Tucked inside a 218-page annual report filed on Thursday was the news that the greeting card maker had eliminated about 2,100 workers between its 2012 and 2013 fiscal years. It's unclear how many of those cuts were from its Brooklyn world headquarters.
BROOKLYN, Ohio -- American Greetings Corp. has quietly been cutting jobs.
Tucked inside a 218-page annual report filed on Thursday was the news that the greeting card maker had eliminated about 2,100 workers between its 2012 and 2013 fiscal years.
American Greetings said it employed about 6,700 full-time and 18,700 part-time workers worldwide when its fiscal year closed on Feb. 28.
That's about 1,500 fewer full-time and 600 fewer part-time workers than the company reported at the end of its 2012 fiscal year.
The company did not respond to requests for more information about the cuts, so it's unclear how many of those cuts were from its Brooklyn world headquarters.
A company spokeswoman has characterized employment there as "about 2,000," including part-timers.
The annual report briefly mentions "headcount reductions," which may have contributed to the $47.7 million in fourth-quarter profits the company reported on Thursday, after posting losses the previous two quarters of fiscal 2013.
That American Greetings is cutting workers "is not too surprising," said David Abate, a certified financial planner and senior wealth advisor with Strategic Wealth Partners LLC in Seven Hills. He had previously wondered if job cuts would accompany the company's decision to go private.
"We've had some visibility into what companies are doing out there," and it's a scenario he's seen over and over across the country.
As publicly traded firms strive to keep shareholders happy and hit their earnings targets, "many are focusing their efforts more on the cost side of the equation, including reducing their workforce and demanding more productivity from those left behind."
For Northeast Ohio, it means that as manufacturers like American Greetings get smaller, "the healthcare industry is going to continue to boom and be the job creation engine that we need," he said.
For the fourth quarter that ended on Feb. 28, the quarter that includes Christmas, Hanukkah and Valentine's Day, the company's total revenues of $575 million were 26 percent higher than the final quarter of fiscal 2012.
That $47.7 million in net income was 96 percent of the $49.9 million the company earned for the year as a whole, but still a 12.7-percent drop from the previous year's $57.2 million.
For the final quarter of fiscal 2012, the company lost $10.1 million.
The company said its results were affected by its efforts to drive product leadership, higher spending on marketing and product innovation, the bankruptcy administration of Clinton Cards, the acquisition of about 400 Clinton Cards stores, and its costs related to going private.
The company's board of directors has agreed to a proposal by Chairman Morry Weiss, Chief Executive Zev Weiss and other members of the controlling Weiss family to buy up all outstanding shares, but investors still must approve the deal.
Sales of North American social expressions products, including seasonal greeting cards, party goods, stationery and gift wrap, rose $16.7 million to $1.25 billion.
AG Interactive, which includes electronic greetings, graphics and digital services and products, declined $4.1 million to $64.4 million. The company finished the year with 3.7 million online subscribers.
Total revenues rose 10 percent to $1.87 billion, from $1.70 billion the previous year.
On Sept. 26, 2012, the Weiss family proposed taking the company private for $17.18 a share in a deal worth about $580.7 million.
Two months later, the company held off on plans to build its new world headquarters in Westlake. Thursday's report said the gross costs of the project will be between $150 million and $200 million.
The company was offered up to $93.5 million in state tax credits, low-interest loans and other incentives over 15 years. Its state aid package required that it keep the equivalent of 1,750 full-time jobs at its headquarters.
On Jan. 18, the Weiss family raised its offer to $17.50 per share in an effort to close the deal, raising the value of the transaction to about $553 million, based on the numbers of shares outstanding. The family said at the time that it would be its last offer.
On March 29, 2013, the company's board of directors agreed to the acquisition for $18.20 per share, a 26.9 percent premium over the trading price on Sept. 25. That increased the value of the deal to about $878 million.
Shareholders could end up getting a total of $18.35 per share, including a quarterly dividend of 15 cents per share, if the transaction closes in July.
If approved by a majority of non-family shareholders, the 107-year-old company would become part of Century Intermediate Holding Co., a Delaware company owned by Weiss; his father, Morry Weiss; his brother, President and Chief Operating Officer Jeffrey Weiss; and other family members.
The shareholders' meeting to vote on the proposal has not yet been scheduled.
American Greetings' shares closed at $18.37, down a penny from Wednesday's close and eight cents short of the 52-week high of $18.45 it hit on Tuesday.
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