##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark one)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended March 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 1-2661
 CSS INDUSTRIES, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

13-1920657(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)1845 Walnut Street, Philadelphia, PA(Address of principal
    executive offices)

19103(Zip Code)   Registrants telephone number, including area code:
 (215) 569-9900
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of each class

Name of each exchange on which registeredCommon Stock, $.10 par value

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  (Title of class)
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





CSS
    INDUSTRIES, INC.FORM 10-K
    FOR THE FISCAL YEAR ENDED MARCH 31, 2010
    INDEX
   
  PagePART IItem 1.

Business


1Item 1A.

Risk Factors


4Item 1B.

Unresolved Staff Comments


9Item 2.

Properties


10Item 3.

Legal Proceedings


10Item 4.

Submission of Matters to a Vote of Security
    Holders


10PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


11Item 6.

Selected Financial Data


13Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


13Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


21Item 8.

Financial Statements and Supplementary Data


22Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


51Item 9A.

Controls and Procedures


51Item 9B.

Other Information


53PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


53Item 11.

Executive Compensation


53Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


53Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


53Item 14.

Principal Accounting Fees and Services


53PART IVItem 15.

Exhibits, Financial Statement Schedules


54Signatures


58EXHIBIT 10.16EXHIBIT 10.24EXHIBIT 10.25EXHIBIT 10.26EXHIBIT 10.27EXHIBIT 10.38EXHIBIT 10.39EXHIBIT 10.40EXHIBIT 23EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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##### Table of Contents



PART I  Item 1.
    Business.  General
  make-up and/or
      tm
      Principal Products ®
 1




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##### Table of Contents



make-up,
  ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ®
  and/or and/or
  
    Boxed greeting cards are produced by Asian manufacturers to our
    specifications. Domestically distributed products are warehoused
    in a distribution facility in Pennsylvania.
    Gift tags and classroom exchange Valentine products are
    domestically manufactured or imported from Asian manufacturers.
    Manufacturing processes include a wide range of finishing,
    assembly and packaging operations. Domestically distributed
    products are warehoused in a facility in Pennsylvania.
    Halloween
    make-up and
    Easter egg dye products are manufactured in Asia to specific
    formulae by contract manufacturers who meet regulatory
    requirements for the formularization and packaging of such
    products. Domestically distributed products are warehoused in a
    distribution facility in Pennsylvania.
    Ribbons and bows are primarily manufactured and warehoused in
    seven facilities located in Pennsylvania, Maryland, South
    Carolina and Texas. The manufacturing process is vertically
    integrated. Non-woven ribbon and bow products are primarily made
    from polypropylene resin, a petroleum-based product, which is
    mixed with color pigment, melted and pressed through an
    extruder. Large rolls of extruded film go through various
    combinations of manufacturing processes before being made into
    bows or packaged on ribbon spools or reels as required by
    various markets and customers. Woven fabric ribbons are
    manufactured domestically or imported from Mexico and Asia.
    Imported woven products are either narrow woven or converted
    from bulk rolls of wide width textiles. Domestic woven products
    are narrow woven.
    Gift wrap is primarily manufactured in one facility in Memphis,
    Tennessee. Manufacturing includes web printing, finishing,
    rewinding and packaging. Finished gift wrap products are
    warehoused and shipped from both the production facility and a
    separate facility in Memphis. A small portion of gift wrap
    products are imported from Asia.
    Memory books, stationery, journals and notecards, infant and
    wedding photo albums, scrapbooks, and other gift items are
    imported from Asian manufacturers and warehoused and distributed
    from a distribution facility in Florence, Alabama.
    Floral accessories, including pot covers, foil, waxed tissue,
    shred, aisle runners, corsage bags and other paper and film
    products, are manufactured in a facility located in Milford, New
    Hampshire. Manufacturing includes gravure and flexo printing,
    waxing and converting. Products are warehoused and distributed
    from a separate location near the manufacturing facility.      Intellectual Property Rights
 2




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Sales and Marketing
    Competition
    Employees
     3




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SEC
    Filings
  www.cssindustries.com Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    Risk
    Factors.  Form 10-K
  Our
    results of operations fluctuate on a seasonal basis, and quarter
    to quarter comparisons may not be a good indicator of our
    performance. Seasonal demand fluctuations may adversely affect
    our cash flow and our ability to sell our
    products.
    We
    rely on a few mass market retailers, warehouse clubs and
    national drug store chains for a significant portion of our
    sales. The loss of sales, or a significant reduction of sales,
    to one or more of our large customers may adversely affect our
    business, results of operations and financial condition. Past
    and future consolidation within the retail sector also may lead
    to reduced profit margins, which may adversely affect our
    business, results of operations and financial
    condition.
   4




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Increases
    in raw material and energy costs, resulting from general
    economic conditions, acts of nature, such as hurricanes,
    earthquakes or pandemics, or other factors, may raise our cost
    of goods sold and adversely affect our business, results of
    operations and financial condition.
    Risks
    associated with our use of foreign suppliers may adversely
    affect our business, results of operations and financial
    condition.
    Increased
    overseas sourcing by our competitors and our customers may
    reduce our market share and profit margins, adversely affecting
    our business, results of operations and financial
    condition.
    Difficulties
    encountered by our key customers may cause them to reduce their
    purchases from us and/or increase our exposure to losses from
    bad debts, and adversely affect our business, results of
    operations and financial condition.
   5




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and/or
  Our
    business, results of operations and financial condition may be
    adversely affected by volatility in the demand for our
    products.
    Our
    business, results of operations and financial condition may be
    adversely affected if we are unable to compete successfully
    against our competitors.
  and/or
  Our
    business, results of operations and financial condition may be
    adversely affected if we are unable to hire and retain
    sufficient qualified personnel.
    Our
    business, results of operations and financial condition may be
    adversely affected if we fail to extend or renegotiate our
    collective bargaining contracts with our labor unions as they
    expire from time to time, or if our unionized employees were to
    engage in a strike, or other work stoppage.
   6




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Employee
    benefit costs may adversely affect our business, results of
    operations and financial condition.
    Our
    acquisition strategy involves risks, and difficulties in
    integrating potential acquisitions may adversely affect our
    business, results of operations and financial
    condition.
    Our
    inability to protect our intellectual property rights, or
    infringement claims asserted against us by others, may adversely
    affect our business, results of operations and financial
    condition.
      Various
    laws and governmental regulations applicable to a manufacturer
    or distributor of consumer products may adversely affect our
    business, results of operations and financial
    condition.
   7




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Our
    business, results of operations and financial condition may be
    adversely affected by national or global changes in economic or
    political conditions.
    Our
    business, results of operations and financial condition may be
    adversely affected by our ability to successfully implement our
    enterprise resource planning systems standardization
    project.
    We are
    subject to a number of restrictive covenants under our borrowing
    and accounts receivable securitization financing arrangements,
    including customary operating restrictions and customary
    financial covenants. Our business, results of operations and
    financial condition may be adversely affected if we are unable
    to maintain compliance with such covenants.
    Form 10-K
 8




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and/or
  If our
    business, results of operations or financial condition is
    adversely affected as a result of any of the risk factors
    described above or elsewhere in this annual report on
    Form 10-K
    or our other SEC filings, we may be required to incur financial
    statement charges, such as goodwill impairment charges, which
    may, in turn, have a further adverse affect on our results of
    operations and financial condition.
  Form 10-K
        Item 1B.
    Unresolved
    Staff Comments.   9




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##### Table of Contents



Item 2.
    Properties.    Approximate Square FeetLocation

Use

Owned


LeasedDanville, PA

Distribution


133,000



Berwick, PA

Manufacturing and distribution


213,000



Berwick, PA

Manufacturing and distribution


220,000



Berwick, PA

Distribution


226,000



Berwick, PA

Distribution






521,000Memphis, TN

Manufacturing and distribution






1,006,000Memphis, TN

Distribution






404,000Hagerstown, MD

Manufacturing and distribution


284,000



Hartwell, SC

Manufacturing


229,000



El Paso, TX

Distribution






100,000Florence, AL

Distribution






180,000Milford, NH

Manufacturing






56,000Milford, NH

Distribution






61,000Total




1,305,000



2,328,000     Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   10




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.    DividendsFiscal 2010

High


Low


DeclaredFirst Quarter

$
23.53


$
15.20


$
.15Second Quarter


27.28



18.25



.15Third Quarter


21.93



17.19



.15Fourth Quarter


21.85



16.09



.15   DividendsFiscal 2009

High


Low


DeclaredFirst Quarter

$
36.83


$
23.71


$
.15Second Quarter


30.83



23.30



.15Third Quarter


25.98



15.15



.15Fourth Quarter


18.94



10.02



.15      11




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Performance
    Graph
    
  and/or
 12




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##### Table of Contents



Item 6.
    Selected
    Financial Data.  Years Ended March 31,2010(a)


2009


2008


2007


2006(In thousands, except per share amounts)Statement of Operations Data:Net sales

$
448,450


$
482,424


$
498,253


$
530,686


$
525,494(Loss) income before income taxes


(30,987
)


25,890



38,833



36,804



32,716Net (loss) income


(23,739
)


16,986



25,358



23,889



21,841Net (loss) income per common share:Basic

$
(2.46
)

$
1.71


$
2.36


$
2.25


$
2.08Diluted

$
(2.46
)

$
1.70


$
2.31


$
2.19


$
2.00Balance Sheet Data:Working capital

$
130,897


$
114,371


$
136,000


$
188,309


$
161,482Total assets


281,762



322,259



345,041



343,070



334,149Current portion of long-term debt


481



10,479



10,246



10,195



10,169Long-term debt


66



485



10,192



20,392



30,518Stockholders equity


233,045



259,254



262,353



261,110



232,510Cash dividends declared per common share

$
.60


$
.60


$
.56


$
.48


$
.48     (a)
    
    In the fourth quarter of fiscal 2010, the Company recorded a
    non-cash pre-tax impairment charge of $44,315,000 due to a full
    impairment of goodwill in two of its reporting units, C.R.
    Gibson, LLC and BOC Design Group (consisting of Berwick Offray
    LLC and Cleo Inc), and partial impairments of tradenames used by
    such entities. The foregoing impairment charge was partially
    offset by an $11,692,000 tax benefit.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Overview
     13




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less-than-fair-value
               14




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Litigation
    Results
    of Operations
  Fiscal
    2010 Compared to Fiscal 2009
             15




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Reconciliation
    of Certain Non-GAAP Measures
    Year Ended March 31, 2010(Loss) Income





Diluted (Loss)Before Income


Net (Loss)


EarningsTaxes


Income


per Share(In thousands, except per share amounts)As Reported

$
(30,987
)

$
(23,739
)

$
(2.46
)Impairment of goodwill and intangible assets


44,315



32,623



3.37Non-GAAP Measurement

$
13,328


$
8,884


$
.92     Fiscal
    2009 Compared to Fiscal 2008
       16




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Liquidity
    and Capital Resources
       17




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##### Table of Contents



Less than 1


1-3


4-5


After 5Contractual Obligations

Year


Years


Years


Years


TotalShort-term debt

$



$



$



$



$
Note payable to seller


51















51Capital lease obligations


430



66











496Operating leases


8,461



8,500



4,628



2,397



23,986Other long-term obligations(1)


45



463



362



2,120



2,990$
8,987


$
9,029


$
4,990


$
4,517


$
27,523     (1)
    
    Other long-term obligations consist primarily of postretirement
    medical liabilities and deferred compensation arrangements.
    Future timing of payments for other long-term obligations is
    estimated by management.      Less than 1

1-3

4-5

After 5Year

Years

Years

Years

TotalLetter of credit

$
3,336


$



$



$



$
3,336       Critical
    Accounting Policies
   18




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Revenue
    Accounts
    Receivable
    Inventory
    Valuation
  first-in, last-in,
  Goodwill
   19




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##### Table of Contents



Accounting
    for Income Taxes
    Share-Based
    Compensation
      Accounting
    Pronouncements
    Forward-Looking
    and Cautionary Statements
   20




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##### Table of Contents



Form 10-K
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.    Interest
    Rate Risk
    Foreign
    Currency Risk
   21




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Item 8.
    Financial
    Statements and Supplementary Data.  CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  INDEX
   
 PageReport of Independent Registered Public
    Accounting Firm


23Consolidated Balance Sheets 
    March 31, 2010 and 2009


24Consolidated Statements of Operations and
    Comprehensive (Loss) Income  for the years ended
    March 31, 2010, 2009 and 2008


25Consolidated Statements of Cash Flows 
    for the years ended March 31, 2010, 2009 and 2008


26Consolidated Statements of Stockholders
    Equity  for the years ended March 31, 2010, 2009
    and 2008


27Notes to Consolidated Financial Statements


28-50Financial Statement Schedule:Schedule II. Valuation and Qualifying
    Accounts


57  22




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Report of
    Independent Registered Public Accounting Firm           EITF 06-10, Accounting for Collateral Assignment Split-Dollar Life
    Insurance Agreements
        23




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  March 31,2010


2009(In thousands, except share and per share amounts)ASSETSCURRENT ASSETSCash and cash equivalents

$
27,217


$
2,179Accounts receivable, net of allowances of $4,742 and $5,166


45,711



43,741Inventories


78,851



99,971Deferred income taxes


6,165



5,758Assets held for sale


1,363



1,363Other current assets


15,986



15,295Total current assets


175,293



168,307NET PROPERTY, PLANT AND EQUIPMENT


47,786



54,942DEFERRED INCOME TAXES


5,439



OTHER ASSETSGoodwill


17,233



49,258Intangible assets, net of accumulated amortization of $3,676 and
    $2,383


32,027



45,649Other


3,984



4,103Total other assets


53,244



99,010Total assets

$
281,762


$
322,259LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNotes payable

$



$
4,150Current portion of long-term debt


481



10,479Accounts payable


19,595



14,332Accrued income taxes


555



72Accrued payroll and other compensation


7,691



5,677Accrued customer programs


8,380



9,909Accrued other expenses


7,694



9,317Total current liabilities


44,396



53,936LONG-TERM DEBT, NET OF CURRENT PORTION


66



485OTHER LONG-TERM OBLIGATIONS


4,255



4,376DEFERRED INCOME TAXES






4,208COMMITMENTS AND CONTINGENCIES (Notes 10 and 12)STOCKHOLDERS EQUITYPreferred stock, Class 2, $.01 par,
    1,000,000 shares authorized, no shares issued






Common stock, $.10 par, 25,000,000 shares authorized,
    14,703,084 shares issued at March 31, 2010 and 2009


1,470



1,470Additional paid-in capital


49,295



46,813Retained earnings


321,510



352,674Accumulated other comprehensive loss, net of tax


(74
)


(81
)Common stock in treasury, 5,027,306 and 5,097,753 shares,
    at cost


(139,156
)


(141,622
)Total stockholders equity


233,045



259,254Total liabilities and stockholders equity

$
281,762


$
322,259    24




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
    INCOME
  For the Years Ended March 31,2010


2009


2008(In thousands, except per share amounts)NET SALES

$
448,450


$
482,424


$
498,253COSTS AND EXPENSESCost of sales


337,852



356,115



360,708Selling, general and administrative expenses


95,667



96,723



96,703Impairment of goodwill and intangible assets


44,315







Restructuring expenses, net


207



1,138



1,717Interest expense, net of interest income of $14, $137 and $1,163


1,885



2,551



974Other (income) expense, net


(489
)


7



(682
)479,437



456,534



459,420(LOSS) INCOME BEFORE INCOME TAXES


(30,987
)


25,890



38,833INCOME TAX (BENEFIT) EXPENSE


(7,248
)


8,904



13,475NET (LOSS) INCOME

$
(23,739
)

$
16,986


$
25,358NET (LOSS) INCOME PER COMMON SHAREBasic

$
(2.46
)

$
1.71


$
2.36Diluted

$
(2.46
)

$
1.70


$
2.31COMPREHENSIVE (LOSS) INCOMENet (loss) income

$
(23,739
)

$
16,986


$
25,358Foreign currency translation adjustment






3



2Postretirement medical plan, net of tax


7



6



(91
)Comprehensive (loss) income

$
(23,732
)

$
16,995


$
25,269    25




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CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For the Years Ended March 31,2010


2009


2008(In thousands)Cash flows from operating activities:Net (loss) income

$
(23,739
)

$
16,986


$
25,358Adjustments to reconcile net (loss) income to net cash provided
    by operating activities:Depreciation and amortization


12,560



13,195



13,218Impairment of goodwill and intangible assets


44,315







Provision for doubtful accounts


110



525



5Asset impairments










1,222Deferred tax (benefit) provision


(10,054
)


3,244



2,622Gain on sale or disposal of assets


(20
)


(925
)


(386
)Share-based compensation expense


2,323



2,632



2,830Changes in assets and liabilities, net of effects of
    acquisitions:(Increase) decrease in accounts receivable


(2,080
)


(4,012
)


9,204Decrease (increase) in inventories


21,245



9,127



(10,737
)(Increase) decrease in other assets


(738
)


537



(1,274
)Increase (decrease) in accounts payable


5,263



(3,943
)


(196
)Increase (decrease) in accrued income taxes


370



(1,968
)


3,493Decrease in accrued expenses and other long-term obligations


(879
)


(7,477
)


(3,665
)Net cash provided by operating activities


48,676



27,921



41,694Cash flows from investing activities:Purchase of businesses, net of cash received of $2 in 2008


(225
)


(11,164
)


(71,145
)Final payment of purchase price for a business previously
    acquired






(2,700
)


Purchase of property, plant and equipment


(4,447
)


(14,143
)


(8,330
)Proceeds from sale of assets


752



3,227



3,092Net cash used for investing activities


(3,920
)


(24,780
)


(76,383
)Cash flows from financing activities:Payments on long-term debt obligations


(10,609
)


(10,417
)


(10,149
)Borrowings on notes payable


346,405



545,385



186,900Payments on notes payable


(350,555
)


(541,235
)


(186,900
)Payment of financing transaction costs






(621
)


Dividends paid


(5,784
)


(5,939
)


(5,983
)Purchase of treasury stock






(16,687
)


(25,449
)Proceeds from exercise of stock options


825



435



3,936Tax benefit realized for stock options exercised






5



350Net cash used for financing activities


(19,718
)


(29,074
)


(37,295
)Effect of exchange rate changes on cash and cash equivalents






3



2Net increase (decrease) in cash and cash equivalents


25,038



(25,930
)


(71,982
)Cash and cash equivalents at beginning of period


2,179



28,109



100,091Cash and cash equivalents at end of period

$
27,217


$
2,179


$
28,109    26




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
   AccumulatedAdditional





Other


Common StockPreferred Stock


Common Stock


Paid-in


Retained


Comprehensive


in TreasuryShares


Amount


Shares


Amount


Capital


Earnings


Loss


Shares


Amount


Total(In thousands, except share and per share amounts)BALANCE, APRIL 1, 2007





$




14,703,084


$
1,470


$
40,680


$
325,246


$
(1
)


(3,857,571
)

$
(106,285
)

$
261,110Tax benefit associated with exercise of stock options


















640



















640Share-based compensation expense


















2,830



















2,830Issuance of common stock upon exercise of stock options






















(1,933
)






167,670



5,869



3,936Increase in treasury shares






























(747,424
)


(25,449
)


(25,449
)Foreign currency translation adjustment


























2











2Cash dividends ($.56 per common share)






















(5,983
)














(5,983
)Postretirement medical plan, net of tax


























(91
)










(91
)Net income






















25,358















25,358BALANCE, MARCH 31, 2008










14,703,084



1,470



44,150



342,688



(90
)


(4,437,325
)


(125,865
)


262,353Cumulative effect of adoption of EITF
    06-10






















(566
)














(566
)Tax benefit associated with exercise of stock options


















31



















31Share-based compensation expense


















2,632



















2,632Issuance of common stock upon exercise of stock options






















(495
)






26,572



930



435Increase in treasury shares






























(687,000
)


(16,687
)


(16,687
)Foreign currency translation adjustment


























3











3Cash dividends ($.60 per common share)






















(5,939
)














(5,939
)Postretirement medical plan, net of tax


























6











6Net income






















16,986















16,986BALANCE, MARCH 31, 2009










14,703,084



1,470



46,813



352,674



(81
)


(5,097,753
)


(141,622
)


259,254Tax benefit associated with exercise of stock options


















159



















159Share-based compensation expense


















2,323



















2,323Issuance of common stock upon exercise of stock options






















(1,641
)






70,447



2,466



825Cash dividends ($.60 per common share)






















(5,784
)














(5,784
)Postretirement medical plan, net of tax


























7











7Net loss






















(23,739
)














(23,739
)BALANCE, MARCH 31, 2010





$




14,703,084


$
1,470


$
49,295


$
321,510


$
(74
)


(5,027,306
)

$
(139,156
)

$
233,045    27




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010
  (1)
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Principles
    of Consolidation
    Foreign
    Currency Translation and Transactions
    Nature
    of Business
  make-up and/or
      Use of
    Estimates
   28




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounts
    Receivable
    Inventories
  first-in, last-in,
  March 31,2010


2009Raw material

$
12,696


$
17,533Work-in-process


20,881



25,437Finished goods


45,274



57,001$
78,851


$
99,971   Assets
    Held for Sale
   29




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property,
    Plant and Equipment
    March 31,2010


2009Land

$
2,508


$
2,608Buildings, leasehold interests and improvements


45,165



44,803Machinery, equipment and other


147,305



149,410194,978



196,821Less  Accumulated depreciation


(147,192
)


(141,879
)Net property, plant and equipment

$
47,786


$
54,942     Buildings, leasehold interests and improvements


Lease term to 45 yearsMachinery, equipment and other


3 to 15 years       Impairment
    of Long-Lived Assets including Goodwill and Other Intangible
    Assets
   30




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Derivative
    Financial Instruments
     31




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Income
    Taxes
      Revenue
    Recognition
    Product
    Development Costs
     32




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Shipping
    and Handling Costs
    Share-Based
    Compensation
      Net
    (Loss) Income Per Common Share
    For the Years Ended March 31,2010


2009


2008(In thousands, exceptper share amounts)Numerator:Net (loss) income

$
(23,739
)

$
16,986


$
25,358Denominator:Weighted average shares outstanding for basic (loss) income per
    common share


9,637



9,909



10,732Effect of dilutive stock options






81



261Adjusted weighted average shares outstanding for diluted (loss)
    income per common share


9,637



9,990



10,993Basic net (loss) income per common share

$
(2.46
)

$
1.71


$
2.36Diluted net (loss) income per common share

$
(2.46
)

$
1.70


$
2.31     Statements
    of Cash Flows
   33




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Supplemental
    Schedule of Cash Flow Information
  For the Years Ended March 31,2010


2009


2008(In thousands)Cash paid during the year for:Interest

$
1,892


$
2,896


$
2,413Income taxes

$
3,036


$
7,741


$
8,445Details of acquisitions:Fair value of assets acquired

$
225


$
11,560


$
82,442Liabilities assumed






296



8,595Net assets acquired


225



11,264



73,847Amount due seller






100



2,700Cash paid


225



11,164



71,147Less cash acquired










2Net cash paid for acquisitions

$
225


$
11,164


$
71,145   (2)
    BUSINESS
    ACQUISITIONS        tm
 34




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Currents assets

$
5,418Property, plant and equipment


593Intangible assets


4,652Goodwill


897Total assets acquired


11,560Current liabilities


205Other long-term obligations


91Total liabilities assumed


296Net assets acquired

$
11,264       Current assets

$
25,470Property, plant and equipment


963Intangible assets


38,600Goodwill


17,409Total assets acquired


82,442Current liabilities


8,595Total liabilities assumed


8,595Net assets acquired

$
73,847   (3)
    GOODWILL
    AND OTHER INTANGIBLE ASSETS  Form 10-Q
 35




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            TradenamesGoodwill


and TrademarksBalance as of March 31, 2009

$
49,258


$
25,083Impairment charge


(32,025
)


(12,290
)Balance as of March 31, 2010

$
17,233


$
12,793     CustomerRelationships


PatentsBalance as of March 31, 2009

$
21,957


$
89Acquisition of Designer Dispatch Ribbon


100



Seastone royalty earn-out






161Balance as of March 31, 2010

$
22,057


$
250  36




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31, 2010


March 31, 2009Gross Carrying


Accumulated


Gross Carrying


AccumulatedAmount


Amortization


Amount


AmortizationTradenames and trademarks

$
12,793


$



$
25,083


$
Customer relationships


22,057



3,358



21,957



1,860Non-compete


200



117



500



367Trademarks


403



153



403



123Patents


250



48



89



33$
35,703


$
3,676


$
48,032


$
2,383       Fiscal 2011

$
1,609Fiscal 2012


1,593Fiscal 2013


1,559Fiscal 2014


1,559Fiscal 2015


1,541     (4)
    BUSINESS
    RESTRUCTURING     37




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Termination


OtherCosts


Costs


TotalRestructuring reserve as of March 31, 2008

$
309


$
10


$
319Cash paid  fiscal 2009


(690
)






(690
)Charges to expense  fiscal 2009


436



(10
)


426Restructuring reserve as of March 31, 2009


55







55Cash paid  fiscal 2010


(55
)






(55
)Restructuring reserve as of March 31, 2010

$



$



$
   (5)
    TREASURY
    STOCK TRANSACTIONS    (6)
    SHARE-BASED
    PLANS     38




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Options
        Weighted


WeightedAverage


Average


AggregateNumber


Exercise


Remaining


Intrinsicof Options


Price


Contractual Life


ValueOutstanding at April 1, 2007


1,508,110


$
26.94Granted


234,000



34.41Exercised


(175,245
)


24.17Forfeited/cancelled


(43,775
)


29.14Outstanding at March 31, 2008


1,523,090



28.34Granted


98,000



24.00Exercised


(29,622
)


18.27Forfeited/cancelled


(145,270
)


28.82Outstanding at March 31, 2009


1,446,198



28.20Granted


96,210



20.15Exercised


(123,783
)


15.55Forfeited/cancelled


(296,962
)


31.77Outstanding at March 31, 2010


1,121,663


$
27.96



2.2 years


$
772,000Exercisable at March 31, 2010


819,283


$
28.27



1.7 years


$
649,000    39




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Years Ended March 31,2010


2009


2008Expected dividend yield at time of grant


2.98
%


2.64
%


1.64
%Expected stock price volatility


54
%


38
%


30
%Risk-free interest rate


2.92
%


2.96
%


4.20
%Expected life of option (in years)


4.2



4.3



4.3       Restricted
    Stock Units
      Number


Weighted Average


Weighted Averageof RSUs


Fair Value


Contractual LifeOutstanding at April 1, 2008





$
Granted


58,150



25.70Exercised






Forfeited/cancelled


(9,800
)


26.02Outstanding at March 31, 2009


48,350



25.63Granted


98,760



16.70Exercised






Forfeited/cancelled


(18,940
)


20.41Outstanding at March 31, 2010


128,170


$
19.52



4.7 years    40




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (7)
    RETIREMENT
    BENEFIT PLANS  Profit
    Sharing Plans
    Postretirement
    Medical Plan
      2010


2009Benefit obligation at beginning of year

$
1,022


$
1,037Interest cost


62



60Actuarial gain


(8
)


(7
)Benefits paid


(80
)


(68
)Benefit obligation recognized in the consolidated balance sheet

$
996


$
1,022         (8)
    INCOME
    TAXES    For the Years Ended March 31,2010


2009


2008United States

$
(41,157
)

$
18,478


$
22,281Foreign


10,170



7,412



16,552$
(30,987
)

$
25,890


$
38,833  41




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Years Ended March 31,2010


2009


2008Current:Federal

$
1,099


$
4,451


$
8,147State


29



(14
)


(311
)Foreign


1,678



1,223



3,0172,806



5,660



10,853Deferred:Federal


(9,439
)


2,994



2,344State


(615
)


250



278(10,054
)


3,244



2,622$
(7,248
)

$
8,904


$
13,475     For the Years Ended March 31,2010


2009


2008U.S. federal statutory rate


35.0
%


35.0
%


35.0
%State income taxes, less federal benefit


.4



1.3



.8Tax exempt interest income






(.1
)


(.7
)Changes in tax reserves and valuation allowance


.5



(1.4
)


.1Nondeductible goodwill


(13.6
)






Other, net


1.1



(.4
)


(.5
)23.4
%


34.4
%


34.7
%      42




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31,2010


2009Deferred income tax assets:Accounts receivable

$
229


$
225Inventories


4,155



3,947Accrued expenses


3,316



3,434State net operating loss and credit carryforwards


5,583



5,217Share-based compensation


3,746



2,326Intangibles


7,061



24,090



15,149Valuation allowance


(6,325
)


(5,217
)17,765



9,932Deferred income tax liabilities:Property, plant and equipment


3,257



2,302Intangibles






3,219Unremitted earnings of foreign subsidiaries


2,538



2,211Other


366



6506,161



8,382Net deferred income tax asset

$
11,604


$
1,550       March 31,2010


2009Gross unrecognized tax benefits at April 1

$
1,245


$
1,987Additions based on tax positions related to the current year


205



119Additions for tax positions of prior years






85Reductions for tax positions of prior years






(115
)Reductions relating to settlements with taxing authorities


(13
)


(460
)Reductions as a result of a lapse of the applicable statute of
    limitations


(392
)


(371
)Gross unrecognized tax benefits at March 31

$
1,045


$
1,245  43




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    and/or
    (9)
    LONG-TERM
    DEBT AND CREDIT ARRANGEMENTS    March 31,2010


20094.48% Senior Notes due December 13, 2009

$



$
10,000Other


547



964547



10,964Less  current portion


(481
)


(10,479
)$
66


$
485       back-up
 44




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    back-up
      2011

$
4362012


67Total minimum lease obligations


503Less amount representing interest


(7
)Present value of future minimum lease obligations

$
496       2011

$
4812012


66Total

$
547  45




---



##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (10)
    OPERATING
    LEASES    2011

$
8,4612012


5,1252013


3,3752014


2,4682015


2,160Thereafter


2,397Total

$
23,986     (11)
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS               46




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Quoted PricesIn Active


SignificantMarkets for


Other


SignificantIdentical


Observable


UnobservableMarch 31,


Assets


Inputs


Inputs2010


(Level 1)


(Level 2)


(Level 3)(In thousands)AssetsMarketable securities

$
821


$
821


$



$
Cash surrender value of life insurance policies


863







863



Total assets

$
1,684


$
821


$
863


$
LiabilitiesDeferred compensation plans

$
821


$
821


$



$
Total liabilities

$
821


$
821


$



$
   Quoted PricesIn Active


SignificantMarkets for


Other


SignificantIdentical


Observable


UnobservableMarch 31,


Assets


Inputs


Inputs2009


(Level 1)


(Level 2)


(Level 3)(In thousands)AssetsMarketable securities

$
628


$
628


$



$
Cash surrender value of life insurance policies


837







837



Total assets

$
1,465


$
628


$
837


$
LiabilitiesDeferred compensation plans

$
628


$
628


$



$
Total liabilities

$
628


$
628


$



$
       (12)
    COMMITMENTS
    AND CONTINGENCIES   47




---



##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (13)
    SEGMENT
    DISCLOSURE      For the Years Ended March 31,2010


2009


2008Christmas

$
206,641


$
242,127


$
285,848All occasion


182,191



179,479



151,410Other seasonal


59,618



60,818



60,995Total

$
448,450


$
482,424


$
498,253     (14)
    RECENT
    ACCOUNTING PRONOUNCEMENTS  Accounting
    Standards Codification
    Subsequent
    Events
    Fair
    Value of Financial Instruments Disclosure
     48




---



##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business
    Combinations
      (15)  QUARTERLY
    FINANCIAL DATA (UNAUDITED)
  Quarters2010

First


Second


Third


Fourth(In thousands, except per share amounts)Net sales

$
53,677


$
160,273


$
182,230


$
52,270Gross profit

$
14,612


$
40,643


$
45,569


$
9,774Net (loss) income

$
(4,490
)

$
8,892


$
12,700


$
(40,841
)Net (loss) income per common share:Basic(1)

$
(.47
)

$
.92


$
1.32


$
(4.22
)Diluted(1)

$
(.47
)

$
.92


$
1.31


$
(4.22
)   Quarters2009

First


Second


Third


Fourth(In thousands, except per share amounts)Net sales

$
54,647


$
174,161


$
197,122


$
56,494Gross profit

$
16,934


$
44,707


$
49,155


$
15,513Net (loss) income

$
(4,496
)

$
10,504


$
16,412


$
(5,434
)Net (loss) income per common share:Basic(1)

$
(.44
)

$
1.05


$
1.69


$
(.57
)Diluted(1)

$
(.44
)

$
1.03


$
1.68


$
(.57
)  49




---



##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    Net (loss) income per common share amounts for each quarter are
    required to be computed independently and may not equal the
    amount computed for the total year.       50




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  (a)
    Evaluation
    of Disclosure Controls and Procedures.  Rules 13a-15(e) 15d-15(e)) Rules 13a-15 15d-15.
  (b)
    Managements
    Report on Internal Control over Financial Reporting.          (c)
    Changes
    in Internal Control over Financial Reporting.   51




---



##### Table of Contents



(d)
    Report of
    Independent Registered Public Accounting Firm.                     52




---



##### Table of Contents



Item 9B.
    Other
    Information.    Part III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accounting Fees and Services.   53




---



##### Table of Contents



Part IV
  Item 15.
    Exhibits,
    Financial Statement Schedules.    Financial Statements
  Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets  March 31, 2010 and
    2009Consolidated Statements of Operations and Comprehensive (Loss)
    Income  for the years ended March 31, 2010, 2009
    and 2008Consolidated Statements of Cash Flows  for the years
    ended March 31, 2010, 2009 and 2008Consolidated Statements of Stockholders Equity 
    for the years ended March 31, 2010, 2009 and 2008Notes to Consolidated Financial Statements  Financial Statement Schedules
  Schedule II  Valuation and Qualifying Accounts  Exhibits required by Item 601 of
    Regulation S-K,
    Including Those Incorporated by Reference
  Articles of Incorporation and By-Laws3
.1

Restated Certificate of Incorporation filed December 5, 1990
    (incorporated by reference to Exhibit 3.1 to the
    Registrants Annual Report on Form 10-K for the fiscal year
    ended March 31, 2006).3
.2

Amendment to Restated Certificate of Incorporation filed May 8,
    1992 (incorporated by reference to Exhibit 3.2 to the
    Registrants Annual Report on Form 10-K for the fiscal year
    ended March 31, 2006).3
.3

Certificate eliminating Class 2, Series A, $1.35 Preferred stock
    filed September 27, 1991 (incorporated by reference to Exhibit
    3.3 to the Registrants Annual Report on Form 10-K for the
    fiscal year ended March 31, 2006).3
.4

Certificate eliminating Class 1, Series B, Convertible Preferred
    Stock filed January 28, 1993 (incorporated by reference to
    Exhibit 3.4 to the Registrants Annual Report on Form 10-K
    for the fiscal year ended March 31, 2006).3
.5

Amendment to Restated Certificate of Incorporation filed August
    4, 2004 (incorporated by reference to Exhibit 3.1 to the
    Registrants Quarterly Report on Form 10-Q dated November
    8, 2004).3
.6

Restated Certificate of Incorporation, as amended to date (as
    last amended August 4, 2004) (incorporated by reference to
    Exhibit 3.2 to the Registrants Quarterly Report on Form
    10-Q dated November 8, 2004).3
.7

By-laws of the Company, as amended to date (as last amended
    August 2, 2007) (incorporated by reference to Exhibit 3.1 to the
    Registrants Quarterly Report on Form 10-Q dated October
    25, 2007).Material Contracts10
.1

Receivables Purchase Agreement among CSS Funding LLC, CSS
    Industries, Inc., Market Street Funding Corporation and PNC
    Bank, National Association, dated as of April 30, 2001
    (incorporated by reference to Exhibit 10.9 to the
    Registrants Annual Report on
    Form 10-K/A
    for the fiscal year ended March 31, 2002).10
.2

Purchase and Sale Agreement between Various Entities Listed on
    Schedule I, as the Originators, CSS Industries, Inc. and
    CSS Funding LLC, dated as of April 30, 2001 (incorporated
    by reference to Exhibit 10.10 to the Registrants
    Annual Report on
    Form 10-K/A
    for the fiscal year ended March 31, 2002).10
.3

First Amendment to Receivables Purchase Agreement dated as of
    August 24, 2001 (incorporated by reference to
    Exhibit 10.12 to the Registrants Annual Report on
    Form 10-K/A
    for the fiscal year ended March 31, 2002).10
.4

First Amendment to Purchase and Sale Agreement dated as of
    August 24, 2001 (incorporated by reference to
    Exhibit 10.13 to the Registrants Annual Report on
    Form 10-K/A
    for the fiscal year ended March 31, 2002). 54




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##### Table of Contents



10
.5

Second Amendment to Purchase and Sale Agreement dated as of
    July 29, 2003 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    dated November 8, 2004).10
.6

Third Amendment to Purchase and Sale Agreement dated
    June 1, 2004 (incorporated by reference to
    Exhibit 10.3 to the Registrants Quarterly Report on
    Form 10-Q
    dated November 8, 2004).10
.7

Second Amendment to Receivables Purchase Agreement dated as of
    July 29, 2003 (incorporated by reference to
    Exhibit 10.4 to the Registrants Quarterly Report on
    Form 10-Q
    dated November 8, 2004).10
.8

Third Amendment to Receivables Purchase Agreement dated as of
    April 26, 2004 (incorporated by reference to
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q
    dated November 8, 2004).10
.9

Fourth Amendment to Receivables Purchase Agreement dated
    June 1, 2004 (incorporated by reference to
    Exhibit 10.6 to the Registrants Quarterly Report on
    Form 10-Q
    dated November 8, 2004).10
.10

Fifth Amendment to Receivables Purchase Agreement dated as of
    August 1, 2007 (incorporated by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    dated January 31, 2008).10
.11

Second Amendment dated March 25, 2009 to Note Purchase
    Agreement dated December 12, 2002 pertaining to $50,000,000
    4.48% Senior Notes due December 13, 2009 (incorporated
    by reference to Exhibit 10.1 to the Registrants
    Current Report on
    Form 8-K
    filed on March 31, 2009).10
.12

Asset Purchase Agreement dated August 1, 2008 among Granite
    Acquisition Corp., Lion Ribbon Company, Inc., Hampshire Paper
    Corp. and the Shareholders of Hampshire Paper Corp.
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Quarterly Report on
    Form 10-Q
    dated October 3, 2008).10
.13

Second Amended and Restated Loan Agreement dated
    November 21, 2008 among CSS Industries, Inc., the lenders
    party thereto and PNC Bank, National Association, as
    Administrative agent for the lenders party thereto (incorporated
    by reference to Exhibit 10.1 to the Registrants
    Current Report on
    Form 8-K
    dated November 21, 2008).10
.14

Sixth Amendment to Receivables Purchase Agreement dated
    November 21, 2008 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    dated February 5, 2009).10
.15

Seventh Amendment dated May 8, 2009 to Receivables Purchase
    Agreement dated April 30, 2001 (incorporated by reference
    to Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    filed on May 14, 2009).*10
.16

First Amendment to Loan Agreement dated March 23, 2010 to
    Second Amended and Restated Loan Agreement dated
    November 21, 2008.10
.17

Eighth Amendment to Receivables Purchase Agreement dated
    May 7, 2010 (incorporated by reference to Exhibit 10.1
    to the Registrants Current Report on
    Form 8-K
    filed on May 12, 2010.)Management Contracts, Compensatory Plans or Arrangements10
.18

CSS Industries, Inc. 1995 Stock Option Plan for Non-Employee
    Directors (incorporated by reference to Exhibit 10.2 to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 1996).10
.19

CSS Industries, Inc. 2000 Stock Option Plan for Non-Employee
    Directors (incorporated by reference to Exhibit 10.14 to
    the Registrants Annual Report on
    Form 10-K/A
    for the fiscal year ended March 31, 2002).10
.20

CSS Industries, Inc. 1994 Equity Compensation Plan (as last
    amended August 7, 2002) (incorporated by reference to
    Exhibit 10.29 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended March 31, 2004).10
.21

Employment Agreement dated as of May 12, 2006 between CSS
    Industries, Inc. and Christopher J. Munyan (incorporated by
    reference to Exhibit 10.2 to the Registrants
    Quarterly Report on
    Form 10-Q
    dated August 9, 2006).10
.22

CSS Industries, Inc. 2006 Stock Option Plan for Non-Employee
    Directors (incorporated by reference to Exhibit 10.34 to
    the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended March 31, 2007).10
.23

CSS Industries, Inc. Management Incentive Program (as last
    amended June 3, 2008) (incorporated by reference to
    Exhibit 10.3 to the Registrants Current Report on
    Form 8-K
    filed on June 9, 2008).*10
.24

CSS Industries, Inc. FY2010 Management Incentive Program
    Criteria for CSS Industries, Inc.*10
.25

CSS Industries, Inc. FY2010 Management Incentive Program
    Criteria for BOC Design Group.*10
.26

CSS Industries, Inc. FY2010 Management Incentive Program
    Criteria for Paper Magic Group, Inc. 55




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##### Table of Contents



*10
.27

CSS Industries, Inc. FY2010 Management Incentive Program
    Criteria for C.R. Gibson, LLC.10
.28

2004 Equity Compensation Plan (as last amended July 31,
    2008) (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    dated July 31, 2008).10
.29

Employment Agreement dated as of July 25, 2008 between CSS
    Industries, Inc. and Paul Quick (incorporated by reference to
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q
    dated October 30, 2008).10
.30

Amendment to Employment Agreement dated as of September 5,
    2008 between CSS Industries, Inc. and Christopher J. Munyan
    (incorporated by reference to Exhibit 10.6 to the
    Registrants Quarterly Report on
    Form 10-Q
    dated October 30, 2008).10
.31

Amendment dated December 26, 2008 to Employment Agreement
    between CSS Industries, Inc. and Christopher J. Munyan
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Quarterly Report on
    Form 10-Q
    dated February 5, 2009).10
.32

CSS Industries, Inc. Severance Pay Plan for Senior Management
    and Summary Plan Description (as last amended December 29,
    2008) (incorporated by reference to Exhibit 10.4 to the
    Registrants Quarterly Report on
    Form 10-Q
    dated February 5, 2009).10
.33

Nonqualified Supplemental Executive Retirement Plan Covering
    Officer-Employees of CSS Industries, Inc. and its Subsidiaries
    (Amended and Restated, Effective as of January 1, 2009)
    (incorporated by reference to Exhibit 10.5 to the
    Registrants Quarterly Report on
    Form 10-Q
    dated February 5, 2009).10
.34

Amendment to Employment Agreement, dated as of May 27,
    2009, between Paper Magic Group, Inc. and Paul Quick
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    dated August 4, 2009).10
.35

CSS Industries, Inc. Change of Control Severance Pay Plan for
    Executive Management effective May 27, 2009 (incorporated
    by reference to Exhibit 10.1 to the Registrants
    Current Report on
    Form 8-K
    filed on June 2, 2009).10
.36

Form of Non-Qualified Stock Option Grant for grants under the
    CSS Industries, Inc. 2004 Equity Compensation Plan (incorporated
    by reference to Exhibit 10.2 to the Registrants
    Current Report on
    Form 8-K
    filed on June 2, 2009).10
.37

Form of Stock Bonus Award Grant for time-vested restricted stock
    units under the CSS Industries, Inc. 2004 Equity Compensation
    Plan (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed on June 2, 2009).*10
.38

Employment Agreement dated as of March 25, 2010 between CSS
    Industries, Inc. and Vincent A. Paccapaniccia.*10
.39

Separation Agreement and Release of Claims Agreement dated as of
    March 30, 2010 between CSS Industries, Inc. and Clifford E.
    Pietrafitta.*10
.40

Consulting Agreement dated as of April 15, 2010 between CSS
    Industries, Inc. and Clifford E. Pietrafitta.Other21
.

List of Significant Subsidiaries of the Registrant (incorporated
    by reference to Exhibit 21 to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended March 31, 2008).*23
.

Consent of Independent Registered Public Accounting Firm.*31
.1

Certification of the Chief Executive Officer of CSS Industries,
    Inc. required by
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.*31
.2

Certification of the Chief Financial Officer of CSS Industries,
    Inc. required by
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.*32
.1

Certification of the Chief Executive Officer of CSS Industries,
    Inc. required by
    Rule 13a-14(b)
    under the Securities Exchange Act of 1934 and 18 U.S.C.
    Section 1350.*32
.2

Certification of the Chief Financial Officer of CSS Industries,
    Inc. required by
    Rule 13a-14(b)
    under the Securities Exchange Act of 1934 and 18 U.S.C.
    Section 1350.     *
    
    Filed or furnished with this Annual Report on
    Form 10-K. 56




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##### Table of Contents



CSS
    INDUSTRIES, INC. AND SUBSIDIARIESSCHEDULE II
    VALUATION AND QUALIFYING ACCOUNTS
  Column A

Column B


Column C


Column D


Column EAdditionsBalance


Chargedat


to Costs


Charged





BalanceBeginning


and


to Other





at End ofof Period


Expenses


Accounts


Deductions


Period(In thousands)Year ended March 31, 2010Accounts receivable allowances

$
5,166


$
7,677


$



$
8,101
(a)

$
4,742Accrued restructuring expenses


1,070











1,070
(b)


Year ended March 31, 2009Accounts receivable allowances

$
5,291


$
6,178


$
39
(c)

$
6,342
(a)

$
5,166Accrued restructuring expenses


319



1,747







996
(d)


1,070Year ended March 31, 2008Accounts receivable allowances

$
4,850


$
4,542


$
997
(e)

$
5,098
(a)

$
5,291Accrued restructuring expenses


1,456



628







1,765
(b)


319     Notes:  (a)
    
    Includes amounts written off as uncollectible, net of recoveries.(b)
    
    Includes payments and non cash reductions.(c)
    
    Balance at acquisition of Hampshire Paper.(d)
    
    Includes payments.(e)
    
    Balance at acquisition of C.R. Gibson. 57




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##### Table of Contents



SIGNATURES     
    By
    /s/  Christopher
    J. Munyan  
      
  
    
       
      
      
      
      
      
      
     58