American Greetings (AG) - Final
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Transcript of American Greetings (AG) - Final
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ObjectiveAccess strengths and weaknesses.
Annual report 2012 and their affect on investment
potentials.
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About American Greetings Corp.
Greetings Cards
Party Products
E-greetings Digital service and products
American Greetings Corp is worlds largest publicly owned creator,
manufacturer and distributor of social expression products.
The company was founded in 1906 and is based on Cleveland, OH.
AG sells their products in USA, Canada, UK, Australia, New Zealand
and rest of the world through different channels.
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AG Business Segments
North American Social Expression Products
International Social Expression Products
AG Interactive
Non-reportable Operating Segments
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Greeting Cards
American Greetings
Carlton
Gibson
Papyrus
Just for you
Neutral
Tender thoughts
Today and always
Recycled Paper Greetings
La Rosa
Enter Nous
Forget-Me-Not
Pleasant Thoughts
American Greetings creates, manufactures and distributes their cards
on following brands:
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Party Products
Gift packaging
Party goods
Stationery
Gift ware
American Greeting Corp. manufacture and sell their party related
products to domestic and international market.
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E-greetings
www.americangreetings.com
www.bluemountain.com
www.egreetings.com
www.cardstore.com
AG Interactive Inc. is distributing electronic greetings and broad
range of graphics and digital services and products through web
sites, internet portals , instant messaging service and electronic
mobile devices.
http://www.americangreetings.com/http://www.bluemountain.com/http://www.egreetings.com/http://www.cardstore.com/http://www.cardstore.com/http://www.egreetings.com/http://www.bluemountain.com/http://www.americangreetings.com/ -
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Digital Service & Products
Care Bears
Strawberry Shortcake
AG Interactive creates and license their intellectual properties and
characters. They are providing them under their digital service and
products.
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Net Sales of largest customer
Sales Customer 2012 (% of net sales) 2011 (% of net sales)
Card & Gift shop 42% 39%
Wal-Mart 14% 15%
Target 14% 13%
Others 30% 23%
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Competitors
Hallmark Cards Inc.
More than 3000 greeting card publisher publishes their electronic
cards.
There are two major supplier offering a full range of greeting card
products.
1. American Greetings Corp
2. Hallmark Cards Inc
Based on retail paper cards and electronic cards following are the
competitors of AG:
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Other Factors
Existence globally helps to improve sales of AG.
Product leadership, compelling and superior product offering
requires to invest in ongoing product offerings.
Business can be affected by the fluctuation of US dollar.
Economic fluctuations causes reduces in sales and advertisementrevenue will decrease.
Acquiring other companies may result in profit or loss.
E.g. Schurman is acquired by AG and due to that they are
responsible for all the debt. Schurman is not able to pay rent and
other amounts due with respect to retail store leases and
subleases. AG is responsible for it.
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Financial Data
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AG Financial Position
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Financial Data
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AG Assets
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AG Liability & Equity
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Geographical Revenue & Fixed Assets
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Capital Structure of 2012-2011
2012 2011
Net Income $57.2 million $87 million
Earnings per share $1.42 $2.11
Equity $727.46 million $763.75 million
Debt $225.18 million $232.68 million
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Facts. AG is expected to have some decline in 2013.
AG net sales were $1.66 billion, up from $1.57 billion in year 2012 compare to last
year.
AG Interactive sales has been decreased by $10 million.
Watermark acquisition in International Social Expression Products business
segment has increased net sales of $93 million
AG Total Returns to an investor from price appreciation and dividends has
been increased to 15.39% compare to last year S&P 500.
Increase EPS through increasing net sales.
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Strength Diversified business portfolio.
Solid performance within industry.
Exceptional culture and management regarding people, technology andsystems.
Exceptional creative work culture.
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Factors That May Affect Future
Results Foreign currency translation and transaction risks that may materially and
adversely affect AG operating results.
Bankruptcy of key customers could give rise to an inability to pay and increase
AG exposure to losses from bad debts. Rely on foreign sources of production and face a variety of risks associated with
doing business in foreign markets.
Pending litigation could have a material, adverse effect on our business,financial condition, liquidity, results of operations and cash f lows.
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Summary American Greetings Corp needs to improve their plan and strategy to do
business in rest of the world. They needs to analyze how to improve their sales.
American Greetings Corp needs to be careful until their financial situation isunder control.
Increase in net sales will increase the gross profit, which will eventually
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Appendix
Web-site:
1. http://investors.americangreetings.com/annual_reports
2. http://www.americangreetings.com
3. http://ycharts.com/companies/AM
http://investors.americangreetings.com/annual_reportshttp://www.americangreetings.com/http://ycharts.com/companies/AMhttp://ycharts.com/companies/AMhttp://www.americangreetings.com/http://investors.americangreetings.com/annual_reports