Exhibit 99.1
CSS Industries, Inc. Reports Sales and Earnings for the Year and
Quarter Ended March 31, 2003
PHILADELPHIA--(BUSINESS WIRE)--May 22, 2003--CSS Industries, Inc.
(NYSE:CSS) announced today the results of operations for the year and
quarter ended March 31, 2003. Sales for fiscal year 2003 increased 26%
to $532,815,000 from $424,309,000, while net income before cumulative
effect of change in accounting principle increased 20% to $25,846,000,
or $3.14 per diluted share, from $21,501,000, or $2.40 per diluted
share, in fiscal 2002. Sales for the fourth quarter of 2003 increased
123% to $56,124,000 from $25,165,000 in fiscal 2002. The net loss
increased in the fourth quarter to $6,492,000, or $.84 per share, from
$5,840,000, or $.67 per diluted share, in fiscal 2002. The Company
adopted SFAS No. 142, "Goodwill and Other Intangible Assets",
effective with the beginning of its fiscal year, April 1, 2002, which
resulted in a non-cash write-off of goodwill and negative goodwill in
the amount of $8,813,000, net of taxes, or $1.07 per diluted share.
The Company's highly seasonal orientation results in operating losses
in the first and fourth quarters of the fiscal year and operating
profits in the second and third quarters.d fourth quarters of the
fiscal year and operating profits in the second and third quarters.
The increase in sales for the year and quarter ended March 31,
2003 was primarily a result of the inclusion of C.M. Offray & Son,
Inc. ("Offray"), acquired on March 15, 2002, and Crystal Creative
Products, Inc. ("Crystal"), acquired on October 18, 2002. The increase
in net income per diluted share before the cumulative effect of the
change in accounting principle from $2.40 to $3.14 is due to several
factors. The elimination of the amortization of goodwill in accordance
with SFAS No. 142 contributed $.12 per share and the buy back of
1,100,000 shares in June contributed $.21 per share. The additional
increase of $.41 per share was due to increased sales and improved
margins related to our many Christmas product lines, contributions
from the recent acquisitions and the absence of the loss associated
with the Kmart Chapter 11 filing. These gains were partially offset by
lower sales and margins related to certain fall, spring and
educational product lines.
"This past year was marked by excellent improvements in our many
lines of Christmas products as well as good progress in integrating
the Offray acquisition and in accelerating related cost reductions.
The major disappointment was the deterioration of sales and profits in
certain of the fall, spring and educational lines," commented David J.
M. Erskine, CSS President and CEO. "Looking forward, I am confident
that the significant management changes we have made will reverse the
deterioration in these lines. In addition, despite a weak retail
environment, we anticipate that increased sales and profits from the
recent acquisitions as well as improvements in our other businesses
will generate EPS growth for next year of approximately 10%."
All statements other than statements of historical fact included
in this press release are "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. 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 conditions, increased competition, and other factors described
in the Company's Annual Report on Form 10-K/A for the fiscal year
ended March 31, 2002.
CSS' consolidated results of operations for the three months and
year ended March 31, 2003 and 2002 and condensed consolidated balance
sheets as of March 31, 2003 and 2002 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(In thousands, except
per share amounts)
Three Months Ended Year Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
(Unaudited)(Unaudited)(Unaudited)
SALES $56,124 $25,165 $532,815 $424,309
-------- -------- -------- --------
COSTS AND EXPENSES
Cost of sales 43,575 19,824 392,588 309,409
Selling, general
and administrative
expenses 22,855 14,423 97,241 79,411
Interest expense
(income), net 758 (33) 3,661 1,898
Rental and other
(income) expense, net (546) (35) (685) 136
-------- -------- -------- --------
66,642 34,179 492,805 390,854
-------- -------- -------- --------
(LOSS) INCOME BEFORE
INCOME TAXES (10,518) (9,014) 40,010 33,455
INCOME TAX (BENEFIT)
EXPENSE (4,026) (3,174) 14,164 11,954
-------- -------- -------- --------
(LOSS) INCOME BEFORE
CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING
PRINCIPLE (6,492) (5,840) 25,846 21,501
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX - - (8,813) -
-------- -------- -------- --------
NET (LOSS) INCOME $(6,492) $(5,840) $17,033 $21,501
======== ======== ======== ========
BASIC NET (LOSS) INCOME
PER COMMON SHARE
Before cumulative
effect of accounting
change $(.84) $(.67) $3.29 $2.44
Cumulative effect of
accounting change - - (1.12) -
-------- -------- -------- --------
Basic net (loss) income
per common share $(.84) $(.67) $2.17 $2.44
======== ======== ======== ========
DILUTED NET (LOSS) INCOME
PER COMMON SHARE
Before cumulative
effect of accounting
change $(.84) $(.67) $3.14 $2.40
Cumulative effect of
accounting change - - (1.07) -
-------- -------- -------- --------
Diluted net (loss)
income per common share $(.84) $(.67) $2.07 $2.40
======== ======== ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING
BASIC 7,686 8,750 7,856 8,827
======== ======== ======== ========
DILUTED 7,686 8,750 8,225 8,972
======== ======== ======== ========
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31,
2003 2002
-------- --------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 51,981 $ 20,006
Accounts receivable, net 47,583 41,029
Inventories 106,648 98,541
Income tax receivable 2,398 2,222
Deferred income taxes 6,226 6,408
Other current assets 13,771 19,471
-------- --------
Total current assets 228,607 187,677
-------- --------
PROPERTY, PLANT AND EQUIPMENT, NET 86,621 80,426
-------- --------
OTHER ASSETS
Intangible assets, net 32,155 37,656
Other 4,578 3,744
-------- --------
Total other assets 36,733 41,400
-------- --------
Total assets $351,961 $309,503
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Notes payable $ -- $ --
Other current liabilities 69,645 62,279
-------- --------
Total current liabilities 69,645 62,279
-------- --------
LONG-TERM DEBT 50,063 165
-------- --------
LONG-TERM OBLIGATIONS 3,684 2,973
-------- --------
DEFERRED INCOME TAXES 7,706 9,241
-------- --------
SHAREHOLDERS' EQUITY 220,863 234,845
-------- --------
Total liabilities and shareholders'
equity $351,961 $309,503
======== ========
CONTACT: CSS Industries, Inc.
Clifford E. Pietrafitta, 215/569-9900