CSS Industries Inc. (CSS, Financial) filed Quarterly Report for the period ended 2009-09-30.
CSS Industries Inc. is a consumer products company primarily engaged in the manufacture and sale to mass market retailers of seasonal social expression products including gift wrap gift bags boxed greeting cards gift tags tissue paper paper and vinyl decorations seasonal candles classroom exchange Valentines decorative ribbons and bows Halloween masks costumes make-ups and novelties and Easter egg dyes and novelties. CSS provides its retail customers the opportunity to use a single vendor for much of their seasonal product requirements. Css Industries Inc. has a market cap of $194.5 million; its shares were traded at around $20.24 with a P/E ratio of 12.2 and P/S ratio of 0.4. The dividend yield of Css Industries Inc. stocks is 3%.
Net income for the six months ended September 30, 2009 was $4,402,000, or $.46 per diluted share compared to $6,008,000, or $.58 per diluted share in 2008. The decrease in net income was primarily due to reduced sales volume and lower margins on Christmas and all occasion products, partially offset by improved margins on Halloween products and reduced SG&A expenses. The decline in diluted earnings per share of 21% for the six months ended September 30, 2009 was more favorable than the decline in net income due to the impact of the Companys repurchase of its stock during fiscal 2009.
Interest expense, net of $661,000 in 2009 decreased from interest expense, net of $916,000 in 2008 due to lower borrowing levels during the three months ended September 30, 2009 compared to the same period in the prior year.
Net income for the three months ended September 30, 2009 was $8,892,000, or $.92 per diluted share compared to $10,504,000, or $1.03 per diluted share in 2008. The decrease in net income for the quarter ended September 30, 2009 was primarily the result of lower sales and lower gross margins on Christmas and all occasion products, partially offset by improved margins on Halloween products and reduced SG&A expenses. The decline in diluted earnings per share of 11% for the three months ended September 30, 2009 was more favorable than the decline in net income due to the impact of the Companys repurchase of its stock during fiscal 2009.
At September 30, 2009, the Company had working capital of $120,847,000 and stockholders equity of $262,532,000. The increase in accounts receivable from March 31, 2009 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, 2009 was primarily a result of the normal seasonal inventory build necessary for the fiscal 2010 shipping season. Inventory levels decreased compared to the same period in the prior year as a result of improved inventory management and reduced product demand. The increase in stockholders equity from March 31, 2009 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 $75,000,000 during peak seasonal periods and $25,000,000 during off-peak seasonal periods. In addition, the Company has outstanding $10,000,000 of 4.48% senior notes due in December 2009. 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, 2009, the Companys borrowings consisted of $10,000,000 outstanding under the senior notes and $69,000,000 outstanding under the Companys short-term credit facilities. In addition, the Company has approximately $730,000 of capital leases outstanding at September 30, 2009. 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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CSS Industries Inc. is a consumer products company primarily engaged in the manufacture and sale to mass market retailers of seasonal social expression products including gift wrap gift bags boxed greeting cards gift tags tissue paper paper and vinyl decorations seasonal candles classroom exchange Valentines decorative ribbons and bows Halloween masks costumes make-ups and novelties and Easter egg dyes and novelties. CSS provides its retail customers the opportunity to use a single vendor for much of their seasonal product requirements. Css Industries Inc. has a market cap of $194.5 million; its shares were traded at around $20.24 with a P/E ratio of 12.2 and P/S ratio of 0.4. The dividend yield of Css Industries Inc. stocks is 3%.
Highlight of Business Operations:
Interest expense, net of $1,029,000 in 2009 decreased from interest expense, net of $1,200,000 in 2008 due to lower borrowing levels during the six months ended September 30, 2009 compared to the same period in the prior year.Net income for the six months ended September 30, 2009 was $4,402,000, or $.46 per diluted share compared to $6,008,000, or $.58 per diluted share in 2008. The decrease in net income was primarily due to reduced sales volume and lower margins on Christmas and all occasion products, partially offset by improved margins on Halloween products and reduced SG&A expenses. The decline in diluted earnings per share of 21% for the six months ended September 30, 2009 was more favorable than the decline in net income due to the impact of the Companys repurchase of its stock during fiscal 2009.
Interest expense, net of $661,000 in 2009 decreased from interest expense, net of $916,000 in 2008 due to lower borrowing levels during the three months ended September 30, 2009 compared to the same period in the prior year.
Net income for the three months ended September 30, 2009 was $8,892,000, or $.92 per diluted share compared to $10,504,000, or $1.03 per diluted share in 2008. The decrease in net income for the quarter ended September 30, 2009 was primarily the result of lower sales and lower gross margins on Christmas and all occasion products, partially offset by improved margins on Halloween products and reduced SG&A expenses. The decline in diluted earnings per share of 11% for the three months ended September 30, 2009 was more favorable than the decline in net income due to the impact of the Companys repurchase of its stock during fiscal 2009.
At September 30, 2009, the Company had working capital of $120,847,000 and stockholders equity of $262,532,000. The increase in accounts receivable from March 31, 2009 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, 2009 was primarily a result of the normal seasonal inventory build necessary for the fiscal 2010 shipping season. Inventory levels decreased compared to the same period in the prior year as a result of improved inventory management and reduced product demand. The increase in stockholders equity from March 31, 2009 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 $75,000,000 during peak seasonal periods and $25,000,000 during off-peak seasonal periods. In addition, the Company has outstanding $10,000,000 of 4.48% senior notes due in December 2009. 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, 2009, the Companys borrowings consisted of $10,000,000 outstanding under the senior notes and $69,000,000 outstanding under the Companys short-term credit facilities. In addition, the Company has approximately $730,000 of capital leases outstanding at September 30, 2009. 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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