Back

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2015

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2015


CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three months ended June 30, 2015, which is the first quarter of its fiscal year ending March 31, 2016.  Sales for the first quarter of fiscal 2016 decreased 8.3% to $44,228,000 from $48,257,000 in the first quarter of fiscal 2015, primarily due to lower shipments of all occasion stationery and ribbon products.  Based on new program placements and the expected seasonal shipments attributable to our acquisition of the business and assets of Hollywood Ribbon Industries, Inc. as announced on February 19, 2015, we currently expect sales for the second quarter of fiscal 2016 to exceed sales in the second quarter of the prior year, which is expected to largely offset the lower first quarter sales.  We also incurred expenses in the first quarter of fiscal year 2016 which are expected to benefit the remainder of the year.  The loss before income taxes for the first quarter of fiscal 2016 was $(4,738,000) compared to $(2,058,000) in the first quarter of fiscal 2015.  The net loss for the first quarter of fiscal 2016 was $(3,068,000), or $(0.33) per diluted share, versus $(1,325,000), or $(0.14) per diluted share, in the first quarter 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, including, among others, statements relating to CSS' expected sales growth for the second quarter of fiscal 2016 and expected benefits during the remainder of fiscal 2016 from expenses incurred in the first quarter of fiscal 2016.  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, inherent uncertainties associated with estimating the timing and amount of future sales and estimating the extent to which, and when (if at all), benefits will be derived in future periods from expenses incurred in the first quarter of fiscal 2016; 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 months ended June 30, 2015 and 2014 and condensed consolidated balance sheets as of June 30, 2015, March 31, 2015 and June 30, 2014 follow:

 

 

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 

Three Months Ended June 30,

 

2015

 

2014

 

 

 

 

Sales

$

44,228

 

 

$

48,257

 

Costs and expenses

 

 

 

Cost of sales

31,786

 

 

33,658

 

Selling, general and administrative expenses

17,300

 

 

16,757

 

Interest income, net

(72

)

 

(21

)

Other income, net

(48

)

 

(79

)

 

 

 

 

 

48,966

 

 

50,315

 

 

 

 

 

Loss before income taxes

(4,738

)

 

(2,058

)

 

 

 

 

Income tax benefit

(1,670

)

 

(733

)

 

 

 

 

Net loss

$

(3,068

)

 

$

(1,325

)

 

 

 

 

Basic and diluted net loss per common share

$

(0.33

)

 

$

(0.14

)

 

 

 

 

Weighted average basic and diluted shares outstanding

9,342

 

 

9,308

 

 

 

 

 

Cash dividends per share of common stock

$

0.18

 

 

$

0.15

 

 

 

 

 

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

June 30,
 2015

 

March 31,
 2015

 

June 30,
 2014

 

(Unaudited)

 

(Audited)

 

(Unaudited)

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

$

33,368

 

 

$

36,429

 

 

$

47,176

 

Short-term investments

49,939

 

 

69,845

 

 

29,911

 

Accounts receivable, net

36,363

 

 

42,052

 

 

42,737

 

Inventories

82,093

 

 

65,491

 

 

76,967

 

Deferred income taxes

4,430

 

 

4,375

 

 

4,329

 

Other current assets

14,218

 

 

11,235

 

 

15,565

 

Total current assets

220,411

 

 

229,427

 

 

216,685

 

Property, plant and equipment, net

25,510

 

 

25,493

 

 

26,797

 

Deferred income taxes

89

 

 

582

 

 

1,639

 

Other assets

 

 

 

 

 

Goodwill

15,820

 

 

15,820

 

 

15,083

 

Intangible assets, net

32,409

 

 

33,048

 

 

27,505

 

Other

5,529

 

 

5,103

 

 

4,175

 

Total other assets

53,758

 

 

53,971

 

 

46,763

 

Total assets

$

299,768

 

 

$

309,473

 

 

$

291,884

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

16,467

 

 

$

12,917

 

 

$

17,031

 

Accrued payroll and other compensation

5,207

 

 

9,054

 

 

5,002

 

Accrued customer programs

3,381

 

 

4,042

 

 

3,571

 

Other current liabilities

7,432

 

 

8,992

 

 

6,793

 

Total current liabilities

32,487

 

 

35,005

 

 

32,397

 

Long-term obligations

4,223

 

 

4,213

 

 

4,618

 

Stockholders’ equity

263,058

 

 

270,255

 

 

254,869

 

Total liabilities and stockholders’ equity

$

299,768

 

 

$

309,473

 

 

$

291,884

 

 

 

 

 

 


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