Welcome!

Mobile IoT Authors: Liz McMillan, Dana Gardner, Zakia Bouachraoui, Yeshim Deniz, Elizabeth White

News Feed Item

American Greetings Announces Fourth Quarter Results

CLEVELAND, April 28 /PRNewswire-FirstCall/ -- American Greetings Corporation (NYSE: AM) today announced its fourth quarter results for the fiscal quarter ended February 28, 2009.

Fourth Quarter Results

For the fourth quarter of fiscal 2009, the Company reported total revenue of $422.5 million, a pre-tax loss from continuing operations of $67.9 million, and a loss from continuing operations of $50.1 million or $1.13 per share (all per-share amounts assume dilution). For the fourth quarter of fiscal 2008, the Company reported total revenue of $493.2 million, pre-tax income from continuing operations of $12.7 million, and income from continuing operations of $15.6 million or 31 cents per share.

During the fourth quarter of fiscal 2009, the Company recognized non-cash pre-tax goodwill impairment charges of $47.3 million (after-tax of approximately $42.6 million) that reduced earnings per share by 97 cents during the quarter.

In addition, the Company recognized expenses in its licensing business primarily due to changes in market conditions that caused a change in ultimate revenues related to animated video productions of $16.4 million (after-tax of approximately $10.0 million) that reduced earnings per share by 23 cents during the quarter.

The Company recorded a non-cash pre-tax long-lived asset impairment charge within the Retail Operations segment of $1.5 million (after-tax of approximately $0.9 million) that reduced earnings per share by 2 cents during the quarter.

The Company also announced on December 9, 2008, the elimination of approximately 275 positions as part of a cost reduction effort. As a result of those and other position eliminations during the quarter, the Company recognized a pre-tax severance charge of $7.5 million (after-tax of approximately $4.6 million) that reduced earnings per share by 10 cents.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, "This fiscal year we faced a challenging retail environment as a result of the steep economic downturn. We will continue to be even more vigilant in managing our supply chain and becoming more cost efficient. Our focus on efficiency, we believe, will help us drive a substantial improvement in cash flow next year and we are projecting cash flow from operating activities less capital expenditures to be at least $70 million. We are also excited about the recent acquisitions of Recycled Paper Greetings and the Papyrus brand, and satisfied that the sale of our Carlton Retail stores best positions our Company and those stores for success."

Financing Activities

Under the Company's $75 million share repurchase program, during the fourth quarter the Company purchased approximately 4.9 million shares of its common stock for $24.2 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 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 domestically and worldwide. For more information on the Company, visit http://corporate.americangreetings.com.

Certain statements in this release 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:

  1. a weak retail environment and general economic conditions;
  2. the ability to successfully integrate acquisitions, including the recent acquisitions of Recycled Paper Greetings and the Papyrus brand;
  3. the Company's ability to successfully complete the proposed sale of the Strawberry Shortcake and Care Bears properties;
  4. 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;
  5. retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;
  6. the ability to achieve the desired benefits associated with its cost reduction efforts;
  7. competitive terms of sale offered to customers;
  8. the Company's ability to comply with its debt covenants;
  9. 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;
  10. consumer acceptance of products as priced and marketed;
  11. the impact of technology on core product sales;
  12. the timing and impact of converting customers to a scan-based trading model;
  13. escalation in the cost of providing employee health care;
  14. the ability to successfully implement, or achieve the desired benefits associated with, any information systems refresh the Company may implement;
  15. the Company's ability to achieve the desired accretive effect from any share repurchase programs;
  16. 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
  17. 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.

                       AMERICAN GREETINGS CORPORATION
             FOURTH QUARTER CONSOLIDATED STATEMENT OF OPERATIONS
                     FISCAL YEAR ENDED FEBRUARY 28, 2009


        (In thousands of dollars except share and per share amounts)

                                           (Unaudited)
                              Quarter Ended            Year Ended
                              -------------            ----------
                           Feb. 28,    Feb. 29,    Feb. 28,    Feb. 29,
                             2009        2008        2009        2008
                           ---------   ---------   ---------   ---------

    Net sales              $403,467    $471,875  $1,646,399  $1,730,784
    Other revenue            19,052      21,358      44,339      45,667
                             ------      ------      ------      ------
    Total revenue           422,519     493,233   1,690,738   1,776,451

    Material, labor and
     other production
     costs                  223,288     233,262     809,956     780,771
    Selling,
     distribution and
     marketing expenses     153,818     176,778     618,899     621,478
    Administrative and
     general expenses        55,753      67,261     226,317     246,722
    Goodwill and other
     intangible assets
     impairment              47,277           -     290,166           -
    Other operating
     income - net               (67)       (518)     (1,396)     (1,325)
                                ---        ----      ------      ------

    Operating (loss)
     income                 (57,550)     16,450    (253,204)    128,805

    Interest expense          5,881       5,575      22,854      20,006
    Interest income            (447)     (1,903)     (3,282)     (7,758)
    Other non-operating
     expense (income) -
     net                      4,883          67       2,157      (7,411)
                              -----          --       -----      ------

    (Loss) income from
     continuing operations
     before income tax
     (benefit) expense      (67,867)     12,711    (274,933)    123,968
    Income tax
     (benefit) expense      (17,789)     (2,851)    (47,174)     40,648
                            -------      ------     -------      ------

    (Loss) income from
     continuing
     operations             (50,078)     15,562    (227,759)     83,320

    Loss from
     discontinued
     operations, net of
     tax                          -           -           -        (317)
                              -----       -----       -----       -----

    Net (loss) income      $(50,078)    $15,562   $(227,759)    $83,003
                           ========     =======   =========     =======

    (Loss) earnings per
     share - basic:
       (Loss) income from
        continuing
        operations           $(1.13)      $0.31      $(4.89)      $1.54
       Loss from
        discontinued
        operations                -           -           -       (0.01)
                              -----       -----       -----       -----
       Net (loss) income     $(1.13)      $0.31      $(4.89)      $1.53
                             ======       =====      ======       =====

    (Loss) earnings per share
      - assuming dilution:
       (Loss) income from
        continuing
        operations           $(1.13)      $0.31      $(4.89)      $1.53
       Loss from
        discontinued
        operations                -           -           -       (0.01)
                              -----       -----       -----       -----
       Net (loss) income     $(1.13)      $0.31      $(4.89)      $1.52
                             ======       =====      ======       =====


    Average number of
     common shares
     outstanding         44,144,203  50,895,638  46,543,780  54,236,961

    Average number of
     common shares
     outstanding -
     assuming dilution   44,144,203  50,972,834  46,543,780  54,506,048

    Dividends declared
     per share                $0.24       $0.10       $0.60       $0.40





                  AMERICAN GREETINGS CORPORATION
     FOURTH QUARTER CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                FISCAL YEAR ENDED FEBRUARY 28, 2009

                  (In thousands of dollars)
                                         (Unaudited)
                                         -----------
                                   February 28,  February 29,
                                      2009          2008
                                    --------      --------

    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents      $60,216    $123,500
      Trade accounts receivable,
       net                            63,281      61,902
      Inventories                    203,873     216,671
      Deferred and refundable
       income taxes                   71,850      72,280
      Prepaid expenses and other     162,175     195,017
                                     -------     -------
        Total current assets         561,395     669,370

    GOODWILL                          26,871     285,072
    OTHER ASSETS                     368,958     420,219
    DEFERRED AND REFUNDABLE
     INCOME TAXES                    178,785     133,762

    Property, plant and
     equipment - at cost             958,081     974,073
    Less accumulated depreciation    660,302     678,068
                                     -------     -------
    PROPERTY, PLANT AND
     EQUIPMENT - NET                 297,779     296,005
                                  ----------  ----------
                                  $1,433,788  $1,804,428
                                  ==========  ==========


    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Debt due within one year          $750     $22,690
      Accounts payable               117,504     123,713
      Accrued liabilities             75,673      79,345
      Accrued compensation and
       benefits                       32,198      68,669
      Income taxes payable            11,743      29,037
      Other current liabilities      105,537     108,867
                                     -------     -------
        Total current liabilities    343,405     432,321

    LONG-TERM DEBT                   389,473     220,618
    OTHER LIABILITIES                149,820     181,720
    DEFERRED INCOME TAXES AND
      NONCURRENT INCOME TAXES
       PAYABLE                        21,901      26,358

    SHAREHOLDERS' EQUITY
      Common shares - Class A         37,043      45,324
      Common shares - Class B          3,499       3,434
      Capital in excess of par
       value                         449,085     445,696
      Treasury stock                (938,086)   (872,949)
      Accumulated other
       comprehensive (loss)
       income                        (67,278)     21,244
      Retained earnings            1,044,926   1,300,662
                                  ----------  ----------
        Total shareholders'
         equity                      529,189     943,411
                                  ----------  ----------
                                  $1,433,788  $1,804,428
                                  ==========  ==========



                 AMERICAN GREETINGS CORPORATION
       FOURTH QUARTER CONSOLIDATED STATEMENT OF CASH FLOWS
               FISCAL YEAR ENDED FEBRUARY 28, 2009
                    (In thousands of dollars)

                                            (Unaudited)
                                            Year Ended
                                            ----------
                                       February   February
                                       28,        29,
                                       2009       2008
                                       --------   --------

    OPERATING ACTIVITIES:
      Net (loss) income                $(227,759)   $83,003
      Loss from discontinued
       operations                              -        317
                                         -------     ------
      (Loss) income from continuing
       operations                       (227,759)    83,320
      Adjustments to reconcile (loss)
       income from continuing
       operations to cash flows
       from operating activities:
        Goodwill and other intangible
         assets impairment               290,166          -
        Net loss on disposal of fixed
         assets                            1,215        961
        Depreciation and intangible
         assets amortization              50,016     48,535
        Deferred income taxes            (29,438)    (7,562)
        Other non-cash charges            13,735      9,303
        Changes in operating assets
         and liabilities, net of
         acquisitions and dispositions:
          Trade accounts receivable       (6,413)    41,758
          Inventories                        924    (28,456)
          Other current assets            17,986     27,970
          Deferred costs - net            27,596     53,438
          Accounts payable and other
           liabilities                   (67,542)    18,934
          Other - net                      2,554     (4,664)
                                          ------     ------
        Total Cash Flows From
         Operating Activities             73,040    243,537

    INVESTING ACTIVITIES:
      Proceeds from sale of short-
       term investments                        -    692,985
      Purchases of short-term
       investments                             -   (692,985)
      Property, plant and equipment
       additions                         (55,733)   (56,623)
      Cash payments for business
       acquisitions, net of cash
       acquired                          (37,882)   (76,338)
      Cash receipts related to
       discontinued operations                 -      4,283
      Proceeds from sale of fixed
       assets                                433      3,104
      Other - net                        (44,153)         -
                                         -------    -------
        Total Cash Flows From
         Investing Activities           (137,335)  (125,574)

    FINANCING ACTIVITIES:
      Increase in long-term debt         141,500     20,100
      Reduction of long-term debt        (22,509)         -
      Sale of stock under benefit
       plans                                 525     27,156
      Purchase of treasury shares        (73,983)  (172,328)
      Dividends to shareholders          (22,566)   (21,803)
                                         -------    -------
        Total Cash Flows From
         Financing Activities             22,967   (146,875)

    DISCONTINUED OPERATIONS:
      Operating cash flows from
       discontinued operations                 -        (59)
                                         -------    -------
        Total Cash Flows from
         Discontinued Operations               -        (59)

    EFFECT OF EXCHANGE RATE CHANGES
     ON CASH                             (21,956)     7,758
                                         -------    -------

    DECREASE IN CASH AND CASH
     EQUIVALENTS                         (63,284)   (21,213)

        Cash and Cash Equivalents at
         Beginning of Year               123,500    144,713
                                         -------    -------
        Cash and Cash Equivalents at
         End of Year                     $60,216   $123,500
                                         =======   ========



                     AMERICAN GREETINGS CORPORATION
             FOURTH QUARTER CONSOLIDATED SEGMENT DISCLOSURES
                   FISCAL YEAR ENDED FEBRUARY 28, 2009
                        (In thousands of dollars)

                                        (Unaudited)
                           Quarter Ended           Year Ended
                           -------------           ----------
                        February   February  February    February
                        28,        29,       28,         29,
                        2009       2008      2009        2008
                        --------   --------  --------    --------

    Total Revenue:
    North American Social
      Expression
       Products         $272,595   $286,948  $1,159,162  $1,187,520
    Intersegment items    (9,136)   (13,788)    (57,547)    (57,210)
    Exchange rate
     adjustment           (4,281)     1,178      (6,167)       (668)
                         -------    -------   ---------   ---------
    Net                  259,178    274,338   1,095,448   1,129,642

    International Social
      Expression
       Products           77,401     92,520     299,830     307,959
    Exchange rate
     adjustment          (19,526)     1,200     (29,103)      3,367
                         -------     ------     -------     -------
    Net                   57,875     93,720     270,727     311,326

    Retail Operations     64,879     77,348     183,913     198,271
    Exchange rate
     adjustment           (3,813)       605      (5,101)       (922)
                          ------     ------      ------     -------
    Net                   61,066     77,953     178,812     197,349

    AG Interactive        21,756     22,690      84,254      78,652
    Exchange rate
     adjustment             (551)        62        (841)         63
                          ------     ------      ------      ------
    Net                   21,205     22,752      83,413      78,715

    Non-reportable
     segments             23,195     24,522      62,338      59,356

    Unallocated                -        (52)          -          63

                        --------   --------  ----------  ----------
                        $422,519   $493,233  $1,690,738  $1,776,451
                        ========   ========  ==========  ==========


    Segment (Loss) Earnings:
    North American Social
      Expression
       Products         $(22,160)   $23,417    $114,395    $220,285
    Intersegment items    (6,821)   (10,304)    (42,535)    (42,953)
    Exchange rate
     adjustment             (732)       670      (1,909)       (104)
                          ------     ------      ------     -------
    Net                  (29,713)    13,783      69,951     177,228

    International Social
      Expression
       Products           (1,866)    11,569     (81,616)     24,223
    Exchange rate
     adjustment             (855)       233       3,947         513
                          ------     ------      ------      ------
    Net                   (2,721)    11,802     (77,669)     24,736

    Retail Operations        549     11,372     (19,123)     (3,772)
    Exchange rate
     adjustment             (148)       (10)       (108)        119
                            ----     ------      ------       -----
    Net                      401     11,362     (19,231)     (3,653)

    AG Interactive          (259)    (1,909)   (161,503)      6,755
    Exchange rate
     adjustment             (318)      (301)       (188)       (300)
                            ----      -----     -------       -----
    Net                     (577)    (2,210)   (161,691)      6,455

    Non-reportable
     segments             (9,816)     1,181      (7,627)      3,779

    Unallocated          (24,473)   (23,372)    (76,590)    (84,183)
    Exchange rate
     adjustment             (968)       165      (2,076)       (394)
                          ------     ------      ------      ------
    Net                  (25,441)   (23,207)    (78,666)    (84,577)

                        --------    -------   ---------    --------
                        $(67,867)   $12,711   $(274,933)   $123,968
                        ========    =======   =========    ========

SOURCE American Greetings Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

IoT & Smart Cities Stories
The platform combines the strengths of Singtel's extensive, intelligent network capabilities with Microsoft's cloud expertise to create a unique solution that sets new standards for IoT applications," said Mr Diomedes Kastanis, Head of IoT at Singtel. "Our solution provides speed, transparency and flexibility, paving the way for a more pervasive use of IoT to accelerate enterprises' digitalisation efforts. AI-powered intelligent connectivity over Microsoft Azure will be the fastest connected pat...
There are many examples of disruption in consumer space – Uber disrupting the cab industry, Airbnb disrupting the hospitality industry and so on; but have you wondered who is disrupting support and operations? AISERA helps make businesses and customers successful by offering consumer-like user experience for support and operations. We have built the world’s first AI-driven IT / HR / Cloud / Customer Support and Operations solution.
Codete accelerates their clients growth through technological expertise and experience. Codite team works with organizations to meet the challenges that digitalization presents. Their clients include digital start-ups as well as established enterprises in the IT industry. To stay competitive in a highly innovative IT industry, strong R&D departments and bold spin-off initiatives is a must. Codete Data Science and Software Architects teams help corporate clients to stay up to date with the mod...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
Druva is the global leader in Cloud Data Protection and Management, delivering the industry's first data management-as-a-service solution that aggregates data from endpoints, servers and cloud applications and leverages the public cloud to offer a single pane of glass to enable data protection, governance and intelligence-dramatically increasing the availability and visibility of business critical information, while reducing the risk, cost and complexity of managing and protecting it. Druva's...
BMC has unmatched experience in IT management, supporting 92 of the Forbes Global 100, and earning recognition as an ITSM Gartner Magic Quadrant Leader for five years running. Our solutions offer speed, agility, and efficiency to tackle business challenges in the areas of service management, automation, operations, and the mainframe.
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, compared the Jevons Paradox to modern-day enterprise IT, examin...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DSR is a supplier of project management, consultancy services and IT solutions that increase effectiveness of a company's operations in the production sector. The company combines in-depth knowledge of international companies with expert knowledge utilising IT tools that support manufacturing and distribution processes. DSR ensures optimization and integration of internal processes which is necessary for companies to grow rapidly. The rapid growth is possible thanks, to specialized services an...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...