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CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2014

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2014


CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three- and six months ended September 30, 2014, which is the second quarter and first half of its fiscal year ending March 31, 2015.  Sales for the second quarter of fiscal 2015 decreased 5.7% to $106,092,000 from $112,487,000 in the second quarter of fiscal 2014, primarily due to lower sales of Christmas bows, ribbons and cards and all occasion stationery products, partially offset by higher sales of gift card holders 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.  The business acquired from C&G has been fully integrated into Berwick Offray.  Income from continuing operations before income taxes for the second quarter of fiscal 2015 was $15,485,000 compared to $16,040,000 in the second quarter of fiscal 2014.  Net income for the second quarter of fiscal 2015 was $9,847,000, or $1.05 per diluted share, versus $10,958,000, or $1.16 per diluted share, in the second quarter of fiscal 2014.

 

Sales for the first six months of fiscal 2015 decreased 3.3% to $154,349,000 from $159,604,000 in the first six months of fiscal 2014, primarily due to lower sales of Christmas bows, ribbons and cards and all occasion stationery products, partially offset by higher sales of gift card holders 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 half of fiscal 2015 was $13,427,000 compared to $13,469,000 in the first half of fiscal 2014.  Net income for the first half of fiscal 2015 was $8,522,000, or $0.91 per diluted share, versus $9,291,000, or $0.98 per diluted share, in the first half 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 six months ended September 30, 2014 and 2013 and condensed consolidated balance sheets as of September 30, 2014, March 31, 2014 and September 30, 2013 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,

 

2014

 

 

2013

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

106,092

 

 

$

112,487

 

 

$

154,349

 

 

$

159,604

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

70,695

 

 

75,760

 

 

104,353

 

 

108,418

 

Selling, general and administrative expenses

19,895

 

 

20,675

 

 

36,652

 

 

37,679

 

Interest (income) expense, net

17

 

 

50

 

 

(4

)

 

70

 

Other income, net

 

 

(38

)

 

(79

)

 

(32

)

 

 

 

 

 

 

 

 

 

 

 

 

 

90,607

 

 

96,447

 

 

140,922

 

 

146,135

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

15,485

 

 

16,040

 

 

13,427

 

 

13,469

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

5,638

 

 

5,194

 

 

4,905

 

 

4,290

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

9,847

 

 

$

10,846

 

 

8,522

 

 

9,179

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net of tax

 

 

112

 

 

 

 

112

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

9,847

 

 

$

10,958

 

 

$

8,522

 

 

$

9,291

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

    Basic:

 

 

 

 

 

 

 

 

 

 

 

    Continuing operations

$

1.06

 

 

$

1.15

 

 

$

0.91

 

 

$

0.97

 

    Discontinued operations

$

 

 

$

0.01

 

 

$

 

 

$

0.01

 

    Total

$

1.06

 

 

$

1.16

 

 

$

0.91

 

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

    Diluted:

 

 

 

 

 

 

 

 

 

 

 

    Continuing operations

$

1.05

 

 

$

1.14

 

 

$

0.91

 

 

$

0.96

 

    Discontinued operations

$

 

 

$

0.01

 

 

$

 

 

$

0.01

 

    Total (1)

$

1.05

 

 

$

1.16

 

 

$

0.91

 

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average basic and diluted shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

    Basic

9,323

 

 

9,458

 

 

9,316

 

 

9,482

 

    Diluted

9,397

 

 

9,486

 

 

9,393

 

 

9,527

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share of common stock

$

0.15

 

 

$

0.15

 

 

$

0.30

 

 

$

0.30

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Total net income per common share may not foot due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

September 30,
 2014

 

March 31,
 2014

 

September 30,
 2013

 

(Unaudited)

 

(Audited)

 

(Unaudited)

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

26,840

 

 

$

68,200

 

 

$

37,094

 

Short-term investments

29,961

 

 

29,862

 

 

 

Accounts receivable, net

97,502

 

 

44,243

 

 

100,925

 

Inventories

74,980

 

 

59,252

 

 

74,508

 

Deferred income taxes

4,287

 

 

4,414

 

 

3,863

 

Other current assets

14,347

 

 

13,473

 

 

14,076

 

Total current assets

247,917

 

 

219,444

 

 

230,466

 

Property, plant and equipment, net

25,854

 

 

27,063

 

 

27,957

 

Deferred income taxes

1,539

 

 

1,965

 

 

3,915

 

Other assets

 

 

 

 

 

 

 

 

Goodwill

15,083

 

 

14,522

 

 

14,522

 

Intangible assets, net

27,049

 

 

26,309

 

 

27,177

 

Other

4,191

 

 

4,232

 

 

4,143

 

Total other assets

46,323

 

 

45,063

 

 

45,842

 

Total assets

$

321,633

 

 

$

293,535

 

 

$

308,180

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

$

27,505

 

 

$

10,664

 

 

$

26,786

 

Accrued payroll and other compensation

7,087

 

 

8,754

 

 

6,568

 

Accrued customer programs

5,687

 

 

4,820

 

 

6,862

 

Other current liabilities

12,844

 

 

7,397

 

 

12,280

 

Total current liabilities

53,123

 

 

31,635

 

 

52,496

 

Long-term obligations

4,680

 

 

4,684

 

 

4,767

 

Stockholders’ equity

263,830

 

 

257,216

 

 

250,917

 

Total liabilities and stockholders’ equity

$

321,633

 

 

$

293,535

 

 

$

308,180

 

 


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