CSS Industries, Inc. Reports Results Of Operations For The Quarter Ended June 30, 2012

CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the quarter ended June 30, 2012. Sales for the first quarter of fiscal 2013 increased 11.9% to $61,067,000 from $54,569,000 in the first quarter of fiscal 2012, primarily driven by higher sales of all occasion and Halloween products. Costs of goods sold, as a percentage of sales, decreased from 74.1% in the first quarter of fiscal 2012 to 71.8% in the first quarter of fiscal 2013 reflecting lower commodity and other input costs. The majority of the first quarter increases in sales and gross profit were due to product shipping earlier than last year and which was expected to ship in the second quarter of this fiscal year. Selling, general and administrative (SG&A) expenses decreased by 5.1% to $18,570,000 primarily due to reduced salaries and related costs. A portion of the lower year over year SG&A expenses relates to staff reductions that occurred during the last three quarters of fiscal 2012. Loss from continuing operations before income taxes for the first quarter of fiscal 2013 was ($1,333,000) compared to ($5,484,000) in the first quarter of fiscal 2012. Loss from continuing operations for the first quarter of fiscal 2013 was ($867,000), or ($0.09) per diluted share, versus ($3,447,000), or ($0.35) per diluted share, in the first quarter of the prior fiscal year. Net loss for the first quarter of fiscal 2013, including discontinued operations, was ($904,000), or ($0.09) per diluted share, versus ($7,569,000), or ($0.78) per diluted share, in the first quarter of fiscal 2012. 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.

CSS is a consumer products company primarily engaged in the design, manufacture, procurement, distribution and sale of seasonal and all occasion social expression products, principally to mass market retailers. These seasonal and all occasion 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, Halloween masks, costumes, make-up and novelties, 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, 2012 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 ended June 30, 2012 and 2011 and condensed consolidated balance sheets as of June 30, 2012, March 31, 2012 and June 30, 2011 follow:

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
(In thousands, except per share amounts)
 
Three Months Ended
June 30,
  2012       2011  
 
Sales $ 61,067   $ 54,569  
 
Costs and expenses
Cost of sales 43,869 40,433
Selling, general and administrative expenses 18,570 19,559
Interest (income) expense, net (53 ) 43
Other expense, net   14     18  
  62,400     60,053  
 
Loss from continuing operations before income taxes (1,333 ) (5,484 )
 
Income tax benefit   (466 )   (2,037 )
 
Loss from continuing operations (867 ) (3,447 )
 
Loss from discontinued operations, net of tax   (37 )   (4,122 )
 
Net loss $ (904 ) $ (7,569 )
 
Basic and diluted net loss per common share:
Continuing operations $ (0.09 ) $ (0.35 )
Discontinued operations $ (0.00 ) $ (0.42 )
Total $ (0.09 ) $ (0.78 )
 
Weighted average basic and diluted shares outstanding   9,642     9,735  
 
Cash dividends per share of common stock $ 0.15   $ 0.15  

     

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
June 30, March 31, June 30,
2012 2012 2011
(Unaudited) (Audited) (Unaudited)

ASSETS
 
Current assets
Cash and cash equivalents $ 37,444 $ 66,135 $ 3,878
Accounts receivable, net 55,521 45,026 45,771
Inventories 89,816 71,671 88,801
Deferred income taxes 3,241 3,595 3,787
Other current assets 18,400 15,441 20,858
Current assets of discontinued operations   142   183   21,318
 
Total current assets   204,564   202,051   184,413
 
PROPERTY, PLANT AND EQUIPMENT, NET   29,249   29,582   31,577
 
DEFERRED INCOME TAXES   420   1,184   8,575
 
OTHER ASSETS
Goodwill 17,233 17,233 17,233
Intangible assets, net 29,275 29,689 30,980
Other   6,642   6,825   4,641
 
Total other assets   53,150   53,747   52,854
 
Total assets $ 287,383 $ 286,564 $ 277,419
 

LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES
Short-term debt $ - $ - $ -
Accrued customer programs 3,833 3,298 4,159
Other current liabilities 39,059 33,069 34,694
Current liabilities of discontinued operations   981   2,390   6,847
 
Total current liabilities   43,873   38,757   45,700
 
LONG-TERM OBLIGATIONS   4,516   4,604   4,694
 
STOCKHOLDERS' EQUITY   238,994   243,203   227,025
 
Total liabilities and stockholders' equity $ 287,383 $ 286,564 $ 277,419

Copyright Business Wire 2010

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