CSS Industries, Inc. (NYSE:CSS) announced today its results of
operations for the quarter and year ended March 31, 2015. As
previously announced, the Company's Berwick Offray LLC ("Berwick
Offray") company acquired substantially all of the business and
assets of Hollywood Ribbon Industries, Inc. ("Hollywood Ribbon") on
February 19, 2015. As part of this transaction, the Company
incurred $881,000 pretax, or $0.06 per diluted share, of
transaction and one-time transition costs as the business was
combined with Berwick Offray’s existing manufacturing and
distribution facilities located in the Berwick, Pennsylvania
area.
Sales for the fourth quarter of fiscal 2015 decreased 1.6% to
$53,702,000 from $54,560,000 in the fourth quarter of fiscal 2014,
as lower sales of all occasion stationery products more than offset
higher sales attributable to the acquisition of substantially all
of the business and assets of Carson & Gebel Ribbon Co., LLC
("Carson & Gebel"), as announced on May 19, 2014. Loss from
continuing operations before income taxes for the fourth quarter of
fiscal 2015 was $(1,928,000), compared to $(2,085,000) in the
fourth quarter of fiscal 2014. Net loss for the fourth quarter of
fiscal 2015 was $(1,336,000), or $(0.14) per diluted share, versus
$(1,529,000), or $(0.16) per diluted share, in the fourth quarter
of fiscal 2014. Results for the fourth quarter of fiscal 2015
include the previously mentioned $881,000 of pretax transaction and
one-time transition costs from the acquisition of Hollywood Ribbon,
as detailed in the chart below.
Fourth Quarter Fiscal 2015 Hollywood Ribbon
Non-GAAP As Reported Charges Results
Loss from continuing operations before income taxes $ (1,928,000 )
$ 881,000 $ (1,047,000 ) Income tax benefit (592,000 ) 320,000
(272,000 ) Loss from continuing operations (1,336,000 ) 561,000
(775,000 ) Diluted net loss per common share-continuing operations
$ (0.14 ) $ 0.06 $ (0.08 )
Sales for full year fiscal 2015 decreased 2.3% to $313,044,000
from $320,459,000 in full year fiscal 2014, primarily due to lower
sales of Christmas cards, gift bags and decorations, all occasion
cards and stationery products, partially offset by higher sales of
gift card holders and sales attributable to the acquisition of
substantially all of the business and assets of Carson & Gebel.
Income from continuing operations before income taxes for the full
year fiscal 2015 was $26,641,000, compared to $27,700,000 in the
prior year. Net income for full year fiscal 2015 was $16,954,000,
or $1.80 per diluted share, versus $18,769,000, or $1.99 per
diluted share, in the prior fiscal year. Results for full year
fiscal 2015 include the previously mentioned $881,000 of pretax
transaction and one-time transition costs from the acquisition of
Hollywood Ribbon, as detailed in the chart below. 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.
Full Year Fiscal 2015 Hollywood Ribbon
Non-GAAP As Reported Charges Results
Income (loss) from continuing operations before income taxes $
26,641,000 $ 881,000 $ 27,522,000 Income tax expense (benefit)
9,687,000 320,000 10,007,000 Income (loss) from continuing
operations 16,954,000 561,000 17,515,000 Diluted net income (loss)
per common share-continuing operations $ 1.80
$ 0.06 $ 1.86
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 and
twelve months ended March 31, 2015 and 2014 and condensed
consolidated balance sheets as of March 31, 2015 and March 31, 2014
follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share
amounts)
Three Months Ended Twelve Months Ended March 31,
March 31, 2015 2014 2015 2014 Sales $ 53,702
$ 54,560 $ 313,044 $ 320,459 Costs and
expenses Cost of sales 38,319 38,856 211,342 217,303 Selling,
general and administrative expenses 17,308 17,660 75,062 75,204
Interest (income) expense, net (32 ) 39 7 191 Other expense
(income), net 35 90 (8 ) 61 55,630 56,645
286,403 292,759 (Loss) income from continuing
operations before income taxes (1,928 ) (2,085 ) 26,641 27,700
Income tax (benefit) expense (592 ) (482 ) 9,687
9,136 (Loss) income from continuing operations (1,336 )
(1,603 ) 16,954 18,564 Income from discontinued operations,
net of tax — 74 — 205 Net (loss) income
$ (1,336 ) $ (1,529 ) $ 16,954 $ 18,769 Net (loss)
income per common share Basic: Continuing operations $ (0.14 ) $
(0.17 ) $ 1.82 $ 1.98 Discontinued operations $ — $
0.01 $ — $ 0.02 Total $ (0.14 ) $ (0.16 ) $ 1.82
$ 2.00 Diluted: Continuing operations $ (0.14 ) $
(0.17 ) $ 1.80 $ 1.97 Discontinued operations $ — $
0.01 $ — $ 0.02 Total $ (0.14 ) $ (0.16 ) $ 1.80
$ 1.99 Weighted average shares outstanding Basic
9,343 9,294 9,326 9,389 Diluted 9,343
9,294 9,410 9,436 Cash dividends per share of
common stock $ 0.18 $ 0.15 $ 0.63 $ 0.60
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31, 2015 2014
ASSETS
Current assets: Cash and cash equivalents $ 36,429 $ 68,200
Short-term investments 69,845 29,862 Accounts receivable, net
42,052 44,243 Inventories 65,491 59,252 Deferred income taxes 4,375
4,414 Other current assets 11,235 13,472 Current assets of
discontinued operations — 1 Total current assets
229,427 219,444 Property, plant and equipment, net
25,493 27,063 Deferred income taxes 582 1,965
Other assets: Goodwill 15,820 14,522 Intangible assets, net
33,048 26,309 Other 5,103 4,232 Total other assets
53,971 45,063 Total assets $ 309,473 $ 293,535
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current liabilities: Accrued customer programs $ 4,042 $ 4,820
Other current liabilities 30,963 26,582 Current liabilities of
discontinued operations — 233 Total current
liabilities 35,005 31,635 Long-term obligations 4,213
4,684 Stockholders' equity 270,255 257,216
Total liabilities and stockholders’ equity $ 309,473
$ 293,535 CSS Industries, Inc. Reconciliation of
Certain Non-GAAP Measures (Unaudited) (in thousands, except per
share amounts)
The following is a reconciliation and
computation of income (loss) from continuing operations before
income taxes, income tax expense, income (loss) from continuing
operations and diluted income (loss) per share from continuing
operations to exclude charges incurred as a result of the
acquisition of Hollywood Ribbon:
Three Months Ended March 31, 2015
Loss from Continuing Operations Before
Income Taxes
Income Tax Expense
Loss from Continuing Operations
Diluted Loss Per Share, Continuing
Operations
As Reported $ (1,928 ) $ (592 ) $ (1,336 ) $ (0.14 ) Hollywood
Ribbon Charges 881 320 561 0.06
Non-GAAP Measurement $ (1,047 ) $ (272 ) $ (775 ) $ (0.08 )
Twelve Months Ended March 31, 2015
Income from Continuing Operations Before
Income Taxes
Income Tax Expense
Income from Continuing Operations
Diluted Income Per Share, Continuing
Operations
As Reported $ 26,641 $ 9,687 $ 16,954 $ 1.80 Hollywood Ribbon
Charges 881 320 561 0.06 Non-GAAP
Measurement $ 27,522 $ 10,007 $ 17,515 $ 1.86
Management believes that presentation of results of operations
adjusted for the affects of the acquisition of Hollywood Ribbon
provides useful information to investors with respect to the
Company’s operating results for the three months and twelve months
ended March 31, 2015 because it enhances comparability between the
reporting periods.
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CSS Industries, Inc.Vincent A. PaccapanicciaChief
Financial Officer215-569-9900
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