Business News
American Greetings Announces Second Quarter Results
Friday 26. September 2008 - American Greetings Corporation (NYSE:AM) today announced its second quarter results for the fiscal quarter ended August 29, 2008.
Second Quarter Results
For the second quarter of fiscal 2009, the Company reported total revenue of $385.8 million, pre-tax income from continuing operations of $2.4 million, and income from continuing operations of $2.3 million or 5 cents per share (all per-share amounts assume dilution). For the second quarter of fiscal 2008, the Company reported total revenue of $377.5 million, pre-tax income from continuing operations of $12.6 million, and income from continuing operations of $8.4 million or 15 cents per share.
Management Comments and Outlook
Chief Executive Officer Zev Weiss said, “I am pleased with our revenue performance, particularly given current economic conditions. We believe the changes we have made to our products the last couple of years are showing up in our revenue growth. Increasing the quality of our product to achieve that revenue growth has come at a cost, especially in this time of inflation. We remain committed to mitigating the increasing cost structure while simultaneously continuing to delight the consumer.”
The Company reaffirmed its previously announced fiscal 2009 estimate of earnings per share from continuing operations to be between $1.60 to $1.85 per share and cash flow from operations minus capital expenditures to be between $60 million and $80 million.
Weiss continued, “Due to the seasonality of our business, the majority of our earnings are typically earned in the second half of the fiscal year. During the second half, we are increasing our efforts on productivity improvement projects to help offset the margin pressure we experienced in the first half. The combination of both the challenging economic conditions and the risk inherent in a seasonal business could cause us to finish the year near the lower end of our earnings guidance.”
Financing Activities
Under the Company’s $100 million share repurchase program, during the second quarter, the Company purchased approximately 3.1 million shares of its common stock for $46.0 million. The Company has reduced its diluted share count by forty two percent over the past three and one half years.
The Company’s Board of Directors authorized a cash dividend of 12 cents per share to be paid on October 27, 2008 to shareholders of record at the close of business on October 15, 2008.