Attached files
| file | filename |
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| 8-K - 8-K - CSS INDUSTRIES INC | a8-kcover3x31x2015.htm |
Exhibit 99.1 | ||
FOR FURTHER INFORMATION CONTACT: | Vincent A. Paccapaniccia | |
Chief Financial Officer | ||
(215) 569-9900 | ||
FOR IMMEDIATE RELEASE
May 19, 2015
CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS
FOR THE QUARTER AND YEAR ENDED MARCH 31, 2015
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.