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AMERICAN GREETINGS ANNOUNCES FIRST QUARTER RESULTS
Jun 25, 2009 (AsiaPulse via COMTEX) --
MEDIA RELEASE PR35181
(Full text of statement. Contact details below.)
American Greetings Announces First Quarter Results
American Greetings Corporation (NYSE: AM) today announced
its results for the first fiscal quarter ended May 29, 2009.
CLEVELAND, Ohio, June 24 /PRNewswire-AsiaNet/ --First
Quarter Results
For the first quarter of fiscal 2010, the Company reported
total revenue of $412.9 million, pre-tax income of $16.9
million, and net income of $10.0 million or 25 cents per share
(all per-share amounts assume dilution).
As previously announced, during the first quarter of fiscal
2010, American Greetings sold its retail store operations to
Schurman Fine Papers (Schurman), which operates card and gift
retail stores under the name Papyrus. American Greetings
recognized a preliminary non-cash loss on the disposition,
recorded within the Retail Operations segment, of $28.3 million
(after-tax of approximately $17.4 million) that reduced
earnings per share by approximately 44 cents during the
quarter. At the time of the sale of the retail stores, American
Greetings also purchased the wholesale division of Schurman
which supplies Papyrus brand greeting cards primarily to
leading specialty, mass, grocery and drug store channels and
purchased a fifteen percent equity interest in Schurman.
For the first quarter of fiscal 2009, the Company reported
total revenue of $428.3 million, pre-tax income of $19.2
million, and net income of $13.3 million or 27 cents per
share.
Management Comments and Outlook
Chief Executive Officer Zev Weiss said, I am very pleased
with our performance this quarter. Specifically, sales of
greeting cards increased primarily as a result of the additions
of Recycled Paper Greetings and Papyrus as well as strength in
our overall North American business despite weak economic
conditions. We also realized improved margins as a result of
our cost reduction activities last year and we will continue to
focus on efficiencies this year. We currently anticipate cash
flow from operating activities less capital expenditures to be
greater than $70 million this fiscal year. We are diligently
working through the integration planning processes for Recycled
Paper Greetings, the acquired Papyrus wholesale business, and
the transition of our former retail operations to Schurman Fine
Papers.
Financing Activities
Under the Companys $75 million share repurchase program,
during the first fiscal quarter the Company purchased
approximately 1.1 million shares of its common stock for $4.3
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 provides 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 worldwide. For more information
on the Company, visit http:/ corporate.americangreetings.com.
Non-GAAP Measures
Certain after-tax amounts included in this earnings release
may be considered non-GAAP measures in accordance with
Regulation G and were calculated based on the Company's
statutory tax rate of approximately 38.7%.
Management believes that after-tax information is useful in
analyzing the Company's results.
Factors That May Affect Future Results
Certain statements in this release, including those under
Management Comments and Outlook, 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 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 Companys 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.
SOURCE: American Greetings Corporation
CONTACT: Gregory M. Steinberg
Treasurer and Director of Investor Relations
American Greetings Corporation
+1-216-252-4864
investor.relations@amgreetings.com
(AM)
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