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

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


 

 

FOR FURTHER INFORMATION CONTACT:

Vincent A. Paccapaniccia

 

Chief Financial Officer

 

(215) 569-9900

 

 

FOR IMMEDIATE RELEASE

JULY 29, 2014

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2014

CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three months ended June 30, 2014, which is the first quarter of its fiscal year ending March 31, 2015.  Sales for the first quarter of fiscal 2015 increased 2.4% to $48,257,000 from $47,117,000 in the first quarter of fiscal 2014. Sales in the first quarter of fiscal 2015 include $615,000 due to the acquisition by the Company's Berwick Offray LLC subsidiary of the assets and business of Carson & Gebel Ribbon Co., LLC as announced on May 19, 2014.  Sales in the first quarter of fiscal 2014 include $517,000 of sales from the Halloween portion of the Company's Paper Magic Group, Inc. business, which was sold in September 2012.  The balance of the net sales increase was due to the earlier shipment of back-to-school products.  The loss before income taxes for the first quarter of fiscal 2015 was $2,058,000 compared to $2,571,000 in the first quarter of fiscal 2014.  The net loss for the first quarter of fiscal 2015 was $1,325,000, or $0.14 per diluted share, versus $1,667,000, or $0.18 per diluted share, in the first quarter of fiscal 2014. The Company’s seasonal orientation has historically resulted in operating losses in the first and fourth quarters of the fiscal year and operating profits in the second and third quarters.

 

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 months ended June 30, 2014 and 2013 and condensed consolidated balance sheets as of June 30, 2014, March 31, 2014 and June 30, 2013 follow:

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 

 

Three Months Ended June 30,

 

2014

 

 

2013

 

 

 

 

 

 

Sales

$

48,257

 

 

$

47,117

 

Costs and expenses

 

 

 

 

 

Cost of sales

33,658

 

 

32,658

 

Selling, general and administrative expenses

16,757

 

 

17,004

 

Interest (income) expense, net

(21

)

 

20

 

Other (income) expense, net

(79

)

 

6

 

 

 

 

 

 

 

 

50,315

 

 

49,688

 

 

 

 

 

 

 

Loss before income taxes

(2,058

)

 

(2,571

)

 

 

 

 

 

 

Income tax benefit

(733

)

 

(904

)

 

 

 

 

 

 

Net loss

$

(1,325

)

 

$

(1,667

)

 

 

 

 

 

 

Basic and diluted net loss per common share

$

(0.14

)

 

$

(0.18

)

 

 

 

 

 

 

Weighted average basic and diluted shares outstanding

9,308

 

 

9,505

 

 

 

 

 

 

 

Cash dividends per share of common stock

$

0.15

 

 

$

0.15

 

 

 

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

June 30,
 2014

 

March 31,
 2014

 

June 30,
 2013

 

(Unaudited)

 

(Audited)

 

(Unaudited)

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

47,176

 

 

$

68,200

 

 

$

67,038

 

Short-term investments

29,911

 

 

29,862

 

 

 

Accounts receivable, net

42,737

 

 

44,243

 

 

40,488

 

Inventories

76,967

 

 

59,252

 

 

81,843

 

Deferred income taxes

4,329

 

 

4,414

 

 

4,079

 

Other current assets

15,565

 

 

13,473

 

 

16,669

 

Total current assets

216,685

 

 

219,444

 

 

210,117

 

Property, plant and equipment, net

26,797

 

 

27,063

 

 

28,046

 

Deferred income taxes

1,639

 

 

1,965

 

 

3,204

 

Other assets

 

 

 

 

 

 

 

 

Goodwill

15,083

 

 

14,522

 

 

14,522

 

Intangible assets, net

27,505

 

 

26,309

 

 

27,590

 

Other

4,175

 

 

4,232

 

 

4,352

 

Total other assets

46,763

 

 

45,063

 

 

46,464

 

Total assets

$

291,884

 

 

$

293,535

 

 

$

287,831

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

$

17,031

 

 

$

10,664

 

 

$

22,872

 

Accrued payroll and other compensation

5,002

 

 

8,754

 

 

4,512

 

Accrued customer programs

3,571

 

 

4,820

 

 

3,772

 

Other current liabilities

6,793

 

 

7,397

 

 

6,774

 

Total current liabilities

32,397

 

 

31,635

 

 

37,930

 

Long-term obligations

4,618

 

 

4,684

 

 

4,709

 

Stockholders’ equity

254,869

 

 

257,216

 

 

245,192

 

Total liabilities and stockholders’ equity

$

291,884

 

 

$

293,535

 

 

$

287,831

 

 

 

 

 

 


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