Business News

American Greetings Announces Second Quarter Earnings

Wednesday 29. September 2010 - American Greetings Corporation (NYSE: AM) today announced its results for the second fiscal quarter ended August 27, 2010.

Second Quarter Results

For the second quarter of fiscal 2011, the Company reported total revenue of $342.8 million, pre-tax income of $17.0 million, and net income of $8.5 million or 21 cents per share (all per-share amounts assume dilution). Compared to the prior year, revenue was down approximately $13.6 million. Approximately $10.2 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 $3.4 million or approximately one percent. Also during the quarter, the Company incurred pre-tax costs associated with the integrations of Papyrus and Recycled Paper Greetings of $5.2 million (after tax of approximately $3.2 million) or approximately 8 cents per share.

For the second quarter of fiscal 2010, the Company reported total revenue of $356.4 million, pre-tax income of $34.1 million, and net income of $23.1 million or 59 cents per share. Included within these results was a pre-tax benefit from an insurance program of $7.9 million (after tax of approximately $7.6 million) or approximately 19 cents per share.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “I am pleased with our overall performance in the first half of this year. While we continue to see an erratic recovery in the economy and its effect on our top line, our team has executed well on cost containment and that execution has directly led to healthy cash flow. Our cash flow from operations minus capital expenditures of $74 million in the first half gets us more than halfway to our full year forecast of approximately $125 million.”

For fiscal year 2011, the Company continues to anticipate 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.