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American Greetings Sells Less, Makes More

By Staff -- Gifts and Dec, 12/22/2006 7:30:00 AM

Cleveland — American Greetings Corp.’s income for the third quarter of fiscal 2006 is much higher than last year’s. The card company’s income from continuing operations of $46.6 million, or 78 cents per share, is many times greater than last year’s $8.8 million, or 14 cents per share. American Greetings’ board of directors authorized a cash dividend of 8 cents per share.

This news comes in spite of the fact that the company’s reported net sales of $512.2 million for the quarter are slightly lower than last year’s net sales of $552 million. The effect of retailer consolidations on several long-term supply agreements meant the company saw a $20 million pre-tax gain in the quarter.

CEO Zev Weiss said, "I am pleased with the card investment strategy as both the investment and the results are in line with our expectations. Our strategic card initiative is gaining momentum and both retailers and consumers are delighted. Year-to-date, we are on track with our rollout of changing product displays and the inventory in those displays. We expect to continue to invest in this initiative this year and next."

For the full fiscal year 2007, the company continues to project earnings per share between $0.80 and $1.00. The Company projects cash flow from operating activities, less capital expenditures, of approximately $200 million, compared to earlier guidance of $100 to $130 million. The improved estimate includes anticipated cash receipts from contract terminations, as well as lower-than-anticipated capital expenditures.

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