CSS Industries Inc. Reports Improved Sales and Results for the Year and Quarter Ended Dec. 31, 1998.PHILADELPHIA--(BUSINESS WIRE)--Feb. 17, 1999--CSS Industries Inc. (NYSE NYSE See: New York Stock Exchange :CSS (1) See Cascading Style Sheets. (2) (Content Scrambling System) The copy protection system applied to DVDs, which uses a 40-bit key to encrypt the movie. ) announced today the results of operations for the year and quarter ended Dec. 31, 1998. Sales for 1998 increased 12% to $400,691,000 from $357,720,000, while income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased to $24,276,000, or $2.21 per share, from $18,871,000, or $1.67 per share, in 1997. Sales for the fourth quarter of 1998 increased 7% to $184,124,000 from $171,379,000 in 1997. Income from continuing operations increased to $16,372,000, or $1.56 per share, from $15,155,000, or $1.33 per share, in 1997. The increase in sales is attributable to increased sales of Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). product, particularly gift wrap, ribbons and bows, and boxed greeting cards See e-card. , and increased sales of Halloween products. Income from continuing operations for the year included special, non-recurring, after tax income of $3,398,000, or $.31 per share. These items consisted of the gain on the sale of a 1,135,000 square feet distribution facility offset, in part, by special, non-recurring charges including 1) losses related to the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of certain ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. product lines, 2) severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and other costs related to the blending of certain functions within the Company, and 3) the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of certain systems development costs. Excluding the impact of special items, income from continuing operations was $20,878,000, or $1.90 per share, for the year and $16,856,000, or $1.60 per share, for the fourth quarter. The improved results were primarily due to increased sales volume and reduced interest expense due to proceeds from the sale of a subsidiary in 1997, offset, in part, by lower margins caused by competitive market conditions and higher product costs. In February 1999, CSS was awarded, by an independent arbitrator arbitrator n. one who conducts an arbitration, and serves as a judge who conducts a "mini-trial," somewhat less formally than a court trial. In most cases the arbitraror is an attorney, either alone or as part of a panel. , approximately $11,200,000, including interest, in its arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the case with Gibson Greetings Inc. The dispute related to the valuation of assets, primarily inventory, acquired with the Nov. 15, 1995 purchase of Cleo Inc. The purchase price included $12,000,000 held in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. pending the resolution of purchase price adjustments and the payment of any indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from claims. The award increased slightly the goodwill recorded on the 1998 balance sheet but had no impact on 1998 earnings. In commenting on 1998 results, Jack Farber, chairman of the board and president of CSS stated, "Significant progress was made during 1998 in integrating many Berwick and Paper Magic activities and in completing and implementing the Cleo management information system. "As a result of changes made in 1998 we have the opportunity to realize close reductions in our operations and improve our focus on our primary seasonal business lines. We continue to evaluate acquisition opportunities and improve our focus on our primary seasonal business lines. We continue to evaluate acquisition opportunities and to take necessary action to achieve earnings growth consistent with our past performance." The seasonal nature of most of CSS' business results in low sales and net losses for the first two quarters and high shipment levels and net income for the second half of the year, thereby causing significant fluctuations in the quarterly results of the Company. Any reference to future results, developments, stock performance, and company intentions, hopes beliefs, expectations or predictions of the future constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to a number of risks and uncertainties. It is important to note that the Company's actual results could differ materially from those in forward-looking statements contained from time to time in the Company's earnings releases and the Company's Forms 10-K and 10-Q on file with the Securities and Exchange Commission. CSS' consolidated statement of operations See Income statement. for the quarter and year ended Dec. 31, 1998 and 1997 follow: -0-
CSS Industries Inc. and Subsidiaries
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Consolidated Results of Operations
----------------------------------
(Unaudited)
(In thousands, except
per share amounts)
Three Months Ended Year Ended
Dec. 31, Dec. 31,
------------------ -----------------
1998 1997 1998 1997
---- ---- ---- ----
SALES $184,124 $171,379 $400,691 $357,720
======== ======== ======== ========
INCOME FROM CONTINUING
OPERATIONS BEFORE
SPECIAL ITEMS $26,333 $24,190 $32,617 $30,422
SPECIAL ITEMS (757) - 5,309 -
-------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 25,576 24,190 37,926 30,442
INCOME TAX EXPENSE 9,204 9,035 13,650 11,571
-------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS 16,372 15,155 24,276 18,871
DISCONTINUED OPERATIONS - 20,310 - 24,219
-------- -------- -------- --------
NET INCOME $16,372 $35,465 $24,276 $43,090
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NET INCOME PER COMMON
SHARE - DILUTED
Continuing operations,
before special items $1.60 $1.33 $1.90 $1.67
Special items (.04) - .31 -
Discontinued operations - 1.77 - 2.14
-------- -------- -------- --------
$1.56 $3.10 $2.21 3.81
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