American Greetings Corp. (AM) filed Quarterly Report for the period ended 2009-08-28.
American Greetings Corporation is the world's largest publicly held creator manufacturer and distributor of greeting cards and social expression products. Its staff of artists designers and writers comprises one of the largest creative departments in the world and helps consumers ``say it best'' by supplying greeting cards to retail outlets in nearly every English-speaking country. (PRESS RELEASE) American Greetings Corp. has a market cap of $903.5 million; its shares were traded at around $22.92 with a P/E ratio of 22.2 and P/S ratio of 0.5. The dividend yield of American Greetings Corp. stocks is 2.1%.
Highlight of Business Operations:
Material, labor and other production costs (“MLOPC”) for the three months ended August 28, 2009 were $153.2 million, approximately $17 million less than the prior year three months. As a percentage of total revenue, these costs were 43.0% in the current period compared to 44.1% for the three months ended August 29, 2008. The decrease is due to favorable spending of approximately $9 million, volume variances of approximately $3 million due to the lower sales in the period and foreign currency translation impacts of approximately $5 million. Decreased spending was a result of reduced scrap levels.
Selling, distribution and marketing (“SDM”) expenses for the three months ended August 28, 2009 were $117.5 million, decreasing approximately $37 million from $154.4 million during the prior year three months. The decrease is due to lower spending of approximately $30 million and favorable foreign currency translation of approximately $7 million. The elimination of the operating costs of our retail stores due to the disposition of those stores during the first quarter of 2010 accounted for approximately $26 million of the $30 million decrease as the prior year second quarter included approximately $26 million of store related expenses. The remaining $4 million of lower spending is attributable to reduced expenses in our licensing business in line with the lower royalty revenue. Decreases in supply chain costs, specifically freight and distribution costs, due to a reduction in units shipped were substantially offset by ongoing SDM expenses from our recent acquisitions.
Administrative and general expenses were $48.5 million for the three months ended August 28, 2009, a decrease from $57.2 million for the three months ended August 29, 2008. The decrease of $8.7 million is primarily related to a benefit of approximately $7 million associated with our COLI programs and favorable foreign currency translation of approximately $2 million.
Interest expense for the three months ended August 28, 2009 was $6.7 million, up from $5.4 million for the prior year quarter. The increase of $1.3 million is primarily attributable to interest on the new 7.375% notes and the $100 million term loan facility that were issued and drawn down, respectively, during the fourth quarter of 2009.
segment of approximately $61 million and an unfavorable foreign currency translation impact of approximately $38 million. These decreases were partially offset by higher net sales in our North American Social Expression Products segment of approximately $58 million. Increased net sales in our fixtures business of approximately $4 million were substantially offset by a decrease in our AG Interactive segment of approximately $3 million as a result of continued declining advertising revenues.
MLOPC for the six months ended August 28, 2009 were $320.4 million, a decrease from $363.5 million for the comparable period in the prior year. As a percentage of total revenue, these costs were 41.7% in the current period compared to 44.6% for the six months ended August 29, 2008. The decrease of approximately $43 million is due to favorable spending and product mix of approximately $22 million and $4 million, respectively. Favorable volume variances due to the decreased sales volume in the current year and foreign currency translation impacts decreased MLOPC approximately $1 million and $16 million, respectively. The decreased spending is primarily attributable to lower scrap costs as well as lower costs associated with the conversion to our new Canadian line of cards, which unfavorably impacted prior year results. The favorable product mix is primarily due to a shift to higher margin card products versus non-card products.
AM is in the portfolios of Michael Price of MFP Investors LLC, Kenneth Fisher of Fisher Asset Management, LLC, Charles Brandes of Brandes Investment.
Rate This Article: |
  |