Business News

Visant Corporation Announces 2008 Second Quarter Results

Monday 11. August 2008 - VISANT CORPORATION today announced its results for the second quarter ended June 28, 2008, including consolidated net sales of $567.6 million, an increase of 13% over second quarter 2007 consolidated net sales from continuing operations of $501.5 million.

In addition, the company reported consolidated net income for the second quarter of 2008 of $94.2 million, compared to consolidated net income from continuing operations of $78.8 million for the second quarter of 2007. Visant also reported consolidated earnings before net interest expense, provision for income taxes and depreciation and amortization expense (EBITDA) of $198.0 million for the second quarter of 2008, an increase of 13% compared to EBITDA from continuing operations of $175.6 million for the second quarter of 2007. Visant’s consolidated Adjusted EBITDA (defined in the accompanying summary of financial data) was $202.2 million for the second quarter of 2008, an increase of 14%, compared to Adjusted EBITDA from continuing operations of $177.3 million for the second quarter of 2007.

On April 1, 2008 Visant announced the completion of its acquisition of Phoenix Color Corp. (“Phoenix Color”). The aggregate consideration paid was $219.0 million in cash, subject to certain adjustments. The results of Phoenix Color have been included in the Marketing and Publishing Services segment from the date of acquisition.

For the first six months of fiscal year 2008, consolidated net sales were $814.7 million, compared to $757.3 million from continuing operations for the comparable first six months of 2007, an increase of 8%. Consolidated net income increased by 18% during the first six months of fiscal year 2008 to $91.5 million compared to net income from continuing operations of $77.7 million for the comparable period in 2007. Consolidated EBITDA for the first six months of fiscal year 2008 totaled $233.1 million, an increase of 6%, compared to $220.3 million for the first six months of fiscal year 2007. Consolidated Adjusted EBITDA totaled $241.3 million for the first six months of fiscal year 2008, an increase of 8%, compared to Adjusted EBITDA from continuing operations of $223.3 million for the comparable period in 2007.

Commenting on the second quarter performance, Marc Reisch, Chairman, President and Chief Executive Officer of Visant, said, “Despite the difficult economic environment, we are quite pleased that all three of our business segments recorded higher net sales and adjusted EBITDA in the second quarter of 2008 versus 2007. Highlighting our second quarter performance was the completion of another outstanding school year for our Memory Book business. The integration of the Phoenix Color business has gone extremely well, and in late June we announced that we would be closing our Pennsauken, New Jersey facilities and consolidating our book cover and component production from five facilities to three.”

Net sales of the Scholastic segment increased $7.5 million, or 6%, to $143.6 million for the second quarter of 2008 from $136.1 million for the second quarter of 2007. The increase was primarily attributable to higher volumes and prices in our jewelry and announcement products, partially offset by a shift in metal mix in our jewelry products.

Net sales of the Memory Book segment increased $18.9 million, or 7%, to $283.4 million for the second quarter of 2008 compared to $264.5 million for the second quarter of 2007. The increase was due mainly to account growth, increased sales driven by new and enhanced product and service offerings and the acquisition of Publishing Enterprises, Incorporated (“Publishing Enterprises”) made during the fourth quarter of 2007.

Net sales of the Marketing and Publishing Services segment increased $40.0 million, or 40%, to $141.0 million for the second quarter of 2008 from $101.0 million for the second quarter of 2007. This increase was primarily attributable to incremental volume from the recent Phoenix Color acquisition and the Visual Systems, Inc. acquisition completed in 2007, as well as slightly higher volume in our sampling and direct mail businesses.

Adjusted EBITDA of the Scholastic segment increased $1.0 million, or 3%, to $32.2 million for the second quarter of 2008 from $31.2 million for the second quarter of 2007. The increase was due to higher jewelry and announcement product volume, offset by increased gold costs and a shift in metal mix in our jewelry products.

Adjusted EBITDA for the Memory Book segment was $134.2 million for the second quarter of 2008, an increase of 9%, compared to $122.8 million for the prior year comparative period. This $11.4 million increase in Adjusted EBITDA was primarily the result of increased net sales and strong operating performance.

Adjusted EBITDA of the Marketing and Publishing Services segment increased $12.5 million, or 54%, to $35.8 million during the second quarter of 2008 from $23.2 million in the second quarter of 2007. This increase was primarily a result of the acquisition of Phoenix Color as well as favorable product mix and slightly higher volume in our sampling and direct mail businesses.

For the six months ended June 28, 2008, net sales for the Scholastic segment were $282.6 million, an increase of 2%, compared to $276.4 million in the prior year comparative period. This $6.2 million increase was primarily attributable to incremental volume driven by the acquisition of Neff Motivation, Inc., which occurred in the first quarter of 2007, and the impact of price increases for jewelry products, partially offset by lower overall volume in our jewelry and announcement products for the six-month period.

Net sales for the Memory Book segment were $292.1 million for the six-month period ended June 28, 2008, an increase of 7%, compared to $272.4 million in the comparable prior year period. The increase was primarily the result of account growth, increased sales driven by new and enhanced product and service offerings and the Publishing Enterprises acquisition.

Net sales of the Marketing and Publishing Services segment increased $31.8 million, or 15%, to $240.8 million during the six months ended June 28, 2008 from $209.0 million for the comparable period in 2007. This increase was primarily attributable to higher volumes in our book component business including sales generated by businesses we acquired in 2008 and 2007.

For the six months ended June 28, 2008, the Scholastic segment reported Adjusted EBITDA of $55.6 million, a decrease of $5.9 million, compared to $61.6 million for the prior year comparative period. This decrease was due primarily to lower overall volume, unfavorable metal mix and higher gold costs in our jewelry business. These decreases were partially offset by price increases.

Our Memory Book segment reported Adjusted EBITDA of $127.1 million for the six months ended June 28, 2008, an increase of $12.9 million, compared to $114.2 million for the comparable prior year period. The increase was primarily the result of increased net sales and strong operating performance.

The Marketing and Publishing Services segment reported Adjusted EBITDA of $58.6 million for the six months ended June 28, 2008, an increase of $11.0 million, compared to $47.6 million during the first six months of 2007. This increase was mainly the result of volume generated by the businesses acquired in 2008 and 2007 and favorable product mix in our sampling business. These increases were partially offset by lower sales from our direct marketing business.

As of June 28, 2008, Visant’s consolidated debt, comprised of the outstanding indebtedness under its senior credit facilities and its senior subordinated notes, was $920.8 million, including $104.3 million of borrowings outstanding under Visant’s domestic revolving line of credit arising from Visant’s purchase of Phoenix Color. Visant’s cash position at June 28, 2008 totaled $19.7 million. Visant’s parent, Visant Holding Corp., had outstanding senior discount notes with an accreted value of $237.2 million, senior notes of $350.0 million and incremental cash of $0.4 million as of June 28, 2008.

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 Book and Marketing and Publishing Services.