CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the quarter and year ended March 31, 2010. Sales for the fourth quarter of fiscal 2010 decreased 7% to $52,270,000 from $56,494,000 in fiscal 2009. In the fourth quarter of fiscal 2010, the Company recorded a non-cash pre-tax impairment charge of $44,315,000 due to a full impairment of goodwill in two of its reporting units, C.R. Gibson, LLC and BOC Design Group (consisting of Berwick Offray LLC and Cleo Inc), and partial impairments of tradenames used by such entities. The foregoing impairment charge was partially offset by an $11,692,000 tax benefit. The fourth quarter fiscal 2010 net loss was $40,841,000, or $(4.22) per share. The impact of the impairment charge, net of the associated tax benefit, in the fourth quarter of fiscal 2010 was $(3.37) per share. Excluding the non-cash impairment of goodwill and intangible assets, net of tax benefit, fourth quarter fiscal 2010 net loss per share would have been $(0.85) versus a net loss of $(0.57) per share in fiscal 2009. The Company’s highly 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.
Sales for fiscal year 2010 decreased 7% to $448,450,000 from $482,424,000 in fiscal 2009, while net income decreased to a net loss of $(23,739,000), or $(2.46) per diluted share. Excluding the non-cash impairment of goodwill and intangible assets, net of tax benefit, discussed above, fiscal year 2010 net income per diluted share would have been $0.92 versus $1.70 in fiscal year 2009.
Fourth Quarter Results
Sales declined 7% in the fourth quarter of fiscal 2010 as compared to the same period last year, primarily driven by lower Valentines sales which shipped in the third quarter of fiscal 2010 as compared to the fourth quarter in fiscal 2009. Net loss for the fourth quarter of fiscal 2010 was negatively impacted by the impairment of intangibles noted above, lower sales volume, inventory allowances and increased customer claims in part due to the Company’s Christmas product manufacturing inefficiencies.