Business News
American Greetings Announces Third Quarter Earnings
Wednesday 22. December 2010 - American Greetings Corporation (NYSE: AM) today announced its results for the third fiscal quarter ended November 26, 2010.
Third Quarter Results
For the third quarter of fiscal 2011, the Company reported total revenue of $430.1 million, pre-tax income of $51.5 million, and net income of $32.2 million or 78 cents per share (all per-share amounts assume dilution). Compared to the prior year, revenue was down approximately $10.0 million. Approximately $8.6 million of the revenue decline was a result of the party goods transaction that occurred in December 2009. Holding aside the effect of the party goods transaction, revenue declined about $1.4 million.
For the third quarter of fiscal 2010, the Company reported total revenue of $440.2 million, pre-tax income of $38.1 million, and net income of $29.7 million or 75 cents per share. Included within these results were pre-tax costs related to the wind down of the Mexican operations of $5.9 million (after-tax of approximately $5.7 million) or approximately 14 cents per share as well as incremental variable compensation expense of approximately $12.1 million (after-tax of approximately $7.4 million) or approximately 19 cents during the quarter.
Management Comments and Outlook
Chief Executive Officer Zev Weiss said, “I am pleased with our overall performance in the third fiscal quarter. We have managed to continuously develop new and innovative products while tightly managing expenses, which has resulted in solid earnings for the quarter. During the fourth fiscal quarter, we will face the traditional risk of Christmas and Valentines Day holidays, and this year we face the additional uncertainty of the pace of the economic recovery, which makes consumer buying patterns more difficult to predict. However, we believe our refined business portfolio, along with the changes we have made to our capital structure over the last several years, position the Company well for the opportunities and challenges ahead. We expect to at least meet our projected cash flow from operations minus capital expenditures goal of $125 million with upside to this estimate based on further improvements to the balance sheet and lower than anticipated capital expenditures.”
Previously, for fiscal year 2011, the Company projected cash flow from operating activities of about $165 million and capital expenditures of approximately $40 million resulting in cash flow from operating activities minus capital expenditures of approximately $125 million.