CLEVELAND, April 17 /PRNewswire-FirstCall/ -- American Greetings Corporation and Schurman Fine Papers, a privately held creator, distributor, and retailer of greeting cards and other social expressions products, today announced the sale of business units between the two companies.
American Greetings sold its retail store operations to Schurman Fine Papers ("Schurman"), which operates card and gift retail stores under the name Papyrus. Schurman will operate stores under the American Greetings, Carlton Cards, and Papyrus brands.
American Greetings has purchased the wholesale division of Schurman, which supplies Papyrus brand greeting cards primarily to leading specialty, mass, grocery and drug store channels. American Greetings will become responsible for service to those accounts where Papyrus brand products are sold. The companies have entered into mutual transition services agreements in addition to ongoing commercial licensing, supply, and marketing agreements.
American Greetings paid approximately $18 million dollars as consideration for the wholesale division of Schurman. Schurman paid American Greetings approximately $6 million for its retail business. American Greetings also paid approximately $2 million for a 15% equity interest in Schurman. In connection with the transaction, American Greetings will provide limited credit support to Schurman.
Chief Executive Officer Zev Weiss said, "Today is a very important day for our company. The addition of the Papyrus brand to the American Greetings family provides the opportunity to serve a consumer with distinct tastes -- a consumer who appreciates the Papyrus approach to design and quality. This allows us to focus our efforts and stay true to our vision of providing relevant and compelling products to consumers through leading specialty, mass, grocery and drug store channels. It also brings to an end our business in the specialty retail channel, and we believe our stores will flourish under the Schurman leadership team."
About American Greetings Corporation
For more than 100 years, American Greetings Corporation has been a manufacturer and retailer of innovative social expression products that assist consumers in enhancing their relationships. The Company's major greeting card brands are American Greetings, Carlton Cards, Gibson, Recycled Paper Greetings, and Papyrus, and other paper product offerings include DesignWare party goods, American Greetings and Plus Mark gift-wrap and boxed cards and Date Works calendars. American Greetings also has the largest collection of electronic greetings on the Web, including cards available at AmericanGreetings.com through AG Interactive, Inc., the Company's online division. AG Interactive also offers digital photo sharing and personal publishing at PhotoWorks.com and Webshots.com and a one-stop source for online graphics, animations, and more at Kiwee.com. 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 $1.8 billion, and its products can be found in retail outlets domestically and worldwide. For more information on the Company, visit http://corporate.americangreetings.com/.
Certain statements in this release 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 successfully integrate acquisitions, including the Papyrus brand; -- the ability to achieve the desired benefits associated with its cost reduction efforts; -- retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms; -- 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; -- the Company's ability to successfully complete, or achieve the desired benefits associated with, dispositions, including the sale of the Strawberry Shortcake and Care Bears properties; -- 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, the public's acceptance of online greetings and other social expression products, and the ability to gain a leadership position in 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 for the fiscal year ended February 29, 2008.
American Greetings Corporation
CONTACT: Gregory M. Steinberg, Treasurer and Director of Investor
Relations of American Greetings Corporation, +1-216-252-4864,
investor.relations@amgreetings.com
Web Site: http://corporate.americangreetings.com/
