Business News

American Greetings Announces Improved Fourth Quarter Results

Monday 21. April 2008 - American Greetings Corporation (NYSE:AM) today announced its results for the fourth quarter and fiscal year ended February 29, 2008.

Fourth Quarter Results

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 (all per-share amounts assume dilution).

In the prior year’s fourth fiscal quarter, the Company reported total revenue of $495.9 million, a pre-tax loss from continuing operations of $6.9 million, and a loss from continuing operations of $9.8 million or 18 cents per share. In the prior period, the Company sold its candle product lines and recorded a pre-tax loss of $16 million or approximately 18 cents per share within continuing operations. Also in the prior period, the Company incurred exit costs in connection with the closure of 60 of its retail stores resulting in a pre-tax loss of $6.5 million or approximately 7 cents per share.

Full Year Results

For the fiscal year ended February 29, 2008, the Company reported total revenue of $1,776.5 million, pre-tax income from continuing operations of $124.0 million, and income from continuing operations of $83.3 million or $1.53 per share.

For the prior fiscal year ended February 28, 2007, the Company reported total revenue of $1,794.3 million, pre-tax income from continuing operations of $65.4 million, and income from continuing operations of $39.9 million or 67 cents per share. Included in these results are a pre-tax loss on the sale of the Company’s candle product lines of $16 million or approximately 16 cents per share, a pre-tax loss associated with the closure of 60 stores within the retail operations segment of $6.5 million or approximately 7 cents per share, and a pre-tax gain of $20 million or approximately 20 cents per share as a result of retailer consolidations and the effect the consolidations had on several long-term supply agreements between the Company and the affected retailers.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “I am pleased that we were able to achieve earnings within our forecasted range and exceed our cash flow guidance. Our strong cash flow allowed us to make two acquisitions in the digital photo space, repurchase shares, and raise the dividend this past year.” Weiss added, “While we are expecting a more challenging economy, in fiscal 2009 we are projecting earnings per share increasing to between $1.60 and $1.85, and cash flow from operating activities less capital expenditures between $60 million and $80 million.”

Financing Activities

The Company purchased 4.7 million shares of its common stock for $97.3 million during the fourth quarter of fiscal 2008. During the fiscal year, the Company repurchased a total of 6.7 million shares for a total of $149.1 million under two share repurchase programs. The Company has reduced its total share count by about 40% over the past three years.