CSS News CSS Industries, Inc. Reports Sales and Earnings for the Quarter and Six Months Ended September 30, 2006
PHILADELPHIA--(BUSINESS WIRE)--CSS Industries, Inc. (NYSE: CSS) announced today the results of
operations for the second quarter and six months ended September 30,
2006. For the quarter ended September 30, 2006, sales increased by 6% to
$173,830,000 from $164,043,000 in 2005. Net income increased 27% to
$11,703,000, or $1.08 per diluted share, compared to prior year net
income of $9,239,000, or $.84 per diluted share. For the six months
ended September 30, 2006, sales of $221,363,000 were relatively flat
compared to sales of $221,537,000 in 2005. Net income increased 11% to
$6,196,000, or $.57 per diluted share, compared to prior year net income
of $5,584,000, or $.51 per diluted share. Included in the current year
results is incremental stock option expense related to the adoption of
Statement of Financial Accounting Standards (“SFAS”)
No. 123R. Stock option expense for the quarter and six months ended
September 30, 2006 was $668,000, or $.05 per diluted share and
$1,412,000, or $.10 per diluted share, respectively. The Company’s
highly seasonal business results in operating losses in the first and
fourth quarters of the fiscal year and operating profits in the second
and third quarters.
The 6% increase in sales for the quarter ended September 30, 2006 was
due, in part, to a shift of seasonal sales from the first quarter to the
second quarter compared to the prior year and increased Christmas card
sales to a major retailer. The 27% increase in second quarter net income
was the result of higher sales and improved margins, primarily in our
gift wrap and tissue product lines, net of incremental stock option
expense related to the adoption of SFAS No. 123R and increased selling,
general and administrative costs primarily related to incentive
compensation.
Sales for the six months ended September 30, 2006 were relatively flat
with the prior year as increased Christmas card sales were offset by the
later timing of Christmas ribbon and bow shipments. Net income improved
11% primarily as a result of improved gift wrap and tissue margins, net
of increased incentive compensation expense and incremental stock option
expense attributable to the adoption of the new accounting rules.
“The improvement in earnings for the quarter
and six months is largely a result of the improved performance of our
gift wrap and tissue product lines, which was a major objective of
management,” said Christopher J. Munyan,
President and CEO. “As we enter our busiest
shipping months, we are encouraged by the results to date and expect
earnings to be in line with our previous guidance of $2.40 - $2.55 per
diluted share.”
CSS is a consumer products company primarily engaged in the manufacture
and sale to mass market retailers of seasonal, social expression
products, including gift wrap, gift bags, boxed greeting cards, gift
tags, tissue paper, paper and vinyl decorations, classroom exchange
Valentines, decorative ribbons and bows, Halloween masks, costumes,
make-ups and novelties, educational products and Easter egg dyes and
novelties.
This press release includes “forward-looking
statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, among others,
statements relating to expected future earnings and financial
performance. 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 conditions, increased
competition, increased operating and product 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, the risk that
customers may become insolvent, 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
in the Company’s Annual Report on Form 10-K
for the fiscal year ended March 31, 2006 and elsewhere in the Company’s
SEC filings. 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 quarters and six months ended September 30, 2006 and 2005 and
condensed consolidated balance sheets as of September 30, 2006, March
31, 2006 and September 30, 2005 follow:
