-----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, VqS/tk5YNjzISuGNxG3yqmB9KbknwfgqnPvgOoZzm5bFYEenDmw/8OZMsUzJmaY/ H58V/G28Vz3FyUJf+dc5XA== 0001157523-07-010268.txt : 20071026 0001157523-07-010268.hdr.sgml : 20071026 20071025173555 ACCESSION NUMBER: 0001157523-07-010268 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071025 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071026 DATE AS OF CHANGE: 20071025 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: 071191699 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 a5528725.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): October 25, 2007 ---------------- 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 October 25, 2007, the Company issued a press release announcing its financial results for the quarter and six months ended September 30, 2007. 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 October 25, 2007 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) By: /s/ Clifford E. Pietrafitta --------------------------- Clifford E. Pietrafitta Vice President-Finance and Chief Financial Officer Date: October 25, 2007 EXHIBIT ------- Exhibit No. Description - ----------- ----------- 99.1 Press Release dated October 25, 2007. EX-99.1 2 a5528725ex991.txt EXHIBIT 99.1 Exhibit 99.1 CSS Industries, Inc. Reports Sales and Earnings for the Quarter and Six Months Ended September 30, 2007 PHILADELPHIA--(BUSINESS WIRE)--Oct. 25, 2007--CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the second quarter and six months ended September 30, 2007. For the quarter ended September 30, 2007, sales decreased by 1% to $172,882,000 from $173,830,000 in 2006. Net income increased 16% to $13,535,000, or $1.22 per diluted share, compared to prior year net income of $11,703,000, or $1.08 per diluted share. For the six months ended September 30, 2007, sales of $219,684,000 decreased 1% compared to sales of $221,363,000 in 2006. Net income increased 47% to $9,108,000, or $.82 per diluted share, compared to prior year net income of $6,196,000, or $.57 per diluted share. 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 1% decline in sales for the quarter and six months ended September 30, 2007 is primarily the result of reduced boxed greeting card sales to warehouse clubs and lower sales of educational products, partially offset by the earlier timing of certain Christmas product line shipments, particularly gift wrap. Net income improved 16% for the quarter and 47% for the six months ended September 30, 2007 largely due to the reduced cost structure resulting from the restructuring program implemented in November of 2006, which combined the operations of the Company's Cleo Inc and Berwick Offray LLC subsidiaries, as well as lower interest expense on reduced borrowings compared to the prior year. The Board of Directors of the Company recently approved a systems integration plan designed to standardize the enterprise resource planning ("ERP") systems, master data and business processes across all CSS businesses. Oracle Corp.'s JD Edwards EnterpriseOne is currently utilized at the Company's Paper Magic Group and was selected as the ERP solution for all of CSS. The Company believes this project, which is expected to be implemented in phases over two and one-half years, will provide a sound, cost effective foundation for the future growth of CSS, as well as provide the systems and business process infrastructure for future acquisitions and operating efficiencies. The incremental cash outlay for this initiative over a two and one-half year period is projected to be $8,100,000. During fiscal 2008, the Company expects the cash outlay to be $4,500,000 with no material impact on the income statement. "We are pleased to announce that quarterly and six month results are in line with our expectations. Furthermore, we continue to believe that estimated full year earnings for fiscal 2008 will be within our previously announced range of $2.45 - $2.60 per diluted share," commented Christopher J. Munyan, CSS' President and CEO. "The recent approval by our Board of Directors of the systems integration plan is an important step toward standardizing best business practices across our businesses," continued Mr. Munyan. CSS is a consumer products company primarily engaged in the design and sale of seasonal and all occasion products, principally to mass market retailers. These products include gift wrap, gift bags, gift boxes, boxed greeting cards, gift tags, decorative tissue paper, decorations, classroom exchange Valentines, decorative ribbons and bows, Halloween masks, costumes, make-ups and novelties, Easter egg dyes and novelties, and craft and educational products. 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 and expected future benefits and costs associated with the project relating to the standardization of the Company's ERP systems. 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 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 the combination of the operations of the Company's Cleo and Berwick Offray subsidiaries, including the risk that the restructuring related savings may not meet the expected amounts previously reported, risks associated with the Company's ERP systems standardization project, including the risk that the cost of the project will exceed expectations, the risk that the expected benefits of the project will not be realized and the risk that implementation of the project will interfere with and adversely affect the Company's operations and financial performance, risks associated with the expiration on December 31, 2007 of the collective bargaining agreement between the Company's Cleo subsidiary and the labor union representing certain production and maintenance employees employed at Cleo's Memphis, Tennessee facility, including the risk that a new collective bargaining agreement may not be reached prior to the expiration of the current collective bargaining agreement, 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, 2007 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, 2007 and 2006 and condensed consolidated balance sheets as of September 30, 2007, March 31, 2007 and September 30, 2006 follow: CSS INDUSTRIES, INC. AND SUBSIDIARIES - ---------------------------------------------------------------------- CONSOLIDATED RESULTS OF OPERATIONS - ---------------------------------------------------------------------- (Unaudited) (In thousands, except per share amounts) Three Months Ended Six Months Ended September 30, September 30, ------------------- ------------------- 2007 2006 2007 2006 --------- --------- --------- --------- SALES $172,882 $173,830 $219,684 $221,363 --------- --------- --------- --------- COSTS AND EXPENSES Cost of sales 126,683 129,003 160,202 163,066 Selling, general and administrative expenses 25,158 25,289 45,841 47,493 Interest expense (income), net 284 1,083 (90) 1,217 Other income (159) (66) (401) (228) --------- --------- --------- --------- 151,966 155,309 205,552 211,548 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES 20,916 18,521 14,132 9,815 INCOME TAX EXPENSE 7,381 6,818 5,024 3,619 --------- --------- --------- --------- NET INCOME $ 13,535 $ 11,703 $ 9,108 $ 6,196 ========= ========= ========= ========= NET INCOME PER COMMON SHARE Basic $ 1.25 $ 1.11 $ .84 $ .59 ========= ========= ========= ========= Diluted $ 1.22 $ 1.08 $ .82 $ .57 ========= ========= ========= ========= WEIGHTED AVERAGE SHARES OUTSTANDING Basic 10,857 10,559 10,869 10,528 ========= ========= ========= ========= Diluted 11,129 10,838 11,161 10,831 ========= ========= ========= ========= CASH DIVIDENDS PER SHARE OF COMMON STOCK $ .14 $ .12 $ .28 $ .24 ========= ========= ========= ========= CSS INDUSTRIES, INC. AND SUBSIDIARIES - ---------------------------------------------------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS - ---------------------------------------------------------------------- (In thousands) September 30, March 31, September 30, 2007 2007 2006 ------------- ------------- ------------- (Unaudited) (Audited) (Unaudited) ASSETS - ---------------------------- CURRENT ASSETS Cash and cash equivalents $ 6,004 $ 100,091 $ 11,182 Accounts receivable, net 147,482 37,169 140,450 Inventories 140,014 82,138 167,699 Deferred income taxes 8,130 8,645 7,328 Assets held for sale 2,564 2,564 1,599 Other current assets 14,103 13,665 16,929 ------------- ------------- ------------- Total current assets 318,297 244,272 345,187 ------------- ------------- ------------- PROPERTY, PLANT AND EQUIPMENT, NET 54,753 58,897 65,315 ------------- ------------- ------------- OTHER ASSETS Goodwill 30,952 30,952 30,952 Intangible assets, net 4,298 4,328 4,375 Other 3,685 4,621 3,873 ------------- ------------- ------------- Total other assets 38,935 39,901 39,200 ------------- ------------- ------------- Total assets $ 411,985 $ 343,070 $ 449,702 ============= ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------- CURRENT LIABILITIES Notes payable $ 20,100 $ - $ 73,510 Current portion of long- term debt 10,210 10,195 10,195 Accrued customer programs 11,749 10,290 11,992 Other current liabilities 76,304 35,478 75,219 ------------- ------------- ------------- Total current liabilities 118,363 55,963 170,916 ------------- ------------- ------------- LONG-TERM DEBT, NET OF CURRENT PORTION 20,276 20,392 30,490 ------------- ------------- ------------- LONG-TERM OBLIGATIONS 6,308 3,221 3,211 ------------- ------------- ------------- DEFERRED INCOME TAXES 1,147 2,384 5,298 ------------- ------------- ------------- STOCKHOLDERS' EQUITY 265,891 261,110 239,787 ------------- ------------- ------------- Total liabilities and stockholders' equity $ 411,985 $ 343,070 $ 449,702 ============= ============= ============= CONTACT: CSS Industries, Inc. Clifford E. Pietrafitta Chief Financial Officer 215-569-9900 -----END PRIVACY-ENHANCED MESSAGE-----