EX-99.3 5 c72484exv99w3.htm EXHIBIT 99.3 Filed by Bowne Pure Compliance
 

EXHIBIT 99.3
CSS INDUSTRIES, INC.
UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2007
(In thousands, except per share data)
                                         
                            Pro Forma        
    Historical     Historical     Reclasses     Adjustments     Pro Forma as  
    CSS (c)     CRG (d)     (i)     (a)     Adjusted  
SALES
   $ 530,686     $ 50,229     $ 1,579     $ —     $ 582,494  
 
                              
COSTS AND EXPENSES
                                        
Cost of Sales
     394,045       27,773       4,775       —       426,593  
Selling, general and administrative expenses
     96,125       18,026       (3,203 )     1,310 (h)     112,258  
Restructuring expenses
     2,327       —       —       —       2,327  
Interest expense, net
     2,285       408       —       2,725 (f)     5,418  
Other income, net
     (900 )     (4 )     7       —       (897 )
 
                              
 
                                        
INCOME BEFORE INCOME TAXES
     36,804       4,026       —       (4,035 )     36,795  
INCOME TAX EXPENSE
     12,915       —       —       (3 )(j)     12,912  
 
                              
NET INCOME
     23,889       4,026       —       (4,032 )     23,883  
 
                              
NET INCOME PER COMMON SHARE
                                        
Basic
   $ 2.25                             $ 2.25  
 
                                    
Diluted
   $ 2.19                             $ 2.19  
 
                                    
WEIGHTED AVERAGE SHARES OUTSTANDING
                                        
Basic
     10,622                               10,622  
 
                                    
Diluted
     10,919                               10,919  
 
                                    
COMPREHENSIVE INCOME
                                        
Net income
   $ 23,889     $ 4,026     $ —     $ (4,032 )   $ 23,883  
Foreign currency translation adjustment
     1       —       —       —       1  
 
                              
Comprehensive income
   $ 23,890     $ 4,026     $ —     $ (4,032 )   $ 23,884  
 
                              
See accompanying footnotes to pro-forma financial information

 

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CSS INDUSTRIES, INC.
UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
NINE MONTHS ENDED DECEMBER 31, 2007
(In thousands, except per share data)
                                         
                            Pro Forma        
    Historical     Historical     Reclasses     Adjustments     Pro Forma as  
    CSS (b)     CRG (e)     (i)     (a)     Adjusted  
SALES
   $ 441,854     $ 39,656     $ (1,717 )   $ —     $ 479,793  
 
                              
COSTS AND EXPENSES
                                        
Cost of Sales
     320,990       22,309       4,380       —       347,679  
Selling, general and administrative expenses
     71,493       17,297       (6,097 )     873 (h)     83,566  
Restructuring expenses
     (2 )     —       —       —       (2 )
Interest expense, net
     720       87       —       2,036 (g)     2,843  
Other income, net
     (452 )     (116 )     —       —       (568 )
 
                              
 
                                        
INCOME BEFORE INCOME TAXES
     49,105       79       —       (2,909 )     46,275  
INCOME TAX EXPENSE
     17,143       —       —       (991 )(j)     16,152  
 
                              
NET INCOME
     31,962       79       —       (1,918 )     30,123  
 
                              
NET INCOME PER COMMON SHARE
                                        
Basic
   $ 2.95                             $ 2.78  
 
                                    
Diluted
   $ 2.88                             $ 2.71  
 
                                    
WEIGHTED AVERAGE SHARES OUTSTANDING
                                        
Basic
     10,833                               10,833  
 
                                    
Diluted
     11,115                               11,115  
 
                                    
COMPREHENSIVE INCOME
                                        
Net income
   $ 31,962     $ 79     $ —     $ (1,918 )   $ 30,123  
Foreign currency translation adjustment
     2       —       —       —       2  
 
                              
Comprehensive income
   $ 31,964     $ 79     $ —     $ (1,918 )   $ 30,125  
 
                              
See accompanying footnotes to pro-forma financial information

 

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Notes to Pro-Forma Financial Information
The aggregate purchase price for the acquisition of substantially all of the assets of C.R. Gibson, Inc. (“C.R. Gibson”) through a newly-formed subsidiary, C.R. Gibson, LLC, was approximately $68,000,000 in cash plus the assumption of liabilities of approximately $4,943,000 and transaction costs of approximately $200,000. A portion of the purchase price is being held in escrow for certain post closing adjustments and indemnification obligations. The acquisition was accounted for as a purchase and the preliminary estimated excess of cost over the fair market value of the net tangible and identifiable intangible assets acquired of $17,482,000 was recorded as goodwill. For tax purposes, goodwill resulting from this acquisition is deductible.
The pro forma adjustments are based upon available information and upon certain assumptions that CSS Industries, Inc. (the “Company”) believes are reasonable. The unaudited combined pro forma financial statements are provided for informational purposes only and are not necessarily indicative of the Company’s results of operations that would actually have been obtained had this acquisition been completed as of the beginning of the periods presented, or that may be obtained in the future. Included in the pro forma results are intercompany charges from C.R. Gibson’s previous parent company of $3,150,000 and $2,261,000 for the year ended March 31, 2007 and nine months ended December 31, 2007, respectively. The Company does not expect to incur these charges in the future.
  (a)   The unaudited pro forma combined statement of operations gives effect to the transaction as if it occurred at the beginning of the periods presented.
  (b)   Represents the historical consolidated financial statements of the Company for the nine months ended December 31, 2007. Included in these consolidated financial results are approximately one-month of activity related to the newly formed C.R. Gibson, LLC.
  (c)   Represents the historical consolidated financial statements of the Company for the year ended March 31, 2007.
  (d)   Represents the historical results of operations of the C.R. Gibson Business for the year ended December 31, 2006.
  (e)   Represents the historical results of operations of the C.R. Gibson Business for the period from March 25, 2007 to November 30, 2007.
  (f)   Reflects an adjustment for additional interest expense due to the acquisition of substantially all of the assets of C.R. Gibson, Inc. for the nine months ended December 31, 2007.
  (g)   Reflects an adjustment for additional interest expense due to the acquisition of substantially all of the assets of C.R. Gibson, Inc. for the year ended March 31, 2007.
  (h)   Reflects an adjustment for estimated intangible asset amortization, which included trademarks, customer relationships and non-compete agreements. An appraisal was performed to determine the fair value of intangible assets acquired as part of the C.R. Gibson Business. Intangible asset amortization was $1,310 and $873 and for the year ended March 31, 2007 and the nine months ended December 31, 2007, respectively.
  (i)   Certain reclassification adjustments have been made to the audited presentation of C.R. Gibson Business results to conform with the historical presentation of CSS Industries, Inc. financial results of operations.
  (j)   Represents estimated income tax expense adjustment as a result of the inclusion of the C.R. Gibson Business and estimated pro forma adjustments.

 

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