MRO Magazine

CSS Industries, Inc. Reports Results of Operations for the Three and Nine Months Ended December 31, 2015


January 25, 2016
By Business Wire News

PHILADELPHIA

CSS Industries, Inc. (NYSE:CSS) announced today its results of operations for the three and nine months ended December 31, 2015. Sales for the third quarter of fiscal 2016 decreased 0.4% to $104,568,000 from $104,993,000 in the third quarter of fiscal 2015, as lower sales of craft ribbon, Christmas cards and tags more than offset higher shipments of Christmas bows and ribbon, largely due to the previously announced acquisition of Hollywood Ribbon Industries, Inc., and earlier shipping of Easter products. Income before income taxes for the third quarter of fiscal 2016 was $15,191,000 compared to $15,142,000 in the third quarter of fiscal 2015. Net income for the third quarter of fiscal 2016 was $9,664,000, or $1.06 per diluted share, versus $9,768,000, or $1.04 per diluted share, in the third quarter of fiscal 2015.

Sales for the first nine months of fiscal 2016 increased 0.4% to $260,273,000 from $259,342,000 in the first nine months of fiscal 2015, primarily due to higher sales of Christmas bows and ribbon, largely due to the previously announced acquisition of Hollywood Ribbon Industries, Inc., and earlier shipping of Easter products, largely offset by lower sales of Christmas cards and tags and craft ribbon. Income before income taxes for the first nine months of fiscal 2016 was $28,106,000 compared to $28,569,000 in the first nine months of fiscal 2015. Net income for the first nine months of fiscal 2016 was $17,825,000, or $1.92 per diluted share, versus $18,290,000, or $1.95 per diluted share, in the first nine months of fiscal 2015.

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, journals, boxed greeting cards, classroom exchange Valentines, gift tags, gift bags, gift card holders, gift wrap, decorations, floral accessories, craft and educational products, Easter egg dyes and novelties, memory books, scrapbooks, stickers, infant and wedding photo albums, stationery, 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 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, 2015 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 and nine months ended December 31, 2015 and 2014 and condensed consolidated balance sheets as of December 31, 2015, March 31, 2015 and December 31, 2014 follow:

   

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
(In thousands, except per share data)

 

 

Three Months Ended
December 31,

Nine Months Ended
December 31,

2015   2014 2015   2014
 
Sales $ 104,568   $ 104,993   $ 260,273   $ 259,342  
Costs and expenses
Cost of sales 69,380 68,670 174,852 173,023
Selling, general and administrative expenses 19,967 21,102 57,367 57,754
Interest expense (income), net 39 43 (43 ) 39
Other (income) expense, net (9 ) 36   (9 ) (43 )
 
89,377   89,851   232,167   230,773  
 
Income before income taxes 15,191 15,142 28,106 28,569
 
Income tax expense 5,527   5,374   10,281   10,279  
 
Net income $ 9,664   $ 9,768   $ 17,825   $ 18,290  
 
Net income per common share:
Basic $ 1.07   $ 1.05   $ 1.94   $ 1.96  
Diluted $ 1.06   $ 1.04   $ 1.92   $ 1.95  
 
Weighted average shares outstanding:
Basic 9,037   9,331   9,175   9,321  
Diluted 9,126   9,420   9,271   9,403  
 
Cash dividends per share of common stock $ 0.18   $ 0.15   $ 0.54   $ 0.45  
 

CSS INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     
December 31,
2015
March 31,
2015
December 31,
2014
(Unaudited) (Audited) (Unaudited)

Assets

Current assets
Cash and cash equivalents $ 25,248 $ 36,429 $ 48,163
Short-term investments 59,735 69,845 39,802
Accounts receivable, net 78,978 42,052 84,713
Inventories 67,079 65,491 62,536
Deferred income taxes 4,321 4,375 3,783
Other current assets 9,834   11,235   11,807
Total current assets 245,195   229,427   250,804
Property, plant and equipment, net 26,592   25,493   25,775
Deferred income taxes   582   1,776
Other assets
Goodwill 15,820 15,820 15,075
Intangible assets, net 31,132 33,048 26,594
Other 5,611   5,103   4,247
Total other assets 52,563   53,971   45,916
Total assets $ 324,350   $ 309,473   $ 324,271

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable $ 17,707 $ 12,917 $ 18,233
Accrued payroll and other compensation 8,301 9,054 8,075
Accrued customer programs 4,422 4,042 5,593
Accrued income taxes 4,755 745 4,097
Other current liabilities 9,927   8,247   10,760
Total current liabilities 45,112   35,005   46,758
Deferred income taxes 631    
Long-term obligations 4,494   4,213   4,772
Stockholders’ equity 274,113   270,255   272,741
Total liabilities and stockholders’ equity $ 324,350   $ 309,473   $ 324,271

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