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CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE- AND SIX MONTHS ENDED SEPTEMBER 30, 2015

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE- AND SIX MONTHS ENDED SEPTEMBER 30, 2015


CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three- and six months ended September 30, 2015.  Sales for the second quarter of fiscal 2016 increased 5.1% to $111,477,000 from $106,092,000 in the second quarter of fiscal 2015, primarily due to higher shipments of Christmas bows and ribbon, all occasion stationery and ribbon products, and earlier shipping of Valentine products.  These higher shipments were partially offset by lower shipments of Christmas tags and cards.  Income before income taxes for the second quarter of fiscal 2016 was $17,653,000 compared to $15,485,000 in the second quarter of fiscal 2015.  Net income for the second quarter of fiscal 2016 was $11,229,000, or $1.22 per diluted share, versus $9,847,000, or $1.05 per diluted share, in the second quarter of fiscal 2015.

 

Sales for the first six months of fiscal 2016 increased 0.9% to $155,705,000 from $154,349,000 in the first six months of fiscal 2015, primarily due to higher shipments of Christmas bows and ribbon, all occasion ribbon and earlier shipping of Valentine products, partially offset by lower shipments of Christmas tags and cards.  Selling, general and administrative expenses for the first six months of fiscal 2016 increased 2.0% to $37,400,000 from $36,652,000 in the first six months of fiscal 2015, primarily due to higher amortization expense related to the acquisitions completed in the prior year, and higher marketing and severance costs.  Income before income taxes for the first half of fiscal 2016 was $12,915,000 compared to $13,427,000 in the first half of fiscal 2015.  Net income for the first half of fiscal 2016 was $8,161,000, or $0.87 per diluted share, versus $8,522,000, or $0.91 per diluted share, in the first half of fiscal 2015.

 

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, journals, boxed greeting cards, classroom exchange Valentines, gift tags, gift bags, gift card holders, gift wrap, decorations,  floral accessories, craft and educational products, Easter egg dyes and novelties, memory books, scrapbooks, stickers, infant and wedding photo albums, stationery, 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, 2015 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 six months ended September 30, 2015 and 2014 and condensed consolidated balance sheets as of September 30, 2015, March 31, 2015 and September 30, 2014 follow:

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 

Three Months Ended September 30,

 

Six Months Ended September 30,

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

Sales

$

111,477

 

 

$

106,092

 

 

$

155,705

 

 

$

154,349

 

Costs and expenses

 

 

 

 

 

 

 

Cost of sales

73,686

 

 

70,695

 

 

105,472

 

 

104,353

 

Selling, general and administrative expenses

20,100

 

 

19,895

 

 

37,400

 

 

36,652

 

Interest (income) expense, net

(10

)

 

17

 

 

(82

)

 

(4

)

Other expense (income), net

48

 

 

 

 

 

 

(79

)

 

 

 

 

 

 

 

 

 

93,824

 

 

90,607

 

 

142,790

 

 

140,922

 

 

 

 

 

 

 

 

 

Income before income taxes

17,653

 

 

15,485

 

 

12,915

 

 

13,427

 

 

 

 

 

 

 

 

 

Income tax expense

6,424

 

 

5,638

 

 

4,754

 

 

4,905

 

 

 

 

 

 

 

 

 

Net income

$

11,229

 

 

$

9,847

 

 

$

8,161

 

 

$

8,522

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

Basic

$

1.23

 

 

$

1.06

 

 

$

0.88

 

 

$

0.91

 

Diluted

$

1.22

 

 

$

1.05

 

 

$

0.87

 

 

$

0.91

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

9,148

 

 

9,323

 

 

9,245

 

 

9,316

 

Diluted

9,237

 

 

9,397

 

 

9,345

 

 

9,393

 

 

 

 

 

 

 

 

 

Cash dividends per share of common stock

$

0.18

 

 

$

0.15

 

 

$

0.36

 

 

$

0.30

 

 

 

 

 

 

 

 

 

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

September 30,
 2015

 

March 31,
 2015

 

September 30,
 2014

 

(Unaudited)

 

(Audited)

 

(Unaudited)

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

$

27,745

 

 

$

36,429

 

 

$

26,840

 

Short-term investments

24,929

 

 

69,845

 

 

29,961

 

Accounts receivable, net

95,080

 

 

42,052

 

 

97,502

 

Inventories

79,265

 

 

65,491

 

 

74,980

 

Deferred income taxes

4,652

 

 

4,375

 

 

4,287

 

Other current assets

10,587

 

 

11,235

 

 

14,347

 

Total current assets

242,258

 

 

229,427

 

 

247,917

 

Property, plant and equipment, net

25,769

 

 

25,493

 

 

25,854

 

Deferred income taxes

 

 

582

 

 

1,539

 

Other assets

 

 

 

 

 

Goodwill

15,820

 

 

15,820

 

 

15,083

 

Intangible assets, net

31,770

 

 

33,048

 

 

27,049

 

Other

5,810

 

 

5,103

 

 

4,191

 

Total other assets

53,400

 

 

53,971

 

 

46,323

 

Total assets

$

321,427

 

 

$

309,473

 

 

$

321,633

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

27,165

 

 

$

12,917

 

 

$

27,505

 

Accrued payroll and other compensation

7,368

 

 

9,054

 

 

7,087

 

Accrued customer programs

3,920

 

 

4,042

 

 

5,687

 

Accrued income taxes

3,173

 

 

745

 

 

3,719

 

Other current liabilities

9,641

 

 

8,247

 

 

9,125

 

Total current liabilities

51,267

 

 

35,005

 

 

53,123

 

Deferred income taxes

239

 

 

 

 

 

Long-term obligations

4,295

 

 

4,213

 

 

4,680

 

Stockholders’ equity

265,626

 

 

270,255

 

 

263,830

 

Total liabilities and stockholders’ equity

$

321,427

 

 

$

309,473

 

 

$

321,633

 


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