Exhibit 99.1
CSS Industries, Inc. Reports Sales and Earnings for the Nine Months and
Quarter Ended December 31, 2003
PHILADELPHIA--(BUSINESS WIRE)--Jan. 28, 2004--CSS Industries, Inc.
(NYSE:CSS) announced today the results of operations for the nine
months and quarter ended December 31, 2003. For the nine months ended
December 31, 2003, sales increased by 2% to $484,846,000 from
$476,691,000 in 2002. Net income increased 16% to $37,574,000, or
$3.05 per diluted share, compared to prior year net income before
cumulative effect of change in accounting principle of $32,338,000, or
$2.59 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 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 on 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 $.71 per diluted share.
For the quarter ended December 31, 2003, sales decreased by 1% to
$247,394,000 from $250,682,000 in 2002. Net income increased 7% to
$27,397,000, or $2.18 per diluted share, compared to prior year net
income of $25,666,000, or $2.12 per diluted share.
Sales for the nine months, excluding sales attributed to Crystal
Creative Products, Inc. ("Crystal"), which was acquired on October 18,
2002, decreased $12,770,000, or 3%, due primarily to lower sales of
Halloween and certain Christmas products, partially offset by higher
sales of everyday products. The increase in earnings for the nine
months ended December 31, 2003 is a result of improved margins due to
lower material costs, improved production efficiencies, higher value
sales mix and the previously disclosed decline in bad debt expense.
Sales for the quarter ended December 31, 2003, excluding sales
attributed to Crystal, decreased $7,934,000, or 3%, primarily due to
lower sales of Christmas cards, partially offset by higher sales of
Christmas gift wrap, gift tags and ribbons and bows. Despite lower
sales in the third quarter, earnings improved as a result of higher
margins related to production efficiencies and higher value sales mix.
"We are pleased with the Company's performance to date, especially
the increase in earnings despite the impact of a sluggish retail
environment on our base business. This positive result has been
achieved through continued focus on the integration of acquired
businesses, production efficiencies and cost reduction opportunities,"
noted David Erskine, President and CEO. "As a result, we expect strong
EPS growth for the full year ended March 31, 2004, and are increasing
our guidance for earnings per share growth from 10% to approximately
15% compared to fiscal 2003," he continued.
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 nine
months ended December 31, 2003 and 2002 and condensed consolidated
balance sheets as of December 31, 2003, March 31, 2003 and December
31, 2002 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except
per share data)
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- --------------------
2003 2002 2003 2002
-------- -------- -------- --------
SALES $247,394 $250,682 $484,846 $476,691
-------- -------- -------- --------
COSTS AND EXPENSES
Cost of sales 176,075 181,296 349,056 349,013
Selling, general and
administrative expenses 27,416 27,906 74,698 74,386
Interest expense, net 1,185 1,496 2,874 2,903
Other expense (income),
net 192 (118) (310) (139)
-------- -------- -------- --------
204,868 210,580 426,318 426,163
-------- -------- -------- --------
INCOME BEFORE INCOME
TAXES 42,526 40,102 58,528 50,528
INCOME TAX EXPENSE 15,129 14,436 20,954 18,190
-------- -------- -------- --------
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 27,397 25,666 37,574 32,338
-------- -------- -------- --------
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE (NET OF TAX) - - - (8,813)
-------- -------- -------- --------
NET INCOME $27,397 $25,666 $37,574 $23,525
======== ======== ======== ========
BASIC NET INCOME PER
COMMON SHARE
Before cumulative effect
of accounting change $2.31 $2.24 $3.20 $2.73
Cumulative effect of
accounting change - - - (.75)
-------- -------- -------- --------
Basic net income per
common share $2.31 $2.24 $3.20 $1.98
======== ======== ======== ========
DILUTED NET INCOME PER
COMMON SHARE
Before cumulative effect
of accounting change $2.18 $2.12 $3.05 $2.59
Cumulative effect of
accounting change - - - (.71)
-------- -------- -------- --------
Diluted net income per
common share $2.18 $2.12 $3.05 $1.88
======== ======== ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING
BASIC 11,841 11,457 11,730 11,860
======== ======== ======== ========
DILUTED 12,592 12,086 12,335 12,483
======== ======== ======== ========
CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, March 31, December 31,
2003 2003 2002
-------- -------- --------
(Unaudited) (Audited) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 12,158 $ 51,981 $ 12,467
Accounts receivable, net 215,377 47,583 227,326
Inventories 76,187 106,648 85,223
Income tax receivable - 2,398 -
Deferred income taxes 7,179 6,226 6,091
Other current assets 11,934 13,771 13,288
-------- -------- --------
Total current assets 322,835 228,607 344,395
-------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, NET 82,959 82,731 83,576
-------- -------- --------
OTHER ASSETS
Intangible assets 36,995 36,045 31,213
Other 4,473 4,578 4,823
-------- -------- --------
Total other assets 41,468 40,623 36,036
-------- -------- --------
Total assets $447,262 $351,961 $464,007
======== ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Notes payable $ 28,980 $ - $ 75,900
Other current liabilities 95,653 69,645 101,474
-------- -------- --------
Total current
liabilities 124,633 69,645 177,374
-------- -------- --------
LONG-TERM DEBT, NET OF CURRENT
PORTION 50,000 50,063 50,093
-------- -------- --------
LONG-TERM OBLIGATIONS 3,564 3,684 3,612
-------- -------- --------
DEFERRED INCOME TAXES 9,098 7,706 7,353
-------- -------- --------
SHAREHOLDERS' EQUITY 259,967 220,863 225,575
-------- -------- --------
Total liabilities and
shareholders' equity $447,262 $351,961 $464,007
======== ======== ========
CONTACT: CSS Industries, Inc.
Clifford E. Pietrafitta, 215-569-9900