American Greetings Announces Third Quarter Results, Establishes Earnings Guidance for Fiscal 2001 and 2002 / Earnings in 2001 expected in range of $2.65 to $2.7

Cleveland (PROTEXT) - American Greetings (NYSE: AM) today released third quarter results for fiscal 2000 in line with Wall Street expectations. Due to the success of various plans and initiatives, the Company also said it believes earnings in the next two fiscal years could increase by about 35 percent and 20 percent respectively. For the quarter ended November 30, 1999, American Greetings reported net income of $53.9 million, or 81 cents per share. That compares to net income of $74.6 million, or $1.04 per share, for the same period a year ago. This year's results include a loss of 9 cents per share from the company's Internet unit. Last year's results include a restructuring charge of 12 cents per share. Sales in the quarter were $623.4 million, compared with $638.4 million last year, and were impacted by the company's retail productivity initiative. American Greetings said the initiative, which will result in about a $100 million reduction in shipments to retailers during fiscal 2000, is moving toward completion. "There may be some continued effects in select accounts in the next two quarters, but the expected impact is included in our stated projections," said Morry Weiss, chairman and CEO of American Greetings. "We are encouraged that select point-of-sale data shows continued improvement in sales for our retail partners. Since these sales are achieved with lower inventory levels, the productivity of our accounts has improved, which has further strengthened our relationship with them." For the first nine months, American Greetings reported net income of $38.4 million, or 58 cents per share, compared with $122.3 million, or $1.71 per share, for the same period last year. This year's results include losses of 15 cents per share from its Internet unit and special charges of 36 cents per share related to Canadian restructuring efforts. Sales year-to-date totaled $1.56 billion, compared with $1.61 billion a year ago. American Greetings said its party goods and candle businesses continued to post strong gains in the quarter. Additionally, Plus Mark, the company's seasonal card and gift wrap unit, posted double-digit gains in sales and earnings for the quarter and nine-month periods. The Company's UK operations also continued to report strong gains in both sales and earnings. The UK results have been bolstered in recent quarters by an innovative new greeting card and licensing program called "Bubblegum," which has quickly become the UK's best-selling greeting card program. Bubblegum is scheduled to make its US launch in early 2000 and will be supported by a national print and television advertising campaign. Retailers have greeted the program with enthusiasm, and nearly every major American Greetings account is devoting incremental space to Bubblegum products. "Clearly, the Bubblegum line has been an enormous hit with young adults in the UK market," said Ed Fruchtenbaum, president and chief operating officer. "Our research suggests US consumers also find Bubblegum a fun and creative way to communicate. Once the cards begin appearing next year, we expect the program to be one of the highlights of fiscal 2001." Fruchtenbaum said Bubblegum is just one of the programs that will help American Greetings show significant earnings improvement in fiscal 2001 and 2002. The anticipated results next year also will be aided by the impact from the productivity initiative, savings from restructuring efforts and the elimination of Y2K related expenses. However, overall competitive costs continue to increase, and our guidance reflects this trend as well. Although the financial planning process for fiscal 2001 is not complete, the Company believes earnings next year should fall into the range of $2.65 to $2.75 per share. That guidance does not include expected losses from its Internet unit. It also assumes the pending acquisition of Gibson Greetings is completed and slightly accretive in fiscal 2001. If completed, the Gibson transaction is expected to add 30 cents per share to earnings in its second full year. Assuming the successful integration of Gibson and continued benefit from other programs and cost-saving efforts, earnings in fiscal 2002 could be in the range of $3.20 to $3.30 per share. "We have been aggressive throughout this year in taking the right steps to ensure our future success," Weiss said. "The pending acquisition of Gibson and the acquisition of Contempo Colours are great examples of our commitment to growing this company. As we look forward to fiscal 2001 and 2002, we expect to see meaningful earnings growth and continued focus on enhancing shareholder value." The statements contained in this release that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties, including but not limited to, the following risks: retail bankruptcies and consolidations, a weak retail environment, competitive terms of sale offered to customers to expand or maintain business or unforeseen difficulties in the company' Internet division. These statements also could be affected by revisions in the company's financial planning processes and risks associated with the integration of new business and the introduction of new products. Please see the Company's Form 10K for the year ended February 28, 1999, for other risks and uncertainties that may affect future results. AMERICAN GREETINGS CORPORATION THIRD QUARTER REPORT OF CONSOLIDATED SALES AND INCOME FISCAL YEAR ENDING FEBRUARY 29, 2000 (In thousands of dollars except per share amounts) (Unaudited) Three Months Ended Percent November 30, Change 1999 1998 Net sales $623,356 $638,363 (2.4)% Income before special charges and income taxes 84,191 130,427 -- Income before income taxes 84,191 116,502 -- Income taxes 30,309 41,941 -- Net income 53,882 74,561 -- Earnings per share .81 1.06 -- Earnings per share - assuming dilution .81 1.04 -- Average number of common shares outstanding 64,519,534 70,150,852 -- (Unaudited) Nine Months Ended Percent November 30, Change 1999 1998 Net sales $1,559,896 $1,606,004 2.9)% Income before special charges and income taxes 100,421 205,046 -- Income before income taxes 60,048 191,121 -- Income taxes 21,617 68,804 -- Net income 38,431 122,317 -- Earnings per share .58 1.73 -- Earnings per share - assuming dilution .58 1.71 -- Average number of common shares outstanding 65,948,991 70,625,300 -- AMERICAN GREETINGS CORPORATION CONSOLIDATED STATEMENT OF INCOME (In thousands of dollars except per share amounts) (Unaudited) (Unaudited) Three Months Ended Nine Months Ended November 30, November 30, 1999 1998 1999 1998 Net sales $623,356 $638,363 $1,559,896 $1,606,004 Costs and expenses: Material, labor and other production costs 250,773 226,331 599,359 556,537 Selling, distribution and marketing 222,154 219,939 676,185 660,855 Administrative and general 56,105 56,156 164,943 165,662 Restructuring charge - 13,925 32,747 13,925 Interest 11,434 6,733 26,544 20,651 Other expense (income) (1,301) (1,223) 70 (2,747) Total 539,165 521,861 1,499,848 1,414,883 Income before income taxes 84,191 116,502 60,048 191,121 Income taxes 30,309 41,941 21,617 68,804 Net income $53,882 $74,561 $38,431 $122,317 Earnings per share $.81 $1.06 $.58 $1.73 Earnings per share - assuming dilution $.81 $1.04 $.58 $1.71 Average number of common shares outstanding 64,519,534 70,150,852 65,948,991 70,625,300 ots Original Text Service: American Greetings Internet: http://www.newsaktuell.de Contact: Dale A. Cable, Vice President, Treasurer, Tel.: (USA) 216-252-7300 or Jim King, Manager, Investor & Media Relations, or Tel.: (USA) 216- 252-4864, both of American Greetings Company News On-Call: http://www.prnewswire.com/comp/044150.html or fax, (USA) 800- 758-5804, ext. 044150 Web site: http://www.americangreetings.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. Protext is a commercial service providing distribution of press releases from clients, who are identified in the text of Protext reports and who bear full responsibility for their contents.