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GIBSON GREETINGS, INC. ANNOUNCES YEAR-END 1992 RESULTS

 CINCINNATI, Feb. 12 /PRNewswire/ -- Gibson Greetings, Inc. (NASDAQ: GIBG) announced results for the year ended Dec. 31, 1992. These results reflect the negative impact of Phar-Mor, Inc.'s (Phar-Mor) Chapter XI filing in August 1992. Phar-Mor was the company's largest and fastest growing customer, accounting for approximately 13 percent of total revenues in 1991 and 8 percent of total revenues in 1992.
 Revenues for the fourth quarter of 1992, compared to the like period in 1991, increased 5.1 percent to $212.1 million, while income before income taxes decreased 27.9 percent to $27.1 million. Net income decreased 27.1 percent to $16.7 million, while net income per share decreased 28.0 percent to $1.03 versus $1.43 for the comparable 1991 quarter. The effective tax rate for the fourth quarter of 1992 was 38.4 percent versus 39.0 percent for the like period of 1991.
 Revenues for the year ended Dec. 31, 1992, compared to 1991, decreased 7.3 percent to $485.8 million, while income before income taxes and cumulative effect of accounting changes, decreased 80.8 percent to $13.1 million.
 Net income, before the cumulative effect of accounting changes, decreased 80.9 percent to $8.0 million, while net income per share before cumulative effect of accounting changes, decreased to $.50 per share versus $2.61 in 1991. After accounting changes of $1.4 million, net of income taxes, net income decreased 84.4 percent to $6.5 million, while net income per share decreased to $.41 versus $2.61 in 1991. The effective tax rate for 1992 was 38.9 percent versus 38.6 percent for 1991.
 Accounting changes include the adoption, retroactive to Jan. 1, 1992, of SFAS106 related to post retirement medical benefits which reduced net income by $2.5 million, net of income taxes, or $.15 per share. This was partially offset by the adoption of SFAS109 concerning income taxes which increased net income by $1.1 million or $.06 per share, for a net charge of $.09 per share.
 Benjamin J. Sottile, chairman, president and chief executive officer, stated that income before income taxes for the year ended Dec. 31, 1992, reflected several factors including revenue decreases and operating expense increases. Revenues were adversely affected by write- offs of $16.4 million of sales contracts related to the Phar-Mor bankruptcy as well as decreased product shipments. Revenue decreases were partially offset by lower returns of certain seasonal products.
 Operating expenses increased primarily due to Phar-Mor related items including $5.9 million for the write-off of accounts receivable and $5.1 million for the write-off of card display fixtures. Expenses associated with the first full year of operations of a U.K.-based subsidiary also adversely impacted pre-tax income. In addition, domestic restructuring charges aggregating $3.4 million were incurred.
 Interest expense, net, for the year decreased 25.1 percent to $6.8 million, reflecting lower levels of short-term debt related to decreased sales and capital expenditures plus lower interest rates.
 Sottile emphasized that he was pleased to report that the company's balance sheet remained very strong and that its credit rating for commercial paper remained at A2P2, the second highest category. At Dec. 31, 1992, account receivables, net, were down 17.7 percent to $169.6 million, reflecting decreased sales while inventories increased 3.6 percent to $118.8 million. Debt due within one year decreased $39.3 million, or 55.2 percent, to $31.9 million at year-end, reflecting the lower working capital requirements associated with decreased sales, reduced capital expenditures and decreased expenditures for other assets. All outstanding short-term debt was repaid in late January.
 Long-term debt was $70.2 million versus $71.1 million at Dec. 31, 1991. Shareholders' equity at Dec. 31, 1992 was $303.3 million, up $2.6 million from the prior year, equaling $18.92 per share. Capital expenditures for 1992 were $31.0 million compared to $31.7 million for 1991.
 Sottile commented that the bankruptcy of Phar-Mor was completely unforeseeable and involves allegations of fraud and mismanagement concerning certain former members of Phar-Mor senior management. This action was one of the largest of its kind in the history of American retailing and has adversely affected many suppliers, real estate developers, financial institutions and employees. Since then, Phar-Mor has received new financing as "Debtor-in-Possession," has taken steps to restructure and close unprofitable stores and has reestablished normal relationships with trade creditors including Gibson Greetings. The company looks forward to continuing as an important supplier to Phar-Mor although, for the intermediate term, Phar-Mor expects to operate with fewer retail stores.
 Operating results are expected to improve in 1993, Sottile added, as the company continues to emphasize increasing the productivity of the existing customer base, expand the size of product displays and by continuing to provide superior customer service.
 The company continues to offer the largest number of recognized licensed properties in the industry. In addition to Disney, Sesame Street and Grimmy, recent additions include "Marsupilami," the French childrens' book character; "Beverly Hills 90210" and "The Little Mermaid." "Life As We Know It," an alternative greeting card product offering, continues to be very productive at retail and will be printed entirely on recycled paper this year.
 In December, the company completed the acquisition of certain assets and liabilities of a former distributor in Mexico City. The business will operate as a new subsidiary in that rapidly expanding economy.
 Sottile concluded that the company's prompt response to the loss of a major account through a restructuring program, combined with its acknowledged solid financial strength, will enable the resumption of profitable growth in 1993 while continuing to provide first class, innovative product offerings, effective merchandising programs and superior service to its customers.
 The board of directors declared a payment of the regular quarterly cash dividend of $.10 per share to stockholders of record on Feb. 26, 1993, payable March 15, 1993.
 GIBSON GREETINGS, INC.
 SUMMARY CONSOLIDATED INCOME STATEMENT DATA
 (Amounts in thousands, except per share amounts - Unaudited)
 Three Months
 Ended December 31,
 1992 1991
 Revenues $212,103 $201,763
 Income Before Income Taxes
 and Cumulative Effect of
 Accounting Changes $27,074 $37,544
 Income before Cumulative
 Effect of Accounting Changes $16,685 $22,896
 Cumulative Effect of Accounting
 Changes, net of income taxes -- --
 Net Income $16,685 $22,896
 Income Per Share Before Cumulative
 Effect of Accounting Changes $ 1.03 $ 1.43
 Cumulative Effect of Accounting
 Changes, Net of Income Taxes -- --
 Net Income Per Share $ 1.03 $ 1.43
 Average Common Shares and
 Equivalents Outstanding 16,054 16,069
 Twelve Months
 Ended December 31,
 1992 1991
 Revenues $485,823 $524,314
 Income Before Income Taxes
 and Cumulative Effect of
 Accounting Changes $13,061 $68,187
 Income before Cumulative
 Effect of Accounting Changes $ 7,985 $41,884
 Cumulative Effect of Accounting
 Changes, net of income taxes (1,449) --
 Net Income $ 6,536 $41,884
 Income Per Share Before Cumulative
 Effect of Accounting Changes $ .50 $ 2.61
 Cumulative Effect of Accounting
 Changes, Net of Income Taxes (.09) --
 Net Income Per Share $ .41 $ 2.61
 Average Common Shares and
 Equivalents Outstanding 16,104 16,039
 -0- 2/12/93
 /CONTACT: Ward A. Cavanaugh, vice president-finance of Gibson Greetings, Inc., 513-841-6675/
 (GIBG)


CO: Gibson Greetings, Inc. ST: Ohio IN: HOU SU: ERN

KK -- CL004 -- 6131 02/12/93 11:58 EST
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Date:Feb 12, 1993
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