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CSS Industries, Inc. Reports Results of Operations for the Three Months Ended June 30, 2014

PHILADELPHIA--(BUSINESS WIRE)--CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three months ended June 30, 2014, which is the first quarter of its fiscal year ending March 31, 2015. Sales for the first quarter of fiscal 2015 increased 2.4% to $48,257,000 from $47,117,000 in the first quarter of fiscal 2014. Sales in the first quarter of fiscal 2015 include $615,000 due to the acquisition by the Company's Berwick Offray LLC subsidiary of the assets and business of Carson & Gebel Ribbon Co., LLC as announced on May 19, 2014. Sales in the first quarter of fiscal 2014 include $517,000 of sales from the Halloween portion of the Company's Paper Magic Group, Inc. business, which was sold in September 2012. The balance of the net sales increase was due to the earlier shipment of back-to-school products. The loss before income taxes for the first quarter of fiscal 2015 was $2,058,000 compared to $2,571,000 in the first quarter of fiscal 2014. The net loss for the first quarter of fiscal 2015 was $1,325,000, or $0.14 per diluted share, versus $1,667,000, or $0.18 per diluted share, in the first quarter of fiscal 2014. The Company’s seasonal orientation has historically resulted in operating losses in the first and fourth quarters of the fiscal year and operating profits in the second and third quarters.

CSS is a consumer products company primarily engaged in the design, manufacture, procurement, distribution and sale of all occasion and seasonal social expression products, principally to mass market retailers. These all occasion and seasonal products include decorative ribbons and bows, boxed greeting cards, gift tags, gift wrap, gift bags, gift boxes, gift card holders, decorative tissue paper, decorations, classroom exchange Valentines, floral accessories, Easter egg dyes and novelties, craft and educational products, stickers, memory books, stationery, journals, note cards, infant and wedding photo albums, scrapbooks, and other gift items that commemorate life’s celebrations.

This press release includes “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 as to future events and financial performance with respect to the Company’s operations. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made. 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 and economic conditions; increased competition (including competition from foreign products which may be imported at less than fair value and from foreign products which may benefit from foreign governmental subsidies); increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs and the risk that the Company may not be able to integrate and derive the expected benefits from such acquisitions; the risk that customers may become insolvent, may delay payments or may impose deductions or penalties on amounts owed to the Company; costs of compliance with governmental regulations and government investigations; liability associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws; and other factors described more fully in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2014 and elsewhere in the Company’s filings with the Securities and Exchange Commission. As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.

CSS’ consolidated results of operations for the three months ended June 30, 2014 and 2013 and condensed consolidated balance sheets as of June 30, 2014, March 31, 2014 and June 30, 2013 follow:

 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
(In thousands, except per share data)
 
 
      Three Months Ended June 30,
2014     2013
 
Sales $ 48,257   $ 47,117  
Costs and expenses
Cost of sales 33,658 32,658
Selling, general and administrative expenses 16,757 17,004
Interest (income) expense, net (21 ) 20
Other (income) expense, net   (79 )   6  
 
  50,315     49,688  
 
Loss before income taxes (2,058 ) (2,571 )
 
Income tax benefit   (733 )   (904 )
 
Net loss $ (1,325 ) $ (1,667 )
 
Basic and diluted net loss per common share $ (0.14 ) $ (0.18 )
 
Weighted average basic and diluted shares outstanding   9,308     9,505  
 
Cash dividends per share of common stock $ 0.15   $ 0.15  
 
 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
 
 
      June 30,     March 31,     June 30,
2014 2014 2013
(Unaudited) (Audited) (Unaudited)

Assets

Current assets
Cash and cash equivalents $ 47,176 $ 68,200 $ 67,038
Short-term investments 29,911 29,862
Accounts receivable, net 42,737 44,243 40,488
Inventories 76,967 59,252 81,843
Deferred income taxes 4,329 4,414 4,079
Other current assets   15,565   13,473   16,669
Total current assets   216,685   219,444   210,117
Property, plant and equipment, net   26,797   27,063   28,046
Deferred income taxes   1,639   1,965   3,204
Other assets
Goodwill 15,083 14,522 14,522
Intangible assets, net 27,505 26,309 27,590
Other   4,175   4,232   4,352
Total other assets   46,763   45,063   46,464
Total assets $ 291,884 $ 293,535 $ 287,831

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable $ 17,031 $ 10,664 $ 22,872
Accrued payroll and other compensation 5,002 8,754 4,512
Accrued customer programs 3,571 4,820 3,772
Other current liabilities   6,793   7,397   6,774
Total current liabilities   32,397   31,635   37,930
Long-term obligations   4,618   4,684   4,709
Stockholders’ equity   254,869   257,216   245,192
Total liabilities and stockholders’ equity $ 291,884 $ 293,535 $ 287,831
 

Contacts

CSS Industries, Inc.
Vincent A. Paccapaniccia
Chief Financial Officer
(215) 569-9900