period – the fiscal year in which the award is earned, plus the two-year vesting period.

In connection with the performance bonus plan, the Company, in respect of fiscal year 2016, awarded 41,205 shares of common stock with a fair value of $7.865 per share during the three-month period ended July 3, 2016. In connection with these awards, the Company recognized compensation expense of $108,000 during fiscal year 2016, and will recognize, on a straight-line basis, $108,000 in compensation expense during each of fiscal years 2017 and 2018.

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In connection with the performance bonus plan, the Company, in respect of fiscal year 2015, awarded 58,532 shares of common stock with a fair value of $7.18 per share during the three-month period ended June 28, 2015. In connection with these awards, the Company recognized compensation expense of $140,000 during each of fiscal years 2015 and 2016, and will recognize, on a straight-line basis, $140,000 in compensation expense during fiscal year 2017.

In connection with the performance bonus plan, the Company, in respect of fiscal year 2014, awarded 188,232 shares of common stock with a fair value of $5.65 per share during the three-month period ended June 29, 2014. In connection with these awards, the Company recognized compensation expense of $354,000 during each of fiscal years 2014, 2015 and 2016. During the three-month period ended June 28, 2015, 94,116 of these shares vested, with such shares having an aggregate value of $735,000. Each of the individuals holding shares that vested surrendered to the Company the number of shares necessary to satisfy the income tax withholding obligations that arose from the vesting of the shares, and the Company remitted $360,000 to the appropriate taxing authorities on behalf of such individuals.

For the three-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

	Three-Month Period Ended October 2, 2016						Three-Month Period Ended September 27, 2015
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2011	$	-	$	-	$	-	$	12	$	-	$	12
2014		-		-		-		-		8		8
2015		-		9		9		89		28		117
2016		35		28		63		35		19		54
2017		27		24		51		-		-		-
Total stock grant compensation	$	62	$	61	$	123	$	136	$	55	$	191

For the six-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

	Six-Month Period Ended October 2, 2016						Six-Month Period Ended September 27, 2015
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2011	$	-	$	-	$	-	$	48	$	-	$	48
2014		-		-		-		-		31		31
2015		-		37		37		178		56		234
2016		70		57		127		70		19		89
2017		54		24		78		-		-		-
Total stock grant compensation	$	124	$	118	$	242	$	296	$	106	$	402

As of October 2, 2016, total unrecognized compensation expense related to the Company’s non-vested stock grants amounted to $586,000, which will be recognized over the respective vesting terms associated with each block of non-vested stock indicated above, such grants having an aggregate weighted-average vesting term of 11.2 months. The amount of future compensation expense related to the Company’s non-vested stock grants could be affected by any future non-vested stock grants and by the separation from the Company of any individual who has non-vested stock grants as of such individual’s separation date.

Note 6 – Subsequent Events

On November 15, 2016, the Board declared a special cash dividend on the Company’s common stock of $0.40 per share, which is in addition to the declaration of the regular quarterly cash dividend of $0.08 per share. Both dividends will be paid on January 6, 2017 to stockholders of record at the close of business on December 16, 2016. The Company has evaluated events which have occurred between October 2, 2016 and the date that the accompanying unaudited consolidated financial statements were issued, and has determined that there are no other material subsequent events that require disclosure.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company operates indirectly through its wholly-owned subsidiaries, CCIP and Hamco, in the infant, toddler and juvenile products segment within the consumer products industry. The infant and toddler products segment consists of infant and toddler bedding and blankets, bibs, soft bath products, disposable products and accessories. Sales of the Company’s products are generally made directly to retailers, which are primarily mass merchants, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts and wholesale clubs. The Company’s products are manufactured primarily in Asia and marketed under a variety of Company-owned trademarks, under trademarks licensed from others and as private label goods.

The Company’s products are marketed through a national sales force consisting of salaried sales executives and employees located in Compton, California; Gonzales, Louisiana; and Bentonville, Arkansas. Products are also marketed by independent commissioned sales representatives located throughout the United States. Sales outside the United States are made primarily through distributors.

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 infant, toddler and juvenile consumer products industry is highly competitive. The Company competes with a variety of distributors and manufacturers (both branded and private label), including large infant and juvenile product companies and specialty infant and juvenile product manufacturers, on the basis of quality, design, price, brand name recognition, service and packaging. 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.

A summary of certain factors that management considers important in reviewing the Company’s results of operations, financial position, liquidity and capital resources is set forth below, which should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes included in the preceding sections of this report.

RESULTS OF OPERATIONS

The following table contains results of operations for the three and six-month periods ended October 2, 2016 and September 27, 2015 and the dollar and percentage changes for those periods (in thousands, except percentages):

	Three-Month Periods Ended						Change						Six-Month Periods Ended						Change
	October 2, 2016			September 27, 2015			$			%			October 2, 2016			September 27, 2015			$			%
Net sales by category
Bedding, blankets and accessories	$	10,090		$	14,365		$	(4,275	)		-29.8	%	$	20,402		$	26,635		$	(6,233	)		-23.4	%
Bibs, bath and disposable products		5,719			6,351			(632	)		-10.0	%		11,006			11,939			(933	)		-7.8	%
Total net sales		15,809			20,716			(4,907	)		-23.7	%		31,408			38,574			(7,166	)		-18.6	%
Cost of products sold		11,500			15,010			(3,510	)		-23.4	%		22,812			28,087			(5,275	)		-18.8	%
Gross profit		4,309			5,706			(1,397	)		-24.5	%		8,596			10,487			(1,891	)		-18.0	%
% of net sales		27.3	%		27.5	%								27.4	%		27.2	%
Marketing and administrative expenses		2,761			3,108			(347	)		-11.2	%		5,600			6,369			(769	)		-12.1	%
% of net sales		17.5	%		15.0	%								17.8	%		16.5	%
Interest expense		23			31			(8	)		-25.8	%		42			39			3			7.7	%
Other income		33			19			14			73.7	%		94			39			55			141.0	%
Income tax expense		559			1,021			(462	)		-45.2	%		946			1,626			(680	)		-41.8	%
Net income		999			1,565			(566	)		-36.2	%		2,102			2,492			(390	)		-15.7	%
% of net sales		6.3	%		7.6	%								6.7	%		6.5	%

Net Sales: Sales decreased by $4.9 million, or 23.7%, for the three-month period ended October 2, 2016 and $7.2 million, or 18.6%, for the six-month period ended October 2, 2016, compared with the same periods in the prior year. The decrease in sales is related to the continuing overall sluggish environment in addition to several other factors.  The infant bedding marketplace is experiencing a change in which parents are purchasing fewer bedding sets in favor of separates, which often do not include bumpers and comforters (commonly referred to as the ‘naked crib’ in the infant bedding industry), resulting in a lower average price point for the Company’s products in this business.  This trend has been partially offset by the Company’s expanded offerings of separates and infant bedroom décor.  Additionally, due to the strength of the U.S. dollar, the Company has received price reductions from its global suppliers, which have been partially passed on to the Company’s customers.  The Company has also reduced product shipments to a customer that is experiencing credit problems.  Also, the timing of shipments, for both initial sets and replenishment, can cause comparisons between quarters to be difficult.

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Gross Profit: Gross profit decreased in amount by $1.4 million, and decreased from 27.5% of net sales for the three months ended September 27, 2015 to 27.3% of net sales for the three months ended October 2, 2016. Gross profit decreased in amount by $1.9 million, but increased from 27.2% of net sales for the six-month period ended September 27, 2015 to 27.4% of net sales for the six-month period ended October 2, 2016. The slight increase in the gross profit percentage in the current year is primarily due to the Company’s overall tight cost control combined with improved product cost from China resulting from favorable exchange rate fluctuations.

Marketing and Administrative Expenses:     Marketing and administrative expenses decreased in amount by $347,000 and $769,000 for the three and six-month periods ended October 2, 2016, respectively, compared with the same periods in the prior year. The decrease in amount is primarily related to lower overall compensation, advertising and miscellaneous outside services costs in the current year as compared with the prior year.

Income Tax Expense: The Company’s provision for income taxes is based upon an estimated annual effective tax rate (“ETR”) from continuing operations for the current year of 37.3%.  During the three and six months ended October 2, 2016, the election to early-adopt ASU No. 2016-09 effective as of April 4, 2016 resulted in the recognition of discrete income tax benefits amounting to $43,000 and $242,000, respectively, to reflect the effect of net excess tax benefits arising from the exercise of stock options and the vesting of non-vested stock during the periods.  The recognition of this benefit was the primary factor in the lowering of the overall provision for income taxes to 35.9% and 31.0% for the three and six-month periods ended October 2, 2016. Although the Company does not anticipate a material change to the ETR from continuing operations for the balance of fiscal year 2017, several factors could impact the ETR, including variations from the Company’s estimates of the amount and source of its pre-tax income and the amount of certain tax credits.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities decreased from $7.3 million for the six-month period ended September 27, 2015 to $6.9 million for the six-month period ended October 2, 2016, due primarily to a lower increase in accounts payable, which was offset by a lower increase in inventory and a higher decrease in accounts receivable in the current year.

Net cash used in investing activities decreased to $101,000 in the current year from $255,000 in the prior year, due primarily to $123,000 used in the prior year to purchase certain intangible assets.

Net cash used in financing activities increased by $1.5 million to $4.2 million in the current year. The increase was primarily associated with the payment in the current year of a special dividend of $0.25 per share which had been declared in the prior year.

From September 27, 2015 to October 2, 2016, the Company increased its cash balances from $6.1 million to $10.2 million. During that period, the Company reported net income of $6.4 million, its accounts receivable and inventory balances each decreased by $2.0 million and $5.7 million was paid in dividends. At October 2, 2016, there was no balance owed on the revolving line of credit, there was no letter of credit outstanding and $21.9 million was available under the revolving line of credit based on the Company’s eligible accounts receivable and inventory balances.

To reduce its exposure to credit losses and to enhance the predictability of its cash flow, the Company assigns the majority of its trade accounts receivable to CIT under factoring agreements. Under the terms of the factoring agreements, CIT remits customer payments to the Company as such payments are received by CIT and bears credit losses with respect to assigned accounts receivable from approved customers that are within approved credit limits, while the Company bears the responsibility for adjustments from customers related to returns, allowances, claims and discounts. CIT may at any time terminate or limit its approval of shipments to a particular customer. If such a termination were to occur, the Company must either assume the credit risk for shipments after the date of such termination or limitation or cease shipments to such customer. There were no advances from the factor at either October 2, 2016 or April 3, 2016.

The Company’s future performance is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors beyond its control. Based upon the current level of operations, the Company believes that its cash balance, its cash flow from operations and its availability from the revolving line of credit will be adequate to meet its liquidity needs.

15

FORWARD-LOOKING INFORMATION

This report contains forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current expectations, projections, estimates and assumptions. Words such as “expects,” “believes,” “anticipates” and variations of such words and similar expressions identify such forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. These risks include, among others, general economic conditions, including changes in interest rates, in the overall level of consumer spending and in the price of oil, cotton and other raw materials used in the Company’s products, changing competition, changes in the retail environment, the level and pricing of future orders from the Company’s customers, the Company’s dependence upon third-party suppliers, including some located in foreign countries with unstable political situations, the Company’s ability to successfully implement new information technologies, customer acceptance of both new designs and newly-introduced product lines, actions of competitors that may impact the Company’s business, disruptions to transportation systems or shipping lanes used by the Company or its suppliers, and the Company’s dependence upon licenses from third parties. Reference is also made to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. The Company does not undertake to update the forward-looking statements contained herein to conform to actual results or changes in the Company’s expectations, whether as a result of new information, future events or otherwise.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report, as required by paragraph (b) of Rules 13a-15 or 15d-15 of the Exchange Act.  Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective.

During the three-month period ended October 2, 2016, there was not any change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is, from time to time, involved in various legal and regulatory proceedings relating to claims arising in the ordinary course of its business. Neither the Company nor any of its subsidiaries is a party to any such proceeding the outcome of which, individually or in the aggregate, is expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flow.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Item 1A. of Part 1 of the Company’s annual report on Form 10-K for the year ended April 3, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

16

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

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

Exhibit Number	Description of Exhibit
10.1*	Amendment No. 1 to the Crown Crafts, Inc. 2014 Omnibus Equity Compensation Plan. (1)
10.2*	Form of Incentive Stock Option Grant Agreement (effective November 2016). (1)
10.3*	Form of Nonqualified Stock Option Grant Agreement (effective November 2016). (1)
10.4*	Form of Restricted Stock Grant Agreement (effective November 2016). (1)
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Executive Officer. (1)
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Financial Officer. (1)
32.1	Section 1350 Certification by the Company’s Chief Executive Officer. (1)
32.2	Section 1350 Certification by the Company’s Chief Financial Officer. (1)
101	The following information from the Registrant’s Form 10-Q for the quarterly period ended October 2, 2016, formatted as interactive data files in XBRL (eXtensible Business Reporting Language): (i)Unaudited Condensed Consolidated Statements of Income; (ii)Unaudited Condensed Consolidated Balance Sheets; (iii)Unaudited Condensed Consolidated Statements of Cash Flows; and (iv)Notes to Unaudited Condensed Consolidated Financial Statements.

_______________

* Management contract or a compensatory plan or arrangement.

(1) Filed herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CROWN CRAFTS, INC.
Date: November 16, 2016	/s/ Olivia W. Elliott
	OLIVIA W. ELLIOTT
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

17

Index to Exhibits

Exhibit Number	Description of Exhibit
10.1*	Amendment No. 1 to the Crown Crafts, Inc. 2014 Omnibus Equity Compensation Plan. (1)
10.2*	Form of Incentive Stock Option Grant Agreement (effective November 2016). (1)
10.3*	Form of Nonqualified Stock Option Grant Agreement (effective November 2016). (1)
10.4*	Form of Restricted Stock Grant Agreement (effective November 2016). (1)
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Executive Officer. (1)
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Financial Officer. (1)
32.1	Section 1350 Certification by the Company’s Chief Executive Officer. (1)
32.2	Section 1350 Certification by the Company’s Chief Financial Officer. (1)
101	The following information from the Registrant’s Form 10-Q for the quarterly period ended October 2, 2016, formatted as interactive data files in XBRL (eXtensible Business Reporting Language): (i)Unaudited Condensed Consolidated Statements of Income; (ii)Unaudited Condensed Consolidated Balance Sheets; (iii)Unaudited Condensed Consolidated Statements of Cash Flows; and (iv)Notes to Unaudited Condensed Consolidated Financial Statements.

_______________

* Management contract or a compensatory plan or arrangement.

(1) Filed herewith.

18

EX-10.1

Exhibit 10.1

CROWN CRAFTS, INC.

2014 OMNIBUS EQUITY COMPENSATION PLAN

AMENDMENT NO. 1

This Amendment No. 1 to the 2014 Omnibus Equity Compensation Plan (the “Plan) of CROWN CRAFTS, INC., a Delaware corporation (the “Corporation”), is effective as of August 9, 2016.

1. Section 14.2 of the Plan is hereby amended and restated in its entirety as follows:

“14.2     Election to Withhold Shares. If the Committee so permits, shares of Company Stock may be withheld to satisfy the Company’s tax withholding obligation with respect to Grants paid in Company Stock, at the time such Grants become taxable, up to an amount that does not exceed the maximum statutory tax rates in the applicable jurisdictions.”

2. The remaining provisions of the Plan shall remain in full force and effect in accordance with their terms, except as such terms are specifically amended by, or conflict with, this Amendment.

* * * * *

EX-10.2

Exhibit 10.2

CROWN CRAFTS, INC.

INCENTIVE STOCK OPTION GRANT AGREEMENT

(Pursuant to the 2014 Omnibus Equity Compensation Plan)

THIS INCENTIVE STOCK OPTION GRANT AGREEMENT (the “Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”), by and between Crown Crafts, Inc., a Delaware corporation (the “Company”), and the individual listed below (the “Participant”).

1.     Option Grant. Pursuant to the Crown Crafts, Inc. 2014 Omnibus Equity Compensation Plan (the “Plan”; unless otherwise defined herein, capitalized terms used in this Agreement have the meanings set forth in the Plan), the Company hereby grants to the Participant, as of the Date of Grant, an Incentive Stock Option (the “Option”) to purchase the number of shares of Series A common stock, par value $0.01 per share, of the Company (“Company Stock”) set forth below, as such Option may become vested and exercisable, in accordance with the terms and conditions of this Agreement and subject in all respects to the terms and conditions set forth in the Plan, which is incorporated herein by this reference and made a part hereof.

Participant	Date of Grant	Number of Shares of Company Stock	Exercise Price Per Share
________________________	________________	____________	$_________
Vesting of the Option:	Except as otherwise set forth herein, the Option will vest and become exercisable with respect to [____________] of the shares of Company Stock subject to the Option on [each of] [____________________] ([each, a] [the] “Vesting Date”), provided that (i) the Participant continues to be employed by the Employer through the [applicable] Vesting Date and (ii) the performance criteria, if any, set forth on Appendix A, attached hereto and incorporated herein by this reference, with respect to the [applicable] Vesting Date have been met.
Vesting Upon Death or Disability:	In the event the Participant dies or becomes Disabled while employed by, or providing service to, the Employer, the Option will automatically accelerate and become fully vested and exercisable upon the occurrence of the Participant’s death or Disability.
Vesting Upon Change of Control:	In the event a Change of Control occurs while the Participant is employed by the Employer, the Option will automatically accelerate and become fully vested and exercisable on the date of the effective time of such Change of Control.

2.     Exercisability of the Option.

(a)     The Option will become vested and exercisable as set forth in Section 1 hereof.

(b)     The exercisability of the Option is cumulative, but shall not exceed 100% of the shares of Company Stock subject to the Option.

(c)     If the schedule set forth in Section 1 hereof would produce fractional shares of Company Stock, the number of shares of Company Stock for which the Option becomes exercisable shall be rounded down to the nearest whole share of Company Stock.

3.     Term of Option.

(a)     The Option will have a term of ten (10) years from the Date of Grant and will terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

(b)     The Option will automatically terminate, and no longer be exercisable with respect to any vested portion thereof, upon the happening of the first to occur of the following events:

(i)     the expiration of the three-month period after the Participant ceases to be employed by, or provide service to, the Employer, if the termination is for any reason other than death or Disability (unless the Participant’s death occurs within such three-month period);

(ii)     the expiration of the one-year period after the Participant’s death; and

(iii)     the expiration of the one-year period after the Participant becomes Disabled in the event that the Participant’s termination was by reason of such Disability.

Notwithstanding the foregoing, in no event may the Option be exercised after the date immediately preceding the tenth (10th) anniversary of the Date of Grant.

(c)     Any portion of the Option that is not exercisable immediately prior to, or that does not become exercisable upon, the Participant’s ceasing to be employed by the Employer will immediately terminate at such time.

4.     Exercise Procedures.

(a)     Subject to the provisions of Sections 2 and 3 above, the Participant may exercise part or all of the exercisable Option by giving the Company written notice of intent to exercise in a form prescribed by the Committee or satisfying such other procedures as shall be set forth by the Committee from time to time, specifying the number of shares of Company Stock as to which the Option is to be exercised. At the time of the Participant’s delivery of such notice or such other time as the Committee shall determine, the Participant shall pay the aggregate Exercise Price for that number of shares of Company Stock for which the Option is being exercised as follows: (i) in cash; (ii) with the approval of the Committee, by delivering shares of Company Stock, which shall be valued at their Fair Market Value on the date of delivery, or by attestation (on a form prescribed by the Committee) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the aggregate Exercise Price; (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board; (iv) by surrender of all or any part of the shares of Company Stock for which the Option is exercisable to the Company for an appreciation distribution payable in shares of Company Stock with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the shares of Company Stock subject to the surrendered portion exceeds the aggregate Exercise Price payable for those shares of Company Stock; or (v) by such other method as the Committee may approve, to the extent permitted by applicable law. The Committee may impose from time to time such limitations as it deems appropriate on the use of shares of Company Stock to exercise the Option.

(b)     Promptly after receipt of a notice of exercise and full payment of the Exercise Price for the shares of Company Stock being acquired, the Company shall issue and deliver to the Participant (or other person validly exercising the Option) a certificate or certificates representing the shares of Company Stock being purchased, or evidence of the issuance of such shares in book-entry form, registered in the name of the Participant (or such other person), or, upon request, in the name of the Participant (or such other person) and in the name of another person in such form of joint ownership as requested by the Participant (or such other person) pursuant to applicable state law.

(c)     The obligation of the Company to deliver shares of Company Stock upon exercise of the Option shall be subject to all applicable laws, rules and regulations and such approvals by governmental agencies as may be deemed appropriate by the Committee, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Participant (or other person exercising the Option after the Participant’s death) represent that the Participant is purchasing shares of Company Stock for the Participant’s own account and not with a view to or for sale in connection with any distribution of the shares of Company Stock, or such other representation as the Committee deems appropriate.

(d)     All obligations of the Company under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. The Participant may elect to satisfy any tax withholding obligation of the Employer with respect to the Option by, upon exercise of the Option, having shares of Company Stock withheld having a Fair Market Value up to an amount that does not exceed the maximum statutory tax rates in the applicable jurisdictions.

5.     No Stockholder Rights. Neither the Participant, nor any person entitled to exercise the Participant’s rights in the event of the Participant’s death, shall have any of the rights and privileges of a stockholder with respect to the shares of Company Stock subject to the Option until a certificate or certificates for shares of Company Stock, or evidence of the issuance of such shares in book-entry form, shall have been issued upon the exercise of the Option.

6.     Notice of Sale. The Participant (or other person exercising the Option after the Participant’s death) shall promptly give notice to the Company in the event of the sale or other disposition of shares of Company Stock issued upon the exercise of the Option within the later of (i) two (2) years from the Date of Grant or (ii) one (1) year from the date of exercise. Shares of Company Stock issued upon the exercise of the Option may also be subject to stock-transfer orders for the sole purpose of informing the Company of a disqualifying disposition of such shares (and any such stop-transfer order shall be administered solely for this purpose).

7.     Loss of Incentive Stock Option Status. If any portion of the Option shall fail, for any reason, to qualify as an “incentive stock option” under Section 422 of the Code (or any successor provision), it shall be treated as a Nonqualified Stock Option under the Plan. The Participant acknowledges that the Option will lose such qualification if the shares acquired upon exercise of the Option are sold or otherwise disposed of within one of the time periods described in Section 6 hereof.

8.     Change of Control. Except as set forth in Section 1 hereof, the provisions of the Plan applicable to a Change of Control will apply to the Option, and in the event of a Change of Control, the Committee may take such actions as it deems appropriate pursuant to the Plan.

9.     Restrictions on Exercise. Except as the Committee may otherwise permit pursuant to the Plan, only the Participant may exercise the Option during the Participant’s lifetime, and after the Participant’s death, the Option will be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Participant, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.

10.     Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred, except, in the event of the death of the Participant, by will or by the laws of descent and distribution. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Participant, and the Option and all rights hereunder will thereupon become null and void. The rights and protections of the Company hereunder will extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.

11.     Clawback Rights. The Participant agrees that the Participant will be subject to any compensation, clawback and recoupment policies that may be applicable to the Participant, as in effect from time to time and as approved by the Board, the Committee or a duly authorized committee thereof, whether or not approved before or after the Date of Grant.

12.     Amendment of Agreement. Without limitation of Section 11 or Section 17 hereof, this Agreement may be amended in accordance with the provisions of the Plan and may otherwise be amended in writing by the Participant and the Company without the consent of any other person.

13.     Grant Subject to Plan Provisions. The grant reflected by this Agreement (a) is made pursuant to the Plan, the terms of which are incorporated herein by reference, (b) in all respects will be interpreted in accordance with the Plan and (c) is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights and obligations with respect to withholding taxes, (ii) the registration, qualification or listing of shares of Company Stock, (iii) changes in capitalization of the Company and (iv) other requirements of applicable law. The Committee will have the authority to interpret and construe the grant and this Agreement pursuant to the terms of the Plan, and its decisions will be conclusive as to any questions arising hereunder or with respect to such grant.

14.     No Employment or Other Rights. This Agreement will not confer upon the Participant any right to be retained in the employment of the Employer and will not interfere in any way with the right of the Employer to terminate the Participant’s employment at any time. The right of the Employer to terminate at will the Participant’s employment at any time for any reason is specifically reserved.

15.     Notice. Any notice to the Company provided for in this Agreement will be addressed to the Company in care of the Corporate Secretary at the Company’s corporate headquarters, and any notice to the Participant will be addressed to the Participant at the current address shown on the payroll records of the Company, or to such other address as the Participant may designate to the Company in writing. Any notice will be delivered by hand, sent by facsimile or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or with an overnight courier.

16.     Applicable Law. The validity, construction, interpretation and effect of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

17.     Application of Section 409A of the Code. The grant is intended to be exempt from Section 409A of the Code, and this Agreement shall be administered and interpreted in accordance with such intent. The Committee reserves the right (including the right to delegate such right) to unilaterally amend this Agreement without the consent of the Participant in order to maintain an exclusion from the application of, or to maintain compliance with, Section 409A of the Code, and the Participant hereby acknowledges and consents to such rights of the Committee.

18.     Severability. The various provisions of this Agreement are severable in their entirety. Any judicial or legal determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

19.     Counterparts; Electronic Signature. This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same instrument, and any of the parties or signatories hereto may execute this Agreement by signing any such counterpart. Electronic signatures in the form of handwritten signatures on a facsimile transmittal and scanned and digitized images of a handwritten signature (e.g., scanned document in PDF format) shall have the same force and effect as original manual signatures.

20.     Participant Acceptance. By signing below, the Participant agrees to be bound by the terms and conditions of the Plan and this Agreement and accepts the Option as of the Date of Grant. The Participant accepts as binding, conclusive and final all decisions and determinations of the Committee upon any questions arising under this Agreement or the Plan. The Participant acknowledges delivery of the Plan and the Plan prospectus together with this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Date of Grant set forth herein.

COMPANY:	PARTICIPANT:
CROWN CRAFTS, INC.
	(Signature)
By:
Name:	(Printed Name)
Title:

Appendix A

[Performance criteria, if applicable, to be determined at the time of grant.]

EX-10.3

Exhibit 10.3

CROWN CRAFTS, INC.

NONQUALIFIED STOCK OPTION GRANT AGREEMENT

(Pursuant to the 2014 Omnibus Equity Compensation Plan)

THIS NONQUALIFIED STOCK OPTION GRANT AGREEMENT (the “Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”), by and between Crown Crafts, Inc., a Delaware corporation (the “Company”), and the individual listed below (the “Participant”).

1.     Option Grant. Pursuant to the Crown Crafts, Inc. 2014 Omnibus Equity Compensation Plan (the “Plan”; unless otherwise defined herein, capitalized terms used in this Agreement have the meanings set forth in the Plan), the Company hereby grants to the Participant, as of the Date of Grant, a Nonqualified Stock Option (the “Option”) to purchase the number of shares of Series A common stock, par value $0.01 per share, of the Company (“Company Stock”) set forth below, as such Option may become vested and exercisable, in accordance with the terms and conditions of this Agreement and subject in all respects to the terms and conditions set forth in the Plan, which is incorporated herein by this reference and made a part hereof.

Participant	Date of Grant	Number of Shares of Company Stock	Exercise Price Per Share
________________________	________________	____________	$_________
Vesting of the Option:	Except as otherwise set forth herein, the Option will vest and become exercisable with respect to [____________] of the shares of Company Stock subject to the Option on [each of] [____________________] ([each, a] [the] “Vesting Date”), provided that (i) the Participant continues to be employed by, or provide service to, the Employer through the [applicable] Vesting Date and (ii) the performance criteria, if any, set forth on Appendix A, attached hereto and incorporated herein by this reference, with respect to the [applicable] Vesting Date have been met.
Vesting Upon Death or Disability:	In the event the Participant dies or becomes Disabled while employed by, or providing service to, the Employer, the Option will automatically accelerate and become fully vested and exercisable upon the occurrence of the Participant’s death or Disability.
Vesting Upon Change of Control:	In the event a Change of Control occurs while the Participant is employed by, or providing service to, the Employer, the Option will automatically accelerate and become fully vested and exercisable on the date of the effective time of such Change of Control.

2.     Exercisability of the Option.

(a)     The Option will become vested and exercisable as set forth in Section 1 hereof.

(b)     The exercisability of the Option is cumulative, but shall not exceed 100% of the shares of Company Stock subject to the Option.

(c)     If the schedule set forth in Section 1 hereof would produce fractional shares of Company Stock, the number of shares of Company Stock for which the Option becomes exercisable shall be rounded down to the nearest whole share of Company Stock.

3.     Term of Option.

(a)     The Option will have a term of ten (10) years from the Date of Grant and will terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

(b)     The Option will automatically terminate, and no longer be exercisable with respect to any vested portion thereof, upon the happening of the first to occur of the following events:

(i)     the expiration of the three-month period after the Participant ceases to be employed by, or provide service to, the Employer, if the termination is for any reason other than death or Disability (unless the Participant’s death occurs within such three-month period);

(ii)     the expiration of the one-year period after the Participant’s death; and

(iii)     the expiration of the one-year period after the Participant becomes Disabled in the event that the Participant’s termination was by reason of such Disability.

Notwithstanding the foregoing, in no event may the Option be exercised after the date immediately preceding the tenth (10th) anniversary of the Date of Grant.

(c)     Any portion of the Option that is not exercisable immediately prior to, or that does not become exercisable upon, the Participant’s ceasing to be employed by, or provide service to, the Employer will immediately terminate at such time.

4.     Exercise Procedures.

(a)     Subject to the provisions of Sections 2 and 3 above, the Participant may exercise part or all of the exercisable Option by giving the Company written notice of intent to exercise in a form prescribed by the Committee or satisfying such other procedures as shall be set forth by the Committee from time to time, specifying the number of shares of Company Stock as to which the Option is to be exercised. At the time of the Participant’s delivery of such notice or such other time as the Committee shall determine, the Participant shall pay the aggregate Exercise Price for that number of shares of Company Stock for which the Option is being exercised as follows: (i) in cash; (ii) with the approval of the Committee, by delivering shares of Company Stock, which shall be valued at their Fair Market Value on the date of delivery, or by attestation (on a form prescribed by the Committee) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the aggregate Exercise Price; (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board; (iv) by surrender of all or any part of the shares of Company Stock for which the Option is exercisable to the Company for an appreciation distribution payable in shares of Company Stock with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the shares of Company Stock subject to the surrendered portion exceeds the aggregate Exercise Price payable for those shares of Company Stock; or (v) by such other method as the Committee may approve, to the extent permitted by applicable law. The Committee may impose from time to time such limitations as it deems appropriate on the use of shares of Company Stock to exercise the Option.

(b)     Promptly after receipt of a notice of exercise and full payment of the Exercise Price for the shares of Company Stock being acquired, the Company shall issue and deliver to the Participant (or other person validly exercising the Option) a certificate or certificates representing the shares of Company Stock being purchased, or evidence of the issuance of such shares in book-entry form, registered in the name of the Participant (or such other person), or, upon request, in the name of the Participant (or such other person) and in the name of another person in such form of joint ownership as requested by the Participant (or such other person) pursuant to applicable state law.

(c)     The obligation of the Company to deliver shares of Company Stock upon exercise of the Option shall be subject to all applicable laws, rules and regulations and such approvals by governmental agencies as may be deemed appropriate by the Committee, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Participant (or other person exercising the Option after the Participant’s death) represent that the Participant is purchasing shares of Company Stock for the Participant’s own account and not with a view to or for sale in connection with any distribution of the shares of Company Stock, or such other representation as the Committee deems appropriate.

(d)     All obligations of the Company under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. The Participant may elect to satisfy any tax withholding obligation of the Employer with respect to the Option by, upon exercise of the Option, having shares of Company Stock withheld having a Fair Market Value up to an amount that does not exceed the maximum statutory tax rates in the applicable jurisdictions.

5.     No Stockholder Rights. Neither the Participant, nor any person entitled to exercise the Participant’s rights in the event of the Participant’s death, shall have any of the rights and privileges of a stockholder with respect to the shares of Company Stock subject to the Option until a certificate or certificates for shares of Company Stock, or evidence of the issuance of such shares in book-entry form, shall have been issued upon the exercise of the Option.

6.     Change of Control. Except as set forth in Section 1 hereof, the provisions of the Plan applicable to a Change of Control will apply to the Option, and in the event of a Change of Control, the Committee may take such actions as it deems appropriate pursuant to the Plan.

7.     Restrictions on Exercise. Except as the Committee may otherwise permit pursuant to the Plan, only the Participant may exercise the Option during the Participant’s lifetime, and after the Participant’s death, the Option will be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Participant, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.

8.     Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred, except, in the event of the death of the Participant, by will or by the laws of descent and distribution. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Participant, and the Option and all rights hereunder will thereupon become null and void. The rights and protections of the Company hereunder will extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.

9.     Clawback Rights. The Participant agrees that the Participant will be subject to any compensation, clawback and recoupment policies that may be applicable to the Participant, as in effect from time to time and as approved by the Board, the Committee or a duly authorized committee thereof, whether or not approved before or after the Date of Grant.

10.     Amendment of Agreement. Without limitation of Section 9 or Section 15 hereof, this Agreement may be amended in accordance with the provisions of the Plan and may otherwise be amended in writing by the Participant and the Company without the consent of any other person.

11.     Grant Subject to Plan Provisions. The grant reflected by this Agreement (a) is made pursuant to the Plan, the terms of which are incorporated herein by reference, (b) in all respects will be interpreted in accordance with the Plan and (c) is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights and obligations with respect to withholding taxes, (ii) the registration, qualification or listing of shares of Company Stock, (iii) changes in capitalization of the Company and (iv) other requirements of applicable law. The Committee will have the authority to interpret and construe the grant and this Agreement pursuant to the terms of the Plan, and its decisions will be conclusive as to any questions arising hereunder or with respect to such grant.

12.     No Employment or Other Rights. This Agreement will not confer upon the Participant any right to be retained in the employment or service of the Employer and will not interfere in any way with the right of the Employer to terminate the Participant’s employment or service at any time. The right of the Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved.

13.     Notice. Any notice to the Company provided for in this Agreement will be addressed to the Company in care of the Corporate Secretary at the Company’s corporate headquarters, and any notice to the Participant will be addressed to the Participant at the current address shown on the payroll records of the Company, or to such other address as the Participant may designate to the Company in writing. Any notice will be delivered by hand, sent by facsimile or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or with an overnight courier.

14.     Applicable Law. The validity, construction, interpretation and effect of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

15.     Application of Section 409A of the Code. The grant is intended to be exempt from Section 409A of the Code, and this Agreement shall be administered and interpreted in accordance with such intent. The Committee reserves the right (including the right to delegate such right) to unilaterally amend this Agreement without the consent of the Participant in order to maintain an exclusion from the application of, or to maintain compliance with, Section 409A of the Code, and the Participant hereby acknowledges and consents to such rights of the Committee.

16.     Severability. The various provisions of this Agreement are severable in their entirety. Any judicial or legal determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

17.     Counterparts; Electronic Signature. This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same instrument, and any of the parties or signatories hereto may execute this Agreement by signing any such counterpart. Electronic signatures in the form of handwritten signatures on a facsimile transmittal and scanned and digitized images of a handwritten signature (e.g., scanned document in PDF format) shall have the same force and effect as original manual signatures.

18.     Participant Acceptance. By signing below, the Participant agrees to be bound by the terms and conditions of the Plan and this Agreement and accepts the Option as of the Date of Grant. The Participant accepts as binding, conclusive and final all decisions and determinations of the Committee upon any questions arising under this Agreement or the Plan. The Participant acknowledges delivery of the Plan and the Plan prospectus together with this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Date of Grant set forth herein.

COMPANY:	PARTICIPANT:
CROWN CRAFTS, INC.
	(Signature)
By:
Name:	(Printed Name)
Title:

Appendix A

[Performance criteria, if applicable, to be determined at the time of grant.]

EX-10.4

Exhibit 10.4

CROWN CRAFTS, INC.

RESTRICTED STOCK GRANT AGREEMENT

(Pursuant to the 2014 Omnibus Equity Compensation Plan)

THIS RESTRICTED STOCK GRANT AGREEMENT (the “Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”), by and between Crown Crafts, Inc., a Delaware corporation (the “Company”), and the individual listed below (the “Participant”).

1.     Grant of Shares. Pursuant to the Crown Crafts, Inc. 2014 Omnibus Equity Compensation Plan (the “Plan”; unless otherwise defined herein, capitalized terms used in this Agreement have the meanings set forth in the Plan), the Company hereby grants to the Participant, as of the Date of Grant, that number of shares of Series A common stock, par value $0.01 per share, of the Company (“Company Stock”) that may become vested as set forth below (the “Restricted Stock”), in accordance with the terms and conditions of this Agreement and subject in all respects to the terms and conditions set forth in the Plan, which is incorporated herein by this reference and made a part hereof.

Participant	Date of Grant	Number of Shares of Company Stock
________________________	_____________________	________________________
Vesting Schedule:	Except as otherwise set forth herein, the shares of Restricted Stock shall become vested, and the restrictions described in Sections 2(b) and 2(c) hereof shall lapse, on [each of] [____________________] ([each, a] [the] “Vesting Date”), provided that (i) the Participant continues to be employed by, or provide service to, the Employer through the [applicable] Vesting Date and (ii) the performance criteria, if any, set forth on Appendix A, attached hereto and incorporated herein by this reference, with respect to the [applicable] Vesting Date have been met.
Vesting Upon Death or Disability:	In the event the Participant dies or becomes Disabled during the Restriction Period (as defined below) and while employed by, or providing service to, the Employer, the Restriction Period shall end immediately upon the occurrence of the Participant’s death or Disability and all unvested shares of Restricted Stock will automatically vest in full at such time.
Vesting Upon Change of Control:	In the event a Change of Control occurs during the Restriction Period and while the Participant is employed by, or providing service to, the Employer, the Restriction Period shall end on the date of the effective time of such Change of Control and all unvested shares of Restricted Stock will automatically vest in full on such date.

2.     Vesting and Nonassignability of Restricted Stock.

(a)     The shares of Restricted Stock will become vested as set forth in Section 1 hereof.

(b)     Except as otherwise provided in this Agreement, if the Participant ceases to be employed by, or provide service to, the Employer for any reason before the Restricted Stock fully vests, then the shares of Restricted Stock that are not then vested shall be forfeited and immediately returned to the Company.

(c)     During the period before all of the shares of Restricted Stock vest (the “Restriction Period”), the unvested shares of Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of by the Participant. Any attempt to assign, transfer, pledge or otherwise dispose of the shares contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the shares, shall be null, void and without effect.

(d)     If the Vesting Schedule set forth in Section 1 hereof would result in the Participant vesting in a fractional share of Restricted Stock, the number of shares in which the Participant becomes vested shall be rounded down to the nearest whole share of Restricted Stock.

3.     Issuance of Certificates.

(a)     Stock certificates representing the Restricted Stock may be issued by the Company and held in escrow by the Company until the Restricted Stock vests, or the Company may hold evidence of the issuance of shares in book-entry form until the Restricted Stock vests. The Participant agrees to execute, if required by the Company, a stock power with respect to each stock certificate representing shares of Restricted Stock, or other evidence of book-entry stock ownership, in favor of the Company. When the Participant obtains a vested right to shares of Restricted Stock, a certificate, or evidence of the issuance of shares in book-entry form, representing the vested shares shall be delivered to the Participant, free of the restrictions under Sections 2(b) and 2(c) of this Agreement.

(b)     During the Restriction Period, the Participant shall receive any cash dividends with respect to the shares of Restricted Stock, may vote the shares of Restricted Stock and may participate in any distribution pursuant to a plan of dissolution or complete liquidation of the Company. In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the unvested shares of Restricted Stock shall be subject to the same terms and conditions relating to vesting as the shares to which they relate.

(c)     The obligation of the Company to deliver shares upon the vesting of the Restricted Stock shall be subject to all applicable laws, rules and regulations and such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations.

4.     Withholding of Taxes. The Participant shall be required to pay to the Company, or make other arrangements satisfactory to the Company to provide for the payment of, any federal, state, local or other taxes that the Employer is required to withhold with respect to the grant or vesting of the Restricted Stock. To the extent applicable, the Committee may provide that upon vesting the number of shares of Restricted Stock will be reduced by a number of shares of Restricted Stock sufficient to satisfy the amount of any tax withholding obligation of the Employer associated with vesting of the Restricted Stock. In no event will the amount of withholding exceed the maximum statutory tax rates in the applicable jurisdictions.

5.     Successors and Assigns. The rights and protections of the Company hereunder will extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.

6.     Clawback Rights. The Participant agrees that the Participant will be subject to any compensation, clawback and recoupment policies that may be applicable to the Participant, as in effect from time to time and as approved by the Board, the Committee or a duly authorized committee thereof, whether or not approved before or after the Date of Grant.

7.     Amendment of Agreement. Without limitation of Section 6 or Section 12 hereof, this Agreement may be amended in accordance with the provisions of the Plan and may otherwise be amended in writing by the Participant and the Company without the consent of any other person.

8.     Grant Subject to Plan Provisions. The grant reflected by this Agreement (a) is made pursuant to the Plan, the terms of which are incorporated herein by reference, (b) in all respects will be interpreted in accordance with the Plan and (c) is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights and obligations with respect to withholding taxes, (ii) the registration, qualification or listing of shares of Company Stock, (iii) changes in capitalization of the Company and (iv) other requirements of applicable law. The Committee will have the authority to interpret and construe the grant and this Agreement pursuant to the terms of the Plan, and its decisions will be conclusive as to any questions arising hereunder or with respect to such grant.

9.     No Employment or Other Rights. This Agreement will not confer upon the Participant any right to be retained in the employment or service of the Employer and will not interfere in any way with the right of the Employer to terminate the Participant’s employment or service at any time. The right of the Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved.

10.     Notice. Any notice to the Company provided for in this Agreement will be addressed to the Company in care of the Corporate Secretary at the Company’s corporate headquarters, and any notice to the Participant will be addressed to the Participant at the current address shown on the payroll records of the Company, or to such other address as the Participant may designate to the Company in writing. Any notice will be delivered by hand, sent by facsimile or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or with an overnight courier.

11.     Applicable Law. The validity, construction, interpretation and effect of this Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

12.     Application of Section 409A of the Code. The grant is intended to be exempt from Section 409A of the Code, and this Agreement shall be administered and interpreted in accordance with such intent. The Committee reserves the right (including the right to delegate such right) to unilaterally amend this Agreement without the consent of the Participant in order to maintain an exclusion from the application of, or to maintain compliance with, Section 409A of the Code, and the Participant hereby acknowledges and consents to such rights of the Committee.

13.     Severability. The various provisions of this Agreement are severable in their entirety. Any judicial or legal determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

14.     Counterparts; Electronic Signature. This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same instrument, and any of the parties or signatories hereto may execute this Agreement by signing any such counterpart. Electronic signatures in the form of handwritten signatures on a facsimile transmittal and scanned and digitized images of a handwritten signature (e.g., scanned document in PDF format) shall have the same force and effect as original manual signatures.

15.     Participant Acceptance. By signing below, the Participant agrees to be bound by the terms and conditions of the Plan and this Agreement and accepts the Restricted Stock as of the Date of Grant. The Participant accepts as binding, conclusive and final all decisions and determinations of the Committee upon any questions arising under this Agreement or the Plan. The Participant acknowledges delivery of the Plan and the Plan prospectus together with this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Date of Grant set forth herein.

COMPANY:	PARTICIPANT:
CROWN CRAFTS, INC.
	(Signature)
By:
Name:	(Printed Name)
Title:

Appendix A

[Performance criteria, if applicable, to be determined at the time of grant.]

EX-31.1

Exhibit 31.1

CERTIFICATION

I, E. Randall Chestnut, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Crown Crafts, Inc. for the period ended October 2, 2016;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2016	/s/ E. Randall Chestnut
	E. Randall Chestnut, Chairman of the Board,
	President & Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Olivia W. Elliott, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Crown Crafts, Inc. for the period ended October 2, 2016;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2016	/s/ Olivia W. Elliott
	Olivia W. Elliott,
	Vice President & Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

I, E. Randall Chestnut, Chairman of the Board, President and Chief Executive Officer of Crown Crafts, Inc. (the “Company”), do hereby certify, in accordance with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the period ending October 2, 2016 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 16, 2016
	/s/ E. Randall Chestnut
	E. Randall Chestnut, Chairman of the Board,
	President & Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

I, Olivia W. Elliott, Vice President and Chief Financial Officer of Crown Crafts, Inc. (the “Company”), do hereby certify, in accordance with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the period ending October 2, 2016 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 16, 2016
	/s/ Olivia W. Elliott
	Olivia W. Elliott,
	Vice President and Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Oct. 02, 2016	Nov. 15, 2016
Document Information [Line Items]
Entity Registrant Name	CROWN CRAFTS INC
Entity Central Index Key	0000025895
Trading Symbol	crws
Current Fiscal Year End Date	--04-02
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		10,029,761
Document Type	10-Q
Document Period End Date	Oct. 02, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Oct. 02, 2016	Apr. 03, 2016
Current assets:
Cash and cash equivalents	$ 10,219	$ 7,574
Accounts receivable (net of allowances of $786 at October 2, 2016 and $745 at April 3, 2016):
Due from factor	15,278	20,125
Other	621	671
Inventories	15,532	14,785
Prepaid expenses	1,045	1,689
Deferred income taxes		888
Total current assets	42,695	45,732
Property, plant and equipment - at cost:
Vehicles	247	247
Leasehold improvements	242	239
Machinery and equipment	3,028	2,879
Furniture and fixtures	808	808
Property, plant and equipment - gross	4,325	4,173
Less accumulated depreciation	3,834	3,740
Property, plant and equipment - net	491	433
Finite-lived intangible assets - at cost:
Customer relationships	5,534	5,534
Other finite-lived intangible assets	3,686	3,686
Finite-lived intangible assets gross	9,220	9,220
Less accumulated amortization	5,715	5,338
Finite-lived intangible assets - net	3,505	3,882
Goodwill	1,126	1,126
Deferred income taxes	1,258	1,049
Other	187	193
Total Assets	49,262	52,415
Current liabilities:
Accounts payable	4,687	4,640
Accrued wages and benefits	675	1,988
Accrued royalties	1,412	1,172
Dividends payable	802	3,303
Income taxes payable	26	806
Other accrued liabilities	208	276
Total current liabilities	7,810	12,185
Non-current liabilities:
Reserve for unrecognized tax benefits	578	211
Shareholders' equity:
Common stock - $0.01 par value per share; Authorized 40,000,000 shares at October 2, 2016 and April 3, 2016; Issued 12,398,539 shares at October 2, 2016 and 12,251,834 shares at April 3, 2016	124	123
Additional paid-in capital	51,732	50,723
Treasury stock - at cost - 2,368,778 shares at October 2, 2016 and 2,302,191 shares at April 3, 2016	(11,884)	(11,228)
Retained Earnings	902	401
Total shareholders' equity	40,874	40,019
Total Liabilities and Shareholders' Equity	$ 49,262	$ 52,415

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Oct. 02, 2016	Apr. 03, 2016
Allowance for doubtful accounts receivable	$ 786	$ 745
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	12,398,539	12,251,834
Treasury stock, shares (in shares)	2,368,778	2,302,191

XML

Unaudited Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015
Net sales	$ 15,809	$ 20,716	$ 31,408	$ 38,574
Cost of products sold	11,500	15,010	22,812	28,087
Gross profit	4,309	5,706	8,596	10,487
Marketing and administrative expenses	2,761	3,108	5,600	6,369
Income from operations	1,548	2,598	2,996	4,118
Other income (expense):
Interest expense	(23)	(31)	(42)	(39)
Interest income	34	15	63	30
Gain on sale of property, plant and equipment		15		15
Foreign exchange (loss) gain	(2)	(10)	29	(9)
Other - net	1	(1)	2	3
Income before income tax expense	1,558	2,586	3,048	4,118
Income tax expense	559	1,021	946	1,626
Net income	$ 999	$ 1,565	$ 2,102	$ 2,492
Weighted average shares outstanding:
Basic (in shares)	10,011	10,017	9,995	10,038
Effect of dilutive securities (in shares)	45	45	41	45
Diluted (in shares)	10,056	10,062	10,036	10,083
Earnings per share:
Basic (in dollars per share)	$ 0.10	$ 0.16	$ 0.21	$ 0.25
Diluted (in dollars per share)	0.10	0.16	0.21	0.25
Cash dividends declared per share (in dollars per share)	$ 0.08	$ 0.08	$ 0.16	$ 0.16

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015
Operating activities:
Net income	$ 2,102	$ 2,492
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	94	157
Amortization of intangibles	377	371
Deferred income taxes	679	406
Gain on sale of property, plant and equipment		(15)
Reserve for unrecognized tax benefits	90
Stock-based compensation	307	479
Tax shortfall from stock-based compensation		(3)
Changes in assets and liabilities:
Accounts receivable	4,897	4,452
Inventories	(747)	(2,096)
Prepaid expenses	644	721
Other assets	6	(24)
Accounts payable	(4)	1,909
Accrued liabilities	(1,536)	(1,598)
Net cash provided by operating activities	6,909	7,251
Investing activities:
Capital expenditures for property, plant and equipment	(101)	(163)
Proceeds from sale of property, plant and equipment		31
Capital expenditures for purchased intangible assets		(123)
Net cash used in investing activities	(101)	(255)
Financing activities:
Purchase of treasury stock	(656)	(1,467)
Issuance of common stock	595	147
Excess tax benefit from stock-based compensation		267
Dividends paid	(4,102)	(1,611)
Net cash used in financing activities	(4,163)	(2,664)
Net increase in cash and cash equivalents	2,645	4,332
Cash and cash equivalents at beginning of period	7,574	1,807
Cash and cash equivalents at end of period	10,219	6,139
Supplemental cash flow information:
Income taxes paid	1,346	2,548
Interest paid	2	9
Noncash financing activities:
Property, plant and equipment purchased but unpaid	(51)
Dividends declared but unpaid	(802)	(799)
Compensation paid as common stock	$ 108	$ 140

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Note 1 - Summary of Significant Accounting Policies

6 Months Ended

Oct. 02, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Note 1 – Summary of Significant Accounting Policies

Basis of Presentation:

The accompanying unaudited consolidated financial statements include the accounts of Crown Crafts, Inc. (the “Company”) and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information as promulgated by the Financial Accounting Standards Board (“FASB”). Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. References herein to GAAP are to topics within the FASB Accounting Standards Codification (the “FASB ASC”), which has been established by the FASB as the authoritative source for GAAP to be applied by nongovernmental entities.

In the opinion of management, the interim unaudited consolidated financial statements contained herein include all adjustments necessary to present fairly the financial position of the Company as of October 2, 2016 and the results of its operations and cash flows for the periods presented. Such adjustments include normal, recurring accruals, as well as the elimination of all significant intercompany balances and transactions. Operating results for the three and six-month periods ended October 2, 2016 are not necessarily indicative of the results that may be expected by the Company for its fiscal year ending April 2, 2017. For further information, refer to the Company’s consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 3, 2016.

Reclassifications:

The Company has reclassified certain prior year information to conform to the amounts presented in the current year. None of the changes impact the Company’s previously reported financial position or results of operations.

Fiscal Year:

The Company’s fiscal year ends on the Sunday that is nearest to or on March 31. References herein to “fiscal year 2017” or “2017” represent the 52-week period ending April 2, 2017 and references herein to “fiscal year 2016” or “2016” represent the 53-week period ended April 3, 2016.

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 the disclosure of contingent assets and liabilities as of the date of the accompanying condensed consolidated balance sheets and the reported amounts of revenues and expenses during the periods presented on the accompanying unaudited consolidated statements of income and cash flows. Significant estimates are made with respect to the allowances related to accounts receivable for customer deductions for returns, allowances and disputes. The Company also has a certain amount of discontinued finished products which necessitates the establishment of inventory reserves and allocates indirect costs to inventory based on an estimated percentage of the supplier purchase price, each of which is highly subjective. The Company has also established estimated reserves in connection with the uncertainty concerning the amount of income tax recognized. Actual results could differ from those estimates.

Cash and Cash Equivalents:

The Company considers highly-liquid investments, if any, purchased with original maturities of three months or less to be cash equivalents.

The Company’s credit facility consists of a revolving line of credit under a financing agreement with The CIT Group/Commercial Services, Inc. (“CIT”), a subsidiary of CIT Group, Inc. The Company classifies a negative balance outstanding under this revolving line of credit as cash, as these amounts are legally owed to the Company and are immediately available to be drawn upon by the Company. There are no compensating balance requirements or other restrictions on the transfer of amounts associated with the Company’s depository accounts.

Financial Instruments

:

For short-term instruments such as cash and cash equivalents, accounts receivable and accounts payable, the Company uses carrying value as a reasonable estimate of the fair value.

Royalty Payments:

The Company has entered into agreements that provide for royalty payments based on a percentage of sales with certain minimum guaranteed amounts. These royalties are accrued based upon historical sales rates adjusted for current sales trends by customers. Royalty expense is included in cost of products sold in the accompanying unaudited condensed consolidated statements of income and amounted to $1.6 million and $2.2 million for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $3.3 million and $4.0 million for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

Segment and Related Information:

The Company operates primarily in one principal segment, infant, toddler and juvenile products. These products consist of infant and toddler bedding, bibs, soft bath products, disposable products and accessories. Net sales of bedding, blankets and accessories and net sales of bibs, bath and disposable products for the three and six months ended October 2, 2016 and September 27, 2015 are as follows (in thousands):

	Three-Month Periods Ended				Six-Month Periods Ended
	October 2, 2016		September 27, 2015		October 2, 2016		September 27, 2015
Bedding, blankets and accessories	$	10,090	$	14,365	$	20,402	$	26,635
Bibs, bath and disposable products		5,719		6,351		11,006		11,939
Total net sales	$	15,809	$	20,716	$	31,408	$	38,574

Revenue Recognition:

Sales are recorded when products are shipped to customers and are reported net of allowances for estimated returns and allowances in the accompanying unaudited condensed consolidated statements of income. Allowances for returns are estimated based on historical rates. Allowances for returns, cooperative advertising allowances, warehouse allowances, placement fees and volume rebates are recorded commensurate with sales activity or using the straight-line method, as appropriate, and the cost of such allowances is netted against sales in reporting the results of operations. Shipping and handling costs, net of amounts reimbursed by customers, are not material and are included in net sales.

Allowances Against Accounts Receivable

: The Company’s allowances against accounts receivable are primarily contractually agreed-upon deductions for items such as cooperative advertising and warehouse allowances, placement fees and volume rebates. These deductions are recorded throughout the year commensurate with sales activity or using the straight-line method, as appropriate. Funding of the majority of the Company’s allowances occurs on a per-invoice basis. The allowances for customer deductions, which are netted against accounts receivable in the condensed consolidated balance sheets, consist of agreed upon advertising support, placement fees, markdowns and warehouse and other allowances. All such allowances are recorded as direct offsets to sales, and such costs are accrued commensurate with sales activities or as a straight-line amortization charge of an agreed-upon fixed amount, as appropriate to the circumstances for each such arrangement. When a customer requests deductions, the allowances are reduced to reflect such payments or credits issued against the customer’s account balance. The Company analyzes the components of the allowances for customer deductions monthly and adjusts the allowances to the appropriate levels. The timing of funding requests for advertising support can cause the net balance in the allowance account to fluctuate from period to period. The timing of such funding requests should have no impact on the accompanying unaudited condensed consolidated statements of income since such costs are accrued commensurate with sales activity or using the straight-line method, as appropriate.

To reduce the exposure to credit losses and to enhance the predictability of its cash flows, the Company assigns the majority of its trade accounts receivable under factoring agreements with CIT. In the event a factored receivable becomes uncollectible due to creditworthiness, CIT bears the risk of loss. The Company’s management must make estimates of the uncollectibility of its non-factored accounts receivable to evaluate the adequacy of the Company’s allowance for doubtful accounts, which is accomplished by specifically analyzing accounts receivable, historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in its customers’ payment terms.

The Company’s accounts receivable as of October 2, 2016 was $15.9 million, net of allowances of $786,000. Of this amount, $15.3 million was due from CIT under the factoring agreements. An additional $9.9 million was due from CIT as a negative balance outstanding under the revolving line of credit, which is included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheet. The combined amount of $25.2 million represents the maximum loss that the Company could incur if CIT failed completely to perform its obligations under the factoring agreements and the revolving line of credit.

Depreciation and Amortization:

The accompanying condensed consolidated balance sheets reflect property, plant and equipment, and intangible assets other than goodwill at cost less accumulated depreciation or amortization. The Company capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three to eight years for property, plant and equipment, and five to twenty years for intangible assets other than goodwill. The Company amortizes improvements to its leased facilities over the term of the lease or the estimated useful life of the asset, whichever is shorter.

Valuation of Long-Lived Assets

and

Identifiable Intangible Assets:

In addition to the depreciation and amortization procedures set forth above, the Company reviews for impairment property, plant and equipment, and intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable. In the event of impairment, the asset is written down to its fair market value.

Patent Costs:

The Company incurs certain legal and associated costs in connection with applications for patents. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or an alternative future use for the underlying product is available to the Company. The Company also capitalizes legal and other costs incurred in the protection or defense of the Company’s patents to the extent that it is believed that the future economic benefit of the patent will be maintained or increased and a successful outcome of the litigation is probable. Capitalized patent protection or defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of the future economic benefit of its patents involves considerable management judgment, and a different conclusion could result in a material impairment charge up to the carrying value of these assets.

Inventory Valuation:

The preparation of the Company's financial statements requires careful determination of the appropriate value of the Company's inventory balances. Such amounts are presented as a current asset in the accompanying condensed consolidated balance sheets and are a direct determinant of cost of products sold in the unaudited consolidated statements of income and, therefore, have a significant impact on the amount of net income in the accounting periods reported. The basis of accounting for inventories is cost, which includes the direct supplier acquisition cost, duties, taxes and freight, and the indirect costs incurred to design, develop, source and store the products until they are sold. Once cost has been determined, the Company’s inventory is then stated at the lower of cost or market, with cost determined using the first-in, first-out ("FIFO") method, which assumes that inventory quantities are sold in the order in which they are acquired.

The indirect costs allocated to inventory are done so as a percentage of projected annual supplier purchases and can impact the Company’s results of operations as purchase volume fluctuates from quarter to quarter and year to year. The difference between indirect costs incurred and the indirect costs allocated to inventory creates a burden variance, which is generally favorable when actual inventory purchases exceed planned inventory purchases, and is generally unfavorable when actual inventory purchases are lower than planned inventory purchases. While the burden variance can be significant during interim periods, it is generally not material by the end of each fiscal year. The determination of the indirect charges and their allocation to the Company's finished products inventories is complex and requires significant management judgment and estimates. If management made different judgments or utilized different estimates, then differences would result in the valuation of the Company's inventories, the amount and timing of the Company's cost of products sold and the resulting net income for any accounting period.

On a periodic basis, management reviews the Company’s 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 normal operating cycle of the Company's operations. To the extent that any of these conditions is believed to exist or the market value of the inventory expected to be realized in the ordinary course of business is otherwise no longer as great as its carrying value, an allowance against the inventory value is established. 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 unaudited condensed consolidated statements of income. Only when inventory for which an allowance has been established is later sold or is otherwise disposed of is the allowance reduced accordingly. Significant management judgment is required in determining the amount and adequacy of this allowance. 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.

Advertising Cost

s

:

The Company’s advertising costs are primarily associated with cooperative advertising arrangements with certain of the Company’s customers and are recognized using the straight-line method based upon aggregate annual estimated amounts for those customers, with periodic adjustments to the actual amounts of authorized agreements. Advertising expense is included in marketing and administrative expenses in the accompanying unaudited consolidated statements of income and amounted to $243,000 and $264,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $498,000 and $569,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

Provision for Income Taxes:

The Company’s provision for income taxes includes all currently payable federal, state, local and foreign taxes and is based upon the Company’s estimated annual effective tax rate, which is based on the Company’s forecasted annual pre-tax income, as adjusted for certain expenses that will never be deductible on the Company’s tax returns and certain charges expected to be deducted on the Company’s tax returns that will never be deducted on the accompanying unaudited condensed consolidated statements of income, multiplied by the statutory tax rates for the various jurisdictions in which the Company operates and reduced by certain anticipated tax credits. The Company provides for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company’s policy is to recognize the effect that a change in enacted tax rates would have on net deferred income tax assets and liabilities in the period that the tax rates are changed.

Management evaluates items of income, deductions and credits reported on the Company’s various federal and state income tax returns filed and recognizes the effect of positions taken on those income tax returns only if those positions are more likely than not to be sustained. The Company applies the provisions of FASB ASC Sub-topic 740-10-25, which requires a minimum recognition threshold that a tax benefit must meet before being recognized in the financial statements. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company’s policy is to accrue interest expense and penalties as appropriate on any estimated unrecognized tax benefits as a charge to interest expense. Interest expense or penalties are not accrued with respect to estimated unrecognized tax benefits that are associated with claims for income tax refunds as long as the overpayments are receivable.

The Company files income tax returns in the many jurisdictions within which it operates, including the U.S., several U.S. states and the People’s Republic of China. The statute of limitations for the Company’s filed income tax returns varies by jurisdiction; the tax years open to federal, state or Chinese examination or other adjustment as of October 2, 2016 were the fiscal years ended April 1, 2012, March 31, 2013, March 30, 2014, March 29, 2015 and April 3, 2016, as well as the fiscal year ended April 3, 2011 for California.

Earnings Per Share:

The Company calculates basic earnings per share by using a weighted average of the number of shares outstanding during the reporting periods. Diluted shares outstanding are calculated in accordance with the treasury stock method, which assumes that the proceeds from the exercise of all exercisable options would be used to repurchase shares at market value. The net number of shares issued after the exercise proceeds are exhausted represents the potentially dilutive effect of the options, which are added to basic shares to arrive at diluted shares.

Recently-Issued Accounting Standards

:

In 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09,

Revenue from Contracts with Customers (Topic 606)

, which will replace most existing GAAP guidance on revenue recognition, and which will require the use of more estimates and judgments, as well as additional disclosures. When issued, the ASU was to become effective in the fiscal year beginning after December 15, 2016, but on August 12, 2015 the FASB issued ASU No. 2015-14,

Revenue from Contrac

ts with Customers (Topic 606):

Deferral of the Effective Date

, which provides for a one-year deferral of the effective date to apply the guidance of ASU No. 2014-09. Early adoption was originally not permitted in ASU No. 2014-09, but ASU No. 2015-14 now permits early adoption in the first interim period of the fiscal year beginning after December 15, 2016. The Company is currently evaluating the effect that its adoption of ASU Nos. 2014-09 and 2015-14 on April 3, 2017 will have on its financial position, results of operations and related disclosures.

In July 2015, the FASB issued ASU No. 2015-11,

Inventory (Topic 330): Simplifying the Measurement of Inventory

, which will clarify that after an entity determines the cost of its inventory, the subsequent measurement and presentation of such inventory should be at the lower of cost or net realizable value. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2016. The ASU should be applied prospectively, and early adoption is permitted. The Company intends to adopt ASU No. 2015-11 on April 3, 2017, and is currently evaluating the effect that the adoption of the ASU will have on its financial position, results of operations and related disclosures.

In November 2015, the FASB issued ASU No. 2015-17,

Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes

, the intent of which was to simplify the presentation of deferred taxes by requiring all deferred tax assets and liabilities to be classified as noncurrent on an entity’s balance sheet. ASU No. 2015-17 was to have become effective for the first interim period of the fiscal year beginning after December 15, 2016, and early adoption is permitted. Upon adoption, the ASU may be applied prospectively or retrospectively. The Company elected to early-adopt ASU No. 2015-17 effective as of April 4, 2016 using a prospective application. As such, the condensed consolidated balance sheet presented as of April 3, 2016 in the accompanying consolidated financial statements has not been adjusted. The adoption of the ASU on April 4, 2016 resulted in the reclassification in the accompanying unaudited condensed consolidated balance sheet as of October 2, 2016 of $487,000 in deferred tax assets from current to non-current. The adoption of the ASU did not have an impact on the Company’s results of operations.

On February 25, 2016, the FASB issued ASU No. 2016-02,

Leases (Topic 842)

, which will increase transparency and comparability by requiring an entity to recognize lease assets and lease liabilities on its balance sheet and by requiring the disclosure of key information about leasing arrangements. Under the provisions of ASU No. 2016-02, the Company will be required to capitalize most of its current operating lease obligations as right-of-use assets with corresponding liabilities based upon the present value of the future cash outflows associated with such operating lease obligations. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2018. The ASU is to be applied using a modified retrospective approach, and early adoption is permitted. The Company has not yet decided whether to adopt the ASU early and is currently evaluating the effect that the adoption of the ASU will have on its financial position, results of operations and related disclosures.

On March 30, 2016, the FASB issued ASU No. 2016-09,

Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

, the intent of which was to simplify the accounting for share-based compensation transactions while maintaining or improving the usefulness of the related disclosures. ASU No. 2016-09 was to have become

effective for the first interim period of the fiscal year beginning after December 15, 2016, and early adoption is permitted. Upon adoption, the ASU may be applied prospectively or retrospectively. The Company elected to early-adopt ASU No. 2016-09 effective as of April 4, 2016 using a prospective application. Accordingly, the prior periods presented in the accompanying unaudited consolidated financial statements have not been adjusted.

The provisions of ASU No. 2016-09 that are applicable to the Company and the effect of the adoption of the ASU on the Company’s unaudited consolidated financial statements

include the following:

*	Under previous GAAP, upon the exercise of a stock option or the vesting of non-vested stock, the Company was required to recognize the tax effect of the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes in additional paid-in capital. The provisions of the ASU require the recognition of the excess tax benefit or deficiency as an income tax benefit or expense, respectively, in the Company’s statement of income. The Company’s election to early-adopt the ASU effective as of April 4, 2016 resulted in the recognition of net excess tax benefits amounting to $43,000 and $242,000 as a reduction to the Company’s reported income tax expense for the three and six-month periods ended October 2, 2016, respectively. The effect of the adoption of the ASU on the Company’s future results of operations will depend on such factors as the timing and extent of the exercise of stock options and the vesting of non-vested stock, as well as the closing price per share of the Company’s common stock on the dates of such events. The inherent uncertainty surrounding the details of these factors dictates that the future effects of the adoption of ASU No. 2016-09 on the Company’s results of operations cannot be reasonably estimated.
*	Under previous GAAP, excess tax benefits were classified as a financing activity in the Company’s statement of cash flows. The provisions of ASU No. 2016-09 require that excess tax benefits be classified as an operating activity in the Company’s statement of cash flows. The Company’s election to early-adopt ASU No. 2016-09 effective as of April 4, 2016 resulted in the classification of excess tax benefits amounting to $244,000 as cash provided by operating activities during the six-month period ended October 2, 2016.
*	The provisions of ASU No. 2016-09 clarify that cash paid by the Company to taxing authorities on behalf of an employee to reflect the value of shares withheld from the exercise of options or the vesting of non-vested stock to satisfy the income tax withholding obligations arising from such exercise or vesting should be classified as a financing activity in the Company’s statement of cash flows. As this treatment is consistent with the Company’s long-standing practice, the Company’s adoption of ASU No. 2016-09 effective as of April 4, 2016 did not result in a difference in the reported amount of the Company’s cash used in financing activities during the six months ended October 2, 2016 as a result of this provision in the ASU.

On June 16, 2016, the FASB issued ASU No. 2016-13,

Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

, the objective of which is to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by an entity. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable that a loss has been incurred. Because this methodology restricted the recognition of credit losses that are expected, but did not yet meet the “probable” threshhold, ASU No. 2016-13 was issued to require the consideration of a broader range of reasonable and supportable information when determining estimates of credit losses. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2019. The ASU is to be applied using a modified retrospective approach, and the ASU may be early-adopted as of the first interim period of the fiscal year beginning after December 15, 2018. Although the Company has not yet decided whether to adopt ASU No. 2016-13 early or determined the full impact of the adoption of the ASU, because the Company assigns the majority of its trade accounts receivable under factoring agreements with CIT, the Company does not believe that its adoption of ASU No. 2016-13 will have a significant impact on the Company’s financial position, results of operations and related disclosures.

The Company has determined that all other ASUs which had become effective as of October 2, 2016, or which will become effective at some future date, are not expected to have a material impact on the Company’s unaudited consolidated financial statements.

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Note 2 - Financing Arrangements

6 Months Ended

Oct. 02, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

2

– Financing Arrangements

Factoring Agreement

s:     

The Company assigns the majority of its trade accounts receivable to CIT under factoring agreements whose expiration dates are coterminous with that of the financing agreement described below. Under the terms of the factoring agreements, CIT remits customer payments to the Company as such payments are received by CIT.

CIT bears credit losses with respect to assigned accounts receivable from approved customers that are within approved credit limits, while the Company bears the responsibility for adjustments from customers related to returns, allowances, claims and discounts. CIT may at any time terminate or limit its approval of shipments to a particular customer. If such a termination were to occur, the Company must either assume the credit risk for shipments after the date of such termination or limitation or cease shipments to such customer. Factoring fees, which are included in marketing and administrative expenses in the accompanying statements of income, amounted to $112,000 and $156,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $206,000 and $272,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively. There were no advances from the factor at October 2, 2016 and April 3, 2016.

Credit Facility:     

The Company’s credit facility at October 2, 2016 consisted of a revolving line of credit under a financing agreement with CIT of up to $26.0 million, which includes a $1.5 million sub-limit for letters of credit, with an interest rate of prime minus 0.50% or LIBOR plus 2.00%. The financing agreement is scheduled to mature on July 11, 2019 and is secured by a first lien on all assets of the Company. As of October 2, 2016, the Company had elected to pay interest on balances owed under the revolving line of credit, if any, under the LIBOR option. The financing agreement also provides for the payment by CIT to the Company of interest at the rate of prime as of the beginning of the calendar month minus 2.00%, which was 1.25% at October 2, 2016, on daily cash balances held at CIT.

The financing agreement as in effect prior to December 28, 2015 provided for a monthly fee, which was assessed based on 0.125% of the average unused portion of the $26.0 million revolving line of credit, less any outstanding letters of credit (the “Commitment Fee”). The Commitment Fee amounted to $8,000 and $16,000 for the three and six-month periods ended September 27, 2015, respectively. The financing agreement was amended on December 28, 2015 to eliminate the Commitment Fee. At October 2, 2016 and April 3, 2016, there was no balance owed on the revolving line of credit and there was no letter of credit outstanding. As of October 2, 2016 and April 3, 2016, $21.9 million and $25.6 million, respectively, was available under the revolving line of credit based on the Company’s eligible accounts receivable and inventory balances.

The financing agreement for the revolving line of credit 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. The Company was in compliance with these covenants as of October 2, 2016.

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Note 3 - Goodwill, Customer Relationships and Other Intangible Assets

6 Months Ended

Oct. 02, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

3

– Goodwill

, Customer Relationships

and Other Intangible Assets

Goodwill:

Goodwill represents the excess of the purchase price over the fair value of net identifiable assets acquired in business combinations. The Company considers its wholly-owned subsidiaries, Crown Crafts Infant Products, Inc. (“CCIP”) and Hamco, Inc. (“Hamco”), to each be a reporting unit of the Company for the purpose of presenting and testing for the impairment of goodwill. The goodwill of the reporting units of the Company as of October 2, 2016 and April 3, 2016 amounted to $24.0 million, and is reflected in the accompanying condensed consolidated balance sheets net of accumulated impairment charges of $22.9 million, for a net reported balance of $1.1 million.

The Company

tests the fair value of the goodwill, if any, within its reporting units annually as of the first day of the Company’s fiscal year. An additional interim impairment test is performed during the year whenever an event or change in circumstances occurs that suggests that the fair value of the goodwill 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. The annual or interim impairment test 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. If such qualitative factors so indicate, then the impairment test is continued

in a two-step approach. The first step is the estimation of the fair value of each reporting unit to ensure that its fair value exceeds its carrying value. If step one indicates that a potential impairment exists, then the second step is performed to measure the amount of an impairment charge, if any. In the second step, these estimated fair values are used as the hypothetical purchase price for the reporting units, and an allocation of such hypothetical purchase price is made to the identifiable tangible and intangible assets and assigned liabilities of the reporting units. The impairment charge is calculated as the amount, if any, by which the carrying value of the goodwill exceeds the implied amount of goodwill that results from this hypothetical purchase price allocation.

The annual impairment test of the fair value of the goodwill of the reporting units of the Company was performed as of April 4, 2016, and the Company concluded that the fair value of the goodwill of the Company’s reporting units substantially exceeded their carrying values as of that date.

Other Intangible Assets:

Other intangible assets at October 2, 2016 and April 3, 2016

consisted primarily of the fair value of identifiable assets acquired in business combinations

other than tangible assets and goodwill. The gross amount and accumulated amortization of the Company’s other intangible assets as of October 2, 2016 and April 3, 2016

, the amortization expense for the three and six-month periods ended October 2, 2016 and September 27, 2015 and the classification of such amortization expense within the accompanying unaudited condensed consolidated statements of income are as follows (in thousands):

									Amortization Expense
	Gross Amount				Accumulated Amortization				Three-Month Periods Ended				Six-Month Periods Ended
	October 2,		April 3,		October 2,		April 3,		October 2,		September 27,		October 2,		September 27,
	2016		2016		2016		2016		2016		2015		2016		2015
Tradename and trademarks	$	1,987	$	1,987	$	1,000	$	933	$	33	$	33	$	67	$	66
Non-compete covenants		98		98		63		60		1		1		3		3
Patents		1,601		1,601		512		458		27		27		54		54
Customer relationships		5,534		5,534		4,140		3,887		127		128		253		248
Total other intangible assets	$	9,220	$	9,220	$	5,715	$	5,338	$	188	$	189	$	377	$	371
Classification within the accompanying unaudited condensed consolidated statements of income:
Cost of products sold									$	1	$	1	$	3	$	3
Marketing and administrative expenses										187		188		374		368
Total amortization expense									$	188	$	189	$	377	$	371

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Note 4 - Inventories

6 Months Ended

Oct. 02, 2016

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note

4

– Inventories

Major classes of inventory were as follows (in thousands):

	October 2, 2016		April 3, 2016
Raw Materials	$	35	$	35
Finished Goods		15,497		14,750
Total inventory	$	15,532	$	14,785

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Note 5 - Stock-based Compensation

6 Months Ended

Oct. 02, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

N

ote

5

– Stock-based Compensation

The Company has two incentive stock plans, the 2006 Omnibus Incentive Plan (the “2006 Plan”) and the 2014 Omnibus Equity Compensation Plan (the “2014 Plan”). As a result of the approval of the 2014 Plan by the Company’s stockholders at the Company’s 2014 annual meeting, grants may no longer be issued under the 2006 Plan.

The Company believes that awards of long-term, equity-based incentive compensation will attract and retain directors, officers and employees of the Company and will encourage these individuals to contribute to the successful performance of the Company, which will lead to the achievement of the Company’s overall goal of increasing stockholder value. Awards granted under the 2014 Plan may be in the form of incentive stock options, non-qualified stock options, shares of restricted or unrestricted stock, stock units, stock appreciation rights or other stock-based awards. Awards may be granted subject to the achievement of performance goals or other conditions, and certain awards may be payable in stock or cash, or a combination of the two. The 2014 Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”), which selects eligible employees, non-employee directors and other individuals to participate in the 2014 Plan and determines the type, amount, duration and other terms of individual awards. Grants under the 2014 Plan are settled primarily through the issuance of new shares of the Company’s common stock, 814,000 shares of which were available for future issuance under the 2014 Plan as of October 2, 2016.

Stock-based compensation expense is calculated according to FASB ASC Topic 718,

Compensation – Stock Compensation

, which requires stock-based compensation expense to be accounted for using a fair-value-based measurement. The Company recorded stock-based compensation expense of

$146,000 and $223,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and recorded $307,000 and $479,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

The Company classifies the compensation expense associated with stock-based awards granted to individuals in the same classifications as the cash compensation paid to those same individuals. No stock-based compensation costs have been capitalized as part of the cost of an asset as of October 2, 2016.

Stock Options:

The following table represents stock option activity for

the six-month periods ended October 2, 2016 and September 27, 2015

:

	Six-Month Period Ended					Six-Month Period Ended
	October 2, 2016					September 27, 2015
	Weighted-					Weighted-
	Average		Number of			Average		Number of
	Exercise		Options			Exercise		Options
	Price		Outstanding			Price		Outstanding
Outstanding at Beginning of Period	$	7.64		305,000		$	6.83		330,000
Granted		9.60		120,000			8.38		110,000
Exercised		7.68		(77,500	)		6.57		(22,500	)
Outstanding at End of Period		8.30		347,500			7.25		417,500
Exercisable at End of Period		7.38		172,500			6.46		225,000

As of October 2, 2016, the intrinsic value of the outstanding and exercisable stock options was $659,000 and $487,000, respectively. The intrinsic value of the stock options exercised during the three and six-month periods ended October 2, 2016 was $124,000 and $169,000, respectively. The Company did not receive any cash from the exercise of stock options during the three and six-month periods ended October 2, 2016 and September 27, 2015. Upon the exercise of stock options, participants may choose to surrender to the Company those shares from the option exercise necessary to satisfy the exercise amount and their income tax withholding obligations that arise from the option exercise. The effect on the cash flow of the Company from these “cashless” option exercises is that the Company remits cash on behalf of the participant to satisfy his or her income tax withholding obligations. The Company used cash to remit the required income tax withholding amounts from “cashless” option exercises of $41,000 and $61,000 during the three and six-month periods ended October 2, 2016, respectively, and $12,000 during each of the three and six-month periods ended September 27, 2015.

To determine the estimated fair value of stock options granted, the Company uses the Black-Scholes-Merton valuation formula, which is a closed-form model that uses an equation to estimate fair value. The following table sets forth the assumptions used to determine the fair value of the non-qualified stock options which were awarded to certain employees during the six-month periods ended October 2, 2016 and September 27, 2015, which options vest over a two-year period, assuming continued service.

	Six-Month Periods Ended
	October 2, 2016			September 27, 2015
Options issued		120,000			110,000
Grant date		June 8, 2016			June 12, 2015
Dividend yield		3.33	%		3.82	%
Expected volatility		20.00	%		20.00	%
Risk free interest rate		0.93	%		1.12	%
Contractual term (years)		10.00			10.00
Expected term (years)		3.00			3.00
Forfeiture rate		5.00	%		5.00	%
Exercise price (grant-date closing price) per option	$	9.60		$	8.38
Fair value per option	$	0.94		$	0.77

For the three-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock options as follows (in thousands):

	Three-Month Period Ended October 2, 2016						Three-Month Period Ended September 27, 2015
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2015	$	-	$	-	$	-	$	12	$	11	$	23
2016		5		4		9		5		4		9
2017		8		6		14		-		-		-
Total stock option compensation	$	13	$	10	$	23	$	17	$	15	$	32

For the six-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock options as follows (in thousands):

	Six-Month Period Ended October 2, 2016						Six-Month Period Ended September 27, 2015
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2014	$	-	$	-	$	-	$	7	$	7	$	14
2015		14		12		26		28		24		52
2016		12		10		22		6		5		11
2017		10		7		17		-		-		-
Total stock option compensation	$	36	$	29	$	65	$	41	$	36	$	77

As of October 2, 2016, total unrecognized stock option compensation expense amounted to $126,000, which will be recognized as the underlying stock options vest over a weighted-average period of 12.5 months. The amount of future stock option compensation expense could be affected by any future stock option grants and by the separation from the Company of any individual who has received stock options that are unvested as of such individual’s separation date.

Non-vested Stock

Granted to Non-Employee Directors:

The Board granted the following shares of non-vested stock to the Company’s non-employee directors:

Number of Shares	Fair Value per Share		Three-Month Period Ended
28,000	$	10.08	October 2, 2016
28,000	$	8.20	September 27, 2015
28,000	$	7.97	September 28, 2014
28,000	$	6.67	September 29, 2013

These shares vest over a two-year period, assuming continued service. The fair value of the non-vested stock granted to the Company’s non-employee directors was based on the closing price of the Company’s common stock on the date of each grant. In August 2016, 28,000 shares vested that had been granted to the Company’s non-employee directors, with such shares having an aggregate value of $281,000.

Non-vested Stock

Granted to Employees:

During the three-month period ended June 27, 2010, the Board awarded 345,000 shares of non-vested stock to certain employees in a series of grants, each of which was to vest only if (i) the closing price of the Company’s common stock was at or above certain target levels for any ten trading days out of any period of 30 consecutive trading days and (ii) the respective employees remained employed through July 29, 2015. The Company, with the assistance of an independent third party, determined that the aggregate grant date fair value of the awards amounted to $1.2 million.

With the closing price conditions having been met for these awards, the Board at various times approved amendments to provide for the immediate vesting of all or a portion of several of the grants. The vesting of these awards was accelerated in order to maximize the deductibility of the associated compensation expense by the Company for income tax purposes.

During the three-month period ended September 27, 2015, the remaining 240,000 of these shares vested, with such shares having an aggregate value of $1.9 million. Each of the individuals holding shares that vested surrendered to the Company the number of shares necessary to satisfy the income tax withholding obligations that arose from the vesting of the shares, and the Company remitted $948,000 to the appropriate taxing authorities on behalf of such individuals.

Performance Bonus Plan:

  The Company maintains a performance bonus plan for certain executive officers that provides for awards of shares of common stock in the event that the aggregate average market value of the common stock during the relevant fiscal year, plus the amount of cash dividends paid in respect of the common stock during such period, increases.

These individuals

may instead be awarded cash, if and to the extent that insufficient shares of common stock are available for issuance from all shareholder-approved, equity-based plans or programs of the Company in effect. The performance bonus plan also imposes individual limits on awards and

provides that shares of common stock that may be awarded will vest over a two-year period. Compensation expense associated with performance bonus plan awards are recognized over a three-year period – the fiscal year in which the award is earned, plus the two-year vesting period.

In connection with the performance bonus plan, the Company, in respect of fiscal year 2016, awarded 41,205 shares of common stock with a fair value of $7.865 per share during the three-month period ended July 3, 2016. In connection with these awards, the Company recognized compensation expense of $108,000 during fiscal year 2016, and will recognize, on a straight-line basis, $108,000 in compensation expense during each of fiscal years 2017 and 2018.

In connection with the performance bonus plan, the Company, in respect of fiscal year 2015, awarded 58,532 shares of common stock with a fair value of $7.18 per share during the three-month period ended June 28, 2015. In connection with these awards, the Company recognized compensation expense of $140,000 during each of fiscal years 2015 and 2016, and will recognize, on a straight-line basis, $140,000 in compensation expense during fiscal year 2017.

In connection with the performance bonus plan, the Company, in respect of fiscal year 2014, awarded 188,232 shares of common stock with a fair value of $5.65 per share during the three-month period ended June 29, 2014. In connection with these awards, the Company recognized compensation expense of $354,000 during each of fiscal years 2014, 2015 and 2016. During the three-month period ended June 28, 2015, 94,116 of these shares vested, with such shares having an aggregate value of $735,000. Each of the individuals holding shares that vested surrendered to the Company the number of shares necessary to satisfy the income tax withholding obligations that arose from the vesting of the shares, and the Company remitted $360,000 to the appropriate taxing authorities on behalf of such individuals.

For the three-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

	Three-Month Period Ended October 2, 2016						Three-Month Period Ended September 27, 2015
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2011	$	-	$	-	$	-	$	12	$	-	$	12
2014		-		-		-		-		8		8
2015		-		9		9		89		28		117
2016		35		28		63		35		19		54
2017		27		24		51		-		-		-
Total stock grant compensation	$	62	$	61	$	123	$	136	$	55	$	191

For the six-month periods ended October 2, 2016 and September 27, 2015, the Company recognized compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

	Six-Month Period Ended October 2, 2016						Six-Month Period Ended September 27, 2015
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2011	$	-	$	-	$	-	$	48	$	-	$	48
2014		-		-		-		-		31		31
2015		-		37		37		178		56		234
2016		70		57		127		70		19		89
2017		54		24		78		-		-		-
Total stock grant compensation	$	124	$	118	$	242	$	296	$	106	$	402

As of October 2, 2016, total unrecognized compensation expense related to the Company’s non-vested stock grants amounted to $586,000, which will be recognized over the respective vesting terms associated with each block of non-vested stock indicated above, such grants having an aggregate weighted-average vesting term of 11.2 months. The amount of future compensation expense related to the Company’s non-vested stock grants could be affected by any future non-vested stock grants and by the separation from the Company of any individual who has non-vested stock grants as of such individual’s separation date.

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Note 6 - Subsequent Events

6 Months Ended

Oct. 02, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

N

ote

6

– Subsequent Event

s

On November 15, 2016, the Board declared a special cash dividend on the Company’s common stock of $0.40 per share, which is in addition to the declaration of the regular quarterly cash dividend of $0.08 per share. Both dividends will be paid on January 6, 2017 to stockholders of record at the close of business on December 16, 2016. The Company has evaluated events which have occurred between October 2, 2016 and the date that the accompanying unaudited consolidated financial statements were issued, and has determined that there are no other material subsequent events that require disclosure.

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Significant Accounting Policies (Policies)

6 Months Ended

Oct. 02, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation:

The accompanying unaudited consolidated financial statements include the accounts of Crown Crafts, Inc. (the “Company”) and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information as promulgated by the Financial Accounting Standards Board (“FASB”). Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. References herein to GAAP are to topics within the FASB Accounting Standards Codification (the “FASB ASC”), which has been established by the FASB as the authoritative source for GAAP to be applied by nongovernmental entities.

In the opinion of management, the interim unaudited consolidated financial statements contained herein include all adjustments necessary to present fairly the financial position of the Company as of October 2, 2016 and the results of its operations and cash flows for the periods presented. Such adjustments include normal, recurring accruals, as well as the elimination of all significant intercompany balances and transactions. Operating results for the three and six-month periods ended October 2, 2016 are not necessarily indicative of the results that may be expected by the Company for its fiscal year ending April 2, 2017. For further information, refer to the Company’s consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 3, 2016.

Reclassification, Policy [Policy Text Block]

Reclassifications:

The Company has reclassified certain prior year information to conform to the amounts presented in the current year. None of the changes impact the Company’s previously reported financial position or results of operations.

Fiscal Period, Policy [Policy Text Block]

Fiscal Year:

The Company’s fiscal year ends on the Sunday that is nearest to or on March 31. References herein to “fiscal year 2017” or “2017” represent the 52-week period ending April 2, 2017 and references herein to “fiscal year 2016” or “2016” represent the 53-week period ended April 3, 2016.

Use of Estimates, Policy [Policy Text Block]

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 the disclosure of contingent assets and liabilities as of the date of the accompanying condensed consolidated balance sheets and the reported amounts of revenues and expenses during the periods presented on the accompanying unaudited consolidated statements of income and cash flows. Significant estimates are made with respect to the allowances related to accounts receivable for customer deductions for returns, allowances and disputes. The Company also has a certain amount of discontinued finished products which necessitates the establishment of inventory reserves and allocates indirect costs to inventory based on an estimated percentage of the supplier purchase price, each of which is highly subjective. The Company has also established estimated reserves in connection with the uncertainty concerning the amount of income tax recognized. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents:

The Company considers highly-liquid investments, if any, purchased with original maturities of three months or less to be cash equivalents.

The Company’s credit facility consists of a revolving line of credit under a financing agreement with The CIT Group/Commercial Services, Inc. (“CIT”), a subsidiary of CIT Group, Inc. The Company classifies a negative balance outstanding under this revolving line of credit as cash, as these amounts are legally owed to the Company and are immediately available to be drawn upon by the Company. There are no compensating balance requirements or other restrictions on the transfer of amounts associated with the Company’s depository accounts.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments

:

For short-term instruments such as cash and cash equivalents, accounts receivable and accounts payable, the Company uses carrying value as a reasonable estimate of the fair value.

Revenue Recognition, Services, Royalty Fees [Policy Text Block]

Royalty Payments:

The Company has entered into agreements that provide for royalty payments based on a percentage of sales with certain minimum guaranteed amounts. These royalties are accrued based upon historical sales rates adjusted for current sales trends by customers. Royalty expense is included in cost of products sold in the accompanying unaudited condensed consolidated statements of income and amounted to $1.6 million and $2.2 million for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $3.3 million and $4.0 million for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

Segment Reporting, Policy [Policy Text Block]

Segment and Related Information:

The Company operates primarily in one principal segment, infant, toddler and juvenile products. These products consist of infant and toddler bedding, bibs, soft bath products, disposable products and accessories. Net sales of bedding, blankets and accessories and net sales of bibs, bath and disposable products for the three and six months ended October 2, 2016 and September 27, 2015 are as follows (in thousands):

	Three-Month Periods Ended				Six-Month Periods Ended
	October 2, 2016		September 27, 2015		October 2, 2016		September 27, 2015
Bedding, blankets and accessories	$	10,090	$	14,365	$	20,402	$	26,635
Bibs, bath and disposable products		5,719		6,351		11,006		11,939
Total net sales	$	15,809	$	20,716	$	31,408	$	38,574

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition:

Sales are recorded when products are shipped to customers and are reported net of allowances for estimated returns and allowances in the accompanying unaudited condensed consolidated statements of income. Allowances for returns are estimated based on historical rates. Allowances for returns, cooperative advertising allowances, warehouse allowances, placement fees and volume rebates are recorded commensurate with sales activity or using the straight-line method, as appropriate, and the cost of such allowances is netted against sales in reporting the results of operations. Shipping and handling costs, net of amounts reimbursed by customers, are not material and are included in net sales.

Receivables, Policy [Policy Text Block]

Allowances Against Accounts Receivable

: The Company’s allowances against accounts receivable are primarily contractually agreed-upon deductions for items such as cooperative advertising and warehouse allowances, placement fees and volume rebates. These deductions are recorded throughout the year commensurate with sales activity or using the straight-line method, as appropriate. Funding of the majority of the Company’s allowances occurs on a per-invoice basis. The allowances for customer deductions, which are netted against accounts receivable in the condensed consolidated balance sheets, consist of agreed upon advertising support, placement fees, markdowns and warehouse and other allowances. All such allowances are recorded as direct offsets to sales, and such costs are accrued commensurate with sales activities or as a straight-line amortization charge of an agreed-upon fixed amount, as appropriate to the circumstances for each such arrangement. When a customer requests deductions, the allowances are reduced to reflect such payments or credits issued against the customer’s account balance. The Company analyzes the components of the allowances for customer deductions monthly and adjusts the allowances to the appropriate levels. The timing of funding requests for advertising support can cause the net balance in the allowance account to fluctuate from period to period. The timing of such funding requests should have no impact on the accompanying unaudited condensed consolidated statements of income since such costs are accrued commensurate with sales activity or using the straight-line method, as appropriate.

To reduce the exposure to credit losses and to enhance the predictability of its cash flows, the Company assigns the majority of its trade accounts receivable under factoring agreements with CIT. In the event a factored receivable becomes uncollectible due to creditworthiness, CIT bears the risk of loss. The Company’s management must make estimates of the uncollectibility of its non-factored accounts receivable to evaluate the adequacy of the Company’s allowance for doubtful accounts, which is accomplished by specifically analyzing accounts receivable, historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in its customers’ payment terms.

The Company’s accounts receivable as of October 2, 2016 was $15.9 million, net of allowances of $786,000. Of this amount, $15.3 million was due from CIT under the factoring agreements. An additional $9.9 million was due from CIT as a negative balance outstanding under the revolving line of credit, which is included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheet. The combined amount of $25.2 million represents the maximum loss that the Company could incur if CIT failed completely to perform its obligations under the factoring agreements and the revolving line of credit.

Depreciation, Depletion, and Amortization [Policy Text Block]

Depreciation and Amortization:

The accompanying condensed consolidated balance sheets reflect property, plant and equipment, and intangible assets other than goodwill at cost less accumulated depreciation or amortization. The Company capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three to eight years for property, plant and equipment, and five to twenty years for intangible assets other than goodwill. The Company amortizes improvements to its leased facilities over the term of the lease or the estimated useful life of the asset, whichever is shorter.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Valuation of Long-Lived Assets

and

Identifiable Intangible Assets:

In addition to the depreciation and amortization procedures set forth above, the Company reviews for impairment property, plant and equipment, and intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable. In the event of impairment, the asset is written down to its fair market value.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Patent Costs:

The Company incurs certain legal and associated costs in connection with applications for patents. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or an alternative future use for the underlying product is available to the Company. The Company also capitalizes legal and other costs incurred in the protection or defense of the Company’s patents to the extent that it is believed that the future economic benefit of the patent will be maintained or increased and a successful outcome of the litigation is probable. Capitalized patent protection or defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of the future economic benefit of its patents involves considerable management judgment, and a different conclusion could result in a material impairment charge up to the carrying value of these assets.

Inventory, Policy [Policy Text Block]

Inventory Valuation:

The preparation of the Company's financial statements requires careful determination of the appropriate value of the Company's inventory balances. Such amounts are presented as a current asset in the accompanying condensed consolidated balance sheets and are a direct determinant of cost of products sold in the unaudited consolidated statements of income and, therefore, have a significant impact on the amount of net income in the accounting periods reported. The basis of accounting for inventories is cost, which includes the direct supplier acquisition cost, duties, taxes and freight, and the indirect costs incurred to design, develop, source and store the products until they are sold. Once cost has been determined, the Company’s inventory is then stated at the lower of cost or market, with cost determined using the first-in, first-out ("FIFO") method, which assumes that inventory quantities are sold in the order in which they are acquired.

The indirect costs allocated to inventory are done so as a percentage of projected annual supplier purchases and can impact the Company’s results of operations as purchase volume fluctuates from quarter to quarter and year to year. The difference between indirect costs incurred and the indirect costs allocated to inventory creates a burden variance, which is generally favorable when actual inventory purchases exceed planned inventory purchases, and is generally unfavorable when actual inventory purchases are lower than planned inventory purchases. While the burden variance can be significant during interim periods, it is generally not material by the end of each fiscal year. The determination of the indirect charges and their allocation to the Company's finished products inventories is complex and requires significant management judgment and estimates. If management made different judgments or utilized different estimates, then differences would result in the valuation of the Company's inventories, the amount and timing of the Company's cost of products sold and the resulting net income for any accounting period.

On a periodic basis, management reviews the Company’s 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 normal operating cycle of the Company's operations. To the extent that any of these conditions is believed to exist or the market value of the inventory expected to be realized in the ordinary course of business is otherwise no longer as great as its carrying value, an allowance against the inventory value is established. 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 unaudited condensed consolidated statements of income. Only when inventory for which an allowance has been established is later sold or is otherwise disposed of is the allowance reduced accordingly. Significant management judgment is required in determining the amount and adequacy of this allowance. 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.

Advertising Costs, Policy [Policy Text Block]

Advertising Cost

s

:

The Company’s advertising costs are primarily associated with cooperative advertising arrangements with certain of the Company’s customers and are recognized using the straight-line method based upon aggregate annual estimated amounts for those customers, with periodic adjustments to the actual amounts of authorized agreements. Advertising expense is included in marketing and administrative expenses in the accompanying unaudited consolidated statements of income and amounted to $243,000 and $264,000 for the three-month periods ended October 2, 2016 and September 27, 2015, respectively, and $498,000 and $569,000 for the six-month periods ended October 2, 2016 and September 27, 2015, respectively.

Income Tax, Policy [Policy Text Block]

Provision for Income Taxes:

The Company’s provision for income taxes includes all currently payable federal, state, local and foreign taxes and is based upon the Company’s estimated annual effective tax rate, which is based on the Company’s forecasted annual pre-tax income, as adjusted for certain expenses that will never be deductible on the Company’s tax returns and certain charges expected to be deducted on the Company’s tax returns that will never be deducted on the accompanying unaudited condensed consolidated statements of income, multiplied by the statutory tax rates for the various jurisdictions in which the Company operates and reduced by certain anticipated tax credits. The Company provides for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company’s policy is to recognize the effect that a change in enacted tax rates would have on net deferred income tax assets and liabilities in the period that the tax rates are changed.

Management evaluates items of income, deductions and credits reported on the Company’s various federal and state income tax returns filed and recognizes the effect of positions taken on those income tax returns only if those positions are more likely than not to be sustained. The Company applies the provisions of FASB ASC Sub-topic 740-10-25, which requires a minimum recognition threshold that a tax benefit must meet before being recognized in the financial statements. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company’s policy is to accrue interest expense and penalties as appropriate on any estimated unrecognized tax benefits as a charge to interest expense. Interest expense or penalties are not accrued with respect to estimated unrecognized tax benefits that are associated with claims for income tax refunds as long as the overpayments are receivable.

The Company files income tax returns in the many jurisdictions within which it operates, including the U.S., several U.S. states and the People’s Republic of China. The statute of limitations for the Company’s filed income tax returns varies by jurisdiction; the tax years open to federal, state or Chinese examination or other adjustment as of October 2, 2016 were the fiscal years ended April 1, 2012, March 31, 2013, March 30, 2014, March 29, 2015 and April 3, 2016, as well as the fiscal year ended April 3, 2011 for California.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share:

The Company calculates basic earnings per share by using a weighted average of the number of shares outstanding during the reporting periods. Diluted shares outstanding are calculated in accordance with the treasury stock method, which assumes that the proceeds from the exercise of all exercisable options would be used to repurchase shares at market value. The net number of shares issued after the exercise proceeds are exhausted represents the potentially dilutive effect of the options, which are added to basic shares to arrive at diluted shares.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently-Issued Accounting Standards

:

In 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09,

Revenue from Contracts with Customers (Topic 606)

, which will replace most existing GAAP guidance on revenue recognition, and which will require the use of more estimates and judgments, as well as additional disclosures. When issued, the ASU was to become effective in the fiscal year beginning after December 15, 2016, but on August 12, 2015 the FASB issued ASU No. 2015-14,

Revenue from Contrac

ts with Customers (Topic 606):

Deferral of the Effective Date

, which provides for a one-year deferral of the effective date to apply the guidance of ASU No. 2014-09. Early adoption was originally not permitted in ASU No. 2014-09, but ASU No. 2015-14 now permits early adoption in the first interim period of the fiscal year beginning after December 15, 2016. The Company is currently evaluating the effect that its adoption of ASU Nos. 2014-09 and 2015-14 on April 3, 2017 will have on its financial position, results of operations and related disclosures.

In July 2015, the FASB issued ASU No. 2015-11,

Inventory (Topic 330): Simplifying the Measurement of Inventory

, which will clarify that after an entity determines the cost of its inventory, the subsequent measurement and presentation of such inventory should be at the lower of cost or net realizable value. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2016. The ASU should be applied prospectively, and early adoption is permitted. The Company intends to adopt ASU No. 2015-11 on April 3, 2017, and is currently evaluating the effect that the adoption of the ASU will have on its financial position, results of operations and related disclosures.

In November 2015, the FASB issued ASU No. 2015-17,

Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes

, the intent of which was to simplify the presentation of deferred taxes by requiring all deferred tax assets and liabilities to be classified as noncurrent on an entity’s balance sheet. ASU No. 2015-17 was to have become effective for the first interim period of the fiscal year beginning after December 15, 2016, and early adoption is permitted. Upon adoption, the ASU may be applied prospectively or retrospectively. The Company elected to early-adopt ASU No. 2015-17 effective as of April 4, 2016 using a prospective application. As such, the condensed consolidated balance sheet presented as of April 3, 2016 in the accompanying consolidated financial statements has not been adjusted. The adoption of the ASU on April 4, 2016 resulted in the reclassification in the accompanying unaudited condensed consolidated balance sheet as of October 2, 2016 of $487,000 in deferred tax assets from current to non-current. The adoption of the ASU did not have an impact on the Company’s results of operations.

On February 25, 2016, the FASB issued ASU No. 2016-02,

Leases (Topic 842)

, which will increase transparency and comparability by requiring an entity to recognize lease assets and lease liabilities on its balance sheet and by requiring the disclosure of key information about leasing arrangements. Under the provisions of ASU No. 2016-02, the Company will be required to capitalize most of its current operating lease obligations as right-of-use assets with corresponding liabilities based upon the present value of the future cash outflows associated with such operating lease obligations. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2018. The ASU is to be applied using a modified retrospective approach, and early adoption is permitted. The Company has not yet decided whether to adopt the ASU early and is currently evaluating the effect that the adoption of the ASU will have on its financial position, results of operations and related disclosures.

On March 30, 2016, the FASB issued ASU No. 2016-09,

Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

, the intent of which was to simplify the accounting for share-based compensation transactions while maintaining or improving the usefulness of the related disclosures. ASU No. 2016-09 was to have become

effective for the first interim period of the fiscal year beginning after December 15, 2016, and early adoption is permitted. Upon adoption, the ASU may be applied prospectively or retrospectively. The Company elected to early-adopt ASU No. 2016-09 effective as of April 4, 2016 using a prospective application. Accordingly, the prior periods presented in the accompanying unaudited consolidated financial statements have not been adjusted.

The provisions of ASU No. 2016-09 that are applicable to the Company and the effect of the adoption of the ASU on the Company’s unaudited consolidated financial statements

include the following:

*	Under previous GAAP, upon the exercise of a stock option or the vesting of non-vested stock, the Company was required to recognize the tax effect of the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes in additional paid-in capital. The provisions of the ASU require the recognition of the excess tax benefit or deficiency as an income tax benefit or expense, respectively, in the Company’s statement of income. The Company’s election to early-adopt the ASU effective as of April 4, 2016 resulted in the recognition of net excess tax benefits amounting to $43,000 and $242,000 as a reduction to the Company’s reported income tax expense for the three and six-month periods ended October 2, 2016, respectively. The effect of the adoption of the ASU on the Company’s future results of operations will depend on such factors as the timing and extent of the exercise of stock options and the vesting of non-vested stock, as well as the closing price per share of the Company’s common stock on the dates of such events. The inherent uncertainty surrounding the details of these factors dictates that the future effects of the adoption of ASU No. 2016-09 on the Company’s results of operations cannot be reasonably estimated.
*	Under previous GAAP, excess tax benefits were classified as a financing activity in the Company’s statement of cash flows. The provisions of ASU No. 2016-09 require that excess tax benefits be classified as an operating activity in the Company’s statement of cash flows. The Company’s election to early-adopt ASU No. 2016-09 effective as of April 4, 2016 resulted in the classification of excess tax benefits amounting to $244,000 as cash provided by operating activities during the six-month period ended October 2, 2016.
*	The provisions of ASU No. 2016-09 clarify that cash paid by the Company to taxing authorities on behalf of an employee to reflect the value of shares withheld from the exercise of options or the vesting of non-vested stock to satisfy the income tax withholding obligations arising from such exercise or vesting should be classified as a financing activity in the Company’s statement of cash flows. As this treatment is consistent with the Company’s long-standing practice, the Company’s adoption of ASU No. 2016-09 effective as of April 4, 2016 did not result in a difference in the reported amount of the Company’s cash used in financing activities during the six months ended October 2, 2016 as a result of this provision in the ASU.

On June 16, 2016, the FASB issued ASU No. 2016-13,

Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

, the objective of which is to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by an entity. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable that a loss has been incurred. Because this methodology restricted the recognition of credit losses that are expected, but did not yet meet the “probable” threshhold, ASU No. 2016-13 was issued to require the consideration of a broader range of reasonable and supportable information when determining estimates of credit losses. The ASU will become effective for the first interim period of the fiscal year beginning after December 15, 2019. The ASU is to be applied using a modified retrospective approach, and the ASU may be early-adopted as of the first interim period of the fiscal year beginning after December 15, 2018. Although the Company has not yet decided whether to adopt ASU No. 2016-13 early or determined the full impact of the adoption of the ASU, because the Company assigns the majority of its trade accounts receivable under factoring agreements with CIT, the Company does not believe that its adoption of ASU No. 2016-13 will have a significant impact on the Company’s financial position, results of operations and related disclosures.

The Company has determined that all other ASUs which had become effective as of October 2, 2016, or which will become effective at some future date, are not expected to have a material impact on the Company’s unaudited consolidated financial statements.

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Note 1 - Summary of Significant Accounting Policies (Tables)

6 Months Ended

Oct. 02, 2016

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three-Month Periods Ended				Six-Month Periods Ended
	October 2, 2016		September 27, 2015		October 2, 2016		September 27, 2015
Bedding, blankets and accessories	$	10,090	$	14,365	$	20,402	$	26,635
Bibs, bath and disposable products		5,719		6,351		11,006		11,939
Total net sales	$	15,809	$	20,716	$	31,408	$	38,574

XML

Note 3 - Goodwill, Customer Relationships and Other Intangible Assets (Tables)

6 Months Ended

Oct. 02, 2016

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

									Amortization Expense
	Gross Amount				Accumulated Amortization				Three-Month Periods Ended				Six-Month Periods Ended
	October 2,		April 3,		October 2,		April 3,		October 2,		September 27,		October 2,		September 27,
	2016		2016		2016		2016		2016		2015		2016		2015
Tradename and trademarks	$	1,987	$	1,987	$	1,000	$	933	$	33	$	33	$	67	$	66
Non-compete covenants		98		98		63		60		1		1		3		3
Patents		1,601		1,601		512		458		27		27		54		54
Customer relationships		5,534		5,534		4,140		3,887		127		128		253		248
Total other intangible assets	$	9,220	$	9,220	$	5,715	$	5,338	$	188	$	189	$	377	$	371
Classification within the accompanying unaudited condensed consolidated statements of income:
Cost of products sold									$	1	$	1	$	3	$	3
Marketing and administrative expenses										187		188		374		368
Total amortization expense									$	188	$	189	$	377	$	371

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Note 4 - Inventories (Tables)

6 Months Ended

Oct. 02, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	October 2, 2016		April 3, 2016
Raw Materials	$	35	$	35
Finished Goods		15,497		14,750
Total inventory	$	15,532	$	14,785

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Note 5 - Stock-based Compensation (Tables)

6 Months Ended

Oct. 02, 2016

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Six-Month Period Ended					Six-Month Period Ended
	October 2, 2016					September 27, 2015
	Weighted-					Weighted-
	Average		Number of			Average		Number of
	Exercise		Options			Exercise		Options
	Price		Outstanding			Price		Outstanding
Outstanding at Beginning of Period	$	7.64		305,000		$	6.83		330,000
Granted		9.60		120,000			8.38		110,000
Exercised		7.68		(77,500	)		6.57		(22,500	)
Outstanding at End of Period		8.30		347,500			7.25		417,500
Exercisable at End of Period		7.38		172,500			6.46		225,000

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Six-Month Periods Ended
	October 2, 2016			September 27, 2015
Options issued		120,000			110,000
Grant date		June 8, 2016			June 12, 2015
Dividend yield		3.33	%		3.82	%
Expected volatility		20.00	%		20.00	%
Risk free interest rate		0.93	%		1.12	%
Contractual term (years)		10.00			10.00
Expected term (years)		3.00			3.00
Forfeiture rate		5.00	%		5.00	%
Exercise price (grant-date closing price) per option	$	9.60		$	8.38
Fair value per option	$	0.94		$	0.77

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three-Month Period Ended October 2, 2016						Three-Month Period Ended September 27, 2015
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2015	$	-	$	-	$	-	$	12	$	11	$	23
2016		5		4		9		5		4		9
2017		8		6		14		-		-		-
Total stock option compensation	$	13	$	10	$	23	$	17	$	15	$	32

	Six-Month Period Ended October 2, 2016						Six-Month Period Ended September 27, 2015
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2014	$	-	$	-	$	-	$	7	$	7	$	14
2015		14		12		26		28		24		52
2016		12		10		22		6		5		11
2017		10		7		17		-		-		-
Total stock option compensation	$	36	$	29	$	65	$	41	$	36	$	77

Schedule of Share-based Compensation, Nonemployee Director Stock Award Plan, Activity [Table Text Block]

Number of Shares	Fair Value per Share		Three-Month Period Ended
28,000	$	10.08	October 2, 2016
28,000	$	8.20	September 27, 2015
28,000	$	7.97	September 28, 2014
28,000	$	6.67	September 29, 2013

Schedule of Nonvested Share Activity [Table Text Block]

	Three-Month Period Ended October 2, 2016						Three-Month Period Ended September 27, 2015
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2011	$	-	$	-	$	-	$	12	$	-	$	12
2014		-		-		-		-		8		8
2015		-		9		9		89		28		117
2016		35		28		63		35		19		54
2017		27		24		51		-		-		-
Total stock grant compensation	$	62	$	61	$	123	$	136	$	55	$	191

	Six-Month Period Ended October 2, 2016						Six-Month Period Ended September 27, 2015
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2011	$	-	$	-	$	-	$	48	$	-	$	48
2014		-		-		-		-		31		31
2015		-		37		37		178		56		234
2016		70		57		127		70		19		89
2017		54		24		78		-		-		-
Total stock grant compensation	$	124	$	118	$	242	$	296	$	106	$	402

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Note 1 - Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		6 Months Ended
	Oct. 02, 2016 USD ($)	Sep. 27, 2015 USD ($)	Oct. 02, 2016 USD ($)	Sep. 27, 2015 USD ($)	Apr. 03, 2016 USD ($)
Cost of Sales [Member]
Direct Operating Cost, Royalty Expense	$ 1,600,000	$ 2,200,000	$ 3,300,000	$ 4,000,000
Collectibility of Receivables [Member]
Concentration Risk, Credit Risk, Financial Instrument, Maximum Exposure			$ 25,200,000
Maximum [Member]
Property, Plant and Equipment, Useful Life			8 years
Finite-Lived Intangible Asset, Useful Life			20 years
Minimum [Member]
Property, Plant and Equipment, Useful Life			3 years
Finite-Lived Intangible Asset, Useful Life			5 years
Reclassification from Current Deferred Income Tax Assets to Noncurrent Deferred Income Tax Assets [Member]
Current Period Reclassification Adjustment			$ 487,000
New Accounting Pronouncement, Early Adoption, Effect [Member] | Accounting Standards Update 2016-09 [Member]
Income Tax Expense (Benefit)	43,000		242,000
Net Cash Provided by (Used in) Operating Activities			$ 244,000
Number of Operating Segments			1
Accounts Receivable, Net, Current	15,900,000		$ 15,900,000
Allowance for Doubtful Accounts Receivable, Current	786,000		786,000
Due From Factor	15,278,000		15,278,000		$ 20,125,000
Line of Credit Facility, Negative Balance Outstanding	9,900,000		9,900,000
Advertising Expense	243,000	264,000	498,000	569,000
Income Tax Expense (Benefit)	$ 559,000	$ 1,021,000	946,000	1,626,000
Net Cash Provided by (Used in) Operating Activities			$ 6,909,000	$ 7,251,000

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Note 1 - Summary of Significant Accounting Policies - Segment and Related Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015
Bedding, Blankets, And Accessories [Member]
Net sales	$ 10,090	$ 14,365	$ 20,402	$ 26,635
Bibs, Bath, And Disposable Products [Member]
Net sales	5,719	6,351	11,006	11,939
Net sales	$ 15,809	$ 20,716	$ 31,408	$ 38,574

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Note 2 - Financing Arrangements (Details Textual) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015	Apr. 03, 2016
Revolving Credit Facility [Member] | Prime Rate [Member]
Debt Instrument Basis Spread Below Variable Rate			0.50%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate			2.00%
Revolving Credit Facility [Member]
Long-term Line of Credit	$ 0		$ 0		$ 0
Letters of Credit Outstanding, Amount	0		0		0
Line of Credit Facility, Maximum Borrowing Capacity	26,000,000		26,000,000
Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	1,500,000		1,500,000
Factoring Fees [Member]
Selling, General and Administrative Expense	112,000	$ 156,000	206,000	$ 272,000
Advances On Factoring Agreements			0		0
Selling, General and Administrative Expense	2,761,000	3,108,000	$ 5,600,000	6,369,000
Daily Cash Balance, Interest Rate, Stated Percentage			1.25%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.125%
Line of Credit Facility, Commitment Fee Amount		$ 8,000		$ 16,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 21,900,000		$ 21,900,000		$ 25,600,000

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Note 3 - Goodwill, Customer Relationships and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	Oct. 02, 2016	Apr. 03, 2016
Goodwill, Gross	$ 24,000	$ 24,000
Goodwill, Impaired, Accumulated Impairment Loss	22,900	22,900
Goodwill	$ 1,126	$ 1,126

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Note 3 - Goodwill, Customer Relationships and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015	Apr. 03, 2016
Trademarks and Trade Names [Member]
Finite-lived intangible assets, gross amount	$ 1,987		$ 1,987		$ 1,987
Finite-lived intangible assets, accumulated amortization	1,000		1,000		933
Amortization expense	33	$ 33	67	$ 66
Noncompete Agreements [Member]
Finite-lived intangible assets, gross amount	98		98		98
Finite-lived intangible assets, accumulated amortization	63		63		60
Amortization expense	1	1	3	3
Patents [Member]
Finite-lived intangible assets, gross amount	1,601		1,601		1,601
Finite-lived intangible assets, accumulated amortization	512		512		458
Amortization expense	27	27	54	54
Customer Relationships [Member]
Finite-lived intangible assets, gross amount	5,534		5,534		5,534
Finite-lived intangible assets, accumulated amortization	4,140		4,140		3,887
Amortization expense	127	128	253	248
Cost of Sales [Member]
Amortization expense	1	1	3	3
Selling, General and Administrative Expenses [Member]
Amortization expense	187	188	374	368
Finite-lived intangible assets, gross amount	9,220		9,220		9,220
Finite-lived intangible assets, accumulated amortization	5,715		5,715		$ 5,338
Amortization expense	$ 188	$ 189	$ 377	$ 371

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Note 4 - Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Oct. 02, 2016	Apr. 03, 2016
Raw Materials	$ 35	$ 35
Finished Goods	15,497	14,750
Total inventory	$ 15,532	$ 14,785

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Note 5 - Stock-based Compensation (Details Textual) - USD ($)	1 Months Ended	3 Months Ended				6 Months Ended			12 Months Ended
	Aug. 31, 2016	Oct. 02, 2016	Sep. 27, 2015	Jun. 28, 2015	Jun. 27, 2010	Oct. 02, 2016	Sep. 27, 2015	Sep. 28, 2014	Apr. 01, 2018	Apr. 02, 2017	Apr. 03, 2016	Mar. 29, 2015	Mar. 29, 2015	Mar. 29, 2014
The 2014 Omnibus Equity Compensation Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance		814,000				814,000
Employee Stock Option [Member]
Allocated Share-based Compensation Expense		$ 23,000	$ 32,000			$ 65,000	$ 77,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		126,000				$ 126,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition						1 year 15 days
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						2 years
Restricted Stock [Member] | Non Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	28,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 281,000
Restricted Stock [Member] | Employee [Member]
Payments Related to Tax Withholding for Share-based Compensation			$ 948,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			240,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					345,000
Share Base Compensation Arrangement by Share Based Payment Award Equity Instrument Other Than Options Grants in Period Total Grant Date Fair Value					$ 1,200,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested			$ 1,900,000
Performance Shares [Member] | Awards Granted During 3 Month Period Ended July 03, 2016 [Member] | Scenario, Forecast [Member]
Allocated Share-based Compensation Expense									$ 108,000	$ 108,000
Performance Shares [Member] | Awards Granted During 3 Month Period Ended July 03, 2016 [Member]
Allocated Share-based Compensation Expense											$ 108,000
Performance Shares [Member] | Awards Granted During 3 Month Period Ended June 28, 2015 [Member] | Scenario, Forecast [Member]
Allocated Share-based Compensation Expense										$ 140,000
Performance Shares [Member] | Awards Granted During 3 Month Period Ended June 28, 2015 [Member]
Allocated Share-based Compensation Expense											140,000		$ 140,000
Performance Shares [Member] | Awards Granted During 3 Month Period Ended June 29, 2014 [Member]
Allocated Share-based Compensation Expense											$ 354,000	$ 354,000		$ 354,000
Performance Shares [Member]
Payments Related to Tax Withholding for Share-based Compensation				$ 360,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition						3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						2 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period				94,116
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period						41,205	58,532	188,232
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested				$ 735,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value						$ 7.865	$ 7.18	$ 5.65
Allocated Share-based Compensation Expense		146,000	223,000			$ 307,000	$ 479,000
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount						0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value		659,000				659,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value		487,000				487,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value		124,000				169,000
Proceeds from Stock Options Exercised		0				0
Payments Related to Tax Withholding for Share-based Compensation		41,000	$ 12,000			$ 61,000	$ 12,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition						336 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 586,000				$ 586,000

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Note 5 - Stock-based Compensation - Stock Option Activity (Details) - $ / shares	6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015
Outstanding at Beginning of Period (in dollars per share)	$ 7.64	$ 6.83
Outstanding at Beginning of Period (in shares)	305,000	330,000
Granted (in dollars per share)	$ 9.60	$ 8.38
Options issued (in shares)	120,000	110,000
Exercised (in dollars per share)	$ 7.68	$ 6.57
Exercised (in shares)	(77,500)	(22,500)
Outstanding at End of Period (in dollars per share)	$ 8.30	$ 7.25
Outstanding at End of Period (in shares)	347,500	417,500
Exercisable at End of Period (in dollars per share)	$ 7.38	$ 6.46
Exercisable at End of Period (in shares)	172,500	225,000

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Note 5 - Stock-based Compensation - Estimated Fair Value of Stock Options Assumptions (Details) - $ / shares	6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015
Options issued (in shares)	120,000	110,000
Grant date	Jun. 08, 2016	Jun. 12, 2015
Dividend yield	3.33%	3.82%
Expected volatility	20.00%	20.00%
Risk free interest rate	0.93%	1.12%
Contractual term (years)	10 years	10 years
Expected term (years)	3 years	3 years
Forfeiture rate	5.00%	5.00%
Exercise price (grant-date closing price) per option (in dollars per share)	$ 9.60	$ 8.38
Fair value per option (in dollars per share)	$ 0.94	$ 0.77

XML

Note 5 - Stock-based Compensation - Stock Option Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015
Fiscal Year 2015 [Member] | Employee Stock Option [Member] | Cost of Sales [Member]
Allocated Share Based Compensation Expense		$ 12,000	$ 14,000	$ 28,000
Fiscal Year 2015 [Member] | Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share Based Compensation Expense		11,000	12,000	24,000
Fiscal Year 2015 [Member] | Employee Stock Option [Member]
Allocated Share Based Compensation Expense		23,000	26,000	52,000
Fiscal Year 2014 [Member] | Employee Stock Option [Member] | Cost of Sales [Member]
Allocated Share Based Compensation Expense				7,000
Fiscal Year 2014 [Member] | Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share Based Compensation Expense				7,000
Fiscal Year 2014 [Member] | Employee Stock Option [Member]
Allocated Share Based Compensation Expense				14,000
Fiscal Year 2016 [Member] | Employee Stock Option [Member] | Cost of Sales [Member]
Allocated Share Based Compensation Expense	5,000	5,000	12,000	6,000
Fiscal Year 2016 [Member] | Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share Based Compensation Expense	4,000	4,000	10,000	5,000
Fiscal Year 2016 [Member] | Employee Stock Option [Member]
Allocated Share Based Compensation Expense	9,000	9,000	22,000	11,000
Fiscal Year 2017 [Member] | Employee Stock Option [Member] | Cost of Sales [Member]
Allocated Share Based Compensation Expense	8,000		10,000
Fiscal Year 2017 [Member] | Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share Based Compensation Expense	6,000		7,000
Fiscal Year 2017 [Member] | Employee Stock Option [Member]
Allocated Share Based Compensation Expense	14,000		17,000
Employee Stock Option [Member] | Cost of Sales [Member]
Allocated Share Based Compensation Expense	13,000	17,000	36,000	41,000
Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share Based Compensation Expense	10,000	15,000	29,000	36,000
Employee Stock Option [Member]
Allocated Share Based Compensation Expense	23,000	32,000	65,000	77,000
Allocated Share Based Compensation Expense	$ 146,000	$ 223,000	$ 307,000	$ 479,000

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Note 5 - Stock-based Compensation - Non-vested Stock to Directors (Details) - Non Employee Directors [Member]	6 Months Ended
	Oct. 02, 2016 $ / shares shares
October 2, 2016 [Member]
Number of Shares (in shares) | shares	28,000
Fair Value Per Share (in dollars per share) | $ / shares	$ 10.08
September 27, 2015 [Member]
Number of Shares (in shares) | shares	28,000
Fair Value Per Share (in dollars per share) | $ / shares	$ 8.20
September 28, 2014 [Member]
Number of Shares (in shares) | shares	28,000
Fair Value Per Share (in dollars per share) | $ / shares	$ 7.97
September 29, 2013 [Member]
Number of Shares (in shares) | shares	28,000
Fair Value Per Share (in dollars per share) | $ / shares	$ 6.67

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Note 5 - Stock-based Compensation - Compensaiton Expense Associated with Non-vested Stock Grants (Details) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2011 [Member] | Employee [Member]
Allocated share-based compensation		$ 12,000		$ 48,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2011 [Member] | Non Employee Directors [Member]
Allocated share-based compensation
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2011 [Member]
Allocated share-based compensation		12,000		48,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2014 [Member] | Employee [Member]
Allocated share-based compensation
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2014 [Member] | Non Employee Directors [Member]
Allocated share-based compensation		8,000		31,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2014 [Member]
Allocated share-based compensation		8,000		31,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2015 [Member] | Employee [Member]
Allocated share-based compensation		89,000		178,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2015 [Member] | Non Employee Directors [Member]
Allocated share-based compensation	$ 9,000	28,000	37,000	56,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2015 [Member]
Allocated share-based compensation	9,000	117,000	37,000	234,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2016 [Member] | Employee [Member]
Allocated share-based compensation	35,000	35,000	70,000	70,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2016 [Member] | Non Employee Directors [Member]
Allocated share-based compensation	28,000	19,000	57,000	19,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2016 [Member]
Allocated share-based compensation	63,000	54,000	127,000	89,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2017 [Member] | Employee [Member]
Allocated share-based compensation	27,000		54,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2017 [Member] | Non Employee Directors [Member]
Allocated share-based compensation	24,000		24,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Fiscal Year 2017 [Member]
Allocated share-based compensation	51,000		78,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Employee [Member]
Allocated share-based compensation	62,000	136,000	124,000	296,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member] | Non Employee Directors [Member]
Allocated share-based compensation	61,000	55,000	118,000	106,000
Selling, General and Administrative Expenses [Member] | Non-vested Stock Grants [Member]
Allocated share-based compensation	123,000	191,000	242,000	402,000
Allocated share-based compensation	$ 146,000	$ 223,000	$ 307,000	$ 479,000

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Note 6 - Subsequent Events (Details Textual) - $ / shares			3 Months Ended		6 Months Ended
	Jan. 06, 2017	Nov. 15, 2016	Oct. 02, 2016	Sep. 27, 2015	Oct. 02, 2016	Sep. 27, 2015
Subsequent Event [Member] | Special Cash Dividend [Member]
Common Stock, Dividends, Per Share, Declared		$ 0.40
Special Cash Dividend [Member] | Scenario, Forecast [Member]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.40
Scenario, Forecast [Member]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.08
Common Stock, Dividends, Per Share, Declared			$ 0.08	$ 0.08	$ 0.16	$ 0.16