Visant Reports Q3 Salls Fell 8%

Memory Book segment posted a 4% sales gain to $77.7 million.

Source: Visant Corporation -- Graphic Arts Online, November 19, 2009

ARMONK, N.Y.-- VISANT CORPORATION today announced its results for the third fiscal quarter ended October 3, 2009, including consolidated net sales of $235.9 million, compared to consolidated net sales for the third fiscal quarter ended September 27, 2008 of $256.7 million, a decrease of approximately 8%. In addition, the company reported consolidated net income of $0.8 million for the third fiscal quarter of 2009, compared to a consolidated net loss of $1.9 million for the third fiscal quarter of 2008. Visant also reported consolidated earnings before net interest expense, provision for income taxes and depreciation and amortization expense (EBITDA) for the third fiscal quarter of 2009 of $38.1 million, compared to $38.8 million for the comparable period in 2008. Visant's consolidated Adjusted EBITDA (defined in the accompanying summary of financial data) was $42.8 million for the third fiscal quarter of 2009, compared to consolidated Adjusted EBITDA of $48.0 million for the comparable period in 2008, a decrease of 11%.

 

For the first nine months of fiscal year 2009, consolidated net sales were $1,000.3 million, compared to $1,071.4 million for the first nine months of fiscal year 2008, a decrease of 7%. Consolidated net income decreased less than 1% during the first nine months of fiscal year 2009 to $89.4 million, compared to net income of $89.6 million for the comparable period in fiscal year 2008. Consolidated EBITDA for the first nine months of fiscal year 2009 totaled $261.7 million, a decrease of 4%, compared to $271.9 million for the first nine months of fiscal year 2008. Consolidated Adjusted EBITDA totaled $281.5 million for the first nine months of fiscal year 2009, a decrease of 3%, compared to Adjusted EBITDA of $289.3 million for the comparable period in fiscal year 2008. Results for the nine-month period ended October 3, 2009 included results from Phoenix Color Corp. (Phoenix Color) for the entire 2009 period. The comparable 2008 period includes results from Phoenix Color commencing from the time of acquisition as of April 1, 2008.

 

Commenting on the company's performance, Marc Reisch, Chairman, President and Chief Executive Officer of Visant, said, "Our third quarter results were highlighted by solid performance in our Memory Book business, closing out another very strong school year. In our Marketing and Publishing Services business, though difficult economic conditions impacting the business remain, both our publishing services and direct marketing operations experienced a more moderate decline in revenue and Adjusted EBITDA in the third quarter versus the same prior year period as compared to first half 2009 versus first half 2008."

 

Net sales of the Scholastic segment decreased $2.6 million, or 6%, to $43.2 million for the third fiscal quarter of 2009 from $45.8 million for the third fiscal quarter of 2008. The decrease was primarily attributable to lower volume in our jewelry products.

 

Net sales of the Memory Book segment increased $2.8 million, or 4%, to $77.7 million for the third fiscal quarter of 2009 compared to $74.9 million for the third fiscal quarter of 2008. This increase was primarily due to higher prices driven by new and enhanced products and service offerings and increased volumes resulting from the timing of shipments included in the third fiscal quarter of 2009, which ended one calendar week later than the third fiscal quarter of 2008.

 

Net sales of the Marketing and Publishing Services segment decreased $21.2 million, or 16%, to $115.0 million for the third fiscal quarter of 2009 from $136.2 million for the third fiscal quarter of 2008. This decrease was primarily attributable to lower volumes in our sampling and educational book component operations.

 

Adjusted EBITDA for the Scholastic segment decreased $2.3 million, or 32%, to a loss of $9.3 million for the third fiscal quarter of 2009 from a loss of $7.0 million for the third fiscal quarter of 2008. The decrease was primarily due to lower sales volume of jewelry products, offset somewhat by price increases and the impact of cost reduction initiatives.

 

Adjusted EBITDA for the Memory Book segment increased $3.5 million, or 17%, to $23.8 million for the third fiscal quarter of 2009 compared to $20.3 million for the prior year comparative period. The increase in Adjusted EBITDA was primarily due to an increase in sales and the impact of cost reduction initiatives.

 

Adjusted EBITDA for the Marketing and Publishing Services segment decreased $6.4 million, or 18%, to $28.3 million during the third fiscal quarter of 2009 from $34.7 million in the third fiscal quarter of 2008. This decrease was primarily attributable to lower volume in our sampling operations, partially offset by savings from facility consolidations and other cost reduction initiatives.

 

Net sales of our Scholastic segment for the nine-month period ended October 3, 2009 decreased by $3.5 million to $325.0 million, a decline of 1%, compared to $328.5 million for the nine-month period ended September 27, 2008. The decrease was primarily attributable to lower overall volumes and a shift in metal mix to lower priced metals in our jewelry products. The decrease was partially offset by higher prices in our jewelry and graduation products.

 

Net sales for the Memory Book segment were $369.5 million for the nine-month period ended October 3, 2009 compared to $367.0 million for the nine-month period ended September 27, 2008.

 

Net sales of the Marketing and Publishing Services segment decreased $70.9 million, or 19%, to $306.1 million for the first nine months of 2009 compared to $377.0 million during the first nine months of 2008. This decrease was primarily attributable to lower volumes in our sampling, educational book component and direct marketing operations, offset in part by incremental volume from the 2008 acquisition of Phoenix Color.

 

For the nine-month period ended October 3, 2009, the Scholastic segment reported Adjusted EBITDA of $52.1 million, an increase of $3.5 million or 7%, compared to $48.6 million for the prior year comparative period. This increase was primarily due to higher prices in our jewelry and graduation products, the impact of cost reduction initiatives and lower precious metal costs year-over-year in our jewelry operations.

 

Our Memory Book segment reported Adjusted EBITDA of $159.3 million for the nine-month period ended October 3, 2009, an increase of $11.9 million or 8%, compared to $147.4 million for the nine-month period ended September 27, 2008. The increase was primarily due to the impact of increased prices and cost reduction initiatives.

 

The Marketing and Publishing Services segment reported Adjusted EBITDA of $70.1 million for the nine-month period ended October 3, 2009, a decrease of $23.2 million or 25%, compared to $93.3 million for the first nine months of fiscal 2008. This decrease was primarily due to lower volumes in our sampling, direct marketing and educational book component operations, offset somewhat by incremental volume from the Phoenix Color acquisition and the impact of facility consolidations and other cost reduction initiatives.

 

As of October 3, 2009, Visant's consolidated debt, comprised of the outstanding indebtedness under its senior credit facilities and its senior subordinated notes, was $821.8 million. Visant's cash position at October 3, 2009 totaled $9.8 million. Visant's parent, Visant Holding Corp., had outstanding senior discount notes of $247.2 million, senior notes of $350.0 million and incremental cash of $0.3 million as of October 3, 2009.

 

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.

 

ABOUT OUR COMPANY

Visant Corporation is a leading marketing and publishing services enterprise servicing the school affinity, direct marketing, fragrance and cosmetics, and educational and trade publishing segments.

 

The company has three reportable segments:

 

Scholastic - provides services in conjunction with the marketing, sale and production of class rings and an array of graduation products and other scholastic affinity products to students and administrators primarily in high schools, colleges and other post-secondary institutions.

 

Memory Book - provides services in conjunction with the publication, marketing, sale and production of school yearbooks, memory books and related products that help people tell their stories and chronicle important events.

 

Marketing and Publishing Services - provides services in conjunction with the development, marketing, sale and production of multi-sensory and interactive advertising sampling systems, primarily for the fragrance, cosmetics and personal care segments, and provides innovative products and related services to the direct marketing sector. The group also produces book components primarily for the educational and trade publishing segments.