-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S5HroUYUAcEYwXXp2zYscS4u+47COOaFo9LexZdeShXmJIsxMr7GqLvPZdnKaD0O g1hffrZm2xJZ2x0dOb4wEA== 0001157523-06-000854.txt : 20060131 0001157523-06-000854.hdr.sgml : 20060131 20060131113724 ACCESSION NUMBER: 0001157523-06-000854 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060130 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060131 DATE AS OF CHANGE: 20060131 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSS INDUSTRIES INC CENTRAL INDEX KEY: 0000020629 STANDARD INDUSTRIAL CLASSIFICATION: GREETING CARDS [2771] IRS NUMBER: 131920657 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02661 FILM NUMBER: 06564646 BUSINESS ADDRESS: STREET 1: 1845 WALNUT ST CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2155699900 FORMER COMPANY: FORMER CONFORMED NAME: CITY STORES CO DATE OF NAME CHANGE: 19851212 8-K 1 a5067916.txt CSS INDUSTRIES, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 30, 2006 ---------------- CSS Industries, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-2661 13-920657 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employee of incorporation) File Number) Identification No.) 1845 Walnut Street, Philadelphia, PA 19103 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (215) 569-9900 -------------- Not Applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On January 30, 2006, the Company issued a press release announcing its financial results for the quarter and nine months ended December 31, 2005. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits. (c) Exhibits The following exhibit is being furnished herewith: Exhibit No. Description ----------- ----------- 99.1 Press Release dated January 30, 2006 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CSS Industries, Inc. (Registrant) /s/ Clifford E. Pietrafitta --------------------------- Clifford E. Pietrafitta Vice President-Finance and Chief Financial Officer Date: January 30, 2006 EXHIBIT ------- Exhibit No. Description - ----------- ----------- 99.1 Press Release dated January 30, 2006. EX-99.1 2 a5067916ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 CSS Industries, Inc. Reports Sales and Earnings for the Quarter and Nine Months Ended December 31, 2005 PHILADELPHIA--(BUSINESS WIRE)--Jan. 30, 2006--CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the third quarter and nine months ended December 31, 2005. For the quarter ended December 31, 2005, sales increased by 2% to $251,796,000 from $247,169,000 in the prior year. Net income was essentially flat at $23,924,000 compared to prior year net income of $23,971,000, while earnings per share increased 14% to $2.18 per diluted share from $1.91 per diluted share in the prior year. The increase in earnings per diluted share was the result of stock repurchases in March 2005 and fiscal 2006. For the nine months ended December 31, 2005, sales decreased by 1% to $473,333,000 from $478,435,000 in 2004. Net income decreased 16% to $29,508,000 compared to prior year net income of $35,177,000. For the nine months ended December 31, 2005, earnings per diluted share declined 4% to $2.69 per diluted share from $2.79 per diluted share as lower earnings were partially offset by a 13% reduction in the number of diluted shares outstanding due to the repurchase of stock in March 2005 and during fiscal 2006. 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 for the quarter ended December 31, 2005 was primarily the result of customer requested shifts of Christmas shipments from September to October as well as the earlier timing of Valentine shipments from the fourth quarter to the third quarter in the current fiscal year. The decrease in net income for the quarter ended December 31, 2005 was primarily due to increased product and freight costs related to our gift wrap and tissue product lines, offset by higher sales, including the effect of a reduction in customer program expense. The decrease in sales for the nine months ended December 31, 2005 was primarily due to lower sales of Christmas gift wrap, boxed greeting cards and everyday ribbons and bows, partially offset by improved sales of gift bags and tissue as well as the earlier shipment of Valentine products as described above. The decrease in net income for the nine months ended December 31, 2005 was primarily attributable to the impact of this lower sales volume and higher product and freight costs related to our gift wrap and tissue product lines, partially offset by the effect of a reduction in customer program expense and decreased selling, general and administrative expenses, primarily related to incentive compensation. "Our previous guidance of earnings per share growth for fiscal 2006 was zero to five percent over the prior year. Results for the quarter did not meet our expectations primarily as a result of product cost increases and excessive delivery costs related to our gift wrap and tissue product lines. These factors, combined with reduced expectations for sales in non-seasonal product lines, have led us to reduce our earnings per share guidance for the full year. We now expect earnings per share for the full year to decline between 5% and 10% compared to last year. Significant management changes have been made to address the primary causes of this poor performance," said David Erskine, President and CEO. 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, 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, 2005 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 three and nine months ended December 31, 2005 and 2004 and consolidated condensed balance sheets as of December 31, 2005, March 31, 2005 and December 31, 2004 follow: CSS INDUSTRIES, INC. AND SUBSIDIARIES ------------------------------------- CONSOLIDATED RESULTS OF OPERATIONS ---------------------------------- (Unaudited) (In thousands, except per share amounts) Three Months Ended Nine Months Ended December 31, December 31, --------------------- --------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- SALES $251,796 $247,169 $473,333 $478,435 ---------- ---------- ---------- ---------- COSTS AND EXPENSES Cost of sales 189,367 184,656 357,808 353,270 Selling, general and administrative expenses 23,870 24,221 66,905 68,984 Interest expense, net 1,483 906 2,982 2,032 Other expense (income), net (47) 49 (182) (643) ---------- ---------- ---------- ---------- 214,673 209,832 427,513 423,643 ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 37,123 37,337 45,820 54,792 INCOME TAX EXPENSE 13,199 13,366 16,312 19,615 ---------- ---------- ---------- ---------- NET INCOME $23,924 $23,971 $29,508 $35,177 ========== ========== ========== ========== NET INCOME PER COMMON SHARE Basic $2.27 $2.01 $2.81 $2.95 ========== ========== ========== ========== Diluted $2.18 $1.91 $2.69 $2.79 ========== ========== ========== ========== WEIGHTED AVERAGE SHARES OUTSTANDING Basic 10,538 11,952 10,483 11,929 ========== ========== ========== ========== Diluted 10,979 12,523 10,967 12,607 ========== ========== ========== ========== CASH DIVIDENDS PER SHARE OF COMMON STOCK $.12 $.10 $.36 $.30 ========== ========== ========== ========== - ---------------------------------------------------------------------- COMPREHENSIVE INCOME Net income $23,924 $23,971 $29,508 $35,177 Foreign currency translation adjustment - (8) - (3) ---------- ---------- ---------- ---------- Comprehensive income $23,924 $23,963 $29,508 $35,174 ========== ========== ========== ========== CSS INDUSTRIES, INC. AND SUBSIDIARIES ------------------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Unaudited) (In thousands) December March December 31, 2005 31, 2005 31, 2004 ---------- ---------- ---------- ASSETS - ------------------------------------- CURRENT ASSETS Cash and cash equivalents $18,376 $57,333 $18,845 Accounts receivable, net 200,194 37,273 214,715 Inventories 84,931 101,867 81,652 Deferred income taxes 8,782 8,199 7,491 Other current assets 13,826 13,945 13,719 ---------- ---------- ---------- Total current assets 326,109 218,617 336,422 ---------- ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, NET 71,652 75,402 77,681 ---------- ---------- ---------- OTHER ASSETS Intangible assets, net 35,398 35,468 35,506 Other 4,073 4,419 4,852 ---------- ---------- ---------- Total other assets 39,471 39,887 40,358 ---------- ---------- ---------- Total assets $437,232 $333,906 $454,461 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------- CURRENT LIABILITIES Notes payable $57,900 $- $19,000 Current portion of long-term debt 10,238 10,442 10,000 Other current liabilities 85,599 56,297 95,609 ---------- ---------- ---------- Total current liabilities 153,737 66,739 124,609 ---------- ---------- ---------- LONG-TERM DEBT, NET OF CURRENT PORTION 30,560 40,000 40,000 ---------- ---------- ---------- LONG-TERM OBLIGATIONS 3,541 3,607 3,602 ---------- ---------- ---------- DEFERRED INCOME TAXES 7,430 7,071 6,451 ---------- ---------- ---------- STOCKHOLDERS' EQUITY 241,964 216,489 279,799 ---------- ---------- ---------- Total liabilities and stockholders' equity $437,232 $333,906 $454,461 ========== ========== ========== CONTACT: CSS Industries, Inc. Clifford E. Pietrafitta, 215-569-9900 -----END PRIVACY-ENHANCED MESSAGE-----