CSS INDUSTRIES, INC. ANNOUNCES THE SALE OF THE CHRISTMAS GIFT WRAP PORTION OF ITS CLEO INC BUSINESS
CSS Industries, Inc. (NYSE: CSS) announced today that it has sold the Christmas gift wrap portion of its Cleo Inc ("Cleo") business to Impact Innovations, Inc. ("Impact"). Under the terms of a definitive agreement executed by the parties, Impact acquired, upon execution of the agreement, certain tangible and intangible assets associated with Cleo's Christmas gift wrap business. As part of the transaction, Cleo will remain responsible for the manufacture, sale and distribution of all Cleo Christmas gift wrap for the Christmas 2011 season, and will retain the right to use the "Cleo" name during the Christmas 2011 season. Stifel Nicolaus Weisel served as exclusive financial advisor to CSS in the transaction.
"As part of a continuing review of our Cleo gift wrap business, including our previously announced plan to close our manufacturing facility located in Memphis, Tennessee by no later than December 31, 2011, we decided that the sale of Cleo's Christmas gift wrap business was appropriate at this time, as it will allow management to focus our time and resources on more profitable product categories," said Christopher J. Munyan, President and Chief Executive Officer of CSS. "Impact is a highly respected provider of consumer dÃ©cor and paper products, and we believe that Impact will provide seasonal gift wrap customers with quality products and support during the Christmas 2012 season and thereafter."
"Because the closing of this transaction occurs as we are shipping Christmas 2011 gift wrap to our customers," said Mr. Munyan, "we have agreed that CSS will continue to provide Cleo Christmas gift wrap to our customers for the Christmas 2011 season, and that Impact will provide Cleo Christmas gift wrap for the Christmas 2012 season and thereafter."
CSS is a consumer products company primarily engaged in the design, manufacture, procurement, distribution and sale of seasonal and all occasion social expression products, principally to mass market retailers. These seasonal and all occasion 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, Halloween masks, costumes, make-ups and novelties, 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.
Impact Innovations, Inc. is a privately held consumer products company headquartered in Minnesota. Impact has showrooms in Tennessee and Hong Kong as well as manufacturing facilities in both the United States and China. Impact specializes in the seasonal product business in the mass market.
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements indicating that the sale of the Cleo Christmas gift wrap business will allow management to focus time and resources on more profitable product categories. 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 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 in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2011 and elsewhere in the Company's SEC filings. 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.
FOR FURTHER INFORMATION CONTACT:
Vincent A. Paccapaniccia
Chief Financial Officer