Celebrate Express to continue as stand-alone business

Celebrate Express Inc., an online and catalog retailer of birthday and other event celebration products, has decided to continue operating as a stand-alone entity. Following a review of strategic alternatives with its financial advisor, Cowen and Company LLC, the board of directors decided to end the exploration of strategic options, pay a dividend and re-arm for the next round.

“The best path to maximize shareholder value is to pay the special one-time dividend and to focus on building the business. We believe that the cash remaining after the dividend payment will provide us the financial flexibility for further investments in our business and to continue to fund our growth initiatives,” says CEO Kevin Green.

With an eye on increasing cross-sells among its family of brands, Celebrate Express, redesigned its flagship web site CelebrateExpress.com in February. CelebrateExpress.com now has links to products from its other brands, Birthday Express, Costume Express and 1st Wishes brands.

The board of directors declared a one-time cash dividend of $1.25 per share payable on April 26, 2007 to shareholders of record on April 12. The payout will total approximately $10 million based on the current shares outstanding.

Celebrate Express, No. 173 in the Internet Retailer Top 500 Guide, also announced enhanced corporate governance practices, preliminary financial results for the 3rd quarter of fiscal 2007 and updated financial guidance for fiscal 2007.

Corporate governance changes that were adopted by the board address alteration of bylaws, and removal and reclassification of directors.

Net sales in the third quarter of fiscal 2007 are expected to be between $16.5 million and $16.7 million, compared with net sales of $18.8 million in Q3 of fiscal 2006. Approximately $2.1 million of this decrease is due to ending operation of the Storybook Heirlooms brand and web site, the company says.

Management’s expectations for the full fiscal year ending May 31, 2007 are for net sales to land between $84 million and $87 million. Total sales reached $87 million in fiscal 2006.

Celebrate Express will report third quarter fiscal 2007 results after market close on March 29.

Now that the company’s future plan is more clear, one of the next steps is to hire a vice president of marketing, Green adds.