American Greetings 8-K American Greetings Announces Improved First Quarter Results

Exhibit 99.1

AMERICAN GREETINGS ANNOUNCES IMPROVED FIRST QUARTER RESULTS

CLEVELAND (June 21, 2007) — American Greetings Corporation (NYSE: AM) today announced its first quarter results for the fiscal quarter ended May 25, 2007.

First Quarter Results
For the first quarter of fiscal 2008, the Company reported net sales of $418.0 million, pre-tax income from continuing operations of $54.9 million, and income from continuing operations of $30.6 million or 55 cents per share (all per-share amounts assume dilution). For the first quarter of fiscal 2007, the Company reported net sales of $404.2 million, pre-tax income from continuing operations of $19.4 million, and income from continuing operations of $16.6 million or 26 cents per share.

Management Comments and Outlook
Chief Executive Officer Zev Weiss said, “I am pleased with our performance this quarter as it was ahead of our expectations. We had improved performance of everyday cards within North America. Our first quarter results suggest that the improved performance is the result of the actions we have taken over the past year.”

Weiss also reaffirmed the Corporation’s previously announced estimate of earnings per share from continuing operations to be between $1.35 to $1.55 per share. “While I am happy with our first quarter results, it is still early in the year and as such, we remain comfortable with our earnings guidance for the full year,” added Weiss.

Financing Activities
The Company purchased 135,000 shares of its common stock, under its $100 million share repurchase program, for $3.4 million during the first quarter of fiscal 2008. Since February 2005, the Company has repurchased 21.5 million of its shares for approximately $500 million.

The Company’s Board of Directors is scheduled to meet June 22, 2007 at which time it will review the Company’s quarterly cash dividend. The Board of Directors is expected to maintain the Company’s dividend policy. After the Board has met, a press release will be issued regarding the status of the dividend.

Conference Call on the Web
American Greetings will broadcast its conference call live on the Internet at 9:00 a.m. Eastern time today. The conference call will be accessible through the Investor Relations section of the American Greetings Web site athttp://investors.americangreetings.com. A replay of the call will be available on the site.

About American Greetings Corporation
American Greetings Corporation (NYSE: AM) is one of the world’s largest manufacturers of social expression products. Along with greeting cards, its product lines include gift wrap, party goods, stationery, calendars, ornaments and electronic greetings. Located in Cleveland, Ohio, American Greetings generates annual net sales of approximately $1.7 billion. For more information on the Company, visithttp://corporate.americangreetings.com.

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CONTACT:
Gregory M. Steinberg
Treasurer and Director of Investor Relations
American Greetings Corporation
216-252-4864
investor.relations@amgreetings.com

Certain statements in this release, including those under “Management Comments and Outlook” and “Financing Activities” may constitute forward-looking statements within the meaning of the Federal securities laws. These statements can be identified by the fact that they do not relate strictly to historic or current facts. They use such words as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. These forward-looking statements are based on currently available information, but are subject to a variety of uncertainties, unknown risks and other factors concerning the Company’s operations and business environment, which are difficult to predict and may be beyond the control of the Company. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company’s future financial performance, include, but are not limited to, the following:

• retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;

• the Company’s ability to successfully implement its strategy to invest in its core greeting card business;

• the timing and impact of investments in new retail or product strategies as well as new product introductions and achieving the desired benefits from those investments;

• the ability to execute share repurchase programs or the ability to achieve the desired accretive effect from such repurchases;

• the Company’s ability to successfully complete, or achieve the desired benefits associated with, dispositions;

• a weak retail environment;

• consumer acceptance of products as priced and marketed;

• the impact of technology on core product sales;

• competitive terms of sale offered to customers;

• successful implementation of supply chain improvements and achievement of projected cost savings from those improvements;

• increases in the cost of material, energy, freight, and other production costs;

• the Company’s ability to comply with its debt covenants;

• fluctuations in the value of currencies in major areas where the Company operates, including the U.S. Dollar, Euro, U.K. Pound Sterling, and Canadian Dollar;

• escalation in the cost of providing employee health care;

• successful integration of acquisitions; and

• the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability of online advertising, subscriptions as revenue generators and the public’s acceptance of online greetings and other social expression products.

In addition, this release contains time-sensitive information that reflects management’s best analysis as of the date of this release. American Greetings does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in the Company’s periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007.

AMERICAN GREETINGS CORPORATION
FIRST QUARTER CONSOLIDATED STATEMENT OF INCOME
FISCAL YEAR ENDING FEBRUARY 29, 2008

(In thousands of dollars except share and per share amounts)

	(Unaudited)
	Three Months Ended
	May 25, 2007			May 26, 2006
Net sales	$	418,013		$	404,170
Costs and expenses:
Material, labor and other production costs		161,128			175,237
Selling, distribution and marketing		140,691			142,580
Administrative and general		61,871			61,348
Interest expense		4,757			12,464
Other income — net		(5,347	)		(6,860	)
		363,100			384,769
Income from continuing operations before income tax expense		54,913			19,401
Income tax expense		24,291			2,851
Income from continuing operations		30,622			16,550
Loss from discontinued operations, net of tax		(572	)		(1,158	)
Net income	$	30,050		$	15,392
Earnings per share — basic:
Income from continuing operations	$	0.55		$	0.28
Loss from discontinued operations		(0.01	)		(0.02	)
Net income	$	0.54		$	0.26
Earnings per share — assuming dilution:
Income from continuing operations	$	0.55		$	0.26
Loss from discontinued operations		(0.01	)		(0.02	)
Net income	$	0.54		$	0.24
Average number of common shares outstanding		55,262,716			58,137,230
Average number of common shares outstanding — assuming dilution		55,650,033			71,077,312
Dividends declared per share	$	0.10		$	0.08

AMERICAN GREETINGS CORPORATION
FIRST QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FISCAL YEAR ENDING FEBRUARY 29, 2008

(In thousands of dollars)

	(Unaudited)
	May 25, 2007			May 26, 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	132,582		$	205,468
Short-term investments		28,325			83,100
Trade accounts receivable, net		119,145			119,729
Inventories		192,399			233,155
Deferred and refundable income taxes		76,892			163,051
Assets of businesses held for sale		2,507			23,621
Prepaid expenses and other		215,867			211,354
Total current assets		767,717			1,039,478
GOODWILL		225,318			206,137
OTHER ASSETS		397,567			527,630
DEFERRED AND REFUNDABLE INCOME TAXES		102,060			—
Property, plant and equipment — at cost		947,156			965,588
Less accumulated depreciation		666,651			661,383
PROPERTY, PLANT AND EQUIPMENT — NET		280,505			304,205
	$	1,773,167		$	2,077,450
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Debt due within one year	$	—		$	159,122
Accounts payable		100,914			124,789
Accrued liabilities		77,837			72,781
Accrued compensation and benefits		43,656			45,056
Income taxes		29,878			25,228
Liabilities of businesses held for sale		1,253			3,697
Other current liabilities		84,622			94,324
Total current liabilities		338,160			524,997
LONG-TERM DEBT		223,800			239,838
OTHER LIABILITIES		146,384			98,729
DEFERRED INCOME TAXES AND NONCURRENT INCOME TAXES PAYABLE		27,184			25,041
SHAREHOLDERS’ EQUITY
Common shares — Class A		51,148			53,386
Common shares — Class B		4,340			4,225
Capital in excess of par value		424,201			401,644
Treasury stock		(712,147	)		(732,890	)
Accumulated other comprehensive income		6,030			23,952
Retained earnings		1,264,067			1,438,528
Total shareholders’ equity		1,037,639			1,188,845
	$	1,773,167		$	2,077,450

AMERICAN GREETINGS CORPORATION
FIRST QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS
FISCAL YEAR ENDING FEBRUARY 29, 2008
(In thousands of dollars)

	(Unaudited)
	Three Months Ended
	May 25, 2007			May 26, 2006
OPERATING ACTIVITIES:
Net income	$	30,050		$	15,392
Loss from discontinued operations		572			1,158
Income from continuing operations		30,622			16,550
Adjustments to reconcile to net cash provided by operating activities:
Net gain on disposal of fixed assets		(116	)		(79	)
Loss on extinguishment of debt		—			4,963
Depreciation and amortization		11,989			11,764
Deferred income taxes		4,466			(1,934	)
Other non-cash charges		1,979			3,926
Changes in operating assets and liabilities, net of acquisitions and dispositions:
(Increase) decrease in trade accounts receivable		(14,750	)		22,579
Increase in inventories		(7,389	)		(17,313	)
Decrease (increase) in other current assets		646			(8,708	)
Decrease in deferred costs — net		11,691			12,722
Decrease in accounts payable and other liabilities		(21,753	)		(24,245	)
Other — net		4,236			5,575
Cash Provided by Operating Activities		21,621			25,800
INVESTING ACTIVITIES:
Proceeds from sale of short-term investments		134,900			448,320
Purchases of short-term investments		(163,225	)		(322,680	)
Property, plant and equipment additions		(5,875	)		(9,591	)
Cash payments for business acquisitions, net of cash acquired		(6,056	)		—
Cash receipts related to discontinued operations		2,344			—
Proceeds from sale of fixed assets		890			182
Cash (Used) Provided by Investing Activities		(37,022	)		116,231
FINANCING ACTIVITIES:
Increase in long-term debt		—			200,000
Reduction of long-term debt		—			(281,363	)
Sale of stock under benefit plans		9,358			1,052
Purchase of treasury shares		(3,568	)		(59,529	)
Dividends to shareholders		(5,536	)		(4,605	)
Debt issuance costs		—			(7,276	)
Cash Provided (Used) by Financing Activities		254			(151,721	)
DISCONTINUED OPERATIONS:
Cash used by operating activities from discontinued operations		(542	)		(2,540	)
Cash provided by investing activities from discontinued operations		—			1,644
Cash Used by Discontinued Operations		(542	)		(896	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		3,558			2,441
DECREASE IN CASH AND CASH EQUIVALENTS		(12,131	)		(8,145	)
Cash and Cash Equivalents at Beginning of Year		144,713			213,613
Cash and Cash Equivalents at End of Period	$	132,582		$	205,468

AMERICAN GREETINGS CORPORATION
FIRST QUARTER CONSOLIDATED SEGMENT DISCLOSURES
FISCAL YEAR ENDING FEBRUARY 29, 2008
(In thousands of dollars)

	(Unaudited)
	Three Months Ended
	May 25, 2007			May 26, 2006
Net Sales:
North American Social Expression Products	$	297,066		$	292,950
Intersegment items		(8,167	)		(17,548	)
Exchange rate adjustment		5			(63	)
Net		288,904			275,339
International Social Expression Products		59,145			63,865
Exchange rate adjustment		4,057			(2,251	)
Net		63,202			61,614
Retail Operations		38,924			43,501
Exchange rate adjustment		4			(62	)
Net		38,928			43,439
AG Interactive		19,894			19,960
Exchange rate adjustment		3			5
Net		19,897			19,965
Non-reportable segments		7,082			3,813
Consolidated	$	418,013		$	404,170
Segment Earnings (Loss):
North American Social Expression Products	$	86,940		$	68,161
Intersegment items		(6,255	)		(12,910	)
Exchange rate adjustment		5			(33	)
Net		80,690			55,218
International Social Expression Products		40			497
Exchange rate adjustment		147			46
Net		187			543
Retail Operations		(2,781	)		(7,301	)
Exchange rate adjustment		—			2
Net		(2,781	)		(7,299	)
AG Interactive		3,296			2,041
Exchange rate adjustment		(9	)		(1	)
Net		3,287			2,040
Non-reportable segments		927			(2,095	)
Unallocated		(27,393	)		(28,906	)
Exchange rate adjustment		(4	)		(100	)
Net		(27,397	)		(29,006	)
Consolidated	$	54,913		$	19,401