Exhibit 99.1
CSS Industries, Inc. Reports Sales and Earnings for the Year and
Quarter Ended March 31, 2005
PHILADELPHIA--(BUSINESS WIRE)--May 18, 2005--CSS Industries, Inc.
(NYSE:CSS) announced today the results of operations for the year and
quarter ended March 31, 2005. Sales for fiscal year 2005 decreased 1%
to $536,362,000 from $539,349,000, while net income increased 3% to
$30,692,000, or $2.45 per diluted share, from $29,850,000, or $2.42
per diluted share, in fiscal 2004. Sales for the fourth quarter of
2005 increased 6% to $57,927,000 from $54,503,000 in fiscal 2004. The
net loss decreased in the fourth quarter to $4,485,000, or $.38 per
diluted share, from $7,724,000, or $.65 per diluted share, in fiscal
2004. 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 1% decline in sales for the year ended March 31, 2005 was the
result of selling a product line during the previous year. For
continuing businesses, increases in Christmas and everyday boxed cards
were offset by lower sales of seasonal tissue and ribbons and bows.
The improvement in net income per diluted share reflects lower
selling, general and administrative and interest expenses, partially
offset by lower sales volume and margins. Lower margins in fiscal 2005
reflected $2,300,000 of tissue duties and increased freight and
material costs. For the quarter, sales increased 6% primarily as a
result of increased everyday boxed greeting card sales. The net loss
for the quarter improved by 42% compared to last year as a result of
higher sales volume, improved gross margins and lower selling, general
and administrative expenses.
"We are disappointed with the results delivered for this fiscal
year. Earnings per share, although in line with our previous guidance
as included in our press release dated January 26, 2005, improved only
1% to $2.45 per diluted share from $2.42 in the prior year largely as
a result of incremental tissue duties and increased freight and
commodity material costs," commented David J. M. Erskine, CSS
President and CEO. "The term of our collective bargaining agreement
with the labor union representing predominantly our Cleo plant
employees has expired. We have not reached agreement on a new
contract. Assuming the successful resolution of this matter, we expect
EPS growth of 20% to 25% for the fiscal year ending March 31, 2006.
Improved operations, particularly in tissue, will contribute
approximately half of the increase and the net effect of a recent
share repurchase tender offer will account for the rest."
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, 2004.
CSS' consolidated results of operations for the three months and
year ended March 31, 2005 and 2004 and condensed consolidated balance
sheets as of March 31, 2005 and 2004 follow:
CSS INDUSTRIES, INC. AND SUBSIDIARIES
-------------------------------------
CONSOLIDATED RESULTS OF OPERATIONS
----------------------------------
(In thousands, except
per share amounts)
Year Ended Three Months Ended
March 31, March 31,
------------------- -----------------------
2005 2004 2005 2004
--------- --------- ----------- -----------
(Unaudited) (Unaudited)
SALES $536,362 $539,349 $57,927 $54,503
--------- --------- ----------- -----------
COSTS AND EXPENSES
Cost of sales 397,538 395,878 44,268 45,160
Selling, general and
administrative
expenses 89,997 94,198 21,013 21,162
Interest expense, net 2,374 3,402 342 528
Rental and other
income, net (665) (426) (22) (116)
--------- --------- ----------- -----------
489,244 493,052 65,601 66,734
--------- --------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAXES 47,118 46,297 (7,674) (12,231)
INCOME TAX EXPENSE
(BENEFIT) 16,426 16,447 (3,189) (4,507)
--------- --------- ----------- -----------
NET INCOME (LOSS) $30,692 $29,850 $(4,485) $(7,724)
========= ========= =========== ===========
NET INCOME (LOSS) PER
COMMON SHARE
Basic $2.58 $2.54 $(.38) $(.65)
========= ========= =========== ===========
Diluted $2.45 $2.42 $(.38) $(.65)
========= ========= =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING
BASIC 11,886 11,755 11,799 11,839
========= ========= =========== ===========
DILUTED 12,544 12,346 11,799 11,839
========= ========= =========== ===========
CSS INDUSTRIES, INC. AND SUBSIDIARIES
-------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands)
March 31, March 31,
2005 2004
------------ ------------
(Unaudited)
ASSETS
------
CURRENT ASSETS
Cash and cash equivalents $ 57,333 $ 93,191
Accounts receivable, net 37,273 40,460
Inventories 101,867 94,459
Deferred income taxes 8,199 7,937
Other current assets 13,945 12,987
------------ ------------
Total current assets 218,617 249,034
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, NET 75,402 81,193
------------ ------------
OTHER ASSETS
Intangible assets, net 35,468 35,619
Other 4,419 4,551
------------ ------------
Total other assets 39,887 40,170
------------ ------------
Total assets $ 333,906 $ 370,397
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Notes payable $ - $ -
Current portion of long-term debt 10,442 335
Other current liabilities 56,297 60,886
------------ ------------
Total current liabilities 66,739 61,221
------------ ------------
LONG-TERM DEBT 40,000 50,251
------------ ------------
LONG-TERM OBLIGATIONS 3,607 3,631
------------ ------------
DEFERRED INCOME TAXES 7,071 6,142
------------ ------------
STOCKHOLDERS' EQUITY 216,489 249,152
------------ ------------
Total liabilities and stockholders'
equity $ 333,906 $ 370,397
============ ============
CONTACT: CSS Industries, Inc.
Clifford E. Pietrafitta, 215-569-9900