EX-99 3 a4441631_ex991.txt CSS INDUSTRIES EXHIBIT 99.1 Exhibit 99.1 CSS Industries, Inc. Reports Sales and Earnings for the Quarter Ended June 30, 2003 PHILADELPHIA--(BUSINESS WIRE)--July 24, 2003--CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the first quarter ended June 30, 2003. Sales increased by 15% to $58,290,000 from $50,557,000 in 2002. The loss before cumulative effect of change in accounting principle decreased to $4,039,000, or $.35 per diluted share, compared to a prior year result of $4,340,000, or $.35 per diluted share. The prior year results have been restated to reflect a three for two stock split and also include the adoption of SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS No.142"). Upon adoption of SFAS No. 142 and effective with the beginning of its prior fiscal year, 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 $.70 per 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 increase in sales was primarily the result of the inclusion of Crystal Creative Products, Inc. ("Crystal"), acquired on October 18, 2002. Excluding Crystal, sales increased $446,000, or 1%, due to increased sales of educational and other everyday products, partially offset by the shift of Christmas shipments from the first quarter into the second quarter of fiscal 2004. Despite Crystal's seasonal net loss for the quarter of $840,000, which approximated budget, higher margins and lower selling, general and administrative expenses of the other businesses resulted in a decreased loss before the cumulative effect of the change in accounting principle versus the same quarter in the prior year. "We are pleased with the first quarter results of the Company. Although it is early in the year, these results support our previous guidance of EPS growth for fiscal year 2004 of approximately 10%," noted David Erskine, President and CEO. 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 quarters ended June 30, 2003 and 2002 and consolidated condensed balance sheets as of June 30, 2003, March 31, 2003 and June 30, 2002 follow: CSS INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Three Months Ended June 30, -------------------- 2003 2002 --------- ---------- SALES $58,290 $50,557 --------- ---------- COSTS AND EXPENSES Cost of sales 42,686 36,205 Selling, general and administrative expenses 21,553 20,998 Interest expense, net 705 275 Rental and other income, net (304) (141) --------- ---------- 64,640 57,337 --------- ---------- LOSS BEFORE INCOME TAXES (6,350) (6,780) INCOME TAX BENEFIT (2,311) (2,440) --------- ---------- LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (4,039) (4,340) --------- ---------- CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (NET OF TAX) - (8,813) --------- ---------- NET LOSS $(4,039) $(13,153) ========= ========== BASIC AND DILUTED LOSS PER COMMON SHARE Before cumulative effect of accounting change $ (.35) $ (.35) Cumulative effect of accounting change - (.70) --------- ---------- Basic and diluted loss per common share $ (.35) $ (1.05) ========= ========== WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING 11,632 12,522 ========= ========== CSS INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, March 31, June 30, 2003 2003 2002 --------- --------- ---------- (Unaudited) (Audited) (Unaudited) ASSETS CURRENT ASSETS Cash and temporary investments $ 5,426 $ 51,981 $ 1,769 Accounts receivable, net 45,739 47,583 37,816 Inventories 163,033 106,648 151,675 Income tax receivable 5,112 2,398 2,715 Deferred income taxes 6,194 6,226 6,408 Other current assets 14,475 13,771 10,256 --------- --------- ---------- Total current assets 239,779 228,607 210,639 --------- --------- ---------- PROPERTY, PLANT AND EQUIPMENT, NET 81,618 82,731 78,172 --------- --------- ---------- OTHER ASSETS Intangible assets, net 36,017 36,045 25,983 Other 4,247 4,578 3,965 --------- --------- ---------- Total other assets 40,264 40,623 29,948 --------- --------- ---------- Total assets $361,861 $351,961 $318,759 ========= ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ - $ - $ 50,520 Accrued customer programs 12,963 13,334 9,413 Other current liabilities 69,230 56,311 63,902 --------- --------- ---------- Total current liabilities 82,193 69,645 123,835 --------- --------- ---------- LONG-TERM DEBT, NET OF CURRENT PORTION 50,000 50,063 141 --------- --------- ---------- LONG-TERM OBLIGATIONS 3,785 3,684 2,217 --------- --------- ---------- DEFERRED INCOME TAXES 7,939 7,706 5,660 --------- --------- ---------- SHAREHOLDERS' EQUITY 217,944 220,863 186,906 --------- --------- ---------- Total liabilities and shareholders' equity $361,861 $351,961 $318,759 ========= ========= ========== CONTACT: CSS Industries, Inc. Clifford E. Pietrafitta, 215-569-9900