ARMONK, N.Y.--March 10, 2005-- VISANT CORPORATION (formerly Jostens IH Corp.) today announced 2004 fiscal year sales of $1,462.2 million and net income (loss) before net interest expense and loss on debt redemption, income taxes, and depreciation and amortization (EBITDA) of $246.5 million on an historical basis. The company also reported 2004 pro forma net income of $24.6 million and $287.4 million of Adjusted EBITDA(1).
On October 4, 2004, Kohlberg Kravis Roberts & Co. L.P. and affiliates of DLJ Merchant Banking Partners ("DLJMBP") completed transactions which created a specialty printing, marketing and school-related affinity products and services organization comprised of the operations of Jostens, Inc. ("Jostens"), Von Hoffmann Holdings Inc. ("Von Hoffmann"), including Von Hoffmann's subsidiary, The Lehigh Press, Inc. ("Lehigh"), and AHC I Acquisition Corp. ("Arcade"). On February 22, 2005, the company announced that it along with its parent, Jostens Holding Corp., had been renamed Visant Corporation ("Visant") and Visant Holding Corp., respectively. The new name, derived from the word "advisor", reflects the organization's strategy to capitalize on the collective resources of the Jostens, Von Hoffmann, Lehigh and Arcade businesses in an effort to guide and support the companies toward optimal growth for each of their businesses and the organization as a whole.
As a result of the October 4, 2004 transactions, in addition to reporting audited GAAP statements of operations for the fourth quarter and fiscal year ended January 1, 2005, Visant is presenting unaudited pro forma summary financial information for the 2004 periods and the corresponding periods in 2003 in order to present a meaningful comparison.
The results of Visant's Print Group, comprised of the operations of Von Hoffmann, Lehigh Lithographers, Arcade and Lehigh Direct have been presented on an aggregate basis.
The unaudited pro forma condensed consolidated statements of operations for the periods presented give effect to (1) the October 4th transactions and related financing; (2) the 2003 merger of Jostens with an affiliate of DLJMBP; (3) adjustments to exclude the effect on costs of products sold of purchase accounting adjustments to Jostens' inventory in connection with the 2003 merger, as well as transaction costs related to the 2003 merger; (4) the acquisition by Von Hoffmann of Lehigh; (5) the reclassification of the Lehigh Direct division from a discontinued operation to a continuing operation; and (6) the December 21, 2004 amendment to the Visant credit agreement for the re-pricing of its Tranche C term loan, as if they had all occurred on December 29, 2002. The unaudited pro forma information is based upon available information and certain assumptions that the company believes are reasonable under the circumstances. The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the company's results of operations or financial condition would actually have been had all of the events described above, including the October 4th transactions, occurred on the date indicated, nor does it purport to project the results of operations or financial condition of Visant for any future period or as of any future date.
Net sales for the three-month period and fiscal year ended January 1, 2005 were $319.8 million and $1,462.2 million, respectively, a decrease of 1.3% and an increase of 3.7% over respective prior year periods.
Net sales for Jostens were $182.7 million for the three-month period, a decrease of 7.7%, compared to $198.0 million in the prior year comparative period. This period over period decrease was primarily attributable to the timing of shipments from fourth quarter to third quarter compared to prior year. Net sales for the Print Group were $137.2 million for the three-month period, an increase of 8.9%, compared to $125.9 million of pro forma net sales in 2003. This growth resulted primarily from higher direct mail sales.
Fiscal 2004 full year net sales for Jostens were $807.2 million, an increase of 2.4%, compared to $788.2 million in 2003 and net sales for the Print Group were $654.9 million, an increase of 5.4%, compared to $621.3 million of pro forma net sales in 2003.
Pro forma net loss for the three-month period ended January 1, 2005 was $5.5 million, compared to the fourth quarter 2003 pro forma net loss of $16.4 million. Pro forma net income for fiscal 2004 was $24.6 million, compared to $7.1 million in 2003.
Adjusted EBITDA (as defined in the accompanying summary of financial data) on a pro forma basis for the three-month period and fiscal year was $61.2 million and $287.4 million, respectively, an increase of 5.4% and 8.7%, respectively, over prior year comparative periods. Visant has provided a reconciliation of pro forma net (loss) income to Adjusted EBITDA in the accompanying summary of financial data.
Fourth quarter 2004 Adjusted EBITDA on a pro forma basis for Jostens was up 5.0% to $44.4 million, compared to $42.3 million in 2003, despite the decrease in sales. This increase was primarily due to cost reductions. The Print Group reported fourth quarter 2004 Adjusted EBITDA of $18.4 million, compared to $15.7 million in 2003, due to increased volume of higher margin work and administrative cost reductions.
Full year 2004 Adjusted EBITDA on a pro forma basis for Jostens was $171.5 million, compared to $155.8 million in 2003 primarily due to higher volume and cost reductions. The Print Group reported full year 2004 Adjusted EBITDA of $117.7 million, compared to $108.5 million in 2003 primarily due to higher volume.
At year-end 2004, Visant's cash position was $82.3 million, and $8.3 million was outstanding under its revolving line of credit. Total debt less cash of Visant was $1,446.0 as of January 1, 2005. Visant made an optional bank debt pre-payment of $63.6 million on February 22, 2005.
"We are very pleased to report solid performance in our first full quarter since the close of the transactions in October 2004," said Marc Reisch, Chairman, President and Chief Executive Officer of Visant. "We will continue the momentum underway in integrating the businesses for optimal growth and customer satisfaction. Our recent debt prepayment reflects the ability of these businesses to generate significant free cash flow."
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