American Greetings Announces Record First Quarter Earnings Per Share

By American Greetings Corporation, PRNE
Tuesday, June 29, 2010

CLEVELAND, June 30, 2010 - American Greetings Corporation (NYSE: AM) today announced its results for
the first fiscal quarter ended May 28, 2010.

First Quarter Results

For the first quarter of fiscal 2011, the Company reported total revenue
of US$396.3 million, pre-tax income of US$51.0 million, and net income of
US$30.8 million or 75 cents per share (all per-share amounts assume

For the first quarter of fiscal 2010, the Company reported total revenue
of US$412.9 million, pre-tax income of US$16.9 million, and net income of
US$10.0 million or 25 cents per share. During the first quarter of fiscal
2010, American Greetings sold its retail store operations. The Retail
Operations segment reported revenue of US$11.7 million and a segment loss of
US$34.8 million (after-tax of approximately US$21.3 million), which reduced
earnings per share by approximately 54 cents during the quarter.

Management Comments and Outlook

Chief Executive Officer Zev Weiss said, "I am pleased that our earnings
per share of 75 cents were the highest we have ever achieved in a first
quarter. Our first quarter EPS benefited from several factors including the
solid performance in our core business units, the changes we made over the
last eighteen months to our portfolio of businesses, and the shares we
repurchased over the last several years. We believe our refined business
portfolio, which focuses on our core greeting card business, along with the
changes we have made to our capital structure over the last several years,
position the Company well for the opportunities and challenges ahead."

"The refined portfolio is contributing to the solid EPS for the quarter.
Eliminating the earnings drag of our retail operations has added meaningfully
to our earnings swing quarter on quarter. In addition, we continue to believe
that by the end of this fiscal year, the integration of both Recycled Paper
Greetings and Papyrus will enhance our operating income by US$15 to 20
on an annual run rate," Weiss added.

For fiscal year 2011, the Company continues to anticipate cash flow from
operating activities of about US$165 million and capital expenditures of
approximately US$40 million resulting in cash flow from operating activities
minus capital expenditures of approximately US$125 million.

Conference Call on the Web

American Greetings will broadcast its conference call live on the
Internet at 9:00 a.m. Eastern time today. The conference call will be
accessible through the Investor Relations section of the American Greetings
Web site at A replay of the call will
be available on the site.

About American Greetings Corporation

For more than 100 years, American Greetings Corporation (NYSE: AM) has
been a creator and manufacturer of innovative social expression products that
assist consumers in enhancing their relationships. The Company's major
greeting card lines are American Greetings, Carlton Cards, Gibson, Recycled
Paper Greetings and Papyrus, and other paper product offerings include
DesignWare party goods and American Greetings and Plus Mark gift-wrap and
boxed cards. American Greetings also has the largest collection of electronic
greetings on the Web, including cards available at
through AG Interactive, Inc. (the Company's online division). AG Interactive
also offers digital photo sharing and personal publishing at
and and provides a one-stop source for online graphics and
animations at In addition to its product lines, American Greetings
also creates and licenses popular character brands through the American
Greetings Properties group. Headquartered in Cleveland, Ohio, American
Greetings generates annual revenue of approximately US$1.6 billion, and its
products can be found in retail outlets worldwide. For more information on
the Company, visit

Non-GAAP Measures

Certain after-tax, earnings per share, and liquidity amounts included in
this release may be considered non-GAAP measures under the Securities and
Exchange Commission's Regulation G. The prior year after-tax amounts were
calculated based on the Company's statutory tax rate of approximately 38.9%.
Management believes that after-tax and earnings per share information are
useful in analyzing the Company's results and that cash flow from operating
activities minus capital expenditures provides a liquidity measure useful to
investors in analyzing the cash generation of the Company.

Factors That May Affect Future Results

Certain statements in this release, including those under Management
Comments and Outlook, may constitute forward-looking statements within the
meaning of the Federal securities laws. These statements can be identified by
the fact that they do not relate strictly to historic or current facts. They
use such words as "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," and other words and terms of similar meaning in connection
with any discussion of future operating or financial performance. These
forward-looking statements are based on currently available information, but
are subject to a variety of uncertainties, unknown risks and other factors
concerning the Company's operations and business environment, which are
difficult to predict and may be beyond the control of the Company. Important
factors that could cause actual results to differ materially from those
suggested by these forward-looking statements, and that could adversely
affect the Company's future financial performance, include, but are not
limited to, the following:

    - a weak retail environment and general economic conditions;
    - the ability to achieve both the desired benefits from the
      transaction with Amscan as well as ensuring a seamless transition for
      affected retail customers and consumers;
    - the Company's successful transition of the Retail Operations
      segment to its buyer, Schurman Fine Papers, and Schurman Fine Papers'
      ability to successfully operate its retail operations and satisfy its
      obligations to the Company;
    - the Company's ability to successfully integrate both Recycled
      Paper Greetings and Papyrus;
    - retail consolidations, acquisitions and bankruptcies, including
      the possibility of resulting adverse changes to retail contract terms;
    - the ability to achieve the desired benefits associated with the
      Company's cost reduction efforts;
    - competitive terms of sale offered to customers;
    - the Company's ability to comply with its debt covenants;
    - the timing and impact of investments in new retail or product
      strategies as well as new product introductions and achieving the
      desired benefits from those investments;
    - consumer acceptance of products as priced and marketed;
    - the impact of technology on core product sales;
    - the timing and impact of converting customers to a scan-based
      trading model;
    - escalation in the cost of providing employee health care;
    - the ability to successfully implement, or achieve the desired
      benefits associated with, any information systems refresh the Company
      may implement;
    - the Company's ability to achieve the desired accretive effect
      from any share repurchase programs;
    - fluctuations in the value of currencies in major areas where the
      Company operates, including the U.S. Dollar, Euro, U.K. Pound Sterling,
      and Canadian Dollar; and
    - the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability of
online advertising, subscriptions as revenue generators, and the ability to
adapt to rapidly changing social media and the digital photo sharing space.

In addition, this release contains time-sensitive information that
reflects management's best analysis as of the date of this release. American
Greetings does not undertake any obligation to publicly update or revise any
forward-looking statements to reflect future events, information or
circumstances that arise after the date of this release. Further information
concerning issues that could materially affect financial performance related
to forward-looking statements can be found in the Company's periodic filings
with the Securities and Exchange Commission, including the "Risk Factors"
section of the Company's Annual Report on Form 10-K.

    (All amounts in U.S. dollars unless otherwise noted)

                          AMERICAN GREETINGS CORPORATION
                       FISCAL YEAR ENDING FEBRUARY 28, 2011

           (In thousands of dollars except share and per share amounts)

                                             Three Months Ended
                                      May 28, 2010          May 29, 2009
                                      ------------          ------------

    Net sales                           $392,105              $409,277
    Other revenue                          4,203                 3,645
                                           -----                 -----
    Total revenue                        396,308               412,922

    Material, labor and other
     production costs                    158,013               167,169
    Selling, distribution and
     marketing expenses                  117,551               132,217
    Administrative and general
     expenses                             66,032                63,151
    Other operating (income)
     expense -net                           (594)               27,773
                                            ----                ------

    Operating income                      55,306                22,612

    Interest expense                       6,202                 6,987
    Interest income                         (213)                 (276)
    Other non-operating income -
     net                                  (1,700)               (1,042)
                                          ------                ------

    Income before income tax
     expense                              51,017                16,943
    Income tax expense                    20,178                 6,982
                                          ------                 -----

    Net income                           $30,839                $9,961
                                         =======                ======

    Earnings per share - basic             $0.78                 $0.25

    Earnings per share -assuming
     dilution                              $0.75                 $0.25

    Average number of common shares
     outstanding                      39,638,568            39,608,947

    Average number of common shares
     outstanding -
      assuming dilution               40,849,429            39,608,947

    Dividends declared per share           $0.14                    $-
                          AMERICAN GREETINGS CORPORATION
                        FISCAL YEAR ENDING FEBRUARY 28, 2011

                             (In thousands of dollars)

                                            May 28, 2010       May 29, 2009
                                            ------------       ------------

      Cash and cash equivalents                 $186,775            $87,611
      Trade accounts receivable, net             110,085            120,964
      Inventories                                157,913            172,977
      Deferred and refundable income
       taxes                                      74,951             65,217
      Assets held for sale                        12,936             23,328
      Prepaid expenses and other                 118,047            157,471
                                                 -------            -------
        Total current assets                     660,707            627,568

    GOODWILL                                      30,238             25,921
    OTHER ASSETS                                 413,236            377,973
     TAXES                                       150,207            172,672

    Property, plant and
     equipment -at cost                          839,928            856,723
    Less accumulated
     depreciation                                600,087            589,614
                                                 -------            -------
     NET                                         239,841            267,109
                                                 -------            -------
                                              $1,494,229         $1,471,243
                                              ==========         ==========

      Debt due within one year                   $99,000            $27,325
      Accounts payable                            80,205             85,483
      Accrued liabilities                         75,572             84,074
      Accrued compensation and benefits           35,472             37,274
      Income taxes payable                        25,390              2,937
      Other current liabilities                   93,405            108,863
                                                  ------            -------
        Total current liabilities                409,044            345,956

    LONG-TERM DEBT                               230,973            409,455
    OTHER LIABILITIES                            163,969            125,668
        NONCURRENT INCOME TAXES PAYABLE           30,548             30,292

      Common shares - Class A                     37,064             35,921
      Common shares - Class B                      2,926              3,497
      Capital in excess of par
       value                                     478,676            450,059
      Treasury stock                            (951,830)          (941,063)
      Accumulated other comprehensive
       loss                                      (40,257)           (43,276)
      Retained earnings                        1,133,116          1,054,734
                                               ---------          ---------
        Total shareholders' equity               659,695            559,872
                                                 -------            -------
                                              $1,494,229         $1,471,243
                                              ==========         ==========
                          AMERICAN GREETINGS CORPORATION
                        FISCAL YEAR ENDING FEBRUARY 28, 2011
                            (In thousands of dollars)

                                                Three Months Ended
                                          May 28, 2010       May 29, 2009
                                          ------------       ------------

      Net income                              $30,839             $9,961
      Adjustments to reconcile net
       income to
          cash flows from operating
        Loss on disposition of retail
         stores                                     -             28,333
        Net (gain) loss on disposal of
         fixed assets                            (151)               199
        Depreciation and amortization          10,294             12,393
        Deferred income taxes                    (535)            17,158
        Other non-cash charges                  3,385              2,657
        Changes in operating assets and
              net of acquisitions and
          Trade accounts receivable            19,576            (43,770)
          Inventories                           4,483             11,926
          Other current assets                 (2,878)            (1,243)
          Income taxes                         15,830               (849)
          Deferred costs - net                 13,802             (2,846)
          Accounts payable and other
           liabilities                        (66,362)           (29,548)
          Other - net                           4,256              4,358
                                                -----              -----
        Total Cash Flows From Operating
         Activities                            32,539              8,729

      Property, plant and equipment
       additions                               (5,965)            (8,909)
      Cash payments for business
       acquisitions, net of cash
       acquired                                     -            (16,286)
      Proceeds from sale of fixed
       assets                                     555                113
      Proceeds from escrow related to
       party goods transaction                 24,523                  -
                                               ------                ---
        Total Cash Flows From Investing
         Activities                            19,113            (25,082)

      Net (decrease) increase in
       long-term debt                            (250)            19,800
      Net increase in short-term
       debt                                         -             26,325
      Sale of stock under benefit
       plans                                   19,087                 30
      Purchase of treasury shares             (12,979)            (5,877)
      Dividends to shareholders                (5,525)            (4,865)
                                               ------             ------
        Total Cash Flows From Financing
         Activities                               333             35,413

     ON CASH                                   (3,159)             8,335
                                               ------              -----

     EQUIVALENTS                               48,826             27,395

        Cash and Cash Equivalents at
         Beginning of Year                    137,949             60,216
                                              -------             ------
        Cash and Cash Equivalents at
         End of Period                       $186,775            $87,611
                                             ========            =======

                   FISCAL YEAR ENDING FEBRUARY 28, 2011
                        (In thousands of dollars)

                                              Three Months Ended
                                       May 28, 2010          May 29, 2009
                                       ------------          ------------
    Total Revenue:
    North American Social
     Expression Products                  $304,168              $323,813
    Intersegment items                           -                (5,104)
    Exchange rate adjustment                 4,141                   370
                                             -----                   ---
    Net                                    308,309               319,079

    International Social Expression
     Products                               57,801                56,051
    Exchange rate adjustment                  (228)               (3,289)
                                              ----                ------
    Net                                     57,573                52,762

    Retail Operations                            -                11,727
    Exchange rate adjustment                     -                   112
                                               ---                   ---
    Net                                          -                11,839

    AG Interactive                          18,666                18,949
    Exchange rate adjustment                  (112)                 (104)
                                              ----                  ----
    Net                                     18,554                18,845

    Non-reportable segments                 11,872                10,397
                                          $396,308              $412,922
                                          ========              ========

    Segment Earnings (Loss):
    North American Social
     Expression Products                   $68,107               $77,986
    Intersegment items                           -                (3,511)
    Exchange rate adjustment                 1,942                    81
                                             -----                   ---
    Net                                     70,049                74,556

    International Social Expression
     Products                                2,834                   513
    Exchange rate adjustment                     -                  (174)
                                               ---                  ----
    Net                                      2,834                   339

    Retail Operations                            -               (34,830)
    Exchange rate adjustment                     -                  (285)
                                               ---                  ----
    Net                                          -               (35,115)

    AG Interactive                           2,474                 1,796
    Exchange rate adjustment                  (102)                  (82)
                                              ----                   ---
    Net                                      2,372                 1,714

    Non-reportable segments                  2,152                  (129)

    Unallocated                            (26,399)              (24,852)
    Exchange rate adjustment                     9                   430
                                               ---                   ---
    Net                                    (26,390)              (24,422)
                                           $51,017               $16,943
                                           =======               =======

Gregory M. Steinberg, Treasurer and Executive Director of Investor Relations of American Greetings Corporation, +1-216-252-4864, investor.relations at

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