|
FOR IMMEDIATE RELEASE
January 28, 2004
CSS INDUSTRIES, INC. REPORTS SALES AND EARNINGS
CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the nine months and quarter ended December 31, 2003. For the nine months ended December 31, 2003, sales increased by 2% to $484,846,000 from $476,691,000 in 2002. Net income increased 16% to $37,574,000, or $3.05 per diluted share, compared to prior year net income before cumulative effect of change in accounting principle of $32,338,000, or $2.59 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 prior year results have been restated to reflect a three for two stock split. In addition, the prior year results reflect the adoption of SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No.142”). Upon adoption of SFAS No. 142 on April 1, 2002, the Company recorded a non-cash write-off of goodwill and negative goodwill in the amount of $8,813,000, net of taxes, or $.71 per diluted share.
For the quarter ended December 31, 2003, sales decreased by 1% to $247,394,000 from $250,682,000 in 2002. Net income increased 7% to $27,397,000, or $2.18 per diluted share, compared to prior year net income of $25,666,000, or $2.12 per diluted share.
Sales for the nine months, excluding sales attributed to Crystal Creative Products, Inc. (“Crystal”), which was acquired on October 18, 2002, decreased $12,770,000, or 3%, due primarily to lower sales of Halloween and certain Christmas products, partially offset by higher sales of everyday products. The increase in earnings for the nine months ended December 31, 2003 is a result of improved margins due to lower material costs, improved production efficiencies, higher value sales mix and the previously disclosed decline in bad debt expense. Sales for the quarter ended December 31, 2003, excluding sales attributed to Crystal, decreased $7,934,000, or 3%, primarily due to lower sales of Christmas cards, partially offset by higher sales of Christmas gift wrap, gift tags and ribbons and bows. Despite lower sales in the third quarter, earnings improved as a result of higher margins related to production efficiencies and higher value sales mix.
“We are pleased with the Company’s performance to date, especially the increase in earnings despite the impact of a sluggish retail environment on our base business. This positive result has been achieved through continued focus on the integration of acquired businesses, production efficiencies and cost reduction opportunities,” noted David Erskine, President and CEO. “As a result, we expect strong EPS growth for the full year ended March 31, 2004, and are increasing our guidance for earnings per share growth from 10% to approximately 15% compared to fiscal 2003,” he continued.
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, 2003.
CSS’ consolidated results of operations for the three and nine months ended December 31, 2003 and 2002 and condensed consolidated balance sheets as of December 31, 2003, March 31, 2003 and December 31, 2002 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited) (In thousands, except per share data) | | Three Months Ended
December 31 | Nine Months Ended
December 31 | | | 2003 | 2002 | 2003 | 2002 | | | | SALES | $247,394 | $250,682 | $484,846 | $476,691 | | | | COSTS AND EXPENSES | | Cost of sales | 176,075 | 181,296 | 349,056 | 349,013 | | Selling, general and administrative expenses | 27,416 | 27,906 | 74,698 | 74,386 | | Interest expense, net | 1,185 | 1,496 | 2,874 | 2,903 | | Other expense (income), net | 192 | (118) | (310) | (139) | | | | | 204,868 | 210,580 | 426,318 | 426,163 | | | | INCOME BEFORE INCOME TAXES | 42,526 | 40,102 | 58,528 | 50,528 | | | | INCOME TAX EXPENSE | 15,129 | 14,436 | 20,954 | 18,190 | | | | INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | 27,397 | 25,666 | 37,574 | 32,338 | | | | CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX | - | - | - | (8,813) | | | | NET INCOME | $27,397 | $25,666 | $37,574 | $23,525 | | | | BASIC NET INCOME (LOSS) PER COMMON SHARE | | Before cumulative effect of accounting change | 2.31 | 2.24 | 3.20 | 2.73 | | Cumulative effect of accounting change | - | - | - | (.75) | | Basic net income (loss) per common share | $2.31 | $2.24 | $3.20 | $1.98 | | | | DILUTED NET INCOME (LOSS) PER COMMON SHARE | | Before cumulative effect of accounting change | 2.18 | 2.12 | 3.05 | 2.59 | | Cumulative effect of accounting change | - | - | - | (.71) | | Diluted net income (loss) per common share | $2.18 | $2.12 | $3.05 | $1.88 | | | | WEIGHTED AVERAGE SHARES OUTSTANDING | | BASIC | 11,841 | 11,457 | 11,730 | 11,860 | | DILUTED | 12,592 | 12,086 | 12,335 | 12,483 | CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) | | December 31,
2003 | March 31,
2003 | December 31,
2002 | | | (Unaudited) | | (Unaudited) | | | | ASSETS | | | | | | | CURRENT ASSETS | | Cash and temporary investments | 12,158 | 51,981 | 12,467 | | Accounts receivable, net | 215,377 | 47,583 | 227,326 | | Inventories | 76,187 | 106,648 | 85,223 | | Income tax receivable | - | 2,398 | - | | Deferred income taxes | 7,179 | 6,226 | 6,091 | | Other current assets | 11,934 | 13,771 | 13,288 | | | | Total current assets | 322,835 | 228,607 | 344,395 | | | | PROPERTY, PLANT AND EQUIPMENT, NET | 82,959 | 82,731 | 83,576 | | | | OTHER ASSETS | | Intangible Assets | 36,995 | 36,045 | 31,213 | | Other | 4,473 | 4,578 | 4,823 | | | | Total other assets | 41,468 | 40,623 | 36,036 | | | | Total assets | $447,262 | $351,961 | $464,007 | | | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | | | | | CURRENT LIABILITIES | | Notes payable | 28,980 | - | 75,900 | | Other current liabilities | 95,653 | 69,645 | 101,474 | | | | Total current liabilities | 124,633 | 69,645 | 177,374 | | | | LONG-TERM DEBT | 50,000 | 50,063 | 50,093 | | | | LONG-TERM OBLIGATIONS | 3,564 | 3,684 | 3,612 | | | | DEFERRED INCOME TAXES | 9,098 | 7,706 | 7,353 | | | | SHAREHOLDER'S EQUITY | 259,967 | 220,863 | 225,575 | | | | Total liabilities and shareholders' equity | $447,262 | $351,961 | $464,007 |
FOR FURTHER INFORMATION CONTACT:
Vincent A. Paccapaniccia
Chief Financial Officer
tele: (215) 569-9900
|
