Stocks I Own – June 22nd, 2023 Financial Results Analysis
Welcome back to another daily blog post where I share updates on the stocks in my investment portfolio. Today, we’ll be discussing the financial results of Crown Crafts, FactSet, Methode Electronics, Avid Bioservices, and La-Z-Boy for the fourth quarter and full year of fiscal 2023. Let’s dive in and examine how these companies have performed over the past year
Crown Crafts Reports Fiscal Year 2023 Results
Crown Crafts, Inc. (NASDAQ-CM: CRWS), a leading manufacturer of infant and toddler products, recently reported its results for the fourth quarter and fiscal year 2023, which ended on April 2, 2023. The company reported net sales of $21.6 million for the fourth quarter, a decrease from $25.7 million in the prior-year quarter. Net income was $828,000, or $0.08 per diluted share, compared to $2.4 million, or $0.24 per diluted share, in the previous year’s quarter. For the fiscal year 2023, net sales were $75.1 million, compared to $87.4 million in fiscal 2022. The gross margin was 26.4% of net sales, compared to 26.7% in the prior year. Net income was $5.7 million, or $0.56 per diluted share, compared to $9.9 million, or $0.98 per diluted share, in the prior year.
The company faced multiple headwinds throughout the year due to excess inventory levels, inflationary pressures, and lower consumer spending trends, resulting in reduced orders from customers. Despite these challenges, the company minimized the impact on gross margins, reduced marketing and administrative expenses, and reported the thirteenth consecutive year of profitability. The recent acquisition of Manhattan Group, LLC (“Manhattan Toy”) in March 2023 provides multiple opportunities for the company to increase its top and bottom line in fiscal 2024.
Overall, Crown Crafts remains well-positioned to withstand the current macroeconomic environment, thanks to its strong balance sheet, and looks forward to delivering sustained profitable growth. Given the current state of the company, I recommend holding onto this stock.
FactSet Reports Increase in Q3 GAAP Revenues and Organic ASV Plus Professional Services
FactSet, the global financial digital platform and enterprise solutions provider, has announced its Q3 fiscal 2023 results with an increase in GAAP revenues and organic Annual Subscription Value (ASV) plus professional services. The company’s GAAP revenues have increased by 8.4%, or $41.1 million, to $529.8 million compared to the same period in fiscal 2022. The growth was primarily due to Analytics & Trading and Content & Technology solutions. Meanwhile, organic revenue, which excludes the effects of acquisitions and dispositions completed within the last 12 months and foreign currency movements, grew 8.5% to $530.3 million during Q3 fiscal 2023 from the prior year period.
Moreover, ASV plus professional services reached $2.1 billion at the end of May 2023, showing a growth rate of 8.0% from the previous year. The company reported that the primary source of this growth was Analytics & Trading solutions. On the other hand, the fact that adjusted operating margin is expected to decrease marginally is a cause for concern.
FactSet is updating its fiscal 2023 guidance, expecting an adjusted operating margin of 35%-36% and adjusted diluted EPS growth of 10%-13%. The company’s organic ASV growth and GAAP revenues are expected to be at the lower end of previously communicated ranges.
In my opinion, FactSet’s Q3 fiscal 2023 results are impressive considering the challenging market conditions. I would recommend holding the stock for now and observing whether the company can meet its revised fiscal 2023 guidance. The growth rate of ASV plus professional services and the company’s revenue growth indicate the company is operating profitably. However, investors should pay attention to whether FactSet can maintain its current growth rate, especially given the challenges posed by the pandemic. Overall, FactSet appears to be a good long-term investment opportunity.
Methode Electronics Reports Record Electric and Hybrid Vehicle Sales
Methode Electronics (NYSE: MEI), a leading custom-engineered solutions provider for LED lighting, power distribution, and user interface applications, announced record electric and hybrid vehicle application sales in its fiscal fourth quarter ending April 29, 2023. The sales exceeded 23% of Methode’s net sales and set a record on a dollar basis. The company was awarded programs with expected annual sales of more than $250 million, 80% of which are allocated to EV applications.
In spite of significant material cost inflation, Methode Electronics delivered strong free cash flow by purchasing 191,722 shares of its common stock for $8.5 million. Net sales were $301.2 million, and Methode had a net income of $8.1 million or $0.22 per diluted share.
As Methode Electronics continues its transition from user interface to lighting and power solutions, the company will invest substantially in fiscal 2024 to support more than 20 new program launches. This transition investment, combined with the impacts of legacy program roll-offs, may result in lower earnings. Nonetheless, the company’s strong award pipeline and its expected revenue in EV applications make Methode Electronics an attractive stock to buy.
Overall, I recommend buying the stock based on the company’s achievement of record sales and its strong EV application sales.
Avid Bioservices Reports Record High Revenue and Backlog Numbers for Fiscal Year 2023
Avid Bioservices, Inc. (NASDAQ:CDMO) has announced financial results for the fourth quarter and full fiscal year ended April 30, 2023. The company is a biologics contract development and manufacturing organization (CDMO) providing high-quality development and manufacturing services to biotechnology and pharmaceutical companies.
The financial report indicates that the company ended the year with $39.8 million in fourth-quarter revenue and a yearly record high of $149.3 million. Additionally, Avid Bioservices secured $55 million in net new business orders, contributing to a record backlog of $191 million.
Avid Bioservices’ mammalian cell manufacturing and process development facility expansions are now in full operation, with the facility expected to add approximately $120 million of annual revenue generating capacity. The cell and gene therapy facility expansion is also on track to be online by the end of calendar Q3 2023.
As an investor, I am thrilled with the company’s fiscal year results and the record backlog numbers. The company’s expansion plans also seem to be progressing well, resulting in a substantial increase in annual revenue generating capacity.
Avid Bioservices’ FY 2024 revenue guidance of between $145 million and $165 million also shows continued growth.
Based on this positive news and the company’s strong pipeline, I recommend buying the Avid Bioservices Inc. stock. The company’s financial results showcase a promising future with potential for revenue growth.
La-Z-Boy Inc. Reports Solid 4Q and FY 2023 Results
La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, has reported solid fourth quarter and full year results for the period ending April 29, 2023. The company’s consolidated sales were $561 million, which is a 12% decrease adjusting for the 53rd week in the fourth quarter of fiscal 2022. However, the retail segment saw sales increase by 4% to $243 million, which is a 12% increase when accounting for the extra week in the fourth quarter of fiscal 2022.
The company saw essentially flat written same-store sales, a decrease of 31% in GAAP operating income, and a decrease of 15% in non-GAAP operating income. Despite the decrease in GAAP operating margin by 190 basis points, the non-GAAP operating margin increased by 40 basis points. Additionally, the GAAP diluted EPS was $0.79, with the non-GAAP diluted EPS at $0.99, a 7% decrease. The company generated $78 million from operating activities in Q4.
For fiscal year 2023, La-Z-Boy reported consolidated sales of $2.3 billion, which is a 2% increase when adjusting for the 53rd week in fiscal 2022. The retail segment saw sales increase by 22% to $982 million, which is a record for the company. La-Z-Boy also recorded record sales, operating profit, and operating margin.
The company saw an increase of 2% in GAAP operating income and an increase of 17% in non-GAAP operating income. Moreover, the company’s GAAP operating margin increased by 20 basis points to 9.0%, and the non-GAAP operating margin increased by 140 basis points to 9.5%. La-Z-Boy’s GAAP diluted EPS increased by 3% to $3.48, with the non-GAAP diluted EPS at $3.86, a 24% increase. The company generated $205 million from operating activities for the fiscal year.
As an investor, I am always pleased to see a company report a solid financial performance. Despite the challenges posed by the COVID-19 pandemic, La-Z-Boy has managed to achieve record retail sales and operating profits. The company’s vertically integrated retail and manufacturing model has proven to be resilient and successful. In light of these strong results, I would recommend holding on to this stock.
Recommendation: Hold LZB stock.
