American Greetings Announces First Quarter Earnings

/PRNewswire-FirstCall/ -- American Greetings Corporation (NYSE: AM) today announced its results for the first fiscal quarter ended May 27, 2011.

First Quarter Results

For the first quarter of fiscal 2012, the Company reported total revenue of $402.3 million, pre-tax income of $50.8 million, and net income of $32.6 million or 78 cents per share (all per-share amounts assume dilution).  Revenue was reduced by $1.9 million as a result of scan-based trading conversions that occurred during the quarter.  The pre-tax income impact of the scan-based trading conversions was $2.3 million (after-tax $1.4 million, reducing earnings per share by about 3 cents).  

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.  The Company incurred pre-tax costs associated with the integrations of Papyrus and Recycled Paper Greetings of $3.4 million (after-tax of $2.1 million, reducing earnings per share by about 5 cents).

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, “Despite the continuing erratic economic environment, we achieved a record level of earnings per share in the first quarter driven by the combination of the changes we made to our portfolio of businesses in recent years, our growing market share in North America, and the continuation of good expense management.”

For fiscal 2012, the Company expects revenue to grow approximately 5% compared to fiscal 2011.  The Company expects cash flow from operating activities to fall within the range of $125 million to $145 million and capital expenditures between $45 million and $50 million, resulting in cash flow from operating activities minus capital expenditures of $80 million to $100 million.  This cash flow estimate includes an aggregate use of cash of approximately $5 million to $15 million for the combination of working capital, deferred costs, and taxes.  

Conference Call on the Web

American Greetings will broadcast its conference call live on the Internet at 9:00 a.m. Eastern time today.  The conference call will be accessible through the Investor Relations section of the American Greetings Web site at http://investors.americangreetings.com .  A replay of the call will be available on the site.

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