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):  February 1, 2011

CSS Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-2661	13-920657
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 February 1, 2011, the Company issued a press release announcing its financial results for the nine months and quarter ended December 31, 2010.  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 February 1, 2011

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/ Vincent A. Paccapaniccia
			Vincent A. Paccapaniccia
			Vice President-Finance and
			Chief Financial Officer
Date:	February 1, 2011

EXHIBIT

Exhibit No.	Description
99.1	Press Release dated February 1, 2011.

EX-99.1

Exhibit 99.1

CSS Industries, Inc. Reports Sales and Earnings for the Three and Nine Months Ended December 31, 2010

PHILADELPHIA--(BUSINESS WIRE)--February 1, 2011--CSS Industries, Inc. (NYSE:CSS) announced today the results of operations for the three and nine months ended December 31, 2010. For the quarter ended December 31, 2010, sales decreased 4% to $174,621,000 compared to $182,230,000 in 2009. Net income increased 1% to $12,855,000, or $1.32 per diluted share, compared to prior year net income of $12,700,000, or $1.31 per diluted share last year. For the nine months ended December 31, 2010, sales decreased by 2% to $387,854,000 from $396,180,000 in 2009 while net income decreased 9% to $15,583,000, or $1.61 per diluted share compared to prior year net income of $17,102,000, or $1.77 per diluted 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.

Third Quarter Results

Sales for the third quarter of fiscal 2011 were down 4% as compared to the prior year, primarily due to lower sales of Christmas wrapping paper. Net income was positively impacted by lower costs of goods sold and lower selling, general and administrative and interest expenses. The lower costs of goods sold were primarily due to lower labor and materials costs. The lower selling, general and administrative expenses were largely payroll related, and the lower interest expense was primarily due to a reduction in outstanding debt balances.

Nine Month Results

Sales for the first nine months of fiscal 2011 were down slightly as compared to the prior year. Consistent with the third quarter results, net income was positively impacted by lower costs of goods sold and lower selling, general and administrative and interest expenses.

Management Comments

“Our third quarter earnings per diluted share slightly exceeded last year as our reduced spending in costs of goods sold and selling, general and administrative and interest expenses offset the sales decline,” said Christopher J. Munyan, CSS’ President and CEO. “While sales in the third quarter of this year were 4% below the prior year, we continue to believe that we are making progress in the market and that sales will start to gradually improve. Looking forward, we continue to believe that improved operational efficiencies and processes that we have already implemented, combined with expected higher sales in the fourth quarter of fiscal 2011 versus the fourth quarter of fiscal 2010, will result in improved profitability in the fourth quarter of fiscal 2011 as compared to the fourth quarter of fiscal 2010 (before the net impact of the non-cash impairment charge recorded in the fourth quarter of 2010). Additionally, we focus on cash flow generation, and we continue to expect that free cash flow (defined as cash flow from operations reduced by purchases of property, plant and equipment) for fiscal 2011 will be at least $25,000,000.”

CSS is a consumer products company primarily engaged in the design, manufacture, procurement, distribution and sale of seasonal and all occasion social expression products, principally to mass market retailers. These seasonal and all occasion products include gift wrap, gift bags, gift boxes, gift card holders, boxed greeting cards, gift tags, decorative tissue paper, decorations, classroom exchange Valentines, decorative ribbons and bows, floral accessories, Halloween masks, costumes, make-up and novelties, Easter egg dyes and novelties, craft and educational products, memory books, stationery, journals, notecards, infant and wedding photo albums, scrapbooks, 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 including, among others, statements relating to expected higher sales in the future and our expected minimum level of free cash flow for fiscal 2011. 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 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; risks associated with the Company’s enterprise resource planning 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; 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, 2010 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 statements of operations for the three and nine months ended December 31, 2010 and 2009 and condensed consolidated balance sheets as of December 31, 2010, March 31, 2010 and December 31, 2009 follow:

CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share amounts)
	Three Months Ended						Nine Months Ended
	December 31,						December 31,
		2010			2009			2010			2009
SALES	$	174,621		$	182,230		$	387,854		$	396,180
COSTS AND EXPENSES
Cost of sales		130,478			136,661			290,764			295,356
Selling, general and administrative expenses		23,600			25,224			71,622			72,823
Interest expense, net		425			645			1,018			1,674
Other (income) expense, net		(116	)		(86	)		(67	)		(337	)
		154,387			162,444			363,337			369,516
INCOME BEFORE INCOME TAXES		20,234			19,786			24,517			26,664
INCOME TAX EXPENSE		7,379			7,086			8,934			9,562
NET INCOME	$	12,855		$	12,700		$	15,583		$	17,102
NET INCOME PER COMMON SHARE
Basic	$	1.32		$	1.32		$	1.61		$	1.78
Diluted	$	1.32		$	1.31		$	1.61		$	1.77
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		9,703			9,646			9,694			9,627
Diluted		9,714			9,682			9,706			9,671
CASH DIVIDENDS PER SHARE OF COMMON STOCK	$	.15		$	.15		$	.45		$	.45

CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
	December 31,		March 31,		December 31,
	2010		2010		2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,221	$	27,217	$	4,619
Accounts receivable, net		145,877		45,711		152,536
Inventories		75,800		78,851		67,530
Deferred income taxes		5,102		6,165		6,609
Asset held for sale		1,323		1,363		1,363
Other current assets		12,358		15,986		11,986
Total current assets		244,681		175,293		244,643
PROPERTY, PLANT AND EQUIPMENT, NET		44,665		47,786		50,657
DEFERRED INCOME TAXES		4,767		5,439		-
OTHER ASSETS
Intangible assets, net		49,195		49,260		93,991
Other		3,880		3,984		3,936
Total other assets		53,075		53,244		97,927
Total assets	$	347,188	$	281,762	$	393,227
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Short-term debt	$	33,300	$	-	$	46,100
Current portion of long-term debt		166		481		497
Accrued customer programs		10,288		8,380		13,034
Other current liabilities		50,971		35,535		48,423
Total current liabilities		94,725		44,396		108,054
LONG-TERM DEBT, NET OF CURRENT PORTION		-		66		166
LONG-TERM OBLIGATIONS		6,206		4,255		4,646
DEFERRED INCOME TAXES		-		-		5,768
STOCKHOLDERS’ EQUITY		246,257		233,045		274,593
Total liabilities and stockholders’ equity	$	347,188	$	281,762	$	393,227

CONTACT:
CSS Industries, Inc.
Vince Paccapaniccia, Chief Financial Officer
215-569-9900