8-K

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): April 28, 2009

American Greetings Corporation

(Exact Name of Registrant as Specified in its Charter)

Ohio	1-13859	34-0065325
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One American Road Cleveland, Ohio	44144
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (216) 252-7300

(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 April 28, 2009, American Greetings Corporation issued a press release reporting its results for the quarter ended February 28, 2009. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 of this Current Report on Form 8-K (including the exhibit attached hereto) is being furnished under Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

d) Exhibits.

Exhibit	Description
Exhibit 99.1	Press Release - reporting results for the quarter ended February 28, 2009.

2

SIGNATURES

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 thereunto duly authorized.

American Greetings Corporation
(Registrant)
By:	/s/ Joseph B. Cipollone
	Joseph B. Cipollone, Vice President,
	Corporate Controller and Chief Accounting Officer

Date: April 28, 2009

3

EX-99.1

Exhibit 99.1

AMERICAN GREETINGS ANNOUNCES FOURTH QUARTER RESULTS

CLEVELAND (April 28, 2009) – American Greetings Corporation (NYSE: AM) today announced its fourth quarter results for the fiscal quarter ended February 28, 2009.

Fourth Quarter Results

For the fourth quarter of fiscal 2009, the Company reported total revenue of $422.5 million, a pre-tax loss from continuing operations of $67.9 million, and a loss from continuing operations of $50.1 million or $1.13 per share (all per-share amounts assume dilution). For the fourth quarter of fiscal 2008, the Company reported total revenue of $493.2 million, pre-tax income from continuing operations of $12.7 million, and income from continuing operations of $15.6 million or 31 cents per share.

During the fourth quarter of fiscal 2009, the Company recognized non-cash pre-tax goodwill impairment charges of $47.3 million (after-tax of approximately $42.6 million) that reduced earnings per share by 97 cents during the quarter.

In addition, the Company recognized expenses in its licensing business primarily due to changes in market conditions that caused a change in ultimate revenues related to animated video productions of $16.4 million (after-tax of approximately $10.0 million) that reduced earnings per share by 23 cents during the quarter.

The Company recorded a non-cash pre-tax long-lived asset impairment charge within the Retail Operations segment of $1.5 million (after-tax of approximately $0.9 million) that reduced earnings per share by 2 cents during the quarter.

The Company also announced on December 9, 2008, the elimination of approximately 275 positions as part of a cost reduction effort. As a result of those and other position eliminations during the quarter, the Company recognized a pre-tax severance charge of $7.5 million (after-tax of approximately $4.6 million) that reduced earnings per share by 10 cents.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “This fiscal year we faced a challenging retail environment as a result of the steep economic downturn. We will continue to be even more vigilant in managing our supply chain and becoming more cost efficient. Our focus on efficiency, we believe, will help us drive a substantial improvement in cash flow next year and we are projecting cash flow from operating activities less capital expenditures to be at least $70 million. We are also excited about the recent acquisitions of Recycled Paper Greetings and the Papyrus brand, and satisfied that the sale of our Carlton Retail stores best positions our Company and those stores for success.”

Financing Activities

Under the Company’s $75 million share repurchase program, during the fourth quarter the Company purchased approximately 4.9 million shares of its common stock for $24.2 million.

Conference Call on the Web

American Greetings will broadcast its conference call live on the Internet at 9:00 a.m. Eastern time today. The conference call will be accessible through the Investor Relations section of the American Greetings Web site at http://investors.americangreetings.com. A replay of the call will be available on the site.

About American Greetings Corporation

For more than 100 years, American Greetings Corporation (NYSE: AM) has been a manufacturer and retailer of innovative social expression products that assist consumers in enhancing their relationships. The Company’s major greeting card brands are American Greetings, Carlton Cards, Gibson, Recycled Paper Greetings and Papyrus, and other paper product offerings include DesignWare party goods, American Greetings and Plus Mark gift-wrap and boxed cards and DateWorks calendars. American Greetings also has the largest collection of electronic greetings on the Web, including cards available at AmericanGreetings.com through AG Interactive, Inc. (the Company’s online division). AG Interactive also offers digital photo sharing and personal publishing at PhotoWorks.com and Webshots.com and a one-stop source for online graphics and animations at Kiwee.com. In addition to its product lines, American Greetings also creates and licenses popular character brands through the American Greetings Properties group. Headquartered in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.7 billion, and its products can be found in retail outlets domestically and worldwide. For more information on the Company, visit http://corporate.americangreetings.com.

###

CONTACT:

Gregory M. Steinberg

Treasurer and Director of Investor Relations

American Greetings Corporation

216-252-4864

investor.relations@amgreetings.com

Certain statements in this release may constitute forward-looking statements within the meaning of the Federal securities laws. These statements can be identified by the fact that they do not relate strictly to historic or current facts. They use such words as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. These forward-looking statements are based on currently available information, but are subject to a variety of uncertainties, unknown risks and other factors concerning the Company’s operations and business environment, which are difficult to predict and may be beyond the control of the Company. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company’s future financial performance, include, but are not limited to, the following:

• a weak retail environment and general economic conditions;

• the ability to successfully integrate acquisitions, including the recent acquisitions of Recycled Paper Greetings and the Papyrus brand;

• the Company’s ability to successfully complete the proposed sale of the Strawberry Shortcake and Care Bears properties;

• the Company’s successful transition of the Retail Operations segment to its buyer, Schurman Fine Papers, and the ability to achieve the desired benefits associated with this and other dispositions;

• retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;

• the ability to achieve the desired benefits associated with its cost reduction efforts;

• competitive terms of sale offered to customers;

• the Company’s ability to comply with its debt covenants;

• the timing and impact of investments in new retail or product strategies as well as new product introductions and achieving the desired benefits from those investments;

• consumer acceptance of products as priced and marketed;

• the impact of technology on core product sales;

• the timing and impact of converting customers to a scan-based trading model;

• escalation in the cost of providing employee health care;

• the ability to successfully implement, or achieve the desired benefits associated with, any information systems refresh the Company may implement;

• the Company’s ability to achieve the desired accretive effect from any share repurchase programs;

• fluctuations in the value of currencies in major areas where the Company operates, including the U.S. Dollar, Euro, U.K. Pound Sterling, and Canadian Dollar; and

• the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability of online advertising, subscriptions as revenue generators, the public’s acceptance of online greetings and other social expression products, and the ability to gain a leadership position in the digital photo sharing space.

In addition, this release contains time-sensitive information that reflects management’s best analysis as of the date of this release. American Greetings does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in the Company’s periodic filings with the Securities and Exchange Commission, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K.

AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED STATEMENT OF OPERATIONS

FISCAL YEAR ENDED FEBRUARY 28, 2009

(In thousands of dollars except share and per share amounts)

	(Unaudited)
	Quarter Ended						Year Ended
	February 28, 2009			February 29, 2008			February 28, 2009			February 29, 2008
Net sales	$	403,467		$	471,875		$	1,646,399		$	1,730,784
Other revenue		19,052			21,358			44,339			45,667
Total revenue		422,519			493,233			1,690,738			1,776,451
Material, labor and other production costs		223,288			233,262			809,956			780,771
Selling, distribution and marketing expenses		153,818			176,778			618,899			621,478
Administrative and general expenses		55,753			67,261			226,317			246,722
Goodwill and other intangible assets impairment		47,277			—			290,166			—
Other operating income - net		(67	)		(518	)		(1,396	)		(1,325	)
Operating (loss) income		(57,550	)		16,450			(253,204	)		128,805
Interest expense		5,881			5,575			22,854			20,006
Interest income		(447	)		(1,903	)		(3,282	)		(7,758	)
Other non-operating expense (income) - net		4,883			67			2,157			(7,411	)
(Loss) income from continuing operations before income tax (benefit) expense		(67,867	)		12,711			(274,933	)		123,968
Income tax (benefit) expense		(17,789	)		(2,851	)		(47,174	)		40,648
(Loss) income from continuing operations		(50,078	)		15,562			(227,759	)		83,320
Loss from discontinued operations, net of tax		—			—			—			(317	)
Net (loss) income	$	(50,078	)	$	15,562		$	(227,759	)	$	83,003
(Loss) earnings per share - basic:
(Loss) income from continuing operations	$	(1.13	)	$	0.31		$	(4.89	)	$	1.54
Loss from discontinued operations		—			—			—			(0.01	)
Net (loss) income	$	(1.13	)	$	0.31		$	(4.89	)	$	1.53
(Loss) earnings per share - assuming dilution:
(Loss) income from continuing operations	$	(1.13	)	$	0.31		$	(4.89	)	$	1.53
Loss from discontinued operations		—			—			—			(0.01	)
Net (loss) income	$	(1.13	)	$	0.31		$	(4.89	)	$	1.52
Average number of common shares outstanding		44,144,203			50,895,638			46,543,780			54,236,961
Average number of common shares outstanding - assuming dilution		44,144,203			50,972,834			46,543,780			54,506,048
Dividends declared per share	$	0.24		$	0.10		$	0.60		$	0.40

AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FISCAL YEAR ENDED FEBRUARY 28, 2009

(In thousands of dollars)

	(Unaudited)
	February 28, 2009			February 29, 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	60,216		$	123,500
Trade accounts receivable, net		63,281			61,902
Inventories		203,873			216,671
Deferred and refundable income taxes		71,850			72,280
Prepaid expenses and other		162,175			195,017
Total current assets		561,395			669,370
GOODWILL		26,871			285,072
OTHER ASSETS		368,958			420,219
DEFERRED AND REFUNDABLE INCOME TAXES		178,785			133,762
Property, plant and equipment - at cost		958,081			974,073
Less accumulated depreciation		660,302			678,068
PROPERTY, PLANT AND EQUIPMENT - NET		297,779			296,005
	$	1,433,788		$	1,804,428
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Debt due within one year	$	750		$	22,690
Accounts payable		117,504			123,713
Accrued liabilities		75,673			79,345
Accrued compensation and benefits		32,198			68,669
Income taxes payable		11,743			29,037
Other current liabilities		105,537			108,867
Total current liabilities		343,405			432,321
LONG-TERM DEBT		389,473			220,618
OTHER LIABILITIES		149,820			181,720
DEFERRED INCOME TAXES AND NONCURRENT INCOME TAXES PAYABLE		21,901			26,358
SHAREHOLDERS’ EQUITY
Common shares - Class A		37,043			45,324
Common shares - Class B		3,499			3,434
Capital in excess of par value		449,085			445,696
Treasury stock		(938,086	)		(872,949	)
Accumulated other comprehensive (loss) income		(67,278	)		21,244
Retained earnings		1,044,926			1,300,662
Total shareholders’ equity		529,189			943,411
	$	1,433,788		$	1,804,428

AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS

FISCAL YEAR ENDED FEBRUARY 28, 2009

(In thousands of dollars)

	(Unaudited) Year Ended
	February 28, 2009			February 29, 2008
OPERATING ACTIVITIES:
Net (loss) income	$	(227,759	)	$	83,003
Loss from discontinued operations		—			317
(Loss) income from continuing operations		(227,759	)		83,320
Adjustments to reconcile (loss) income from continuing operations to cash flows from operating activities:
Goodwill and other intangible assets impairment		290,166			—
Net loss on disposal of fixed assets		1,215			961
Depreciation and intangible assets amortization		50,016			48,535
Deferred income taxes		(29,438	)		(7,562	)
Other non-cash charges		13,735			9,303
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Trade accounts receivable		(6,413	)		41,758
Inventories		924			(28,456	)
Other current assets		17,986			27,970
Deferred costs - net		27,596			53,438
Accounts payable and other liabilities		(67,542	)		18,934
Other - net		2,554			(4,664	)
Total Cash Flows From Operating Activities		73,040			243,537
INVESTING ACTIVITIES:
Proceeds from sale of short-term investments		—			692,985
Purchases of short-term investments		—			(692,985	)
Property, plant and equipment additions		(55,733	)		(56,623	)
Cash payments for business acquisitions, net of cash acquired		(37,882	)		(76,338	)
Cash receipts related to discontinued operations		—			4,283
Proceeds from sale of fixed assets		433			3,104
Other - net		(44,153	)		—
Total Cash Flows From Investing Activities		(137,335	)		(125,574	)
FINANCING ACTIVITIES:
Increase in long-term debt		141,500			20,100
Reduction of long-term debt		(22,509	)		—
Sale of stock under benefit plans		525			27,156
Purchase of treasury shares		(73,983	)		(172,328	)
Dividends to shareholders		(22,566	)		(21,803	)
Total Cash Flows From Financing Activities		22,967			(146,875	)
DISCONTINUED OPERATIONS:
Operating cash flows from discontinued operations		—			(59	)
Total Cash Flows from Discontinued Operations		—			(59	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(21,956	)		7,758
DECREASE IN CASH AND CASH EQUIVALENTS		(63,284	)		(21,213	)
Cash and Cash Equivalents at Beginning of Year		123,500			144,713
Cash and Cash Equivalents at End of Year	$	60,216		$	123,500

AMERICAN GREETINGS CORPORATION

FOURTH QUARTER CONSOLIDATED SEGMENT DISCLOSURES

FISCAL YEAR ENDED FEBRUARY 28, 2009

(In thousands of dollars)

	(Unaudited)
	Quarter Ended						Year Ended
	February 28, 2009			February 29, 2008			February 28, 2009			February 29, 2008
Total Revenue:
North American Social Expression Products	$	272,595		$	286,948		$	1,159,162		$	1,187,520
Intersegment items		(9,136	)		(13,788	)		(57,547	)		(57,210	)
Exchange rate adjustment		(4,281	)		1,178			(6,167	)		(668	)
Net		259,178			274,338			1,095,448			1,129,642
International Social Expression Products		77,401			92,520			299,830			307,959
Exchange rate adjustment		(19,526	)		1,200			(29,103	)		3,367
Net		57,875			93,720			270,727			311,326
Retail Operations		64,879			77,348			183,913			198,271
Exchange rate adjustment		(3,813	)		605			(5,101	)		(922	)
Net		61,066			77,953			178,812			197,349
AG Interactive		21,756			22,690			84,254			78,652
Exchange rate adjustment		(551	)		62			(841	)		63
Net		21,205			22,752			83,413			78,715
Non-reportable segments		23,195			24,522			62,338			59,356
Unallocated		—			(52	)		—			63
	$	422,519		$	493,233		$	1,690,738		$	1,776,451
Segment (Loss) Earnings:
North American Social Expression Products	$	(22,160	)	$	23,417		$	114,395		$	220,285
Intersegment items		(6,821	)		(10,304	)		(42,535	)		(42,953	)
Exchange rate adjustment		(732	)		670			(1,909	)		(104	)
Net		(29,713	)		13,783			69,951			177,228
International Social Expression Products		(1,866	)		11,569			(81,616	)		24,223
Exchange rate adjustment		(855	)		233			3,947			513
Net		(2,721	)		11,802			(77,669	)		24,736
Retail Operations		549			11,372			(19,123	)		(3,772	)
Exchange rate adjustment		(148	)		(10	)		(108	)		119
Net		401			11,362			(19,231	)		(3,653	)
AG Interactive		(259	)		(1,909	)		(161,503	)		6,755
Exchange rate adjustment		(318	)		(301	)		(188	)		(300	)
Net		(577	)		(2,210	)		(161,691	)		6,455
Non-reportable segments		(9,816	)		1,181			(7,627	)		3,779
Unallocated		(24,473	)		(23,372	)		(76,590	)		(84,183	)
Exchange rate adjustment		(968	)		165			(2,076	)		(394	)
Net		(25,441	)		(23,207	)		(78,666	)		(84,577	)
	$	(67,867	)	$	12,711		$	(274,933	)	$	123,968