American Greetings 8-K American Greetings Announces Record Second Quarter Earnings

Exhibit 99.1

AMERICAN GREETINGS ANNOUNCES RECORD SECOND QUARTER EARNINGS

CLEVELAND (September 24, 2009) – American Greetings Corporation (NYSE: AM) today announced its second quarter results for the quarter ended August 28, 2009.

Second Quarter Results

For the second quarter of fiscal 2010, the Company reported total revenue of $356.4 million, pre-tax income of $34.1 million, and net income of $23.1 million or 59 cents per share (all per-share amounts assume dilution). Included within these results was a pre-tax benefit from an insurance program of $7.9 million (after tax of approximately $7.6 million) or approximately 19 cents per share.

For the second quarter of fiscal 2009, the Company reported total revenue of $385.8 million, pre-tax income of $2.4 million, and net income of $2.3 million or 5 cents per share.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “I am very pleased with our record earnings performance this quarter as well as our strong cash flow. I believe the changes we have made to our business over the last year are showing up in our results. We could not have achieved these results without the teamwork and coordination of all our associates.”

Weiss continued, “We have devoted more time and effort to develop new products so that consumers can find unique and fresh offerings in the greeting card aisle. We have expanded our use of technology for both traditional greeting cards as well as on-line applications including Facebook and the iPhone. These examples of leadership in innovation are all in addition to the recent enhancements we have made to our portfolio, specifically the acquisitions of Recycled Paper Greetings and Papyrus, which complement our innovation with leadership in both humor and elegant design.”

As a result of the strong cash flow performance during the first half of the fiscal year, the Company raised its previously announced fiscal 2010 cash flow estimate. Previously, the Company expected cash flow from operating activities of approximately $105 million to $115 million and capital expenditures of approximately $35 million to $45 million resulting in cash flow from operating activities minus capital expenditures of approximately $70 million. The Company now expects cash flow from operating activities of at least $160 million and capital expenditures of approximately $35 million resulting in cash flow from operating activities minus capital expenditures to be greater than $125 million.

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

For more than 100 years, American Greetings Corporation (NYSE: AM) has been a manufacturer and retailer of innovative social expression products that assist consumers in enhancing their relationships. The Company’s major greeting card brands are American Greetings, Carlton Cards, Gibson, Recycled Paper Greetings and Papyrus, and other paper product offerings include DesignWare party goods and American Greetings and Plus Mark gift-wrap and boxed cards. American Greetings also has the largest collection of electronic greetings on the Web, including cards available at AmericanGreetings.com through AG Interactive, Inc. (the Company’s online division). AG Interactive also offers digital photo sharing and personal publishing at PhotoWorks.com and Webshots.com and provides a one-stop source for online graphics and animations at Kiwee.com. In addition to its product lines, American Greetings also creates and licenses popular character brands through the American Greetings Properties group. Headquartered in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.7 billion, and its products can be found in retail outlets worldwide. 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

Non-GAAP Measures

Certain after-tax and liquidity amounts included in this earnings release may be considered non-GAAP measures under the Securities and Exchange Commission’s Regulation G. The after-tax amounts were calculated based on the Company’s statutory tax rate of approximately 38.9%. Management believes that after-tax information is useful in analyzing the Company’s results and that cash flow from operating activities minus capital expenditures provides a liquidity measure useful to investors in analyzing the cash generation of the Company.

Factors That May Affect Future Results

Certain statements in this release, including those under Management Comments and Outlook, 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:

• a weak retail environment and general economic conditions;

• the ability to successfully integrate acquisitions, including the recent acquisitions of Recycled Paper Greetings and the Papyrus brand;

• the Company’s ability to successfully complete the sale of the Strawberry Shortcake and Care Bears properties;

• the Company’s successful transition of the Retail Operations segment to its buyer, Schurman Fine Papers, and the ability to achieve the desired benefits associated with this and other dispositions;

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

• the ability to achieve the desired benefits associated with its cost reduction efforts;

• competitive terms of sale offered to customers;

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

• 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;

• consumer acceptance of products as priced and marketed;

• the impact of technology on core product sales;

• the timing and impact of converting customers to a scan-based trading model;

• escalation in the cost of providing employee health care;

• the ability to successfully implement, or achieve the desired benefits associated with, any information systems refresh the Company may implement;

• the Company’s ability to achieve the desired accretive effect from any share repurchase programs;

• 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; 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, the ability to adapt to rapidly changing social media, and the ability to gain a leadership position in the digital photo sharing space.

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.

AMERICAN GREETINGS CORPORATION

SECOND QUARTER CONSOLIDATED STATEMENT OF INCOME

FISCAL YEAR ENDING FEBRUARY 28, 2010

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

	(Unaudited)
	Three Months Ended						Six Months Ended
	August 28, 2009			August 29, 2008			August 28, 2009			August 29, 2008
Net sales	$	348,639		$	372,942		$	757,916		$	798,405
Other revenue		7,711			12,893			11,356			15,730
Total revenue		356,350			385,835			769,272			814,135
Material, labor and other production costs		153,248			170,112			320,417			363,454
Selling, distribution and marketing expenses		117,531			154,387			249,748			305,262
Administrative and general expenses		48,483			57,162			111,634			119,723
Other operating (income) expense - net		(1,397	)		(111	)		26,376			(838	)
Operating income		38,485			4,285			61,097			26,534
Interest expense		6,671			5,434			13,658			10,339
Interest income		(989	)		(898	)		(1,265	)		(1,888	)
Other non-operating income - net		(1,291	)		(2,617	)		(2,333	)		(3,518	)
Income before income tax expense		34,094			2,366			51,037			21,601
Income tax expense		10,972			69			17,954			5,971
Net income	$	23,122		$	2,297		$	33,083		$	15,630
Earnings per share - basic	$	0.59		$	0.05		$	0.84		$	0.32
Earnings per share - assuming dilution	$	0.59		$	0.05		$	0.84		$	0.32
Average number of common shares outstanding		39,407,532			47,769,594			39,508,240			48,285,267
Average number of common shares outstanding - assuming dilution		39,407,532			47,807,313			39,508,240			48,328,659
Dividends declared per share	$	0.12		$	0.12		$	0.12		$	0.24

AMERICAN GREETINGS CORPORATION

SECOND QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FISCAL YEAR ENDING FEBRUARY 28, 2010

(In thousands of dollars)

	(Unaudited)
	August 28, 2009			August 29, 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	49,903		$	84,040
Trade accounts receivable, net		78,070			62,826
Inventories		208,130			259,789
Deferred and refundable income taxes		63,665			54,149
Assets held for sale		1,423			2,604
Prepaid expenses and other		144,773			179,571
Total current assets		545,964			642,979
GOODWILL		26,393			289,662
OTHER ASSETS		363,480			440,589
DEFERRED AND REFUNDABLE INCOME TAXES		167,138			133,827
Property, plant and equipment - at cost		893,554			980,103
Less accumulated depreciation		607,851			679,862
PROPERTY, PLANT AND EQUIPMENT - NET		285,703			300,241
	$	1,388,678		$	1,807,298
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Debt due within one year	$	1,000		$	18,445
Accounts payable		96,279			125,648
Accrued liabilities		67,985			66,007
Accrued compensation and benefits		50,925			39,378
Income taxes payable		2,856			7,729
Other current liabilities		94,462			113,379
Total current liabilities		313,507			370,586
LONG-TERM DEBT		335,372			391,889
OTHER LIABILITIES		127,066			147,906
DEFERRED INCOME TAXES AND NONCURRENT INCOME TAXES PAYABLE		30,736			23,343
SHAREHOLDERS’ EQUITY
Common shares - Class A		35,923			42,208
Common shares - Class B		3,477			3,494
Capital in excess of par value		451,328			447,502
Treasury stock		(941,198	)		(914,262	)
Accumulated other comprehensive loss		(40,562	)		(9,711	)
Retained earnings		1,073,029			1,304,343
Total shareholders’ equity		581,997			873,574
	$	1,388,678		$	1,807,298

AMERICAN GREETINGS CORPORATION

SECOND QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS

FISCAL YEAR ENDING FEBRUARY 28, 2010

(In thousands of dollars)

	(Unaudited) Six Months Ended
	August 28, 2009			August 29, 2008
OPERATING ACTIVITIES:
Net income	$	33,083		$	15,630
Adjustments to reconcile net income to cash flows from operating activities:
Net loss on dispositions		27,696			—
Net loss on disposal of fixed assets		9			385
Depreciation and intangible assets amortization		23,466			25,324
Deferred income taxes		26,708			15,394
Other non-cash charges		4,622			3,379
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Trade accounts receivable		(10,877	)		(725	)
Inventories		(15,022	)		(47,426	)
Other current assets		12,347			(952	)
Deferred costs - net		11,885			14,654
Accounts payable and other liabilities		(22,190	)		(69,511	)
Other - net		(7,561	)		(9,826	)
Total Cash Flows From Operating Activities		84,166			(53,674	)
INVESTING ACTIVITIES:
Property, plant and equipment additions		(15,447	)		(28,545	)
Cash payments for business acquisitions, net of cash acquired		(19,300	)		(15,625	)
Proceeds from sale of fixed assets		729			275
Other - net		3,063			(44,153	)
Total Cash Flows From Investing Activities		(30,955	)		(88,048	)
FINANCING ACTIVITIES:
Net (decrease) increase in long-term debt		(54,750	)		148,591
Increase in short-term debt		—			18,445
Sale of stock under benefit plans		91			434
Purchase of treasury shares		(6,176	)		(46,137	)
Dividends to shareholders		(9,593	)		(11,667	)
Total Cash Flows From Financing Activities		(70,428	)		109,666
EFFECT OF EXCHANGE RATE CHANGES ON CASH		6,904			(7,404	)
DECREASE IN CASH AND CASH EQUIVALENTS		(10,313	)		(39,460	)
Cash and Cash Equivalents at Beginning of Year		60,216			123,500
Cash and Cash Equivalents at End of Period	$	49,903		$	84,040

AMERICAN GREETINGS CORPORATION

SECOND QUARTER CONSOLIDATED SEGMENT DISCLOSURES

FISCAL YEAR ENDING FEBRUARY 28, 2010

(In thousands of dollars)

	(Unaudited)
	Three Months Ended						Six Months Ended
	August 28, 2009			August 29, 2008			August 28, 2009			August 29, 2008
Total Revenue:
North American Social Expression Products	$	266,934		$	256,756		$	590,818		$	554,933
Intersegment items		—			(13,720	)		(5,104	)		(27,026	)
Exchange rate adjustment		1,995			3,786			2,294			7,202
Net		268,929			246,822			588,008			535,109
International Social Expression Products		45,754			43,374			92,760			91,288
Exchange rate adjustment		10,986			19,950			16,742			42,996
Net		56,740			63,324			109,502			134,284
Retail Operations		—			34,586			11,727			73,063
Exchange rate adjustment		—			3,078			112			6,584
Net		—			37,664			11,839			79,647
AG Interactive		18,075			20,334			36,709			40,233
Exchange rate adjustment		422			638			633			1,300
Net		18,497			20,972			37,342			41,533
Non-reportable segments		11,964			17,053			22,361			23,562
Unallocated		220			—			220			—
	$	356,350		$	385,835		$	769,272		$	814,135
Segment Earnings (Loss):
North American Social Expression Products	$	42,679		$	32,248		$	120,556		$	84,431
Intersegment items		—			(9,973	)		(3,511	)		(20,150	)
Exchange rate adjustment		1,092			1,325			1,282			1,830
Net		43,771			23,600			118,327			66,111
International Social Expression Products		1,887			(1,569	)		2,220			204
Exchange rate adjustment		428			(589	)		434			443
Net		2,315			(2,158	)		2,654			647
Retail Operations		—			(6,588	)		(34,830	)		(9,939	)
Exchange rate adjustment		—			(88	)		(285	)		(150	)
Net		—			(6,676	)		(35,115	)		(10,089	)
AG Interactive		1,644			456			3,296			(879	)
Exchange rate adjustment		287			305			349			579
Net		1,931			761			3,645			(300	)
Non-reportable segments		367			2,541			238			575
Unallocated		(14,209	)		(19,415	)		(38,520	)		(39,110	)
Exchange rate adjustment		(81	)		3,713			(192	)		3,767
Net		(14,290	)		(15,702	)		(38,712	)		(35,343	)
	$	34,094		$	2,366		$	51,037		$	21,601