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FOR IMMEDIATE RELEASE
May 18, 2005
CSS INDUSTRIES, INC. REPORTS SALES AND EARNINGS FOR THE YEAR AND QUARTER ENDED MARCH 31, 2005
CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the year and quarter ended March 31, 2005. Sales for fiscal year 2005 decreased 1% to $536,362,000 from $539,349,000, while net income increased 3% to $30,692,000, or $2.45 per diluted share, from $29,850,000, or $2.42 per diluted share, in fiscal 2004. Sales for the fourth quarter of 2005 increased 6% to $57,927,000 from $54,503,000 in fiscal 2004. The net loss decreased in the fourth quarter to $4,485,000, or $.38 per diluted share, from $7,724,000, or $.65 per diluted share, in fiscal 2004. 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 1% decline in sales for the year ended March 31, 2005 was the result of selling a product line during the previous year. For continuing businesses, increases in Christmas and everyday boxed cards were offset by lower sales of seasonal tissue and ribbons and bows. The improvement in net income per diluted share reflects lower selling, general and administrative and interest expenses, partially offset by lower sales volume and margins. Lower margins in fiscal 2005 reflected $2,300,000 of tissue duties and increased freight and material costs. For the quarter, sales increased 6% primarily as a result of increased everyday boxed greeting card sales. The net loss for the quarter improved by 42% compared to last year as a result of higher sales volume, improved gross margins and lower selling, general and administrative expenses.
“We are disappointed with the results delivered for this fiscal year. Earnings per share, although in line with our previous guidance as included in our press release dated January 26, 2005, improved only 1% to $2.45 per diluted share from $2.42 in the prior year largely as a result of incremental tissue duties and increased freight and commodity material costs,” commented David J. M. Erskine, CSS President and CEO. “The term of our collective bargaining agreement with the labor union representing predominantly our Cleo plant employees has expired. We have not reached agreement on a new contract. Assuming the successful resolution of this matter, we expect EPS growth of 20% to 25% for the fiscal year ending March 31, 2006. Improved operations, particularly in tissue, will contribute approximately half of the increase and the net effect of a recent share repurchase tender offer will account for the rest.”
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, 2004.
CSS’ consolidated results of operations for the three months and year ended March 31, 2005 and 2004 and condensed consolidated balance sheets as of March 31, 2005 and 2004 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED RESULTS OF OPERATIONS (In thousands, except per share amounts) | | Year Ended March 31, | Three Months Ended March 31, | | | 2005 | 2004 | 2005
(Unaudited)
| 2004
(Unaudited)
| | | | SALES | $536,362 | $539,349 | $57,927 | $54,503 | | | | COSTS AND EXPENSES | | Cost of sales | 397,538 | 395,878 | 44,268 | 45,160 | | Selling, general and administrative expenses | 89,997 | 94,198 | 21,013 | 21,162 | | Interest expense (income), net | 2,374 | 3,402 | 342 | 528 | | Rental and other (income) expense, net | (665) | (426) | (22) | (116) | | | | | 489,244 | 493,052 | 65,601 | 66,734 | | | | (LOSS) INCOME BEFORE INCOME TAXES | 47,118 | 46,297 | (7,674) | (12,231) | | | | INCOME TAX EXPENSE (BENEFIT) | 16,426 | 16,447 | (3,189) | (4,507) | | | | (NET INCOME (LOSS) | $30,692 | $29,850 | $(4,485) | $(7,724) | | | | | | | | | | | | NET INCOME (LOSS) PER COMMON SHARE | | | | | | |
| Basic | $2.58 | $2.54 | $(.38) | $(.65) | | Diluted | $2.45 | $2.42 | $(.38) | $(.65) | | | | | | | | | | WEIGHTED AVERAGE SHARES OUTSTANDING | | BASIC | 11,886 | 11,755 | 11,799 | 11,839 | | DILUTED | 12,544 | 12,346 | 11,799 | 11,839 | | | | | | |
CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) | | March 31, 2005
(Unaudited)
| March 31, 2004 | | | | ASSETS | | | | | | CURRENT ASSETS | | Cash and cash equivalents | $ 57,333 | $ 93,191 | | Accounts receivable, net | 37,273 | 40,460 | | Inventories | 101,867 | 94,459 | | Deferred income taxes | 8,199 | 7,937 | | Other current assets | 13,945 | 12,987 | | | | | | | | Total current assets | 218,617 | 249,034 | | | | PROPERTY, PLANT AND EQUIPMENT, NET | 75,402 | 81,193 | | | | OTHER ASSETS | | Intangible Assets, Net | 35,468 | 35,619 | | Other | 4,419 | 4,551 | | | | Total other assets | 39,887 | 40,170 | | | | Total assets | $333,906 | $370,397 | | | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | | | | CURRENT LIABILITIES | | Notes payable | - | - | | Current portion of long-term debt | 10,442 | 335 | | Other current liabilities | 56,297 | 60,886 | | | | Total current liabilities | 66,739 | 61,221 | | | | LONG-TERM DEBT | 40,000 | 50,251 | | | | LONG-TERM OBLIGATIONS | 3,607 | 3,631 | | | | DEFERRED INCOME TAXES | 7,071 | 6,142 | | | | STOCKHOLDERS’ EQUITY | 216,489 | 249,152 | | | | Total liabilities and shareholders' equity | $333,906 | $370,397 |
FOR FURTHER INFORMATION CONTACT:
Vincent A. Paccapaniccia
Chief Financial Officer
tele: (215) 569-9900
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