CSS Industries, Inc. Reports Results Of Operations For The Three And Nine Months Ended December 31, 2012

CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three and nine months ended December 31, 2012. As previously announced, the Company sold the Halloween portion of its Paper Magic Group, Inc. (“PMG”) business during the second quarter of fiscal 2013. Under the terms of the purchase agreement, PMG retained responsibility for the manufacture, sale and distribution of all PMG Halloween products for the Halloween 2012 season. Net sales of the Halloween business were $1,415,000 and $1,046,000 in the three months ended December 31, 2012 and 2011, respectively, and were $29,345,000 and $28,718,000 in the nine months ended December 31, 2012 and 2011, respectively. Operating results for the three and nine months ended December 31, 2012 reflect higher profitability compared to the same periods in 2011 from the Halloween portion of the PMG business because costs were reduced as a result of the sale.

Sales for the third quarter of fiscal 2013 decreased 10.2% to $116,020,000 from $129,240,000 in the third quarter of fiscal 2012. Income from continuing operations before income taxes for the third quarter of fiscal 2013 was $17,020,000, compared to $18,857,000 in the third quarter of fiscal 2012. Income from continuing operations for the third quarter of fiscal 2013 was $11,601,000, or $1.21 per diluted share, versus $12,109,000, or $1.24 per diluted share, in the third quarter of the prior fiscal year. Net income for the third quarter of fiscal 2013 was $11,611,000, or $1.22 per diluted share, versus $10,978,000, or $1.13 per diluted share, in the third quarter of fiscal 2012.

Sales for the first nine months of fiscal 2013 decreased 4.0% to $310,572,000 from $323,534,000 in the first nine months of fiscal 2012. Income from continuing operations before income taxes for the first nine months of fiscal 2013 was $27,945,000, compared to $29,677,000 in the prior year. Income from continuing operations for the first nine months of fiscal 2013 was $17,573,000, or $1.83 per diluted share, versus $18,976,000, or $1.95 per diluted share, in the first nine months of fiscal 2012. Net income for the first nine months of fiscal 2013 was $17,628,000, or $1.84 per diluted share, versus $18,894,000, or $1.94 per diluted share, in the first nine months of the fiscal 2012. During the first nine months of fiscal 2013, the Company incurred certain charges as a result of the sale of the Halloween portion of PMG that reduced the operating results for the nine months ended December 31, 2012 as shown in the table below:
             
First Nine Months of Fiscal 2013   As Reported Results   Halloween Charges, net   Non-GAAP Results
Income from continuing operations before income taxes   27,945,000   6,764,000   34,709,000
Income tax expense 10,372,000 1,532,000 11,904,000
Income from continuing operations 17,573,000 5,232,000 22,805,000
Diluted net income per common share - Continuing Operations   $ 1.83   $ 0.55   $ 2.38
 

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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