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Visant Corporation Announces Increased Q3 Results

Monday, November 07, 2005

Press release from the issuing company

ARMONK, NY, November 3, 2005 -- VISANT CORPORATION today announced 2005 third quarter consolidated net sales of $288.1 million, an increase of 1.2% versus third quarter 2004 consolidated sales of $284.5 million. In addition, the company reported a consolidated net loss for the 2005 third quarter of $8.6 million, compared to a consolidated net loss of $48.3 million for the third quarter of 2004. The company also reported net income before net interest expense, provision for income taxes, and depreciation and amortization expense (EBITDA) of $33.8 million for the third quarter of 2005, an increase of 13.3%, versus $29.8 million for the same prior year period. Visant announced Adjusted EBITDA (as defined in the accompanying summary of financial data) of $33.4 million for the third quarter of 2005, a decrease of 8.7%, compared to Adjusted EBITDA of $36.6 million for the third quarter of 2004. For the first nine months of 2005, consolidated net sales were $1,159.7 million, a 1.5% increase over $1,142.3 million for the comparable 2004 period. Consolidated net income increased by 216.1% during the first nine months of 2005 to $40.2 million from a net loss of $34.7 million for the same prior year period. Consolidated EBITDA for the first nine months of 2005 totaled $222.7 million, an increase of 3.8%, versus $214.6 million for the first nine months of 2004. Consolidated Adjusted EBITDA (as defined in the accompanying summary of financial data) totaled $230.3 million for the first nine months of 2005, an increase of 2.0%, compared to Adjusted EBITDA of $225.7 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 $113.9 million for the three-month period ended October 1, 2005, an increase of 8.2%, compared to $105.3 million in the prior year comparative period. This period over period increase was primarily attributable to stronger sales of scholastic products and a modest shift of yearbook production into the third quarter from the fourth quarter as compared to the same period last year. Net sales for the Print Group were $175.0 million for the three-month period ended October 1, 2005, a decrease of 2.4%, compared to $179.2 million of net sales in the third quarter of 2004. The sale of paper to customers increased approximately $9.0 million versus the same period last year. The decrease in net sales was due to lower book and book premedia sales attributable to lower pricing and reduced throughput in our four-color book print facility, $2.4 million less sales resulting from the closure of the Frederick, Maryland plant and lower sales of sampling materials due to a shift in timing of production to earlier quarters in 2005 versus 2004. These decreases were partially offset by higher sales of direct marketing materials. Jostens reported third quarter 2005 Adjusted EBITDA of $2.2 million, an increase of $2.8 million, compared to ($0.6) million in the prior year comparative period. This increase was due primarily to increased scholastic and yearbook sales and continued cost savings initiatives offset partially by approximately $2.5 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 does not expect to continue to incur significant costs related to this issue. Visant's Print Group reported third quarter 2005 Adjusted EBITDA of $31.2 million, a decrease of $6.0 million, compared to $37.2 million for the same prior year period, related to lower sales in books, book premedia and sampling materials partially offset by stronger results in direct marketing. For the nine-month period ended October 1, 2005, net sales for Jostens were $650.5 million, an increase of 4.2%, compared to $624.6 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 $511.3 million for the nine-month period ended October 1, 2005, a decrease of 1.2%, compared to $517.7 million of net sales in the same prior year period. The decrease was due primarily to $7.5 million of less sales resulting from the closure of the Frederick, Maryland facility and lower book and book premedia sales attributable to lower pricing and reduced throughput in our four-color book print facility offset by strong direct marketing sales. For the nine months ended October 1, 2005, Jostens reported Adjusted EBITDA of $134.2 million, an increase of $7.2 million, compared to $127.0 million in the prior year comparative period. This increase was due primarily to increased yearbook volume and continued cost savings initiatives, offset significantly by approximately $14.7 million of higher than planned diploma production and delivery costs. The Print Group reported Adjusted EBITDA of $96.2 million for the first nine months of 2005, a decrease of $2.6 million, compared to $98.8 million for the same prior year period. The decrease was related to lower book pricing and higher book manufacturing costs offset by solid results in sampling products and direct mail and the benefits of reduced costs including synergy initiatives. As of October 1, 2005, Visant Corporation's total debt was $1,466.4 million, including $49.9 million outstanding under its revolving line of credit. The cash position at October 1, 2005 totaled $9.1 million. On a year-to-date basis through October 1, 2005, Visant has made voluntary pre-payments on its bank term loans of $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 of 2005 to make these pre-payments. Visant Corporation's parent, Visant Holding Corp., additionally has senior discount notes with an accreted value of $180.2 million and cash of $0.7 million as of October 1, 2005. "During the third quarter, Visant experienced revenue softness and production difficulties in certain of our book operations", commented Marc Reisch, Chairman, President and Chief Executive Officer of Visant. "We are taking steps, including redeploying certain assets and investing in new binding equipment, to significantly improve these results in 2006. We continue to be very pleased with our performance in direct marketing and sampling materials. We are also pleased to have the Jostens diploma production issues behind us, and we believe that Jostens is well-positioned for a promising new school year", commented Mr. Reisch.

 

 

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