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Visant Corporation Reports Q3 '07 Net Loss of $2.8 million

Thursday, November 15, 2007

Press release from the issuing company

ARMONK, N.Y., Nov. 13 2007 -- VISANT CORPORATION today announced its results from continuing operations for the third quarter ended September 29, 2007, including consolidated net sales of $238.4 million for the quarter, an increase of 11% over third quarter 2006 consolidated net sales from continuing operations of $215.7 million. In addition, the company reported a consolidated net loss from continuing operations for the third quarter of 2007 of $2.8 million, compared to a consolidated net loss from continuing operations of $7.8 million for the same period of 2006. Visant also reported consolidated earnings before net interest expense, provision for income taxes and depreciation and amortization expense (EBITDA) from continuing operations of $37.3 million for the third quarter of 2007, an increase of 9% compared to EBITDA of $34.1 million from continuing operations for the third quarter of 2006.
Visant sold Von Hoffmann Holdings Inc. and its subsidiaries, Von Hoffmann Corporation and Anthology, Inc., during the second quarter of 2007. These operations were held as discontinued operations as of year-end 2006 and have been reflected as such for all periods presented. These businesses have been reclassified on the consolidated statement of operations to a single caption titled "Income from discontinued operations, net". Previously, the results of these businesses included certain allocated corporate costs, which have been reallocated to the remaining continuing operations.
For the first nine months of fiscal year 2007, consolidated net sales from continuing operations were $995.7 million, compared to $913.2 million for the corresponding 2006 period, an increase of approximately 9%. Consolidated net income from continuing operations increased by 26% during the first nine months of fiscal year 2007 to $74.9 million from $59.2 million for the comparable period for 2006. Consolidated EBITDA from continuing operations for the first nine months of fiscal year 2007 totaled $257.6 million, an increase of 10%, compared to $234.8 million for the first nine months of fiscal year 2006.
Visant's consolidated Adjusted EBITDA from continuing operations (defined in the accompanying summary of financial data) was $38.5 million for the third quarter of 2007, an increase of 14%, compared to Adjusted EBITDA from continuing operations of $33.9 million for the third quarter of 2006. Consolidated Adjusted EBITDA from continuing operations totaled $261.8 million for the first nine months of fiscal year 2007, an increase of 9%, compared to Consolidated Adjusted EBITDA from continuing operations of $239.8 million for the comparable period in 2006.
Commenting on the third quarter performance, Marc Reisch, Chairman, President and Chief Executive Officer of Visant, said, "We are pleased with our third quarter performance which was again driven by the strong performance of our book component, sampling and Memory Book businesses."
Net sales of the Scholastic segment increased $9.9 million, or 29%, to $44.0 million for the third quarter of 2007 from $34.1 million for the third quarter of 2006. The increase was primarily attributable to incremental volume driven by the acquisition of Neff Motivation, Inc. ("Neff"), which occurred in the first quarter of 2007.
In 2007 we changed the name of our Yearbook segment to Memory Books to reflect our diversified offering of custom yearbooks, memory books and related products that help people tell their stories and chronicle important events. Net sales of the Memory Books segment increased $1.4 million, or 2%, to $72.1 million for the quarter ended September 29, 2007 compared to $70.7 million for the third quarter of 2006.
Net sales of the continuing operations of the Marketing and Publishing Services segment increased $11.7 million, or 11%, to $122.7 million for the third quarter of 2007 from $111.0 million for the third quarter of 2006. This increase was primarily attributable to higher volume in both our sampling and book component businesses, including sales generated from businesses that we acquired in 2006 and 2007. These increases were partially offset by lower sales in our direct marketing business.
Adjusted EBITDA of the Scholastic segment decreased $0.2 million to a loss of $9.0 million for the third quarter of 2007 from a loss of $8.8 million for the third quarter of 2006. The decrease was due to lower jewelry and graduation product volume, timing of certain expenses and planned investments related to growth initiatives, offset primarily by the impact of incremental volume from the Neff acquisition.
Adjusted EBITDA for the Memory Books segment was $18.8 million for the third quarter of 2007 compared to $17.9 million for the prior year comparative period. The increase in Adjusted EBITDA for the Memory Books segment compared to the same prior year period was related to increased sales and the impact of operational cost reductions from the market adoption of new technologies. These effects were partially offset by additional spending related to the continuation of the planned investments that began in the fourth quarter of 2006 related to growth initiatives.
Adjusted EBITDA of the continuing operations of the Marketing and Publishing Services segment increased $3.9 million, or 16%, to $28.7 million during the third quarter of 2007 from $24.8 million in the third quarter of 2006. This increase was primarily attributable to higher volume in both the sampling and book component businesses, including sales generated by businesses that we acquired in 2006 and 2007. These increases were partially offset by higher selling and marketing costs as well as research and development spending and lower sales in our direct marketing business.
For the nine months ended September 29, 2007, net sales for the Scholastic segment were $320.4 million, an increase of 7%, compared to $298.3 million in the prior year comparative period. This increase was primarily attributable to incremental volume driven by the acquisition of Neff, which occurred in the first quarter of 2007, and the impact of price increases, partially offset by lower jewelry volume.
Net sales for the Memory Books segment were $344.4 million for the nine month period ended September 29, 2007, an increase of 3%, compared to $333.3 million in the same prior year period. The increase was due mainly to account growth and increased price driven by new product and service offerings.
Net sales of the continuing operations of the Marketing and Publishing Services segment increased $50.0 million, or 18%, to $331.7 million during the nine months ended September 29, 2007 from $281.6 million for the comparable period in 2006. This increase was primarily attributable to higher sales volumes in the sampling and book component businesses, including sales generated by businesses that we acquired in 2006 and 2007. Sales from our direct marketing business were relatively flat in the first nine months of fiscal year 2007 compared to the same period in 2006.
For the nine months ended September 29, 2007, the Scholastic segment reported Adjusted EBITDA of $52.5 million, an increase of $2.5 million, compared to $50.1 million for the prior year comparative period. This increase was due primarily to the volume from the acquisition of Neff and price increases. The increases were offset by the impact of lower unit volume and the continuation of the planned investments related to growth initiatives.
Memory Books reported Adjusted EBITDA of $133.0 million for the first nine months of fiscal year 2007, an increase of $8.9 million, compared to $124.1 million for the same prior year period. The increase was primarily due to higher sales, driven by both price and volume increases, and the impact of continued production improvements offset by the continuation of the planned investments that began in the fourth quarter of 2006 related to growth initiatives.
The continuing operations of the Marketing and Publishing Services segment reported Adjusted EBITDA of $76.3 million for the nine months ended September 29, 2007, an increase of $10.7 million, compared to $65.6 million during the first nine months of 2006. This increase was mainly the result of higher volume, including sales generated by the businesses acquired in 2006 and 2007, partially offset by higher selling and marketing costs as well as higher research and development spending.
As of September 29, 2007, Visant Corporation's consolidated debt, comprised of the outstanding indebtedness under its senior credit facilities and senior subordinated notes, was $894.0 million, including $77.5 million borrowings outstanding under its revolving line of credit. Visant's cash position at September 29, 2007 totaled $21.0 million. Visant's parent, Visant Holding Corp., also had outstanding senior discount notes with an accreted value of $220.1 million, senior notes of $350.0 million and cash of $0.5 million as of September 29, 2007.
Visant has provided a reconciliation of net income to EBITDA and Adjusted EBITDA in the accompanying summary of financial data.
Supplemental data has also been provided for Visant's three segments: Scholastic, Memory Books and Marketing and Publishing Services.
CONFERENCE CALL
The company's regular quarterly conference call concerning the third quarter results will be webcast live today at 10:00 a.m. Eastern Time on the Investor Information section of Visant's website at http://www.visant.net/.

 

 

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