Business News

American Greetings Announces First Quarter Results

Thursday 25. June 2009 - American Greetings Corporation (NYSE:AM) today announced its results for the first fiscal quarter ended May 29, 2009.

First Quarter Results

For the first quarter of fiscal 2010, the Company reported total revenue of $412.9 million, pre-tax income of $16.9 million, and net income of $10.0 million or 25 cents per share (all per-share amounts assume dilution).

As previously announced, during the first quarter of fiscal 2010, American Greetings sold its retail store operations to Schurman Fine Papers (“Schurman”), which operates card and gift retail stores under the name Papyrus. American Greetings recognized a preliminary non-cash loss on the disposition, recorded within the Retail Operations segment, of $28.3 million (after-tax of approximately $17.4 million) that reduced earnings per share by approximately 44 cents during the quarter. At the time of the sale of the retail stores, American Greetings also purchased the wholesale division of Schurman which supplies Papyrus brand greeting cards primarily to leading specialty, mass, grocery and drug store channels and purchased a fifteen percent equity interest in Schurman.

For the first quarter of fiscal 2009, the Company reported total revenue of $428.3 million, pre-tax income of $19.2 million, and net income of $13.3 million or 27 cents per share.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “I am very pleased with our performance this quarter. Specifically, sales of greeting cards increased primarily as a result of the additions of Recycled Paper Greetings and Papyrus as well as strength in our overall North American business despite weak economic conditions. We also realized improved margins as a result of our cost reduction activities last year and we will continue to focus on efficiencies this year. We currently anticipate cash flow from operating activities less capital expenditures to be greater than $70 million this fiscal year. We are diligently working through the integration planning processes for Recycled Paper Greetings, the acquired Papyrus wholesale business, and the transition of our former retail operations to Schurman Fine Papers.”

Financing Activities

Under the Company’s $75 million share repurchase program, during the first fiscal quarter the Company purchased approximately 1.1 million shares of its common stock for $4.3 million.