Business News

American Greetings Announces Record First Quarter Earnings Per Share

Thursday 01. July 2010 - American Greetings Corporation (NYSE:AM) today announced its results for the first fiscal quarter ended May 28, 2010.

First Quarter Results

For the first quarter of fiscal 2011, the Company reported total revenue of $396.3 million, pre-tax income of $51.0 million, and net income of $30.8 million or 75 cents per share (all per-share amounts assume dilution).

For the first quarter of fiscal 2010, the Company reported total revenue of $412.9 million, pre-tax income of $16.9 million, and net income of $10.0 million or 25 cents per share. During the first quarter of fiscal 2010, American Greetings sold its retail store operations. The Retail Operations segment reported revenue of $11.7 million and a segment loss of $34.8 million (after-tax of approximately $21.3 million), which reduced earnings per share by approximately 54 cents during the quarter.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “I am pleased that our earnings per share of 75 cents were the highest we have ever achieved in a first quarter. Our first quarter EPS benefited from several factors including the solid performance in our core business units, the changes we made over the last eighteen months to our portfolio of businesses, and the shares we repurchased over the last several years. We believe our refined business portfolio, which focuses on our core greeting card business, 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.”

“The refined portfolio is contributing to the solid EPS for the quarter. Eliminating the earnings drag of our retail operations has added meaningfully to our earnings swing quarter on quarter. In addition, we continue to believe that by the end of this fiscal year, the integration of both Recycled Paper Greetings and Papyrus will enhance our operating income by $15 to 20 million on an annual run rate,” Weiss added.

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.