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Visant Corporation Sales Steady in Q2

Monday, August 07, 2006

Press release from the issuing company

ARMONK, NY, August 3, 2006 -- VISANT CORPORATION today announced its results for the second quarter endedJuly 1, 2006, including consolidated net sales of $548.1 million for the quarter, compared toconsolidated net sales of $549.6 million in the second quarter of 2005. In addition, the companyreported consolidated net income for the second quarter of 2006 of $70.7 million compared toconsolidated net income of $57.0 million for the same period of 2005. Visant also reported consolidatedearnings before net interest expense, provision for income taxes and depreciation and amortizationexpense (EBITDA) of $170.4 million for the second quarter of 2006, an increase of 12.3%, over EBITDA of$151.7 million for the second quarter of 2005. For the first six months of 2006, consolidated net sales were $853.2 million, versus $850.5 million forthe same 2005 period. Consolidated net income increased by 48.3% during the first six months of 2006 to$72.5 million from $48.9 million for the same prior year period. Consolidated EBITDA for the first sixmonths of 2006 totaled $225.7 million, an increase of 15.3%, versus $195.7 million for the first sixmonths of 2005. Visant's consolidated Adjusted EBITDA (defined in the accompanying summary of financial data) of $172.2million for the second quarter of 2006 represents an increase of 4.1% compared to consolidated AdjustedEBITDA of $165.5 million during the second quarter of 2005. Consolidated Adjusted EBITDA totaled $231.0million for the first six months of 2006, an increase of 6.7%, compared to consolidated Adjusted EBITDAof $216.5 million for the same period of 2005. Commenting on the second quarter performance, Marc Reisch, Chairman, President and Chief ExecutiveOfficer of Visant, said, "Strong performance by the Jostens Yearbook segment, as well as good growth byour Marketing Services business contributed to our solid second quarter results. During the quarter, wealso executed two important steps in our strategic growth plan by completing both the sale of theJostens Photo businesses and the acquisition of Dixon Direct. I am also pleased that in early July wemade an optional pre-payment of $100 million on our Term Loan C facility. The total pre-payments on ourterm loans since Visant was formed in October 2004 now total $303.5 million." On June 30, 2006, the company completed the sale of its Jostens photography businesses in Canada and theUnited States. As a result, all amounts relating to Jostens photography business have been reclassifiedfrom the various lines on the consolidated statement of operations to a single caption titled "Loss fromdiscontinued operations, net". Previously this business was reported as a separate segment, whichincluded certain allocated corporate costs which have been reallocated to the remaining reportablesegments. The net sales of the Jostens Scholastic segment decreased $9.8 million, or 7.0%, to $129.9 million forthe second quarter of 2006 from $139.6 million for the second quarter of 2005. The decrease wasprimarily attributable to timing, since 2005's second quarter recognized a shift of scholastic net salesfrom 2005's first quarter due to the production challenges last year. Such a shift did not occur in2006. Jostens Yearbook net sales increased $10.1 million, or 4.1%, to $254.3 million for the quarterended July 1, 2006 compared to $244.3 million in the second quarter of 2005. The net sales of the Marketing and Publishing Services segment increased $9.0 million, or 8.1%, to$120.7 million during the second quarter of 2006 from $111.7 million in the second quarter of 2005. Thisincrease was attributable to higher sales of paper to our customers of approximately $5.2 million aswell as higher direct marketing sales. On June 16, 2006, the company acquired the assets of Dixon Web,(now known as Dixon Direct), which contributed slightly to the net sales of the Marketing and PublishingServices segment for the quarter. The net sales of the Educational Textbook business decreased $10.0million, or 17.8%, to $46.3 million for the second quarter of 2006 from $56.3 million for the secondquarter of 2005 due to lower sales of paper of approximately $4.4 million as well as lower volume fromcertain customers. The Adjusted EBITDA of the Jostens Scholastic segment decreased $4.1 million, or 12.5%, to $28.6 millionduring the second quarter of 2006 from $32.7 million during the second quarter of 2005. The year-over-year decrease was primarily attributable to lower sales volume discussed above, as well as the impact of$1.5 million for higher gold costs in 2006. Jostens Yearbook Adjusted EBITDA improved $10.5 million, to$111.3 million for the second quarter of 2006 compared to $100.8 million for the same period in 2005.The increase related to higher sales and continued savings from operating synergies and other costreduction initiatives. The Adjusted EBITDA of the Marketing and Publishing Services segment increased $1.8 million, or 8.9%, to$21.5 million for the second quarter of 2006 from $19.7 million in the second quarter of 2005. Thisincrease was primarily attributable to higher sales volume and savings from operating synergies. TheAdjusted EBITDA of the Educational Textbook segment decreased $1.5 million, or 12.1%, to $10.8 millionfor the second quarter of 2006 from $12.3 million in the second quarter of 2005 due to lower volume fromcertain customers, partially offset by cost reductions from operating synergies. For the six-month period ended July 1, 2006, net sales for Jostens Scholastic segment were $264.2million, an increase of 0.4%, compared to $263.2 million in the prior year comparative period. JostensYearbook net sales were $262.6 million for the six-month period ended July 1, 2006, an increase of 4.1%,compared to $252.2 million of net sales in the same prior year period. The net sales of the Marketing and Publishing Services segment increased $3.0 million, or 1.2%, to$242.4 million during the six-month period ended July 1, 2006 from $239.4 million for the comparableperiod in 2005. This increase was primarily attributable to higher sales of paper to customers ofapproximately $3.6 million, while higher sales of direct marketing materials were offset by lowersampling sales during the period. The net sales of the Educational Textbook business decreased $11.3million, or 11.2%, to $89.1 million for the first six months of 2006 from $100.4 million in 2005 due tolower sales of paper of approximately $3.9 million as well as lower sales volume to certain customers. For the six months ended July 1, 2006, Jostens Scholastic reported Adjusted EBITDA of $58.8 million, anincrease of $1.7 million, compared to $57.1 million for the prior year comparative period. This increasewas due primarily to cost reduction initiatives and synergies offset by the impact of $2.7 million forhigher gold costs. Jostens Yearbook reported Adjusted EBITDA of $106.9 million for the first six monthsof 2006, an increase of $13.0 million, compared to $93.9 million for the same prior year period. Theincrease was related to higher sales volume and the impact of operating synergies and other costreduction initiatives. The Marketing and Publishing services segment reported Adjusted EBITDA of $48.4 million, an increase of$2.5 million, compared to $45.9 million during the first six months of 2005. This increase was mainlythe result of higher earnings from direct marketing services and operating synergies, partially offsetby lower first half earnings from Visant's sampling business. The Adjusted EBITDA of the EducationalTextbook segment decreased by $2.7 million to $16.9 million for the six months ended July 1, 2006compared to $19.6 million for the same period in 2005 due to lower sales volume. As of July 1, 2006, Visant Corporation's consolidated debt was $1,328.9 million, including $12.4 millionoutstanding under its Canadian revolving line of credit. Visant's cash position at July 1, 2006 totaled$136.8 million. Visant Corporation's parent, Visant Holding Corp. ("Holdings"), also had senior discountnotes with an accreted value of $194.2 million, senior notes of $350.0 million and cash of $1.7 millionas of July 1, 2006. As noted above, on July 7, 2006, Visant made an additional optional pre-payment of$100 million under its Term Loan C facility. Visant has provided a reconciliation of net income to EBITDA and Adjusted EBITDA in the accompanyingsummary of financial data. It should be noted that Adjusted EBITDA as presented excludes certain non-recurring costs, including Jostens 2005 incremental diploma costs. These higher than planned diplomaproduction and delivery costs were incurred in connection with the manufacturing inefficienciesresulting from relocation of Jostens' diploma operations out of the Red Wing, Minnesota manufacturingfacility to certain other facilities in 2005.

 

 

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