American Greetings Announces Second Quarter Results, Continued Progress With Retail Productivity Initiative

Cleveland (PROTEXT) - American Greetings (NYSE: AM) todayreleased its second quarter financial results for fiscal 2000,which reflect recent restructuring efforts, its initiative toimprove the productivity of its retail partners, and the impactof its electronic marketing group. For the quarter ended Aug. 31, 1999, American Greetingsreported a pre-tax loss of $718,000 before special charges.However, those results were impacted by a $4.4 million pre-taxloss incurred by the Company's electronic marketing unit. Whenexcluding that issue, American Greetings had a pre-tax profitduring the quarter of $3.7 million. Additionally, the Company reported $40.4 million of specialcharges during the quarter related to the consolidation ofCanadian manufacturing and distribution into the US. That totalwas comprised of a $32.7 million restructuring charge and a $7.7million charge for a write down of Canadian inventory. Thosecharges resulted in a net loss for the quarter of $26.3 million,or 39 cents per share assuming dilution. For the second quarterlast year, American Greetings reported net income of $13.9million, or 20 cents per share. Revenues in the quarter were $477.8 million, compared with$479.7 million for the same period a year earlier. As expected,revenues were impacted by the Company's productivity initiative,which will result in about a $100 million reduction in shipmentsto retailers during fiscal 2000. "We remain on track with our productivity initiatives andexpect to complete the program in the second half of this year,"said Morry Weiss, chairman and chief executive of AmericanGreetings. "By lowering the inventory of card departments whileintroducing exciting new greeting card designs, many of ouraccounts are beginning to see the positive impact of our effortsto further improve their productivity." Weiss said American Greetings still expects earnings for theyear between $2 and $2.10 per share. That guidance does notinclude the impact of restructuring charges or the impact ofexpected results in the electronic marketing unit. For the first six months of fiscal 2000, American Greetingshad pre-tax profits of $16.2 million before special charges. Whenalso excluding the results of the electronic marketing unit, theCompany reported a pre-tax profit of $20.3 million. When including all factors, the Company reported a net loss of$15.5 million, or 23 cents per share, during the six-monthperiod. A year earlier, the Company reported net income of $47.8million, or 67 cents per share. Last year's results included aone-time gain of 5 cents per share from the sale of the company'sinvestment in Artistic Greetings. Revenue during the first six months was $936.5 million,compared with $967.6 million for the same period of fiscal 1999,reflecting, as anticipated, the impact of fewer shipments toretailers. Consumer and retailer response to new greeting card programsremained strong throughout the first six months. "Intuitions," aprovocative new card line, continued to see strong response andhas become one of the industry's top-selling everyday card lines. American Greetings has seen strong results from itsinternational operations, especially the UK where sales andoperating profits both showed double-digit gains from last year.Plus Mark and Magnivision also showed gains during the quarterover last year. During the quarter, the Company's strategic business unitsalso continued to show double-digit growth. The Company completedits acquisition of Contempo Colours, a Michigan-based party goodscompany. Contempo will complement DesignWare, the party goodsunit of American Greetings formed in 1997. Together, Contempo andDesignWare will give American Greetings a double-digit share ofthe party goods industry. "The acquisition of Contempo is the latest step inimplementing our long- term strategic plan," said EdFruchtenbaum, president and chief operating officer. "We continueto explore several other acquisition opportunities while pursuingstrong internal growth." American Greetings is the world's largest publicly heldcreator, manufacturer and distributor of greeting cards andsocial expression products. With headquarters in Cleveland, Ohio,American Greetings employs more than 21,000 associates around theworld and has one of the largest creative studios in the world.For more information on the Company, visit our site on the WorldWide Web at www.americangreetings.com . The statements contained in this release that are nothistorical facts are forward-looking statements. Actual resultsmay differ materially from those projected in the forward-lookingstatements. These forward-looking statements involve risks anduncertainties, including but not limited to, the following risks:retail bankruptcies and consolidations, a weak retailenvironment, competitive terms of sale offered to customers toexpand or maintain business. Please see the Company's Form 10Kfor the year ended February 28, 1999, for other risks anduncertainties that may affect future results.

AMERICAN GREETINGS CORPORATION

SECOND QUARTER REPORT OF CONSOLIDATED SALES AND INCOME

FISCAL YEAR ENDING FEBRUARY 29, 2000

(In thousands of dollars except per share amounts)

(Unaudited)

Three Months EndedPercent

August 31,Change

1999

1998 Net sales

$477,783

$479,733(0.4)% Income (loss) before special

charges and income taxes

(718)

21,342 Income (loss) before income taxes (41,091)

21,342 Income taxes

(14,793)

7,417 Net income (loss)

(26,298)

13,925 Earnings (loss) per share

(.39)

.20 Earnings (loss) per share

- assuming dilution

(.39)

.20 Average number of common

shares outstanding

65,948,721 70,524,337

(Unaudited)

Six Months Ended

Percent

August 31,

Change

1999

1998 Net sales

$936,540

$967,641 (3.2)% Income before special charges

and income taxes

16,230

74,619 Income (loss) before income taxes (24,143)

74,619 Income taxes

(8,692)

26,863 Net income (loss)

(15,451)

47,756 Earnings (loss) per share

(.23)

.67 Earnings (loss) per share

- assuming dilution

(.23)

.67 Average number of common

shares outstanding

66,663,719 70,862,530

AMERICAN GREETINGS CORPORATION

CONSOLIDATED STATEMENT OF INCOME

(In thousands of dollars except per share amounts)

(Unaudited)

(Unaudited)

Three Months Ended

Six MonthsEnded

August 31,

August 31,

1999

1998

19991998 Net sales

$477,783

$479,733

$936,540$967,641 Costs and expenses: Material, labor

and other

production costs 188,821

170,487

348,586330,206 Selling, distribution

and marketing

234,709

226,032

454,031440,916 Administrative

and general

54,235

51,342

108,838109,506 Restructuring charge 32,747

-

32,747- Interest

7,970

7,345

15,11013,918 Other expense (income) 392

3,185

1,371(1,524)

Total

518,874

458,391

960,683893,022 Income (loss) before

income taxes

(41,091)

21,342

(24,143)74,619 Income taxes

(14,793)

7,417

(8,692)26,863 Net income (loss) $(26,298)

$13,925

$(15,451)$47,756 Earnings (loss)

per share

$(.39)

$.20

$(.23)$.67 Earnings (loss) per share -

assuming dilution $(.39)

$.20

$(.23)$.67 Average number of

common shares

outstanding

65,948,721

70,524,337 66,663,71970,862,530 ots Original Text Service: American GreetingsCorporation Internet: http://www.newsaktuell.de Contact: Dale A.Cable, Vice President, Treasurer, (USA) 216-252-7300, or JimKing, Manager, Investor & Media Relations, (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

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