Exhibit 99.1
CSS Industries, Inc. Reports Sales and Earnings for
the Quarter and Six Months Ended September 30, 2003
PHILADELPHIA--(BUSINESS WIRE)--Oct. 23, 2003--CSS Industries, Inc.
(NYSE:CSS) announced today the results of operations for the second
quarter and six months ended September 30, 2003. For the quarter ended
September 30, 2003, sales increased by 2% to $179,162,000 from
$175,452,000 in 2002. Net income increased 29% to $14,216,000, or
$1.15 per diluted share, compared to prior year net income of
$11,012,000, or $.91 per diluted share. For the six months ended
September 30, 2003, sales increased by 5% to $237,452,000 from
$226,009,000 in 2002. Net income before cumulative effect of change in
accounting principle increased 53% to $10,177,000, or $.83 per diluted
share, compared to $6,672,000 in the prior year, or $.52 per diluted
share. The prior year results have been restated to reflect a three
for two stock split. In addition, the prior year results reflect the
adoption of SFAS No. 142, "Goodwill and Other Intangible Assets"
("SFAS No.142"). Upon adoption of SFAS No. 142 and effective with the
beginning of its prior fiscal year, April 1, 2002, the Company
recorded a non-cash write-off of goodwill and negative goodwill in the
amount of $8,813,000, net of taxes, or $.69 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.
The increase in sales for the six months ended September 30, 2003
was the result of the inclusion of Crystal Creative Products, Inc.
("Crystal"), acquired on October 18, 2002. Excluding Crystal, sales
decreased $4,679,000, or 2%, due primarily to decreased sales of
Halloween products and the later timing of certain Christmas
shipments. In addition to Crystal's modest contribution to earnings in
the quarter and six months ended September 30, 2003, improved margins
due to lower material costs and favorable production efficiencies as
well as lower selling, general and administrative expenses ("SG&A") of
the other businesses resulted in the increase in earnings. The
decrease in SG&A for the quarter and six months ended September 30,
2003 was partially due to a decline in bad debt expense of $1,100,000
related to the settlement of our Kmart bankruptcy claim and the
collection of additional funds under a pre-existing claims put
agreement with an unrelated financial institution.
"We remain pleased with the Company's results through the first
half of the year and have an increased level of confidence in our
previous guidance of approximately 10% EPS growth for the full year,"
noted David Erskine, President and CEO.
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 for the fiscal year ended
March 31, 2003.
CSS' consolidated results of operations for the three and six
months ended September 30, 2003 and 2002 and consolidated condensed
balance sheets as of September 30, 2003, March 31, 2003 and September
30, 2002 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share amounts)
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ----------------
2003 2002 2003 2002
---- ---- ---- ----
SALES $179,162 $175,452 $237,452 $226,009
-------- -------- -------- --------
COSTS AND EXPENSES
Cost of sales 130,295 131,512 172,981 167,717
Selling, general
and administrative
expenses 25,729 25,482 47,282 46,480
Interest expense,
net 984 1,132 1,689 1,407
Other (income)
expense, net (198) 120 (502) (21)
-------- -------- -------- --------
156,810 158,246 221,450 215,583
INCOME BEFORE INCOME TAXES 22,352 17,206 16,002 10,426
INCOME TAX EXPENSE 8,136 6,194 5,825 3,754
-------- -------- -------- --------
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 14,216 11,012 10,177 6,672
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE, NET
OF TAX - - - (8,813)
-------- -------- -------- --------
NET INCOME (LOSS) $ 14,216 $ 11,012 $ 10,177 $ (2,141)
======== ======== ======== ========
BASIC NET INCOME (LOSS) PER
COMMON SHARE
Before cumulative effect
of accounting change $ 1.21 $ .97 $ .87 $ .55
Cumulative effect of
accounting change - - - (.73)
-------- -------- -------- --------
Basic net income (loss)
per common share $ 1.21 $ .97 $ .87 $ (.18)
======== ======== ======== ========
DILUTED NET INCOME (LOSS) PER
COMMON SHARE
Before cumulative effect
of accounting change $ 1.15 $ .91 $ .83 $ .52
Cumulative effect of
accounting change - - - (.69)
-------- -------- -------- --------
Diluted net income (loss)
per common share $ 1.15 $ .91 $ .83 $ (.17)
======== ======== ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING
BASIC 11,748 11,381 11,682 12,033
======== ======== ======== ========
DILUTED 12,366 12,078 12,254 12,717
======== ======== ======== ========
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
September March September
30, 2003 31, 2003 30, 2002
--------- --------- ---------
(Unaudited)(Audited)(Unaudited)
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 8,635 $ 51,981 $ 3,263
Accounts receivable, net 157,048 47,583 149,978
Inventories 162,407 106,648 157,676
Income tax receivable - 2,398 -
Deferred income taxes 6,715 6,226 6,408
Other current assets 17,425 13,771 11,234
--------- --------- ---------
Total current assets 352,230 228,607 328,559
--------- --------- ---------
PROPERTY, PLANT AND EQUIPMENT, NET 81,019 82,731 78,642
--------- --------- ---------
OTHER ASSETS
Intangible assets 37,033 36,045 25,939
Other 3,997 4,578 5,211
--------- --------- ---------
Total other assets 41,030 40,623 31,150
--------- --------- ---------
Total assets $474,279 $351,961 $438,351
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 76,600 $ - $134,600
Other current liabilities 102,455 69,645 97,980
--------- --------- ---------
Total current liabilities 179,055 69,645 232,580
--------- --------- ---------
LONG-TERM DEBT, NET OF CURRENT PORTION 50,000 50,063 117
--------- --------- ---------
LONG-TERM OBLIGATIONS 4,012 3,684 2,190
--------- --------- ---------
DEFERRED INCOME TAXES 8,249 7,706 4,919
--------- --------- ---------
SHAREHOLDERS' EQUITY 232,963 220,863 198,545
--------- --------- ---------
Total liabilities and
shareholders' equity $474,279 $351,961 $438,351
========= ========= =========
CONTACT: CSS Industries, Inc.
Clifford E. Pietrafitta, 215-569-9900