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CSS INDUSTRIES, INC. ANNOUNCES ACQUISITION OF THE BUSINESS AND ASSETS OF THE McCALL PATTERN COMPANY

CSS INDUSTRIES, INC. ANNOUNCES ACQUISITION OF THE BUSINESS AND ASSETS OF THE McCALL PATTERN COMPANY


CSS Industries, Inc. (NYSE: CSS), a leading consumer products company within the craft, seasonal and celebrations markets, announced today that it has completed the acquisition of substantially all of the business and assets of The McCall Pattern Company and certain affiliated companies (“McCall”).  McCall designs, manufactures, and sells sewing patterns under the McCall’s®, Butterick®, Kwik Sew® and Vogue Patterns® brand names.  McCall is a leading provider of home sewing patterns, selling to mass market retailers, specialty fabric and craft chains, and wholesale distributors.  Worldwide sales for McCall in the year ended December 31, 2015 totaled approximately $32.0 million.  The cash purchase price totals $14.0 million and is subject to certain post-closing adjustments and indemnification obligations.  The acquisition of McCall marks the fifth acquisition by CSS since May 2014.  This acquisition is consistent with the Company’s strategy to expand its presence in the craft, seasonal and celebrations markets, primarily in North America, including selective acquisitions. 

 

“As CSS integrates McCall’s operations into our business, we expect to realize significant efficiencies and revenue enhancement opportunities”, said Christopher J. Munyan, President and Chief Executive Officer of CSS.  “McCall’s products and markets are highly complementary and we expect this combination will further our strategy of building on our existing relationships with craft, seasonal, and celebrations customers.  When combined with our acquisition earlier this calendar year of the button business of Blumenthal Lansing Company, we have expanded and diversified our product line, which should enable us to grow our presence with the largest retailers in North America.” 

 

CSS is a consumer products company within the craft, seasonal and celebrations markets that is 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 craft ribbon and buttons, packaging ribbon and bows, sewing patterns, classroom exchange Valentines, infant products, journals, fashion buttons, boxed greeting cards, gift tags, gift card holders, gift bags, gift wrap, decorations, floral accessories, craft and educational products, Easter egg dyes and novelties, memory books, scrapbooks, stickers, stationery, and other 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 the Company’s expected realization of significant efficiencies and revenue enhancement opportunities in connection with the acquisition of substantially all of the business and assets of McCall and statements relating to the Company growing its presence with the largest retailers in North America.  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, risks and uncertainties associated with realizing efficiencies and revenue enhancement opportunities from the acquisition of McCall, including the risk that such efficiencies and revenue enhancements may not be realized or may be realized to a lesser extent than currently expected by management and the risk the Company may not be able to achieve the expected growth of its presence with the largest retailers in North America; 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); information technology risks, such as cyber attacks and data breaches; 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; 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 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.

 

FOR FURTHER INFORMATION CONTACT:

David F. McHugh, Interim Chief Financial Officer

(610) 729-3746