CSS Industries Inc. (NYSE:CSS) filed Quarterly Report for the period ended 2010-09-30.
Css Industries Inc. has a market cap of $179.5 million; its shares were traded at around $18.09 with a P/E ratio of 23.5 and P/S ratio of 0.4. The dividend yield of Css Industries Inc. stocks is 3.3%.CSS is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Interest expense, net of $593,000 in 2010 decreased over interest expense, net of $1,029,000 in 2009 due to lower borrowing levels and lower interest rates during the six months ended September 30, 2010 compared to the same period in the prior year.
Net income for the six months ended September 30, 2010 was $2,728,000, or $.28 per diluted share compared to $4,402,000, or $.46 per diluted share in 2009. The decrease in net income for the six months ended September 30, 2010 was primarily due to reduced sales volume, higher material and freight costs, and higher SG&A expenses, partially offset by lower interest expense.
Interest expense, net of $384,000 in 2010 decreased over interest expense, net of $661,000 in 2009 due to lower borrowing levels and interest rates during the three months ended September 30, 2010 compared to the same period in the prior year.
Net income for the three months ended September 30, 2010 was $8,465,000, or $.87 per diluted share compared to $8,892,000, or $.92 per diluted share in 2009. The decrease in net income for the quarter ended September 30, 2010 was primarily due to lower margins, partially offset by lower payroll related expenses and interest expense.
At September 30, 2010, the Company had working capital of $135,262,000 and stockholders equity of $234,137,000. The increase in accounts receivable from March 31, 2010 reflected seasonal billings of current year Halloween and Christmas accounts receivables, net of current year collections. The increase in inventories and other current liabilities from March 31, 2010 was primarily a result of the normal seasonal inventory build necessary for the fiscal 2011 shipping season. The increase in other long-term obligations was primarily attributable to the recording of the asset retirement obligation (see Note 1) and the Seastone royalty earn out obligation (see Note 4). The increase in stockholders equity from March 31, 2010 was primarily attributable to year-to-date net income, partially offset by payments of cash dividends.
The Company relies primarily on cash generated from its operations and seasonal borrowings to meet its liquidity requirements. Historically, a significant portion of the Companys revenues have been seasonal with approximately 80% of sales recognized in the second and third quarters. As payment for sales of Christmas related products is usually not received until just before or just after the holiday selling season in accordance with general industry practice, short-term borrowing needs increase throughout the second and third quarters, peaking prior to Christmas and dropping thereafter. Seasonal financing requirements are met under a $110,000,000 revolving credit facility with four banks and an accounts receivable securitization facility with an issuer of receivables-backed commercial paper. This facility has a funding limit of $60,000,000 during peak seasonal periods and $15,000,000 during off-peak seasonal periods. These financing facilities are available to fund the Companys seasonal borrowing needs and to provide the Company with sources of capital for general corporate purposes, including acquisitions as permitted under the revolving credit facility. At September 30, 2010, the Companys borrowings consisted of $55,690,000 outstanding under the Companys short-term credit facilities and the Company has approximately $264,000 of capital leases outstanding. Based on its current operating plan, the Company believes its sources of available capital are adequate to meet its future cash needs for at least the next 12 months.
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