<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
X EXCHANGE ACT OF 1934
- ---------
For the quarterly period ended May 31, 1999
---------------------------------
OR
--
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934
For the transition period from_______________________ to _______________________
Commission file number 1-13859
------------
AMERICAN GREETINGS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0065325
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One American Road, Cleveland, Ohio 44144
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 252-7300
--------------------------------------------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
As of May 31, 1999, the date of this report, the number of shares outstanding of
each of the issuer's classes of common stock was:
Class A Common 62,728,192
Class B Common 4,673,419
<PAGE> 2
AMERICAN GREETINGS CORPORATION
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements......................................... 1
Item 2. Management's Discussion and Analysis......................... 8
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K........................... 14
SIGNATURES................................................................ 14
- ----------
<PAGE> 3
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
--------------------
<TABLE>
<CAPTION>
AMERICAN GREETINGS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Thousands of dollars except per share amounts)
(Unaudited)
Three Months Ended
May 31,
-----------------------------------
1999 1998
---------------- -----------------
<S> <C> <C>
Net sales $ 458,757 $ 487,908
Costs and expenses:
Material, labor and other production costs 159,765 159,719
Selling, distribution and marketing 219,322 214,884
Administrative and general 54,603 58,164
Interest 7,140 6,573
Other expense (income) 979 (4,709)
------------ ------------
Total costs and expenses 441,809 434,631
------------ ------------
Income before income taxes 16,948 53,277
Income taxes 6,101 19,446
------------ ------------
Net income $ 10,847 $ 33,831
============ ============
Earnings per share $ 0.16 $ 0.47
============ ============
Earnings per share - assuming dilution $ 0.16 $ 0.47
============ ============
Dividends per share $ - * $ 0.18
============ ============
Average number of common shares outstanding 67,678,717 71,310,434
</TABLE>
See notes to consolidated financial statements.
* Dividend of $0.19 per share paid June 10, 1999 was declared in February 1999.
Page 1
<PAGE> 4
<TABLE>
<CAPTION>
AMERICAN GREETINGS CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Thousands of dollars)
(Unaudited) (Unaudited)
May 31, 1999 Feb. 28, 1999 May 31, 1998
-------------- --------------- ---------------
ASSETS
<S> <C> <C> <C>
Current assets
Cash and equivalents $ 130,107 $ 144,555 $ 43,497
Trade accounts receivable, less allowances
of $91,115, $147,686, $98,399, respectively
(principally for sales returns) 335,108 390,740 357,659
Total inventories 257,755 251,289 296,008
Deferred income taxes 127,085 133,092 96,571
Prepaid expenses and other 225,121 226,142 214,498
---------- ---------- ----------
Total current assets 1,075,176 1,145,818 1,008,233
Goodwill 138,741 135,516 134,125
Other assets 680,816 703,188 595,888
Property, plant and equipment - at cost 965,125 958,623 945,907
Less accumulated depreciation 539,014 523,817 504,883
---------- ---------- ----------
Property, plant and equipment - net 426,111 434,806 441,024
---------- ---------- ----------
$2,320,844 $2,419,328 $2,179,270
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Debt due within one year $ 35,902 $ 17,777 $ 276,469
Accounts payable and accrued liabilities 158,555 175,366 130,470
Accrued compensation and benefits 55,013 89,284 57,519
Income taxes 5,307 27,165 11,124
Dividends payable 12,806 26,337 12,888
Other current liabilities 92,191 81,745 65,948
---------- ---------- ----------
Total current liabilities 359,774 417,674 554,418
Long-term debt 455,074 463,246 148,712
Other liabilities 125,490 142,045 92,695
Deferred income taxes 52,349 49,752 37,749
Shareholders' equity 1,328,157 1,346,611 1,345,696
---------- ---------- ----------
$2,320,844 $2,419,328 $2,179,270
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE> 5
<TABLE>
<CAPTION>
AMERICAN GREETINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
Three Months Ended
May 31,
----------------------------------
1999 1998
-------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 10,847 $ 33,831
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation 16,044 16,752
Deferred income taxes 5,402 18,896
Change in operating assets and liabilities,
net of effects from acquisitions 47 (64,152)
Other - net 3,990 1,404
--------- --------
Cash Provided by Operating Activities 36,330 6,731
INVESTING ACTIVITIES:
Business acquisitions -- (52,957)
Property, plant & equipment additions (7,061) (10,009)
Proceeds from sale of fixed assets 108 263
Investment in corporate-owned life insurance 4,393 7,308
Other - net (2,842) 6,998
--------- --------
Cash Used by Investing Activities (5,402) (48,397)
FINANCING ACTIVITIES:
Increase in long-term debt 17,685 5,410
Reduction of long-term debt (1,690) (403)
(Decrease) increase in short-term debt (8,017) 68,569
Sale of stock under benefit plans 404 5,100
Purchase of treasury shares (41,028) (28,229)
Dividends to shareholders (12,730) (12,907)
--------- --------
Cash (Used) Provided by Financing Activities (45,376) 37,540
--------- --------
DECREASE IN CASH AND EQUIVALENTS (14,448) (4,126)
Cash and Equivalents at Beginning of Year 144,555 47,623
--------- --------
Cash and Equivalents at End of Period $ 130,107 $ 43,497
========= ========
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE> 6
AMERICAN GREETINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Thousands of dollars)
Three Months Ended May 31, 1999 and 1998
Note A - Basis of Presentation
- ------------------------------
The accompanying financial statements have been prepared in accordance with the
instructions to Form 10-Q. Although they are unaudited, the Corporation believes
that all adjustments (consisting only of normal recurring accruals) necessary
for a fair presentation of the results of operations have been made.
Note B - Seasonal Nature of Business
- ------------------------------------
The Corporation's business is seasonal in nature. Therefore, the results of
operations for interim periods are not necessarily indicative of the results for
the fiscal year taken as a whole.
Note C - Earnings Per Share
- ---------------------------
The following table sets forth the computation of earnings per share and
earnings per share - assuming dilution:
<TABLE>
<CAPTION>
Three Months Ended
May 31,
------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Numerator:
Net income, earnings per share
and earnings per share -
assuming dilution $ 10,847 $33,831
======== =======
Denominator (thousands):
Weighted average shares outstanding 67,679 71,310
Effect of dilutive securities - stock options -- 1,028
-------- -------
Adjusted weighted average shares
outstanding 67,679 72,338
======== =======
Earnings per share $ 0.16 $ 0.47
======== =======
Earnings per share - assuming dilution $ 0.16 $ 0.47
======== =======
</TABLE>
Page 4
<PAGE> 7
Note D - Comprehensive Income
- -----------------------------
The Corporation's total comprehensive income was as follows:
<TABLE>
<CAPTION>
Three Months Ended
May 31,
---------------------------
1999 1998
------------ -------------
<S> <C> <C>
Net income $ 10,847 $ 33,831
Other comprehensive income (loss):
Foreign currency translation adjustments 4,708 (3,063)
Unrealized gain on available-for-sale securities 6,212 6,231
------------ -------------
Other comprehensive income 10,920 3,168
------------ -------------
Total comprehensive income $ 21,767 $ 36,999
============ =============
</TABLE>
Note E - Inventories
- --------------------
<TABLE>
<CAPTION>
May 31, 1999 February 28, 1999 May 31, 1998
-------------- ------------------ --------------
<S> <C> <C> <C>
Raw materials $ 34,772 $ 37,745 $ 41,654
Work in process 28,424 25,523 41,792
Finished products 244,551 229,220 265,161
-------- -------- --------
307,747 292,488 348,607
Less LIFO reserve 91,693 89,207 91,170
-------- -------- --------
216,054 203,281 257,437
Display materials and factory supplies 41,701 48,008 38,571
-------- -------- --------
Inventories $257,755 $251,289 $296,008
======== ======== ========
</TABLE>
Page 5
<PAGE> 8
Note F- Deferred Costs
- ----------------------
Deferred costs relating to agreements with certain customers are charged to
operations on a straight-line basis over the effective period of each agreement,
generally three to six years. Deferred costs estimated to be charged to
operations during the next year are classified with prepaid expenses and other.
Total commitments under the agreements are capitalized as deferred costs and
future payment commitments, if any, are recorded as liabilities when the
agreements are consummated.
As of May 31, 1999, February 28, 1999 and May 31, 1998 deferred costs and future
payment commitments are included in the following financial statement captions:
<TABLE>
<CAPTION>
May 31, 1999 February 28, 1999 May 31, 1998
-------------- ----------------- --------------
<S> <C> <C> <C>
Prepaid expenses and other $ 192,618 $ 192,619 $ 177,366
Other assets 566,829 595,136 476,490
Other current liabilities (92,191) (81,745) (65,948)
Other liabilities (94,551) (113,799) (64,399)
--------- --------- ---------
$ 572,705 $ 592,211 $ 523,509
========= ========= =========
</TABLE>
Page 6
<PAGE> 9
Note G - Business Segment Information
- -------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
May 31,
------------------------------
1999 1998
------------ -------------
<S> <C> <C>
Net Sales
Social Expression Products $ 387,092 $ 413,271
Intersegment Items (17,949) (15,850)
--------- ---------
Total 369,143 397,421
Non-reportable segments 88,243 86,537
Exchange rate adjustment - net 1,371 3,950
--------- ---------
Consolidated total $ 458,757 $ 487,908
========= =========
Earnings
Social Expression Products $ 58,548 $ 91,858
Intersegment Items (13,050) (11,571)
--------- ---------
Total 45,498 80,287
Non-reportable segments 2,460 1,931
Exchange rate adjustment - net (18) 228
Unallocated items - net (30,992) (29,169)
--------- ---------
Consolidated total $ 16,948 $ 53,277
========= =========
</TABLE>
Note H - New Accounting Standard
- --------------------------------
The Corporation will adopt SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities, for the fiscal quarter beginning March 1, 2001, as
required. Because of the Corporation's current minimal use of derivatives, the
Corporation does not anticipate that the adoption of SFAS No. 133 will have a
significant effect on its earnings or financial position.
Page 7
<PAGE> 10
Part 1., Item 2, MANAGEMENT'S DISCUSSION AND ANALYSIS
- -----------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Net sales of $458.8 million for the quarter ended May 31, 1999 were down 6.0% or
$29.2 million compared to the same period in the prior year, reflecting the
impact of the Corporation's initiative to reduce retailer inventories in order
to improve retail inventory productivity. Shipments of everyday and seasonal
cards were reduced and as a result, unit sales of total greeting cards decreased
approximately 5% for the quarter from the same period in the prior year. The
full year impact of this initiative is to reduce inventories held by our
retailers and to decrease the Corporation's net sales for the fiscal year ended
February 29, 2000 by approximately $100 million from the prior year.
Material, labor and other production costs were 34.8% of net sales for the
quarter, up from 32.7% in the prior year. Gross profit margins were unfavorably
impacted due to the decrease in high margin card sales. Additionally, reduced
production levels resulted in unfavorable manufacturing variances.
Selling, distribution and marketing expenses were 47.8% of net sales for the
quarter, up from 44.0% in the prior year. This $4.4 million increase was due
primarily to higher competitive costs as other selling, distribution and
marketing expenses were lower compared to the prior year.
Administrative and general expenses were $54.6 million for the quarter, down
from $58.2 million for the same period in the prior year. The decrease is due
primarily to cost reductions associated with the Corporation's restructuring
activities implemented in the third quarter of last fiscal year.
Interest expense increased slightly from the prior year by $0.6 million for the
quarter due primarily to the issuance of $300 million of 30 year notes with a
6.1% coupon rate in July 1998, the proceeds of which reduced commercial paper
and other short-term debt. Net interest expense, however, was favorable $0.4
million for the quarter compared to the prior year due to higher interest income
as a result of higher cash balances and short-term investments.
Other expense (income) was $1.0 million of expense for the quarter compared to
$4.7 million of income in the prior year due primarily to the gain on the sale
of an equity investment last year.
The effective tax rate for the quarter was 36.0%, down from 36.5% in the prior
year due to reduced subsidiary losses with no tax benefit.
Net income for the quarter decreased 67.9% to $10.8 million from $33.8 million
last year while earnings per share decreased 66.0% to $0.16 from $0.47 last
year.
Page 8
<PAGE> 11
RESTRUCTURING ACTIVITIES
During the third quarter of fiscal 1999, the Corporation recorded a restructure
charge of $13.9 million ($8.3 million net of tax, or earnings per share of
$0.12) which reflects management's efforts to optimize the Corporation's cost
structure and to provide for operational streamlining initiatives. This
restructure charge consisted of approximately $8.6 million of personnel-related
charges associated with the termination of 228 employees; $4.6 million of exit
costs associated with discontinuing the kiosk business; $0.4 million of costs
associated with carrying vacated office space until lease expiration or
sublease; and approximately $0.3 million of other restructure costs.
<TABLE>
<CAPTION>
FY99 RESTRUCTURING SUMMARY
(Thousands of dollars)
--------------------------
Termination Kiosk Other
Benefits Exit Costs Costs Total
------- ---------- ------- --------
<S> <C> <C> <C> <C>
Expense accrued $ 8,644 $ 4,618 $ 663 $ 13,925
Cash expenditures (5,019) (5,019)
Non-cash charges (3,362) (3,362)
------- ------- ------- --------
Balance 2/28/99 3,625 1,256 663 5,544
Cash expenditures (2,535) (104) (2,639)
Non-cash charges (566) (566)
------- ------- ------- --------
Balance 5/31/99 $ 1,090 $ 690 $ 559 $ 2,339
======= ======= ======= ========
</TABLE>
Approximately $3.2 million of the restructuring reserve was used for payment or
charged against the restructure reserve during the three months ended May
31,1999. Included in accounts payable and accrued liabilities at May 31, 1999 is
$2.3 million related to severance and other exit costs for those actions that
are not yet completed. The Corporation believes the remaining accrued
restructure liability is adequate for its remaining cash and non-cash
obligations.
On June 23, 1999, the Corporation announced the first phase of its international
restructuring efforts, designed to more fully integrate the Canadian and
domestic operations. Effective March 1, 2000, all products sold in Canada will
be manufactured and distributed through existing facilities in the United
States. During the three months ending August 31, 1999, the Corporation will
record a restructure charge of approximately $30 million relating to the costs
of closing all Canadian manufacturing and distribution facilities and
involuntary severance costs associated with the elimination of approximately 650
positions at those facilities.
Page 9
<PAGE> 12
Year 2000
The Year 2000 issue is the result of information technology ("IT") system
programs being written using two digits rather than four digits to define the
application year. Any of the Corporation's IT systems that have date-sensitive
software may be unable to interpret appropriately the calendar Year 2000 and
thus could cause the disruption of normal business activities. The Corporation
uses IT systems in various aspects of its business, including manufacturing,
distribution, product development, and many administrative functions, and much
of this software needs to be modified or replaced. The Corporation is currently
in the process of working toward Year 2000 compliance so that all of its
material business processes and components will properly handle dates prior to,
during and after the Year 2000.
The Corporation has prioritized its IT systems into three categories: critical,
necessary or other. Failure of a "critical" system would result in a serious
disruption of revenue and would critically impact competitive advantages.
Failure of a "necessary" system would result in serious processing delays and a
significant reduction in productivity. The Corporation believes its critical and
necessary applications are Year 2000 compliant. The remainder of the
Corporation's systems should be remediated by the end of the third quarter of
calendar 1999. However, given the number of systems in the Year 2000 portfolio,
slippage in the schedule could occur.
The Corporation's non-IT systems include embedded technology such as
microcontrollers included in production equipment, environmental control
equipment and timeclocks. These non-IT systems are continuing to be assessed,
and plans continue to be updated. Remediation actions have begun.
The Corporation is also in the process of ensuring the continuity and stability
of its normal business functions by identifying and assessing potential Year
2000 compliance risks associated with its external business relationships,
including those with vendors, customers, financial institutions and employee
benefit providers. This process has completed its assessment phase with
potential risks identified and contingency plans are being developed.
Contingency plans will be needed in the event any of the Corporation's critical
business partners are not Year 2000 compliant when required. The Corporation
does not currently anticipate such a situation and expects to complete the
contingency planning phase during the third quarter of calendar 1999.
The Corporation's current estimate of total cost to achieve Year 2000 compliance
in both its IT and non-IT systems is approximately $35 million for modifications
to existing software, software replacement, computing hardware and embedded
systems. Through May 31, 1999, $26 million has been cumulatively expended on
Year 2000 compliance.
In addition, the Corporation has developed a program to provide independent
validation of its Year 2000 compliance efforts. This program includes engaging
independent consultants for audits of its completed coding corrections and for
providing guidance and suggestions for the remediation efforts.
Page 10
<PAGE> 13
The Corporation believes, but cannot warrant, that with timely modifications to
its existing software and conversion to new software, by both the Corporation
and its significant business partners, the Year 2000 compliance issue should not
have a material impact on the Corporation's operations. Specific factors which
might cause a material adverse effect include the availability and cost of
trained personnel and the ability to recruit and retain them, as well as the
ability to locate all system coding requiring correction. Based upon information
available at this time, the Corporation believes that the cost of modifications,
replacements and related testing will not have a material impact on the
Corporation's liquidity or results of operations. Year 2000 expenditures are
being funded through operations.
LIQUIDITY AND CAPITAL RESOURCES
The seasonality of the Corporation's business precludes a useful comparison of
the current period and the year-end financial statements; therefore, a Statement
of Financial Position for May 31, 1998 has been included.
Operations provided $36.3 million of cash for the first three months, an
improvement of $29.6 million from the same period last year despite the $23.0
million decrease in net income. Contributing to this improvement was lower
accounts receivable and reduced growth of inventories.
Accounts receivable decreased $56.6 million for the three months compared to a
decrease of $25.1 million during the same period in the prior year, due to lower
card product shipments and decreases in extended payment terms to customers. Net
accounts receivable improved to 15.4% of the prior twelve months' sales at May
31, 1999, compared to 16.2% at May 31, 1998.
Amortization of deferred costs exceeded payments by $19.8 million for the three
months reflecting lower payments under agreements with certain retailers than
last year when payments net of amortization provided $3.3 million of cash.
Inventories, which continue to benefit from the Corporation's focus to reduce
production lead times, used just $4.2 million for the three months compared to
$22.7 million during the same period in the prior year. Inventories as a percent
of the prior twelve months' material, labor, and other production costs
decreased to 34% at May 31, 1999 from 37.5% at May 31, 1998.
Investing activities used $5.4 million in cash for the first three months this
year. While $48.4 million was used in the same period last year, this included
$53.0 million for the acquisition of two greeting card companies in the United
Kingdom. Excluding the acquisitions, investing activities provided $4.6 million
in the prior year quarter. This decrease of $10.0 million from the prior year,
excluding acquisitions, reflects lower cash distributions received from the
Corporation's investment in corporate owned life insurance this year and to
proceeds from the sale of an equity investment last year.
Page 11
<PAGE> 14
On May 20, 1998, the Corporation filed a Form S-3 Registration Statement with
the Securities and Exchange Commission for a shelf registration to issue up to
$600 million of debt securities. Under the registration, the Corporation on July
27, 1998 completed the sale of $300 million of 30-year senior notes with a 6.10%
coupon rate. The majority of the proceeds were used to retire commercial paper
and other short-term debt, with the remainder used for other general corporate
purposes and short-term investments.
Financing activities used $45.4 million for the three months compared to
providing $37.5 million during the same period in the prior year. The current
period use includes the purchase of 1.7 million shares of the Corporation's
Class A common stock for $41.0 million at an average price of $24.00 per share.
During the same period last year, 545,000 shares of stock had been purchased for
$28.2 million.
Total debt less cash decreased from $381.7 million at May 31, 1998 to $360.9
million at May 31, 1999. Debt as a percentage of debt plus equity increased to
27.0% at May 31, 1999 from 24.0% at May 31, 1998 due to the impact of the share
repurchase program. On a per-share basis, shareholders' equity increased from
$18.92 per share at May 31, 1998 to $19.71 at May 31, 1999.
There were no material changes in the financial condition, liquidity or capital
resources of the Corporation from February 28, 1999, the end of its preceding
fiscal year, to May 31,1999, the end of its last fiscal quarter and the date of
the most recent balance sheet included in this report, nor from May 31,1998, the
end of the corresponding fiscal quarter last year, to May 31, 1999, except the
changes discussed above and aside from normal seasonal fluctuations.
PROSPECTIVE INFORMATION
On February 24, 1999, the Corporation announced an initiative to further
strengthen its position as the productivity leader in the greeting card
industry. This initiative should result in more productive greeting card
departments in retail outlets by lowering retailer inventories to support
increased greeting card sales. The Corporation's investment in technology
improvements allows for shorter production lead times and a more efficient
retail distribution system. The Corporation's ability to more quickly offer
fresher, more innovative cards to the marketplace is key to this strategy.
Primarily as a result of this initiative, the Corporation believes Fiscal 2000
revenues will be reduced by approximately $100 million from the prior year level
with full fiscal year 2000 earnings per share declining to approximately $2.00
to $2.10, excluding non-recurring items.
On June 1, 1999, the Corporation announced that its electronic marketing group,
americangreetings.com, will be established as a separate subsidiary in order to
aggressively grow and promote the electronic communication business. Also, on
June 17, 1999, the Corporation announced that it plans to sell a minority
interest in americangreetings.com in an initial public stock offering later this
year. The Corporation will continue to hold a majority interest in the new
company.
Page 12
<PAGE> 15
Management is not aware of any current trends, events, demands, commitments or
uncertainties which reasonably can be expected to have a material effect on the
liquidity, capital resources, financial position or results of operations of the
Corporation, except those mentioned above. However, the Corporation's future
results could be negatively impacted by such factors as retail bankruptcies, a
weak retail environment, loss of retail accounts to other suppliers or as a
result of retail consolidation and competitive terms of sale offered to
customers to expand or maintain business. Other risks, which are not
all-inclusive, include costs associated with correcting the Year 2000 issues,
unforeseen circumstances which may affect the Corporation's plans to reduce its
cost structure, as well as economic conditions in the various markets served by
the Corporation's operations. Please see the Corporation's Form 10-K for the
year ended February 28, 1999 for other risks and uncertainties that may affect
future results.
Page 13
<PAGE> 16
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits (exhibit reference numbers refer to Item 601 of Regulation
S-K)
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN GREETINGS CORPORATION
By: /s/ Patricia L. Ripple
-----------------------------------
Patricia L. Ripple
Controller
Chief Accounting Officer
July 14, 1999
Page 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PART I, ITEM
1 OF THE FIRST-QUARTER FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-29-2000
<PERIOD-START> MAR-01-1999
<PERIOD-END> MAY-31-1999
<CASH> 130,107
<SECURITIES> 0
<RECEIVABLES> 335,108
<ALLOWANCES> 17,634
<INVENTORY> 257,755
<CURRENT-ASSETS> 1,075,176
<PP&E> 965,125
<DEPRECIATION> 539,014
<TOTAL-ASSETS> 2,320,844
<CURRENT-LIABILITIES> 359,774
<BONDS> 0
0
0
<COMMON> 67,401
<OTHER-SE> 1,260,756
<TOTAL-LIABILITY-AND-EQUITY> 2,320,844
<SALES> 458,757
<TOTAL-REVENUES> 458,757
<CGS> 159,765
<TOTAL-COSTS> 159,765
<OTHER-EXPENSES> 979
<LOSS-PROVISION> 1,205
<INTEREST-EXPENSE> 7,140
<INCOME-PRETAX> 16,948
<INCOME-TAX> 6,101
<INCOME-CONTINUING> 10,847
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,847
<EPS-BASIC> 0.16
<EPS-DILUTED> 0.16
</TABLE>
