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Visant Corporation Announces Increasing Sales in Q2

Monday, August 08, 2005

Press release from the issuing company

ARMONK, NY, August 4, 2005 -- VISANT CORPORATION today announced 2005 second quarter consolidated net sales of $562.5 million, an increase of 2.7% versus second quarter 2004 consolidated sales of $547.7 million. In addition, the company reported consolidated net income for the 2005 second quarter of $57.0 million, an increase of 38.1%, compared to consolidated net income of $41.3 million for the second quarter of 2004. The company also reported net income before net interest expense, provision for income taxes, and depreciation and amortization expense (EBITDA) of $149.2 million for the second quarter of 2005, an increase of 1.7%, versus $146.7 million for the same prior year period. Visant announced Adjusted EBITDA (as defined in the accompanying summary of financial data) of $152.3 million for the second quarter of 2005, an increase of 2.8%, compared to Adjusted EBITDA of $148.2 million for the second quarter of 2004. For the first six months of 2005, consolidated sales were $871.6 million, a 1.6% increase over $857.8 million for the comparable 2004 period. Consolidated net income increased by 257.8% during the first six months of 2005 to $48.9 million from $13.7 million for the same prior year period. Consolidated EBITDA for the first six months of 2005 totaled $189.0 million, an increase of 2.3%, versus $184.8 million for the first six months of 2004. Consolidated Adjusted EBITDA (as defined in the accompanying summary of financial data) totaled $197.0 million for the first six months of 2005, an increase of 4.1%, compared to Adjusted EBITDA of $189.2 million for the same period of 2004. Visant has provided a reconciliation of net income to EBITDA and Adjusted EBITDA in the accompanying summary of financial data. In addition, supplemental data is provided for Jostens, Inc. ("Jostens") and Visant's Print Group. Net sales for Jostens were $396.8 million for the three-month period ended July 2, 2005, an increase of 5.5%, compared to $376.2 million in the prior year comparative period. This period over period increase was primarily attributable to strong yearbook printing sales and a shift of graduation product sales into the second quarter from the first quarter as compared to the same period last year. Net sales for the Print Group were $166.6 million for the three-month period ended July 2, 2005, a decrease of 2.9%, compared to $171.5 million of net sales in the second quarter of 2004. The decrease was due primarily to lower book and premedia sales. The lower book sales were attributable to the manufacture of fewer noneducational books resulting from the first quarter closing of the Frederick, Maryland plant, lower pricing for certain educational products and lower throughput in our four-color facility due primarily to the reduction in run length and increased complexity related to state-specific textbooks. Jostens reported second quarter 2005 Adjusted EBITDA of $120.4 million, an increase of $6.1 million, compared to $114.3 million in the prior year comparative period. This increase was due primarily to increased yearbook and graduation product sales and continued cost savings initiatives offset partially by approximately $10 million of higher than planned diploma production and delivery costs in connection with the relocation of Jostens' diploma operations out of its Red Wing, Minnesota manufacturing facility to certain other facilities. Jostens expects to incur an additional $1 to $2 million of higher than planned diploma costs in the third quarter of 2005. Visant's Print Group reported second quarter 2005 Adjusted EBITDA of $31.9 million, a decrease of $2.0 million, compared to $33.9 million for the same prior year period, related to the lower sales volume. For the six-month period ended July 2, 2005, net sales for Jostens were $536.6 million, an increase of 3.3%, compared to $519.3 million in the prior year comparative period. This period over period increase was primarily attributable to higher yearbook sales. Net sales for the Print Group were $336.3 million for the six-month period ended July 2, 2005, a decrease of 0.6%, compared to $338.5 million of net sales in the same prior year period. The decrease was primarily attributable to the lower sales in the second quarter of 2005 described above as well as lower paper sales in the first quarter 2005, offset by strong revenues from direct marketing and sampling products in the first quarter. For the six months ended July 2, 2005, Jostens reported Adjusted EBITDA of $132.0 million, an increase of $4.4 million, compared to $127.6 million in the prior year comparative period. This increase was due primarily to increased yearbook volume and continued cost savings initiatives, offset partially by approximately $12 million of higher than planned diploma production and delivery costs. The Print Group reported Adjusted EBITDA of $65.0 million for the first six months of 2005, an increase of $3.4 million, compared to $61.6 million for the same prior year period. The increase was related to increased activity in our sampling business and the benefit of reduced costs resulting from synergy initiatives, partially offset by lower volume. As of July 2, 2005, Visant's total debt was $1,425.5 million, including $9.0 million outstanding under its revolving line of credit. The cash position at July 2, 2005 totaled $11.8 million. Visant made an optional bank term loan pre-payment of $39.9 million on July 1, 2005. This pre-payment brought Visant's total year to date voluntary pre-payment of its bank term loans to $103.5 million, representing the originally scheduled payments through most of 2009. Visant used cash flow generated from operations and $5.9 million from proceeds of equity investments by certain members of management in the first quarter to make this pre-payment. "During the second quarter, Visant experienced significant, but specific, production challenges and costs, particularly in addressing the Jostens diploma manufacturing requirements", commented Marc Reisch, Chairman, President and Chief Executive Officer of Visant. "We have initiated numerous corrective actions to improve our diploma operations, which represent less than 3% of Visant's consolidated net sales. I am pleased with our progress to date in reducing operating and overhead costs throughout the business, as well as the strengthening of our balance sheet resulting from the $103.5 million of voluntary prepayments of our bank term loans", commented Mr. Reisch. Jostens is a leading provider of school-related affinity products and services that help people celebrate important moments, recognize achievements and build affiliation. Jostens' products include yearbooks, class rings, graduation products and school photography. Visant's Print Group includes the production of four-color case bound and soft-cover educational textbooks and textbook covers, standardized test materials and related components for major educational publishers in the United States. The Print Group also produces business-to-business catalogues and multi-sensory and interactive advertising sampling systems for the fragrance, cosmetics and personal care markets, as well as other consumer product markets, and a range of innovative printing products and services to the direct marketing sector.

 

 

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