Profile: CSS Industries, Inc. (CSS)

CSS Industries, Inc. (CSS) is a consumer product company primarily engaged in the design, manufacture, procurement, distribution and sale of seasonal and all occasion social expression products, principally to mass market retailers. These seasonal and all occasion products include gift wrap, gift bags, gift boxes, gift card holders, boxed greeting cards, gift tags, decorative tissue paper, decorations, classroom exchange valentines, decorative ribbons and bows, floral accessories, halloween masks, costumes, make-up and novelties, easter egg dyes and novelties, craft and educational products, memory books, stationery, journals, notecards, infant and wedding photo albums, scrapbooks, and other gift items that commemorate life’s celebrations. A substantial portion of CSS’ products are manufactured, packaged and/or warehoused in 13 facilities located in the United States, with the remainder purchased primarily from manufacturers in Asia and Mexico. On February 20, 2009, a subsidiary of the Company completed the acquisition of Seastone L.C., which is a provider of specialty gift card holders.

The Company’s principal operating subsidiaries include Paper Magic Group, Inc. (Paper Magic), BOC Design Group (consisting of Berwick Offray LLC (Berwick Offray) and Cleo Inc (Cleo)), and C.R. Gibson, LLC (C.R. Gibson). On August 5, 2008, a subsidiary of the Company completed the acquisition of Hampshire Paper Corp., which is a manufacturer and supplier of pot covers, waxed tissue, paper and foil to the wholesale floral, and horticultural industries. On May 16, 2008, a subsidiary of the Company completed the acquisition of iota, a designer, manufacturer and marketer of stationery products, such as notecards, gift wrap, journals and stationery kits. The Company’s brands include Paper Magic, Berwick, Offray, Cleo, C.R. Gibson, Crystal, Lion Ribbon Company, Markings, Creative Papers, Tapestry, Seastone, Dudley’s, Don Post Studios, Eureka, Learning Playground and iota.

The Company’s Christmas products include gift wrap, gift bags, gift boxes, gift card holders, boxed greeting cards, gift tags, decorative tissue paper, decorations and decorative ribbons and bows. CSS’ Valentine product offerings include classroom exchange Valentine cards and other related Valentine products, while its Easter product offerings include Dudley’s brand of Easter egg dyes and related Easter seasonal products. For Halloween, CSS offers a line of Halloween merchandise, including make-up, costumes, masks and novelties. In addition to seasonal products, CSS designs and markets all occasion boxed greeting cards, gift wrap, gift bags, gift boxes, gift card holders, decorative and waxed tissue, decorative ribbons and bows, decorative films and foils, memory books, stationery, journals, notecards, infant and wedding photo albums, scrapbooks, floral accessories and other gift and craft items to its mass market, craft, specialty and floral retail and wholesale distribution customers, and teachers’ aids and other learning oriented products to the education market through mass market retailers, school supply distributors and teachers’ stores. CSS operates 13 manufacturing and/or distribution facilities located in Pennsylvania, Maryland, New Hampshire, South Carolina, Alabama, Tennessee and Texas.

Boxed greeting cards are produced by Asian manufacturers to the Company’s specifications. Domestically distributed products are warehoused in a distribution facility in Pennsylvania. Gift tags and classroom exchange Valentine products are domestically manufactured or imported from Asian manufacturers. Halloween make-up and Easter egg dye products are manufactured in Asia to specific formulae by contract manufacturers. Ribbons and bows are primarily manufactured and warehoused in seven facilities located in Pennsylvania, Maryland, South Carolina and Texas. Gift wrap is primarily manufactured in one facility in Memphis, Tennessee. A small portion of gift wrap products are imported from Asia.

Memory books, stationery, journals and note cards, infant and wedding photo albums and scrapbooks, and other gift items are imported from Asian manufacturers and warehoused and distributed from a distribution facility in Florence, Alabama. Floral accessories, including pot covers, foil, waxed tissue, shred aisle runners, corsage bags and other paper and film products, are manufactured in a facility located in Milford, New Hampshire. Other products, including, but not limited to, decorative tissue paper, gift bags, gift boxes, gift card holders, decorations and school products are designed to the specifications of CSS and are imported primarily from Asian manufacturers.

CSS’ customers include mass market retailers, discount department stores, specialty chains, warehouse clubs, drug and food chains, dollar stores, independent card, gift and floral shops and retail teachers’ stores. Net sales to Wal-Mart Stores, Inc. and its affiliates, and Target Corporation accounted for approximately 27% and 10% of total net sales, respectively, during the fiscal year ended March 31, 2009. Approximately 63% of the Company’s sales are attributable to seasonal (Christmas, Halloween, Valentine’s Day and Easter) products, with the remainder attributable to everyday products. Approximately 50% of CSS’ sales relate to the Christmas season. The Company also sells custom products to private-label customers, other social expression companies and to converters of the Company’s ribbon products.

The Company competes with American Greetings Corporation and Hallmark Cards, Incorporated.