Form 8-K CSS INDUSTRIES INC For: May 19

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May 19, 2015 4:09 PM EDT
UNITED STATES
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): May 19, 2015


 
CSS Industries, Inc.
 
 
(Exact name of registrant as specified in its charter)
 


 
 
 
Delaware
1-2661
13-1920657
(State or other jurisdiction of
(Commission
(I.R.S. Employer
incorporation or organization)
File Number)
Identification No.)
 
 
1845 Walnut Street, Philadelphia, PA
 
19103
(Address of principal executive offices)
 
(Zip Code)
 
 
 
 
 
 
Registrant's telephone number, including area code: (215) 569-9900

 
Not Applicable
 
 
(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 May 19, 2015, the Company issued a press release announcing its financial results for the quarter and year ended March 31, 2015. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is being furnished herewith:
    
 
Exhibit No.
Description
 
 
 
 
 
 
 
 
99.1
Press Release dated May 19, 2015
 
 








SIGNATURE



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 hereunto duly authorized.



                                
 
 
 
CSS Industries, Inc.
 
 
 
(Registrant)
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Vincent A. Paccapaniccia
 
 
 
 
Vincent A. Paccapaniccia
 
 
 
 
Vice-President-Finance and
 
 
 
 
Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date:
May 19, 2015
 
 
 
 
 
 
 






                                








EXHIBIT INDEX


Exhibit No.
Description
 
 
 
 
 
 
99.1
Press Release dated May 19, 2015
 
 






                
 
 
Exhibit 99.1
 
FOR FURTHER INFORMATION CONTACT:
Vincent A. Paccapaniccia
 
 
Chief Financial Officer
 
 
(215) 569-9900
FOR IMMEDIATE RELEASE

May 19, 2015

CSS INDUSTRIES, INC. REPORTS RESULTS OF OPERATIONS
FOR THE QUARTER AND YEAR ENDED MARCH 31, 2015


CSS Industries, Inc. (NYSE: CSS) announced today its results of operations for the quarter and year ended March 31, 2015. As previously announced, the Company's Berwick Offray LLC ("Berwick Offray") company acquired substantially all of the business and assets of Hollywood Ribbon Industries, Inc. ("Hollywood Ribbon") on February 19, 2015. As part of this transaction, the Company incurred $881,000 pretax, or $0.06 per diluted share, of transaction and one-time transition costs as the business was combined with Berwick Offray’s existing manufacturing and distribution facilities located in the Berwick, Pennsylvania area.

Sales for the fourth quarter of fiscal 2015 decreased 1.6% to $53,702,000 from $54,560,000 in the fourth quarter of fiscal 2014, as lower sales of all occasion stationery products more than offset higher sales attributable to the acquisition of substantially all of the business and assets of Carson & Gebel Ribbon Co., LLC ("Carson & Gebel"), as announced on May 19, 2014. Loss from continuing operations before income taxes for the fourth quarter of fiscal 2015 was $(1,928,000), compared to $(2,085,000) in the fourth quarter of fiscal 2014. Net loss for the fourth quarter of fiscal 2015 was $(1,336,000), or $(0.14) per diluted share, versus $(1,529,000), or $(0.16) per diluted share, in the fourth quarter of fiscal 2014. Results for the fourth quarter of fiscal 2015 include the previously mentioned $881,000 of pretax transaction and one-time transition costs from the acquisition of Hollywood Ribbon, as detailed in the chart below.

Fourth Quarter Fiscal 2015
 
Hollywood Ribbon
Non-GAAP
 
As Reported
Charges
Results
Loss from continuing operations before income taxes
$
(1,928,000
)
$
881,000

$
(1,047,000
)
Income tax benefit
(592,000
)
320,000

(272,000
)
Loss from continuing operations
(1,336,000
)
561,000

(775,000
)
Diluted net loss per common share-continuing operations
$
(0.14
)
$
0.06

$
(0.08
)

Sales for full year fiscal 2015 decreased 2.3% to $313,044,000 from $320,459,000 in full year fiscal 2014, primarily due to lower sales of Christmas cards, gift bags and decorations, all occasion cards and stationery products, partially offset by higher sales of gift card holders and sales attributable to the acquisition of substantially all of the business and assets of Carson & Gebel. Income from continuing operations before income taxes for the full year fiscal 2015 was $26,641,000, compared to $27,700,000 in the prior year. Net income for full year fiscal 2015 was $16,954,000, or $1.80 per diluted share, versus $18,769,000, or $1.99 per diluted share, in the prior fiscal year. Results for full year fiscal 2015 include the previously mentioned $881,000 of pretax transaction and one-time transition costs from the acquisition of Hollywood Ribbon, as detailed in the chart below. The Company's seasonal orientation has historically resulted in operating losses in the first and fourth quarters of the fiscal year and operating profits in the second and third quarters.

Full Year Fiscal 2015
 
Hollywood Ribbon
Non-GAAP
 
As Reported
Charges
Results
Income (loss) from continuing operations before income taxes
$
26,641,000

$
881,000

$
27,522,000

Income tax expense (benefit)
9,687,000

320,000

10,007,000

Income (loss) from continuing operations
16,954,000

561,000

17,515,000

Diluted net income (loss) per common share-continuing operations
$
1.80

$
0.06

$
1.86

 
CSS is a consumer products company primarily engaged in the design, manufacture, procurement, distribution and sale of all occasion and seasonal social expression products, principally to mass market retailers. These all occasion and seasonal products include decorative ribbons and bows, boxed greeting cards, gift tags, gift wrap, gift bags, gift boxes, gift card holders, decorative tissue paper, decorations, classroom exchange Valentines, floral accessories, Easter egg dyes and novelties, craft and educational products, stickers, memory books, stationery, journals, note cards, infant and wedding photo albums, scrapbooks, and other gift items that commemorate life’s celebrations.

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management as to future events and financial performance with respect to the Company’s operations. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, general market and economic conditions; increased competition (including competition from foreign products which may be imported at less than fair value and from foreign products which may benefit from foreign governmental subsidies); increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs and the risk that the Company may not be able to integrate and derive the expected benefits from such acquisitions; the risk that customers may become insolvent, may delay payments or may impose deductions or penalties on amounts owed to the Company; costs of compliance with governmental regulations and government investigations; liability associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws; and other factors described more fully in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2014 and elsewhere in the Company’s filings with the Securities and Exchange Commission. As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.

CSS’ consolidated results of operations for the three months and twelve months ended March 31, 2015 and 2014 and condensed consolidated balance sheets as of March 31, 2015 and March 31, 2014 follow:




CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
Three Months Ended
 
Twelve Months Ended
 
March 31,
 
March 31,
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
Sales
$
53,702

 
$
54,560

 
$
313,044

 
$
320,459

 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
  Cost of sales
38,319

 
38,856

 
211,342

 
217,303

  Selling, general and administrative expenses
17,308

 
17,660

 
75,062

 
75,204

  Interest (income) expense, net
(32
)
 
39

 
7

 
191

  Other expense (income), net
35

 
90

 
(8
)
 
61

 
55,630

 
56,645

 
286,403

 
292,759

 
 
 
 
 
 
 
 
(Loss) income from continuing operations before income taxes
(1,928
)
 
(2,085
)
 
26,641

 
27,700

 
 
 
 
 
 
 
 
Income tax (benefit) expense
(592
)
 
(482
)
 
9,687

 
9,136

 
 
 
 
 
 
 
 
(Loss) income from continuing operations
(1,336
)
 
(1,603
)
 
16,954

 
18,564

 
 
 
 
 
 
 
 
Income from discontinued operations, net of tax
—

 
74

 
—

 
205

 
 
 
 
 
 
 
 
Net (loss) income
$
(1,336
)
 
$
(1,529
)
 
$
16,954

 
$
18,769

 
 
 
 
 
 
 
 
Net (loss) income per common share
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
   Continuing operations
$
(0.14
)
 
$
(0.17
)
 
$
1.82

 
$
1.98

   Discontinued operations
$
—

 
$
0.01

 
$
—

 
$
0.02

   Total
$
(0.14
)
 
$
(0.16
)
 
$
1.82

 
$
2.00

 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
   Continuing operations
$
(0.14
)
 
$
(0.17
)
 
$
1.80

 
$
1.97

   Discontinued operations
$
—

 
$
0.01

 
$
—

 
$
0.02

   Total
$
(0.14
)
 
$
(0.16
)
 
$
1.80

 
$
1.99

 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
   Basic
9,343

 
9,294

 
9,326

 
9,389

   Diluted
9,343

 
9,294

 
9,410

 
9,436

 
 
 

 
 
 
 
Cash dividends per share of common stock
$
0.18

 
$
0.15

 
$
0.63

 
$
0.60




CSS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
March 31,
 
March 31,
 
2015
 
2014
ASSETS
 
 
 
Current assets:
 
 
 
   Cash and cash equivalents
$
36,429

 
$
68,200

   Short-term investments
69,845

 
29,862

   Accounts receivable, net
42,052

 
44,243

   Inventories
65,491

 
59,252

   Deferred income taxes
4,375

 
4,414

   Other current assets
11,235

 
13,472

   Current assets of discontinued operations
—

 
1

 
 
 
 
      Total current assets
229,427

 
219,444

 
 
 
 
Property, plant and equipment, net
25,493

 
27,063

 
 
 
 
Deferred income taxes
582

 
1,965

 
 
 
 
Other assets:
 
 
 
   Goodwill
15,820

 
14,522

   Intangible assets, net
33,048

 
26,309

   Other
5,103

 
4,232

 
 
 
 
   Total other assets
53,971

 
45,063

 
 
 
 
      Total assets
$
309,473

 
$
293,535

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
   Accrued customer programs
$
4,042

 
$
4,820

   Other current liabilities
30,963

 
26,582

   Current liabilities of discontinued operations
—

 
233

 
 
 
 
      Total current liabilities
35,005

 
31,635

 
 
 
 
Long-term obligations
4,213

 
4,684

 
 
 
 
Stockholders' equity
270,255

 
257,216

 
 
 
 
      Total liabilities and stockholders’ equity
$
309,473

 
$
293,535




CSS Industries, Inc.
Reconciliation of Certain Non-GAAP Measures
(Unaudited)
(in thousands, except per share amounts)

The following is a reconciliation and computation of income (loss) from continuing operations before income taxes, income tax expense, income (loss) from continuing operations and diluted income (loss) per share from continuing operations to exclude charges incurred as a result of the acquisition of Hollywood Ribbon:

 
Three Months Ended March 31, 2015
 
Loss from Continuing Operations Before Income Taxes
 
Income Tax Expense
 
Loss from Continuing Operations
 
Diluted Loss Per Share, Continuing Operations
As Reported
$
(1,928
)
 
$
(592
)
 
$
(1,336
)
 
$
(0.14
)
Hollywood Ribbon Charges
881

 
320

 
561

 
0.06

Non-GAAP Measurement
$
(1,047
)
 
$
(272
)
 
$
(775
)
 
$
(0.08
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended March 31, 2015
 
Income from Continuing Operations Before Income Taxes
 
Income Tax Expense
 
Income from Continuing Operations
 
Diluted Income Per Share, Continuing Operations
As Reported
$
26,641

 
$
9,687

 
$
16,954

 
$
1.80

Hollywood Ribbon Charges
881

 
320

 
561

 
0.06

Non-GAAP Measurement
$
27,522

 
$
10,007

 
$
17,515

 
$
1.86


Management believes that presentation of results of operations adjusted for the affects of the acquisition of Hollywood Ribbon provides useful information to investors with respect to the Company’s operating results for the three months and twelve months ended March 31, 2015 because it enhances comparability between the reporting periods.



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