<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 1, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5064
Jostens, Inc.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Minnesota 41-0343440
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification number)
incorporation or organization)
5501 Norman Center Drive, Minneapolis, Minnesota 55437
- ------------------------------------------------ --------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (952) 830-3300
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
On May 1, 2000 there were 33,347,250 shares of the Registrant's common stock
outstanding.
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
Part I Financial Information Page
- ---------------------------- ----
Item 1. Financial Statements
Condensed Consolidated Statements of Operations for the
Three months ended April 1, 2000 and April 3, 1999 3
Condensed Consolidated Balance Sheets as of April 1, 2000,
April 3, 1999 and January 1, 2000 4
Condensed Consolidated Statements of Cash Flows for the
Three months ended April 1, 2000 and April 3, 1999 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 14
Part II Other Information
- -------------------------
Item 1. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JOSTENS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended
---------------------------
April 1 April 3
In thousands, except per-share data 2000 1999
- ------------------------------------------------------------------------------
Net sales $174,589 $166,358
Cost of products sold 66,586 68,499
- ------------------------------------------------------------------------------
Gross profit 108,003 97,859
Selling and administrative expenses 87,253 83,302
- ------------------------------------------------------------------------------
Operating income 20,750 14,557
Net interest expense 1,727 1,039
- ------------------------------------------------------------------------------
Income before income taxes 19,023 13,518
Income taxes 7,704 5,475
- ------------------------------------------------------------------------------
Net income $ 11,319 $ 8,043
==============================================================================
Earnings per common share
Basic $0.34 $0.23
Diluted $0.34 $0.23
Weighted average common shares outstanding
Basic 33,263 34,816
Diluted 33,451 34,950
Cash dividends declared per common share $0.22 $0.22
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
--------------------------------
April 1 April 3 January 1
In thousands, except per-share data 2000 1999 2000
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $14,278 $5,206 $ 38,517
Accounts receivable, net of allowance of $6,405, $6,479 and
$5,775, respectively 132,253 128,852 107,638
Inventories 109,619 122,962 87,839
Deferred income taxes 17,400 14,682 17,400
Salespersons overdrafts, net of allowance of $6,354, $7,045 and
$6,332, respectively 24,220 21,026 26,194
Prepaid expenses and other current assets 9,848 6,255 8,721
- ------------------------------------------------------------------------------------------------------------------------
Total current assets 307,618 298,983 286,309
Other Assets
Intangibles, net 18,629 27,616 18,895
Other 18,918 9,460 17,872
- ------------------------------------------------------------------------------------------------------------------------
Total other assets 37,547 37,076 36,767
Property and equipment 273,942 263,599 271,790
Less accumulated depreciation (193,192) (173,508) (187,150)
- ------------------------------------------------------------------------------------------------------------------------
Property and equipment, net 80,750 90,091 84,640
- ------------------------------------------------------------------------------------------------------------------------
$425,915 $426,150 $407,716
========================================================================================================================
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities
Short-term borrowings $ 74,960 $ 96,910 $117,608
Accounts payable 24,443 25,670 23,641
Employee compensation 25,234 22,731 29,478
Commissions payable 42,281 38,277 26,134
Customer deposits 155,826 146,672 112,958
Income taxes 22,725 8,471 17,223
Other accrued liabilities 27,007 21,907 30,100
- ------------------------------------------------------------------------------------------------------------------------
Total current liabilities 372,476 360,638 357,142
Other noncurrent liabilities 12,578 19,871 14,064
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities 385,054 380,509 371,206
Commitments and contingencies
Shareholders' investment
Preferred shares, $1.00 par value: authorized 4,000 shares,
none issued -- -- --
Common shares, $.33 1/3 par value: authorized 100,000 shares,
issued April 1, 2000 - 33,339; April 3, 1999 - 34,506;
January 1, 2000 - 33,324 11,113 11,502 11,108
Retained earnings 35,418 41,653 31,072
Accumulated other comprehensive loss (5,670) (7,514) (5,670)
- ------------------------------------------------------------------------------------------------------------------------
Total shareholders' investment 40,861 45,641 36,510
- ------------------------------------------------------------------------------------------------------------------------
$425,915 $426,150 $407,716
========================================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
----------------------------------
April 1 April 3
In thousands 2000 1999
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities
Net income $ 11,319 $ 8,043
Depreciation 6,313 5,823
Amortization 268 549
Changes in assets and liabilities
Accounts receivable (24,615) (22,505)
Inventories (21,780) (32,468)
Salespersons overdrafts 1,974 (337)
Prepaid expenses and other current assets (1,127) (518)
Accounts payable (3,712) 2,526
Employee compensation (4,244) (4,829)
Commissions payable 16,147 16,146
Customer deposits 42,868 54,580
Income taxes 5,502 3,758
Other (4,631) (2,148)
- ----------------------------------------------------------------------------------------------
Net cash provided by operating activities 24,282 28,620
- ----------------------------------------------------------------------------------------------
Investing activities
Purchases of property and equipment (2,711) (7,267)
Equity investments (1,103) --
Other 395 13
- ----------------------------------------------------------------------------------------------
Net cash used for investing activities (3,419) (7,254)
- ----------------------------------------------------------------------------------------------
Financing activities
Net short-term borrowings (repayments) (38,134) 2,450
Dividends paid (7,331) (7,716)
Proceeds from exercise of stock options 363 1,527
Repurchases of common stock -- (15,016)
- ----------------------------------------------------------------------------------------------
Net cash used for financing activities (45,102) (18,755)
- ----------------------------------------------------------------------------------------------
Change in cash and cash equivalents (24,239) 2,611
Cash and cash equivalents, beginning of period 38,517 2,595
- ----------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 14,278 $ 5,206
==============================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
We prepared our accompanying unaudited condensed consolidated financial
statements following the requirements of the Securities and Exchange
Commission (SEC) for interim reporting. As permitted under those rules,
certain footnotes or other financial information that are normally required
by generally accepted accounting principles can be condensed or omitted.
Therefore, we suggest that these financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in our Annual Report on Form 10-K for the fiscal year ended
January 1, 2000 ("1999 Form 10-K").
Revenues, expenses, assets and liabilities can vary during each quarter of
the year. Therefore, the results and trends in these interim financial
statements may not be the same as those for the full year.
In our opinion, the accompanying unaudited condensed consolidated financial
statements include all adjustments, consisting of normal recurring items,
considered necessary to present fairly, when read in conjunction with the
1999 Form 10-K, our financial position, results of operations and cash
flows for the periods presented.
2. Earnings Per Common Share
Basic earnings per share are computed by dividing net income by the
weighted average number of common shares outstanding. Diluted earnings per
share are computed by dividing net income by the average number of common
shares outstanding, including the dilutive effects of options, restricted
stock and contingently issuable shares. Unless otherwise noted, references
are to diluted earnings per share.
Basic and diluted earnings per share were calculated using the following:
Three months ended
--------------------
April 1 April 3
In thousands, except per-share data 2000 1999
---------------------------------------------------------------------------
Weighted average common shares outstanding - basic 33,263 34,816
Dilutive shares 188 134
---------------------------------------------------------------------------
Weighted average common shares outstanding - diluted 33,451 34,950
===========================================================================
Net income for basic and diluted earnings per share $11,319 $8,043
Earnings per share - basic $0.34 $0.23
Earnings per share - diluted $0.34 $0.23
6
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
3. Special Charge
During the fourth quarter of 1999, we recorded a special charge of $20.2
million. Cash outlays associated with the charge were $1.2 million in the
first quarter of 2000. The components of the special charge and utilization
in 1999 and the first three months of 2000 are as follows:
<TABLE>
<CAPTION>
Utilization
----------------------
Three months
Initial ended Balance
In thousands accrual 1999 April 1, 2000 April 1, 2000
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employee termination benefits $ 4,910 $ -- $1,047 $3,863
Abandonment of internal use software
under development 6,455 6,245 -- 210
Write-off of impaired goodwill related
to retail class ring sales channel 4,560 4,560 -- --
Write-off of goodwill related to exiting
the college alumni direct marketing business 3,086 3,086 -- --
Other costs related to exiting the college
alumni direct marketing business 1,183 270 154 759
-------------------------------------------------------------------------------------------------
$20,194 $14,161 $1,201 $4,832
=================================================================================================
</TABLE>
We expect to complete restructuring activities and utilize the remaining
charge by the end of 2000.
As a result of the special charge, the work force will be reduced by about
100 personnel, primarily in corporate staff and executive functions and in
our college alumni direct marketing business. Cumulative terminations were
65 at April 1, 2000.
4. Inventories
Inventories were comprised of the following:
April 1 April 3 January 1
In thousands 2000 1999 2000
---------------------------------------------------------------------
Raw material and supplies $ 17,021 $ 27,305 $ 17,886
Work-in-process 60,921 61,762 29,772
Finished goods 31,677 33,895 40,181
---------------------------------------------------------------------
Total inventories $109,619 $122,962 $87,839
=====================================================================
7
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
5. Comprehensive Income
Comprehensive income and its components, net of tax, are as follows:
Three months ended
------------------------------
April 1 April 3
In thousands 2000 1999
---------------------------------------------------------------------------
Net income $11,319 $8,043
Change in cumulative translation adjustment -- 251
---------------------------------------------------------------------------
Comprehensive income $11,319 $8,294
===========================================================================
6. Business Segments
Financial information by reportable business segment is included in the
following summary:
Three months ended
-------------------------------
April 1 April 3
In thousands 2000 1999
-----------------------------------------------------------------------
Net Sales From External Customers
School Products $151,442 $142,788
Recognition 21,071 21,598
Other 2,076 1,972
-----------------------------------------------------------------------
Consolidated $174,589 $166,358
=======================================================================
Operating Income
School Products $ 28,411 $ 24,458
Recognition (308) 129
Other (7,353) (10,030)
-----------------------------------------------------------------------
Consolidated 20,750 14,557
Net interest expense 1,727 1,039
-----------------------------------------------------------------------
Income before income taxes $ 19,023 $ 13,518
=======================================================================
7. Subsequent Event
On May 9, 2000, our shareholders approved the merger and the Merger
Agreement between Jostens, Inc. and Saturn Acquisition Corporation.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Our disclosure and analysis in this report may contain some "forward-looking
statements". Forward-looking statements give our current expectations or
forecasts of future events. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may," "will,"
"expected," "intend," "estimate," "anticipate," "believe," "project," or
"continue," or the negative thereof or similar words. From time to time, we also
may provide oral or written forward-looking statements in other materials we
release to the public. Any or all of our forward-looking statements in this
report and in any public statements we make may turn out to be wrong. They can
be affected by inaccurate assumptions we might make or by known or unknown risks
or uncertainties. Consequently, no forward-looking statements can be guaranteed.
Actual results may vary materially. Investors are cautioned not to place undue
reliance on any forward-looking statements. Investors should also understand
that it is not possible to predict or identify all such factors and should not
consider the following list to be a complete statement of all potential risks
and uncertainties.
Any change in the following factors may impact the achievement of results:
o the merger with Saturn Acquisition Corporation;
o our ability to achieve the intended benefits of our corporate
restructuring announced in the fourth quarter of 1999;
o our relationship with our independent and employee sales
representatives;
o material litigation cases we are currently involved which, if decided
against us, may adversely affect our financial results;
o environmental regulations that could impose substantial costs upon us
and may adversely affect our financial results;
o the fluctuating prices of raw materials, primarily gold;
o the seasonality of our School Products segment sales and operating
income;
o our dependence on a key supplier for our synthetic and semiprecious
stones; and
o fashion and demographic trends.
The foregoing factors are not exhaustive, and new factors may emerge or changes
to the foregoing factors may occur that would impact our business.
9
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth selected information from our Condensed
Consolidated Statements of Operations.
<TABLE>
<CAPTION>
Three months ended
----------------------------------
April 1 April 3
Dollars in thousands 2000 1999 $ change % change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $174,589 $166,358 $ 8,231 4.9%
% of net sales 100.0% 100.0%
Cost of products sold 66,586 68,499 (1,913) (2.8%)
% of net sales 38.1% 41.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Gross profit 108,003 97,859 10,144 10.4%
% of net sales 61.9% 58.8%
Selling and administrative expenses 87,253 83,302 3,951 4.7%
% of net sales 50.0% 50.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Operating income 20,750 14,557 6,193 42.5%
% of net sales 11.9% 8.8%
Net interest expense 1,727 1,039 688 66.2%
% of net sales 1.0% 0.6%
- ----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 19,023 13,518 5,505 40.7%
% of net sales 10.9% 8.1%
Income taxes 7,704 5,475 2,229 40.7%
% of net sales 4.4% 3.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $11,319 $8,043 $3,276 40.7%
==================================================================================================================================
% of net sales 6.5% 4.8%
</TABLE>
Percentages in this table may reflect rounding adjustments.
Net sales
The components of the net sales increase were:
% change
from 1999
first quarter
-------------------------------------------------------------
Price/Mix 2.0%
Volume 2.8%
Currency 0.1%
-------------------------------------------------------------
Total net sales increase 4.9%
=============================================================
10
<PAGE>
Net sales for the first quarter by segment and the changes from last year were
as follows:
Three months ended
-----------------------------
April 1 April 3
In thousands 2000 1999 $ change % change
- -------------------------------------------------------------------------------
School Products $151,442 $142,788 $8,654 6.1%
Recognition 21,071 21,598 (527) (2.4%)
Other 2,076 1,972 104 5.3%
- -------------------------------------------------------------------------------
Consolidated $174,589 $166,358 $8,231 4.9%
===============================================================================
o School Products sales increased primarily due to shorter production
cycle times which allowed for earlier shipments of yearbooks and
graduation products during the first quarter of 2000 compared with the
prior year. These increases were offset by accelerated jewelry
shipments in the fourth quarter of 1999 due to improved manufacturing
efficiencies compared with the prior year, and a decline in commercial
printing volume.
o Recognition sales decreased primarily due to a change in product mix
from jewelry to brand name merchandise.
Gross Profit
Gross margin for the three months ended April 1, 2000 was 61.9 percent, compared
with 58.8 percent for the comparable period in 1999.
The increase in gross margin was primarily due to:
o favorable mix and price increases;
o shorter production cycle times which allowed for earlier shipments of
higher margin graduation products during the first quarter of 2000
compared with the prior year;
o manufacturing efficiencies in our School Products segment in 2000; and
o a $1.5 million charge in the first quarter of 1999 to close a facility
in Mexico and realign all Jewelry operations in the United States.
These increases were partially offset by:
o a decline in Recognition segment sales due to a change in product mix
from jewelry to brand name merchandise.
Selling and Administrative Expenses
Selling and administrative expenses increased 4.7 percent in the first quarter
of 2000 over the prior year period.
The increase reflects:
o higher commission expense in 2000 due to increased sales;
o higher selling expense in 2000 related to programs and initiatives
intended to increase our sales;
o higher bad debt expense in 2000; and
o higher information system expense, primarily for depreciation.
These increases were partially offset by:
o lower amortization expense in 2000 related to our write-off of
goodwill as part of the 1999 special charge;
11
<PAGE>
o lower selling and administrative expenses as a result of exiting the
college alumni direct marketing business in the fourth quarter of
1999;
o reduced spending on temporary labor in our Recognition segment in 2000
compared with 1999 as we prepared for a system implementation in the
first quarter of 1999; and
o lower legal fees in 2000 compared with 1999 related to the lawsuit
with Taylor Publishing.
Operating Income
Operating income (loss) for the first quarter by segment and the changes from
last year were as follows:
Three months ended
--------------------------------
April 1 April 3
In thousands 2000 1999 $ change % change
- -----------------------------------------------------------------------------
School Products $28,411 $24,458 $3,953 16.2%
Recognition (308) 129 (437) (338.8%)
Other (7,353) (10,030) 2,677 (26.7%)
- -----------------------------------------------------------------------------
Consolidated $20,750 $14,557 $6,193 42.5%
=============================================================================
School Products
The increase in School Products operating income of $4.0 million was
primarily due to:
o favorable mix and price increases;
o higher sales of graduation products due to shorter production
cycle times which allowed for earlier shipments in the first
quarter of 2000 compared with the prior year;
o manufacturing efficiencies in 2000;
o a $1.5 million charge in the first quarter of 1999 to close a
facility in Mexico and realign all Jewelry operations in the
United States; and
o lower legal fees in 2000 compared with 1999 related to the
lawsuit with Taylor Publishing.
These increases were partially offset by:
o timing of jewelry sales volume as shipments were accelerated in
the fourth quarter of 1999 due to manufacturing efficiencies
compared with the prior year;
o a decline in commercial printing volume;
o higher commission expense in 2000 due to increased sales;
o higher selling and marketing expense in 2000 related to programs
and initiatives intended to increase our sales;
o higher bad debt expense in 2000; and
o higher information system depreciation expense as a result of our
1999 systems implementations.
12
<PAGE>
Recognition
The decrease in Recognition operating income of $0.4 million was primarily
due to:
o a sales decline primarily due to a change in product mix from
jewelry to brand name merchandise; and
o higher information system depreciation expense as a result of our
1999 systems implementations.
This decreases were partially offset by:
o reduced spending on temporary labor in our Recognition segment in
2000 compared with 1999 as we prepared for a system
implementation in the first quarter of 1999.
Other
The decrease in Other operating loss of $2.7 million was primarily due to:
o lower selling and administrative expenses as a result of exiting
the college alumni direct marketing business in the fourth
quarter of 1999;
o lower spending in 2000 compared with 1999 related to our new
product and channel development group; and
o lower information system expense due to decreased spending
related to the year 2000 and Oracle system.
Net Interest Expense
Net interest expense increased $0.7 million in the first quarter of 2000 over
the prior year period. The year-over-year increase reflects lower average
borrowings offset by higher average interest rates in 2000.
Income Taxes
Income taxes for the first quarter of 2000 and 1999 were accrued at an overall
effective rate of 40.5 percent.
LIQUIDITY AND CAPITAL RESOURCES
Cash generated from operating activities and availability under short-term
borrowing agreements were our principal sources of liquidity for the quarter
ended April 1, 2000. These funds covered our dividend payments, investments in
property and equipment, and equity investments.
Operating Activities
Operating activities generated cash of $24.3 million in the first three months
of 2000, compared with $28.6 million for the same period in the prior year. The
decrease of $4.3 million was primarily due to the timing of customer deposits
and accounts payable, offset by higher net income and reduced inventories.
Investing Activities
Capital expenditures for the first three months of 2000 were $2.7 million,
compared with $7.3 million for the same period in 1999. The decrease of $4.6
million relates to higher capital expenditures in 1999 on information systems.
Financing Activities
Net cash used for financing activities in the first three months of 2000 was
$45.1 million, compared with $18.8 million for the same period in 1999. The
increase of $26.3 million was primarily due to repayments of short-term
borrowings as a result of delaying these payments to ensure availability of
funds until after the year 2000 date change. This increase was offset by the
decrease in common stock repurchases.
13
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risk during the three months
ended April 1, 2000. For additional information, refer to Item 7A on page 17 of
our 1999 Form 10-K.
14
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 9, 2000, we agreed in principal to settle the three purported
class action lawsuits that were filed in Minnesota district court for
the County of Hennepin against Jostens and its directors alleging
breaches of fiduciary duty by Jostens' directors in connection with
the merger. The settlement is subject to court approval. There have
been no other material developments in legal proceedings during the
three months ended April 1, 2000. For additional information, refer to
Item 3 on pages 6 and 7 of our 1999 Form 10-K.
We are occasionally a party to litigation arising in the normal course
of business. We regularly analyze current information and, as
necessary, provide accruals for probable liabilities on the eventual
disposition of these matters. We believe the effect on our
consolidated results of operations and financial position, if any, for
the disposition of all currently pending matters will not be material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the special meeting of shareholders held on May 9, 2000, Jostens
shareholders voted on the following item:
1. Approval of the merger and of the Merger Agreement between
Jostens, Inc. and Saturn Acquisition Corporation.
Votes were cast for approval of the merger and the Merger
Agreement as follows:
Votes For 23,734,518
Votes Against 1,209,304
Abstentions 147,193
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K
A Form 8-K dated and filed on April 14, 2000,
announcing that Jostens would hold a special meeting
of shareholders on Tuesday, May 9, 2000, at 10:00 a.m.
to vote on the proposed merger of Jostens with a
company controlled by Investcorp, a global investment
group, and its co-investors. Additionally, the special
proxy in connection with the said special meeting of
shareholders was mailed on April 7, 2000.
A Form 8-K dated April 27, 2000 and filed on April 28, 2000,
announcing earnings for the three months ended April 1, 2000.
A Form 8-K dated May 11, 2000 and filed on May 12, 2000,
announcing that our shareholders approved the pending merger
with a company controlled by Investcorp, a global investment
group, and its co-investors.
15
<PAGE>
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, on May 12, 2000.
JOSTENS, INC.
Registrant
By /s/ Robert C. Buhrmaster
--------------------------------------
Robert C. Buhrmaster
Chairman of the Board, President
and Chief Executive Officer
By /s/ William N. Priesmeyer
--------------------------------------
William N. Priesmeyer
Senior Vice President and Chief
Financial Officer
(Chief Accounting Officer)
16
<PAGE>
EXHIBIT 12
JOSTENS, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
<TABLE>
<CAPTION>
Six months
Three months ended Years ended ended Years ended
---------------------- ------------------------------- ------------ -----------------
April 1 April 3 January 1 January 2 January 3 December 28 June 30 June 30
Dollars in thousands 2000 1999 2000 1999 1998 1996 1996 1995
- -------------------------------------------------------------- ------------------------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations
before income taxes $19,023 $13,518 $74,659 $83,520 $93,383 $ 26 $87,479 $ 93,893
Interest expense
(excluding capitalized interest) 1,916 1,122 7,312 7,014 6,854 4,324 9,296 5,350
Portion of rent expense under
long-term operating leases
representative of an interest factor 322 398 1,483 1,233 2,133 1,070 2,103 2,100
Amortization of debt expense 23 3 174 12 12 6 107 102
- -------------------------------------------------------------- ------------------------------- ------------ ------------------
Total earnings $21,284 $15,041 $83,628 $91,779 $102,382 $5,426 $98,985 $101,445
============================================================== =============================== ============ ==================
Fixed charges
Interest expense
(including capitalized interest) $ 1,916 $ 1,267 $ 7,713 $ 7,717 $ 6,854 $4,324 $ 9,296 $ 5,350
Portion of rent expense under
long-term operating leases
representative of an interest factor 322 398 1,483 1,233 2,133 1,070 2,103 2,100
Amortization of debt expense 23 3 174 12 12 6 107 102
- -------------------------------------------------------------- ------------------------------- ------------ ------------------
Total fixed charges $ 2,261 $ 1,668 $ 9,370 $ 8,962 $ 8,999 $5,400 $11,506 $ 7,552
============================================================== =============================== ============ ==================
Ratio of earnings to fixed charges 9.4 9.0 8.9 10.2 11.4 1.0 8.6 13.4
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOSTENS,
INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTH
PERIOD ENDED APRIL 1, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-2000
<PERIOD-START> JAN-02-2000
<PERIOD-END> APR-01-2000
<CASH> 14,278
<SECURITIES> 0
<RECEIVABLES> 138,658
<ALLOWANCES> (6,405)
<INVENTORY> 109,619
<CURRENT-ASSETS> 307,618
<PP&E> 273,942
<DEPRECIATION> (193,192)
<TOTAL-ASSETS> 425,915
<CURRENT-LIABILITIES> 372,476
<BONDS> 3,600
0
0
<COMMON> 11,113
<OTHER-SE> 29,748
<TOTAL-LIABILITY-AND-EQUITY> 425,915
<SALES> 174,589
<TOTAL-REVENUES> 174,589
<CGS> 66,586
<TOTAL-COSTS> 66,586
<OTHER-EXPENSES> 87,253
<LOSS-PROVISION> 594
<INTEREST-EXPENSE> 1,727
<INCOME-PRETAX> 19,023
<INCOME-TAX> 7,704
<INCOME-CONTINUING> 11,319
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,319
<EPS-BASIC> 0.34
<EPS-DILUTED> 0.34
</TABLE>
