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CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2014

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2014


CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three- and nine months ended December 31, 2014, which is the third quarter and first nine months of its fiscal year ending March 31, 2015.  Sales for the third quarter of fiscal 2015 decreased 1.2% to $104,993,000 from $106,295,000 in the third quarter of fiscal 2014, primarily due to lower sales of Christmas and all occasion cards and all occasion stationery products, partially offset by higher sales of craft ribbon and sales attributable to the acquisition by the Company's Berwick Offray LLC company of substantially all of the assets and business of Carson & Gebel Ribbon Co., LLC ("C&G"), as announced on May 19, 2014.  Income from continuing operations before income taxes for the third quarter of fiscal 2015 was $15,142,000 compared to $16,316,000 in the third quarter of fiscal 2014.  Net income for the third quarter of fiscal 2015 was $9,768,000, or $1.04 per diluted share, versus $11,007,000, or $1.18 per diluted share, in the third quarter of fiscal 2014.

 

Sales for the first nine months of fiscal 2015 decreased 2.5% to $259,342,000 from $265,899,000 in the first nine months of fiscal 2014, primarily due to lower sales of Christmas bows, ribbons and cards and all occasion cards and all occasion stationery products, partially offset by higher sales of gift card holders, craft ribbon and  sales attributable to the acquisition of substantially all of the assets and business of C&G, as announced on May 19, 2014.  The business acquired from C&G has been fully integrated into Berwick Offray.  Income from continuing operations before income taxes for the first nine months of fiscal 2015 was $28,569,000 compared to $29,785,000 in the first nine months of fiscal 2014.  Net income for the first nine months of fiscal 2015 was $18,290,000, or $1.95 per diluted share, versus $20,298,000, or $2.14 per diluted share, in the first nine months of fiscal 2014.

 

CSS is a consumer products company primarily engaged in the design, manufacture, procurement, distribution and sale of all occasion and seasonal social expression products, principally to mass market retailers.  These all occasion and seasonal products include decorative ribbons and bows, boxed greeting cards, gift tags, gift wrap, gift bags, gift boxes, gift card holders, decorative tissue paper, decorations, classroom exchange Valentines, floral accessories, Easter egg dyes and novelties, craft and educational products, stickers, memory books, stationery, journals, note cards, infant and wedding photo albums, scrapbooks, and other gift items that commemorate life’s celebrations.

 

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management as to future events and financial performance with respect to the Company’s operations.  Forward-looking statements speak only as of the date made.  The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made.  Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, general market and economic conditions; increased competition (including competition from foreign products which may be imported at less than fair value and from foreign products which may benefit from foreign governmental subsidies); increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs and the risk that the Company may not be able to integrate and derive the expected benefits from such acquisitions; the risk that customers may become insolvent, may delay payments or may impose deductions or penalties on amounts owed to the Company; costs of compliance with governmental regulations and government investigations; liability associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws; and other factors described more fully in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2014 and elsewhere in the Company’s filings with the Securities and Exchange Commission.  As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.

CSS’ consolidated results of operations for the three and nine months ended December 31, 2014 and 2013 and condensed consolidated balance sheets as of December 31, 2014, March 31, 2014 and December 31, 2013 follow:

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 

 

Three Months Ended December 31,

 

Nine Months Ended December 31,

 

2014

 

 

2013

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

104,993

 

 

$

106,295

 

 

$

259,342

 

 

$

265,899

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

68,670

 

 

70,029

 

 

173,023

 

 

178,447

 

Selling, general and administrative expenses

21,102

 

 

19,865

 

 

57,754

 

 

57,544

 

Interest expense, net

43

 

 

82

 

 

39

 

 

152

 

Other income (expense), net

36

 

 

3

 

 

(43

)

 

(29

)

 

 

 

 

 

 

 

 

 

 

 

 

 

89,851

 

 

89,979

 

 

230,773

 

 

236,114

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

15,142

 

 

16,316

 

 

28,569

 

 

29,785

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

5,374

 

 

5,328

 

 

10,279

 

 

9,618

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

9,768

 

 

$

10,988

 

 

18,290

 

 

20,167

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net of tax

 

 

19

 

 

 

 

131

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

9,768

 

 

$

11,007

 

 

$

18,290

 

 

$

20,298

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

    Basic:

 

 

 

 

 

 

 

 

 

 

 

    Continuing operations

$

1.05

 

 

$

1.18

 

 

$

1.96

 

 

$

2.14

 

    Discontinued operations

$

 

 

$

 

 

$

 

 

$

0.01

 

    Total

$

1.05

 

 

$

1.18

 

 

$

1.96

 

 

$

2.15

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

    Diluted:

 

 

 

 

 

 

 

 

 

 

 

    Continuing operations

$

1.04

 

 

$

1.18

 

 

$

1.95

 

 

$

2.13

 

    Discontinued operations

$

 

 

$

 

 

$

 

 

$

0.01

 

    Total

$

1.04

 

 

$

1.18

 

 

$

1.95

 

 

$

2.14

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average basic and diluted shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

    Basic

9,331

 

 

9,296

 

 

9,321

 

 

9,420

 

    Diluted

9,420

 

 

9,341

 

 

9,403

 

 

9,467

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share of common stock

$

0.15

 

 

$

0.15

 

 

$

0.45

 

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

December 31,
 2014

 

March 31,
 2014

 

December 31,
 2013

 

(Unaudited)

 

(Audited)

 

(Unaudited)

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

48,163

 

 

$

68,200

 

 

$

68,551

 

Short-term investments

39,802

 

 

29,862

 

 

 

Accounts receivable, net

84,713

 

 

44,243

 

 

88,934

 

Inventories

62,536

 

 

59,252

 

 

65,156

 

Deferred income taxes

3,783

 

 

4,414

 

 

3,873

 

Other current assets

11,807

 

 

13,473

 

 

12,410

 

Total current assets

250,804

 

 

219,444

 

 

238,924

 

Property, plant and equipment, net

25,775

 

 

27,063

 

 

27,553

 

Deferred income taxes

1,776

 

 

1,965

 

 

3,314

 

Other assets

 

 

 

 

 

 

 

 

Goodwill

15,075

 

 

14,522

 

 

14,522

 

Intangible assets, net

26,594

 

 

26,309

 

 

26,763

 

Other

4,247

 

 

4,232

 

 

4,156

 

Total other assets

45,916

 

 

45,063

 

 

45,441

 

Total assets

$

324,271

 

 

$

293,535

 

 

$

315,232

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

$

18,233

 

 

$

10,664

 

 

$

21,733

 

Accrued payroll and other compensation

8,075

 

 

8,754

 

 

8,227

 

Accrued customer programs

5,593

 

 

4,820

 

 

6,188

 

Other current liabilities

14,857

 

 

7,397

 

 

14,717

 

Total current liabilities

46,758

 

 

31,635

 

 

50,865

 

Long-term obligations

4,772

 

 

4,684

 

 

4,814

 

Stockholders’ equity

272,741

 

 

257,216

 

 

259,553

 

Total liabilities and stockholders’ equity

$

324,271

 

 

$

293,535

 

 

$

315,232

 

 


FOR FURTHER INFORMATION CONTACT:
Vincent A. Paccapaniccia
Chief Financial Officer
(215) 569-9900