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FOR IMMEDIATE RELEASE
July 27, 2004
CSS IND., INC. REPORTS SALES AND EARNINGS FOR THE QUARTER ENDED JUNE 30, 2004
CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the first quarter ended June 30, 2004. Sales decreased by 15% to $49,555,000 from $58,290,000 in 2003. The net loss increased to $4,407,000, or $.37 per diluted share, compared to a prior year loss of $4,039,000, or $.35 per diluted share. The Company’s highly seasonal orientation results in operating losses in the first and fourth quarters of the fiscal year and operating profits in the second and third quarters.
The decrease in sales was primarily the result of the absence of sales related to the retail packaging product line of a recently acquired business which was sold in July of 2003 and lower sales of Halloween products and ribbons and bows which is substantially due to timing of shipments compared to a year ago. This sales decline was the primary reason for the increased net loss for the quarter. Partially offsetting the effects of the sales decline was improved margins, integration savings related to recent acquisitions and lower interest expense compared to the prior year.
“The first quarter results are in line with our expectations. Although it is early in the year, these results support our previous guidance of EPS growth for fiscal year 2005 of approximately 10%,” noted David Erskine, President and CEO.
All statements other than statements of historical fact included in this press release are “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. 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 conditions, increased competition, and other factors described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2004. CSS’ consolidated results of operations for the quarters ended June 30, 2004 and 2003 and consolidated condensed balance sheets as of June 30, 2004, March 31, 2004 and June 30, 2003 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED RESULTS OF OPERATIONS (In thousands, except per share amounts) | | Three Months Ended
June 30 | | | | 2004 | 2003 | | | | | | SALES | $49,555 | $58,290 | | | | | | COSTS AND EXPENSES | | Cost of sales | 36,061 | 58,290 | | | | Cost of Sales | 36,061 | 43,161 | | | | Selling, general and administrative expenses | 20,175 | 21,078 | | | | Interest expense (income), net | 417 | 705 | | | | Rental and other (income, net | (235) | (304) | | | | | | | $56,418 | $64,640 | | | | | | LOSS BEFORE INCOME TAXES | (6,863) | (6,350) | | | | | | INCOME TAX BENEFIT | 2,456) | 2,311) | | | | | | Net Loss | (4,407)( | (4,039)( | | | | | BASIC AND DILUTED NET LOSS
PER COMMON SHARE | (.37) | (.35) | | | | | | WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING | 11,894 | 11,632 | | |
CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) | | June 30,
2004
(Unaudited) | March 31,
2004
(Audited) | June 30,
2003
(Unaudited) | | | | ASSETS | | | | | | | CURRENT ASSETS | | Cash and cash equivalents | $41,718 | $93,191 | $5,426 | | Accounts receivable, net | 37,617 | 40,460 | 45,739 | | Inventories | 146,271 | 94,459 | 163,033 | | Current income tax | - | - | 5,112 | | Deferred income taxes | 7,681 | 7,937 | 6,194 | | Other current assets | 14,784 | 12,987 | 14,475 | | | | Total current assets | 248,071 | 249,034 | 239,979 | | | | PROPERTY, PLANT AND EQUIPMENT, NET | 79,696 | 81,193 | 81,618 | | | | OTHER ASSETS | | Intangible Assets, Net | 35,582 | 35,619 | 36,017 | | Other | 4,797 | 4,551 | 4,247 | | | | Total other assets | 40,379 | 40,170 | 40,264 | | | | Total assets | $368,146 | $370,397 | $361,861 | | | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | | | | | CURRENT LIABILITIES | | Accrued customer programs | 10,988 | 12,385 | 12,963 | | Other current liabilities | 52,604 | 48,836 | 69,230 | | | | Total current liabilities | 63,592 | 61,221 | 82,193 | | | | LONG-TERM DEBT NET OF CURRENT PORTION | 50,139 | 50,251 | 50,000 | | | | LONG-TERM OBLIGATIONS | 3,631 | 3,631 | 3,785 | | | | DEFERRED INCOME TAXES | 6,138 | 6,142 | 7,939 | | | | SHAREHOLDER'S EQUITY | 244,646 | 249,152 | 217,944 | | | | Total liabilities and shareholders' equity | $368,146 | $370,397 | $361,861 |
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