CSS Industries, Inc. Reports Results Of Operations For The Three And Nine Months Ended December 31, 2011

CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three and nine months ended December 31, 2011. During the second quarter of fiscal 2012, the Company sold its Cleo Christmas gift wrap business and is reporting the results of that business as discontinued operations.

Sales for the third quarter of fiscal 2012 decreased 2.9% to $129,240,000 from $133,089,000 in the third quarter of fiscal 2011, primarily driven by lower sales of Christmas cards which was partially offset by higher sales of all occasion products. Income from continuing operations before income taxes for the third quarter of fiscal 2012 was $18,857,000 compared to $22,759,000 in the third quarter of fiscal 2011. In the current fiscal year, the Company began to charge incentive compensation expense to the periods in which profits are generated. Due to this change, pre-tax incentive compensation expense for the third quarter of fiscal 2012 was $1,401,000 higher than the third quarter of fiscal 2011. Income from continuing operations for the third quarter of fiscal 2012 was $12,109,000, or $1.24 per diluted share, versus $14,499,000, or $1.49 per diluted share, in the third quarter of the prior fiscal year. Net income for the third quarter of fiscal 2012 was $10,978,000, or $1.13 per diluted share, versus $12,855,000, or $1.32 per diluted share, in the third quarter of fiscal 2011.

Sales for the first nine months of fiscal 2012 increased 0.8% to $323,534,000 from $320,983,000 in the first nine months of fiscal 2011, with this increase primarily driven by higher sales of all occasion products which was partially offset by lower sales of Christmas cards. Income from continuing operations before income taxes for the first nine months of fiscal 2012 was $29,677,000, which was 3.7% lower than the $30,829,000 in the prior year largely due to $1,816,000 of higher incentive compensation expense in the first nine months of fiscal 2012 compared to the same period in fiscal 2011. Income from continuing operations for the first nine months of fiscal 2012 was $18,976,000, or $1.95 per diluted share, versus $19,692,000, or $2.03 per diluted share, in the first nine months of fiscal 2011. Net income for the first nine months of fiscal 2012 was $18,894,000, or $1.94 per diluted share, versus $15,583,000, or $1.61 per diluted share, in the first nine months of the fiscal 2011. 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.

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