FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 1994
JOSTENS, INC.
(Exact name of registrant as specified in its charter)
Minnesota 1-5064 41-0343440
(State of Incorporation) (Commission File (I.R.S. Employer
File Number) Identification No.)
5501 Norman Center Drive, Minneapolis, Minnesota 55437
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 830-3300
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Item 5. Other Events. On April 28, 1994, the Company issued a press
release.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
a. Financial statements of businesses acquired. Not applicable.
b. Pro forma financial information. Not applicable.
c. Exhibits.
28.1 Press Release dated April 28, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOSTENS, INC.
(Registrant)
By:/s/Robert C. Buhrmaster
Robert C. Buhrmaster
President and Chief Executive Officer
Dated: May 16, 1994
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INDEX TO EXHIBITS
Exhibit Page
28.1 Press release dated April 28, 1994. 5
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Contact:
Media: Kevin Whalen 612/830-3251
Financial: Robb Prince 612/830-3262
FOR IMMEDIATE RELEASE
JOSTENS EARNS $1.7 MILLION IN FISCAL THIRD QUARTER
AFTER CHARGES AND DISCONTINUED OPERATIONS
Company Announces Plan to Restructure Jostens Learning;
Charge to be Taken in Fourth Quarter
Board Declares 22-Cent Quarterly Dividend
Results Restated for Past Periods
MINNEAPOLIS, April 28 -- Jostens Inc. (NYSE: JOS) today reported net
income of $1.7 million, or 4 cents per share, in the third quarter of
fiscal 1994. Quarterly results include after-tax charges of $10.1 million,
or 22 cents per share, from changes in several accounting estimates, and an
after-tax gain of $11 million, or 24 cents per share, from the January sale
of the company's sportswear business.
Excluding the gain, the charges and discontinued operations, Jostens
earned $900,000, or 2 cents per share, from continuing operations in the
quarter ended March 31. Comparable year-earlier earnings were $4.4
million, or 10 cents per share.
The company also revised certain practices and policies, and as a
result restated earnings for the last five fiscal years. The restatement
had only a modest impact on the company's previously reported earnings and
no impact on the trend of earnings, the company said.
In addition, the company announced a restructuring plan for its
Jostens Learning (JLC) education software subsidiary and said it expects an
after-tax cost of from $45 million to $50 million in the fiscal fourth
quarter. The company also expects an after-tax charge of about $5 million
to cover costs associated with work-force reductions at its corporate
offices.
Taken together, the actions announced today reflect the efforts of a
new leadership team to reshape and strengthen the company, said Robert C.
Buhrmaster, president and chief executive officer.
"We continue to develop and implement plans to restore Jostens to
acceptable financial performance," said Buhrmaster, who was named president
last June and elected CEO last month. "Over the last 10
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JOSTENS REPORTS THIRD-QUARTER RESULTS.../2
months, we've initiated a series of actions to establish a foundation for
sustained profitable growth.
"Today we are taking another major step forward, particularly with an
active restructuring plan for Jostens Learning. Although our actions may
be painful in the short term, they are necessary to return Jostens to its
historical levels of profitability."
Dividend. Jostens also said its board of directors Wednesday
declared a quarterly cash dividend of 22 cents per common share, payable
June 1 to shareholders of record at the close of business May 16. The
company has about 45.4 million shares outstanding.
JLC restructuring plan. The company approved a restructuring plan
for Jostens Learning, whose sales and earnings have declined as a result of
market changes. Under the plan, JLC will:
- Focus on the kindergarten through grade 12 market, and exit
peripheral businesses and minority investments in education and technology
companies.
- Develop educational software that runs on industry-standard
systems, and discontinue investment in proprietary systems.
- Exit the hardware business and rely on third-party vendors for
hardware service.
- Establish a new model for providing customer training and service
that clarifies expectations and meets well-defined customer needs.
- Offer complete integrated learning systems as well as stand-alone
products to meet customer demands of different market segments.
"We developed this plan for Jostens Learning following a thorough
analysis of the entire education technology marketplace," said Buhrmaster,
who noted that new JLC CEO Stan Sanderson is leading the restructuring
effort. "This plan will hone JLC's focus on what it does best -- using
software-based curriculum to help teachers help children become successful
learners -- and provide an acceptable return to shareholders."
The costs of this restructuring plan are expected to range from $45
million to $50 million and will be targeted at JLC in the following areas:
- About two-thirds will be to abandon a proprietary approach to
interactive media, and to eliminate a duplicate management system and
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JOSTENS REPORTS THIRD-QUARTER RESULTS.../3
other software.
- The remaining one-third will be split between costs to exit the
hardware sales/service business and peripheral investments, and costs for a
reorganization, including severance, relocation and facilities
consolidation.
Corporate restructuring plan. About $5 million in after-tax costs
relate to the expected fourth-quarter reduction of 150 positions primarily
in the company's general and administrative staffs.
Accounting/Restated earnings. In the third quarter, Jostens recorded
a non-cash charge of $10.1 million, or 22 cents per share, after taxes, to
update accounting estimates involving obsolete inventory, sales-force
receivables and bad debts.
In addition, the company said it would restate its earnings for the
last five fiscal years to address several items, previously noted by its
independent auditors, that had been deemed immaterial. These items are
being revised in order to more fully conform the company's accounting
practices and policies to Generally Accepted Accounting Principles. The
items relate to accounting for vacations, sales returns, an executive
retirement program and tax benefits of net operating loss carryforwards.
Also included are adjustments for certain accruals and tax benefits that
had previously been netted, and eliminates a write-down taken in fiscal
1993 in connection with the restructuring of the company's U.S. photography
business.
A table showing restated earnings follows the text of this release.
The restatement increased shareholders' investment by $2.4 million to
$315.7 million as of June 30, 1993, primarily because of previously
unrecorded tax benefits.
Sportswear sale. During the quarter, the company sold its sportswear
business to Fruit of the Loom for $46.7 million. The company recognized an
$11 million after-tax gain on the sale primarily because, in the 1993
restructuring, the sportswear business had been written down by $15
million, pre-tax, to its estimated net realizable value.
The sportswear business has now been recorded as a discontinued
operation; accordingly, historical financial statements have been
reclassified.
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JOSTENS REPORTS THIRD-QUARTER RESULTS.../4
Earnings summary. Net income for the third quarter was $1.7 million,
or 4 cents per share, compared with restated net income of $4.6 million, or
10 cents per share, a year earlier. Sales from continuing operations in
the quarter were $158.7 million, compared with $164.6 million in the third
quarter of last year. The quarter's performance reflected continued
weakness at Jostens Learning.
In the first nine months of fiscal 1994, Jostens reported restated
net income of $8 million, or 18 cents per share, compared with restated net
income of $12 million, or 26 cents per share, in the year-earlier period.
The company reported sales of $505.4 million in the first nine months of
fiscal 1994, compared with $509.9 million a year earlier. Excluding
charges, the sportswear gain and discontinued operations, earnings in the
first nine months of fiscal 1994 were $8 million, or 18 cents per share,
compared with $16.4 million, or 36 cents per share, a year earlier, a
difference more than attributable to Jostens Learning.
"It's important to keep the proper perspective. We are moving
decisively to reposition Jostens Learning, our big problem," Buhrmaster
said. "Our traditional businesses, notably jewelry, printing, photography
and recognition, have improved from last year and continue to perform well,
although I anticipate some disruption across the company because of the
large amount of change we are asking people to deal with.
"The actions taken over the last 10 months -- installing a new
management team, repositioning photography, selling sportswear,
reengineering the general and administrative areas, and restructuring JLC -
- - - prepare Jostens to move forward into a strong and successful future."
Jostens, a Fortune 500 company, is a leading provider of products and
services for the youth, education, corporate and sports performance and
recognition award markets.
-30-
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<TABLE>
JOSTENS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1994 1993 1994 1993
(Restated) (Restated)
<S> <C> <C> <C> <C>
NET SALES $158,726 $164,632 $505,432 $509,873
Cost of products sold 82,965 76,516 263,640 256,684
Selling and administrative expenses 90,291 79,107 241,124 220,424
173,256 155,623 504,764 477,108
INCOME(LOSS) FROM CONTINUING OPERATIONS (14,530) 9,009 668 32,765
Interest expense 989 1,659 4,176 5,306
INCOME(LOSS) FROM CONTINUING OPERATIONS (15,519) 7,350 (3,508) 27,459
BEFORE TAXES, DISCONTINUED OPERATIONS
AND CHANGE IN ACCOUNTING PRINCIPLE
Income taxes (6,272) 2,939 (1,421) 11,064
INCOME(LOSS) FROM CONTINUING OPERATIONS
BEFORE DISCONTINUED OPERATIONS AND
CHANGE IN ACCOUNTING PRINCIPLE (9,247) 4,411 (2,087) 16,395
DISCONTINUED OPERATIONS:
Income(Loss) from discontinued
operations, net of tax - 145 (810) (277)
Gain on sale of discontinued
operations, net of tax 10,987 - 10,987 -
Cumulative effect of change in
accounting principle, net of tax - - - (4,150)
NET INCOME $ 1,740 $ 4,556 $ 8,090 $ 11,968
EARNINGS(LOSS) PER COMMON SHARE
Before discontinued operations and $ (.20) $ .10 $ (.04) $ .36
change in accounting principle
Income(Loss) from discontinued operations - - (.02) (.01)
Gain on sale of discontinued operations .24 - .24 -
Cumulative effect of change in - - - (.09)
accounting principle
Net Income $ .04 $ .10 $ .18 $ .26
Average Shares Outstanding 45,450 45,364 45,446 45,297
Dividends Declared Per Common Share $ .22 $ .22 $ .66 $ .66
</TABLE>
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<TABLE>
JOSTENS, INC. AND SUBSIDIARIES
Net Income and Earnings Per Share (EPS)
(In thousands, except per share data)
<CAPTION>
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net income(loss) before restatement (12,097) 61,974 64,915 61,883 52,360
Net income(loss) after restatement (12,672) 59,169 61,592 58,489 51,285
EPS before restatement (0.27) 1.38 1.46 1.41 1.21
EPS after restatement (0.28) 1.32 1.38 1.34 1.19
</TABLE>
