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) todayreleased third quarter results for fiscal 2000 in line with WallStreet expectations. Due to the success of various plans andinitiatives, the Company also said it believes earnings in thenext two fiscal years could increase by about 35 percent and 20percent respectively. For the quarter ended November 30, 1999, American Greetingsreported net income of $53.9 million, or 81 cents per share. Thatcompares to net income of $74.6 million, or $1.04 per share, forthe same period a year ago. This year's results include a loss of9 cents per share from the company's Internet unit. Last year'sresults include a restructuring charge of 12 cents per share. Sales in the quarter were $623.4 million, compared with $638.4million last year, and were impacted by the company's retailproductivity initiative. American Greetings said the initiative,which will result in about a $100 million reduction in shipmentsto retailers during fiscal 2000, is moving toward completion. "There may be some continued effects in select accounts in thenext two quarters, but the expected impact is included in ourstated projections," said Morry Weiss, chairman and CEO ofAmerican Greetings. "We are encouraged that select point-of-saledata shows continued improvement in sales for our retailpartners. Since these sales are achieved with lower inventorylevels, the productivity of our accounts has improved, which hasfurther strengthened our relationship with them." For the first nine months, American Greetings reported netincome of $38.4 million, or 58 cents per share, compared with$122.3 million, or $1.71 per share, for the same period lastyear. This year's results include losses of 15 cents per sharefrom its Internet unit and special charges of 36 cents per sharerelated to Canadian restructuring efforts. Sales year-to-date totaled $1.56 billion, compared with $1.61billion a year ago. American Greetings said its party goods and candle businessescontinued to post strong gains in the quarter. Additionally, PlusMark, the company's seasonal card and gift wrap unit, posteddouble-digit gains in sales and earnings for the quarter andnine-month periods. The Company's UK operations also continued to report stronggains in both sales and earnings. The UK results have beenbolstered in recent quarters by an innovative new greeting cardand licensing program called "Bubblegum," which has quicklybecome the UK's best-selling greeting card program. Bubblegum is scheduled to make its US launch in early 2000 andwill be supported by a national print and television advertisingcampaign. Retailers have greeted the program with enthusiasm, andnearly every major American Greetings account is devotingincremental space to Bubblegum products. "Clearly, the Bubblegum line has been an enormous hit withyoung adults in the UK market," said Ed Fruchtenbaum, presidentand chief operating officer. "Our research suggests US consumersalso find Bubblegum a fun and creative way to communicate. Oncethe cards begin appearing next year, we expect the program to beone of the highlights of fiscal 2001." Fruchtenbaum said Bubblegum is just one of the programs thatwill help American Greetings show significant earningsimprovement in fiscal 2001 and 2002. The anticipated results nextyear also will be aided by the impact from the productivityinitiative, savings from restructuring efforts and theelimination of Y2K related expenses. However, overall competitivecosts continue to increase, and our guidance reflects this trendas well. Although the financial planning process for fiscal 2001 is notcomplete, the Company believes earnings next year should fallinto the range of $2.65 to $2.75 per share. That guidance doesnot include expected losses from its Internet unit. It alsoassumes the pending acquisition of Gibson Greetings is completedand slightly accretive in fiscal 2001. If completed, the Gibson transaction is expected to add 30cents per share to earnings in its second full year. Assuming thesuccessful integration of Gibson and continued benefit from otherprograms and cost-saving efforts, earnings in fiscal 2002 couldbe in the range of $3.20 to $3.30 per share. "We have been aggressive throughout this year in taking theright steps to ensure our future success," Weiss said. "Thepending acquisition of Gibson and the acquisition of ContempoColours are great examples of our commitment to growing thiscompany. As we look forward to fiscal 2001 and 2002, we expect tosee meaningful earnings growth and continued focus on enhancingshareholder value." 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 or unforeseen difficulties in thecompany' Internet division. These statements also could beaffected by revisions in the company's financial planningprocesses and risks associated with the integration of newbusiness and the introduction of new products. Please see theCompany's Form 10K for the year ended February 28, 1999, forother 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,

November30,

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

599,359556,537

Selling, distribution

and marketing

222,154 219,939

676,185660,855

Administrative

and general

56,105

56,156

164,943165,662

Restructuring charge

-

13,925

32,74713,925

Interest

11,434

6,733

26,54420,651

Other expense (income)

(1,301) (1,223)

70(2,747)

Total

539,165 521,861 1,499,8481,414,883 Income before income taxes 84,191 116,502

60,048191,121 Income taxes

30,309 41,941

21,61768,804 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 65,948,99170,625,300 ots Original Text Service: American GreetingsInternet: http://www.newsaktuell.de Contact: Dale A. Cable,Vice President, Treasurer, Tel.: (USA) 216-252-7300 or JimKing, 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

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