American Greetings Corporation News
American Greetings Announces Improved Fourth Quarter Results
Fourth Quarter Results
For the fourth quarter of fiscal 2008, the Company reported total revenue of
In the prior year's fourth fiscal quarter, the Company reported total revenue of
Full Year Results
For the fiscal year ended
For the prior fiscal year ended
Management Comments and Outlook
Chief Executive Officer
Financing Activities
The Company purchased 4.7 million shares of its common stock for
Conference call on the Web
American Greetings will broadcast its conference call live on the Internet at
About American Greetings Corporation
American Greetings Corporation (NYSE: AM) is one of the world's largest manufacturers of social expression products. Along with greeting cards, its product lines include gift wrap, party goods, stationery, calendars, ornaments and electronic greetings. Located in
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; — retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms; — competitive terms of sale offered to customers; — the Company's ability to successfully implement its strategy to invest in its core greeting card business; — 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 integrate acquisitions; — the ability to successfully implement, or achieve the desired benefits associated with any information systems refresh the Company may implement; — the ability to execute share repurchase programs or the ability to achieve the desired accretive effect from such repurchases; — the Company's ability to comply with its debt covenants; — the Company's ability to successfully complete, or achieve the desired benefits associated with, dispositions; — 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 for the fiscal year ended
AMERICAN GREETINGS CORPORATION FOURTH QUARTER CONSOLIDATED STATEMENT OF OPERATIONS FISCAL YEAR ENDED FEBRUARY 29, 2008 (In thousands of dollars except share and per share amounts) (Unaudited) Quarter Ended Year Ended —————————————- —————————————- February 29, February 28, February 29, February 28, 2008 2007 2008 2007 ——————- ——————- ——————- ——————- Net sales $ 471,875 $ 472,969 $ 1,730,784 $ 1,744,798 Other revenue 21,358 22,955 45,667 49,492 ——————- ——————- ——————- ——————- Total revenue 493,233 495,924 1,776,451 1,794,290 Material, labor and other production costs 233,262 233,559 780,771 826,791 Selling, distribution and marketing expenses 176,778 176,493 621,478 627,940 Administrative and general expenses 67,261 68,179 246,722 253,035 Goodwill impairment - 2,196 - 2,196 Other operating (income) expense - net (518) 15,711 (1,325) (5,252) ——————- ——————- ——————- ——————- Operating income (loss) 16,450 (214) 128,805 89,580 Interest expense 5,575 7,962 20,006 34,986 Interest income (1,903) (1,401) (7,758) (8,135) Other non-operating expense (income) - net 67 130 (7,411) (2,682) ——————- ——————- ——————- ——————- Income (loss) from continuing operations before income tax (benefit) expense 12,711 (6,905) 123,968 65,411 Income tax (benefit) expense (2,851) 2,886 40,648 25,473 ——————- ——————- ——————- ——————- Income (loss) from continuing operations 15,562 (9,791) 83,320 39,938 (Loss) income from discontinued operations, net of tax - (2,432) (317) 2,440 ——————- ——————- ——————- ——————- Net income (loss) $ 15,562 $ (12,223) $ 83,003 $ 42,378 ============= ============= ============= ============= Earnings (loss) per share - basic: Income (loss) from continuing operations $ 0.31 $ (0.18) $ 1.54 $ 0.69 (Loss) income from discontinued operations - (0.04) (0.01) 0.04 ——————- ——————- ——————- ——————- Net income (loss) $ 0.31 $ (0.22) $ 1.53 $ 0.73 ============= ============= ============= ============= Earnings (loss) per share - assuming dilution: Income (loss) from continuing operations $ 0.31 $ (0.18) $ 1.53 $ 0.67 (Loss) income from discontinued operations - (0.04) (0.01) 0.04 ——————- ——————- ——————- ——————- Net income (loss) $ 0.31 $ (0.22) $ 1.52 $ 0.71 ============= ============= ============= ============= Average number of common shares outstanding 50,895,638 56,035,238 54,236,961 57,951,952 Average number of common shares outstanding - assuming dilution 50,972,834 56,035,238 54,506,048 62,392,794 Dividends declared per share $ 0.10 $ 0.08 $ 0.40 $ 0.32 AMERICAN GREETINGS CORPORATION FOURTH QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION FISCAL YEAR ENDED FEBRUARY 29, 2008 (In thousands of dollars) (Unaudited) —————————————————- February 29, February 28, 2008 2007 ——————- ——————- ASSETS CURRENT ASSETS Cash and cash equivalents $ 123,500 $ 144,713 Trade accounts receivable, net 61,902 104,000 Inventories 216,671 182,618 Deferred and refundable income taxes 72,280 135,379 Assets of businesses held for sale - 2,810 Prepaid expenses and other 195,017 227,496 ——————- ——————- Total current assets 669,370 797,016 GOODWILL 285,072 224,105 OTHER ASSETS 420,219 419,071 DEFERRED AND REFUNDABLE INCOME TAXES 133,762 52,869 Property, plant and equipment - at cost 974,073 944,646 Less accumulated depreciation 678,068 659,493 ——————- ——————- PROPERTY, PLANT AND EQUIPMENT - NET 296,005 285,153 ——————- ——————- $ 1,804,428 $ 1,778,214 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Debt due within one year $ 42,790 $ - Accounts payable 123,713 118,250 Accrued liabilities 79,345 80,389 Accrued compensation and benefits 68,669 61,192 Income taxes payable 29,037 26,386 Liabilities of businesses held for sale - 674 Other current liabilities 108,867 84,897 ——————- ——————- Total current liabilities 452,421 371,788 LONG-TERM DEBT 200,518 223,915 OTHER LIABILITIES 181,720 163,623 DEFERRED INCOME TAXES AND NONCURRENT INCOME TAXES PAYABLE 26,358 6,314 SHAREHOLDERS' EQUITY Common shares - Class A 45,324 50,839 Common shares - Class B 3,434 4,283 Capital in excess of par value 445,696 414,859 Treasury stock (872,949) (710,414) Accumulated other comprehensive income (loss) 21,244 (1,013) Retained earnings 1,300,662 1,254,020 ——————- ——————- Total shareholders' equity 943,411 1,012,574 ——————- ——————- $ 1,804,428 $ 1,778,214 ============= ============= AMERICAN GREETINGS CORPORATION FOURTH QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS FISCAL YEAR ENDED FEBRUARY 29, 2008 (In thousands of dollars) (Unaudited) Year Ended ———————————————- February 29, February 28, 2008 2007 ——————- ——————- OPERATING ACTIVITIES: Net income $ 83,003 $ 42,378 Loss (income) from discontinued operations 317 (2,440) ——————- ——————- Income from continuing operations 83,320 39,938 Adjustments to reconcile to net cash provided by operating activities: Goodwill impairment - 2,196 Net loss on disposal of fixed assets 961 1,726 Loss on extinguishment of debt - 5,055 Loss on disposal of product lines - 15,969 Depreciation and amortization 48,535 49,412 Deferred income taxes (7,562) (16,277) Other non-cash charges 9,303 13,891 Changes in operating assets and liabilities, net of acquisitions and dispositions: Decrease in trade accounts receivable 41,758 42,206 (Increase) decrease in inventories (28,456) 22,227 Decrease (increase) in other current assets 27,970 (36,082) Decrease in deferred costs - net 53,438 128,752 Increase in accounts payable and other liabilities 18,934 553 Other - net (4,664) (4,836) ——————- ——————- Cash Provided by Operating Activities 243,537 264,730 INVESTING ACTIVITIES: Proceeds from sale of short-term investments 692,985 1,026,280 Purchases of short-term investments (692,985) (817,540) Property, plant and equipment additions (56,623) (41,716) Cash payments for business acquisitions, net of cash acquired (76,338) (13,122) Cash receipts related to discontinued operations 4,283 12,559 Proceeds from sale of fixed assets 3,104 4,847 Other - net - 6,160 ——————- ——————- Cash (Used) Provided by Investing Activities (125,574) 177,468 FINANCING ACTIVITIES: Increase in long-term debt - 200,000 Reduction of long-term debt - (440,588) Net increase in short-term debt 20,100 - Sale of stock under benefit plans 27,156 6,834 Purchase of treasury shares (172,328) (257,817) Dividends to shareholders (21,803) (18,418) Debt issuance costs - (8,533) ——————- ——————- Cash Used by Financing Activities (146,875) (518,522) DISCONTINUED OPERATIONS: Cash (used) provided by operating activities from discontinued operations (59) 1,283 Cash provided by investing activities from discontinued operations - 1,634 ——————- ——————- Cash (Used) Provided by Discontinued Operations (59) 2,917 EFFECT OF EXCHANGE RATE CHANGES ON CASH 7,758 4,507 ——————- ——————- DECREASE IN CASH AND CASH EQUIVALENTS (21,213) (68,900) Cash and Cash Equivalents at Beginning of Year 144,713 213,613 ——————- ——————- Cash and Cash Equivalents at End of Year $ 123,500 $ 144,713 ============= ============= AMERICAN GREETINGS CORPORATION FOURTH QUARTER CONSOLIDATED SEGMENT DISCLOSURES FISCAL YEAR ENDED FEBRUARY 29, 2008 (In thousands of dollars) (Unaudited) Quarter Ended Year Ended —————————————- ————————————— February 29, February 28, February 29, February 28, 2008 2007 2008 2007 ——————- ——————- ——————- —————— Total Revenue: North American Social Expression Products $ 286,443 $ 297,452 $ 1,178,961 $ 1,206,361 Intersegment items (13,204) (11,995) (54,736) (59,806) Exchange rate adjustment 1,099 (579) 5,417 (254) ——————- ——————- ——————- —————— Net 274,338 284,878 1,129,642 1,146,301 International Social Expression Products 86,010 70,826 285,658 279,845 Exchange rate adjustment 7,710 3,412 25,668 1,885 ——————- ——————- ——————- —————— Net 93,720 74,238 311,326 281,730 Retail Operations 74,293 82,235 190,149 207,441 Exchange rate adjustment 3,660 (554) 7,200 (255) ——————- ——————- ——————- —————— Net 77,953 81,681 197,349 207,186 AG Interactive 22,087 23,196 78,051 85,347 Exchange rate adjustment 665 25 664 101 ——————- ——————- ——————- —————— Net 22,752 23,221 78,715 85,448 Non-reportable segments 24,522 31,857 59,356 73,441 Unallocated (52) 49 63 184 ——————- ——————- ——————- —————— $ 493,233 $ 495,924 $ 1,776,451 $ 1,794,290 ============= ============= ============= ============ Segment Earnings (Loss): North American Social Expression Products $ 24,066 $ 21,968 $ 216,354 $ 204,079 Intersegment items (9,864) (8,592) (41,067) (42,717) Exchange rate adjustment (419) (216) 1,941 (87) ——————- ——————- ——————- —————— Net 13,783 13,160 177,228 161,275 International Social Expression Products 10,738 2,286 22,208 9,434 Exchange rate adjustment 1,064 225 2,528 259 ——————- ——————- ——————- —————— Net 11,802 2,511 24,736 9,693 Retail Operations 10,616 5,013 (4,482) (16,415) Exchange rate adjustment 746 (23) 829 (22) ——————- ——————- ——————- —————— Net 11,362 4,990 (3,653) (16,437) AG Interactive (2,344) 315 6,323 5,813 Exchange rate adjustment 134 (22) 132 (39) ——————- ——————- ——————- —————— Net (2,210) 293 6,455 5,774 Non-reportable segments 1,181 4,837 3,779 11,852 Unallocated (22,704) (32,643) (83,939) (106,544) Exchange rate adjustment (503) (53) (638) (202) ——————- ——————- ——————- —————— Net (23,207) (32,696) (84,577) (106,746) ——————- ——————- ——————- —————— $ 12,711 $ (6,905) $ 123,968 $ 65,411 ============= ============= ============= ============
SOURCE American Greetings Corporation
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