19. Condensed Consolidating Guarantor Information

As discussed in Note 10, Debt, Visant’s obligations under the Credit Facilities and the Senior Notes are guaranteed by certain of its wholly-owned subsidiaries on a full, unconditional and joint and several basis. The following tables present condensed consolidating financial information for Visant, as issuer, and its guarantor and non-guarantor subsidiaries. Included in the presentation of “Equity (earnings) loss in subsidiary, net of tax” is the elimination of intercompany interest expense incurred by the guarantors in the amount of $135.5 million, $138.0 million and $52.5 million in fiscal year 2012, 2011, and 2010, respectively.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND

COMPREHENSIVE (LOSS) INCOME

2012


In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net sales	$	—		$	1,087,262		$	93,151		$	(25,071	)	$	1,155,342
Cost of products sold		—			513,861			60,643			(25,014	)		549,490

Gross profit		—			573,401			32,508			(57	)		605,852
Selling and administrative expenses		(630	)		404,155			22,851			—			426,376
(Gain) loss on sale of assets		—			(1,683	)		54			—			(1,629	)
Special charges		30			75,840			35			—			75,905

Operating income		600			95,089			9,568			(57	)		105,200
Gain on redemption of debt		(947	)		—			—			—			(947	)

Income before interest and taxes		1,547			95,089			9,568			(57	)		106,147
Net interest expense		156,648			137,639			143			(135,506	)		158,924

(Loss) income before income taxes		(155,101	)		(42,550	)		9,425			135,449			(52,777	)
(Benefit from) provision for income taxes		(8,305	)		10,702			3,445			(19	)		5,823

(Loss) income from operations		(146,796	)		(53,252	)		5,980			135,468			(58,600	)
Equity (earnings) in subsidiary, net of tax		(88,196	)		(5,980	)		—			94,176			—

Net (loss) income	$	(58,600	)	$	(47,272	)	$	5,980		$	41,292		$	(58,600	)


Other comprehensive (loss) income, net of tax:
Deferred loss on derivatives		(1,960	)		—			—			—			(1,960	)
Change in cumulative translation adjustment		(167	)		—			(167	)		167			(167	)
Minimum pension liability		(23,269	)		(23,269	)		—			23,269			(23,269	)

Comprehensive (loss) income	$	(83,996	)	$	(70,541	)	$	5,813		$	64,728		$	(83,996	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND

COMPREHENSIVE (LOSS) INCOME

2011


In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net sales	$	—		$	1,154,477		$	86,383		$	(23,068	)	$	1,217,792
Cost of products sold		—			538,404			57,221			(23,014	)		572,611

Gross profit		—			616,073			29,162			(54	)		645,181
Selling and administrative expenses		2,943			427,731			19,127			—			449,801
Gain on sale of assets		—			(910	)		—			—			(910	)
Special charges		320			44,064			29			—			44,413

Operating (loss) income		(3,263	)		145,188			10,006			(54	)		151,877
Net interest expense		161,931			140,055			142			(137,992	)		164,136

(Loss) income before income taxes		(165,194	)		5,133			9,864			137,938			(12,259	)
(Benefit from) provision for income taxes		(8,966	)		9,906			1,709			(24	)		2,625

(Loss) income from operations		(156,228	)		(4,773	)		8,155			137,962			(14,884	)
Equity (earnings) in subsidiary, net of tax		(141,344	)		(8,155	)		—			149,499			—

Net (loss) income	$	(14,884	)	$	3,382		$	8,155		$	(11,537	)	$	(14,884	)


Other comprehensive (loss) income, net of tax:
Deferred loss on derivatives		(3,427	)		—			—			—			(3,427	)
Change in cumulative translation adjustment		(1,137	)		—			(1,137	)		1,137			(1,137	)
Minimum pension liability		(29,001	)		(29,001	)		—			29,001			(29,001	)

Comprehensive (loss) income	$	(48,449	)	$	(25,619	)	$	7,018		$	18,601		$	(48,449	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND

COMPREHENSIVE INCOME

2010


*In thousands*	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net sales	$	—		$	1,193,546		$	60,200		$	(12,859	)	$	1,240,887
Cost of products sold		—			553,225			36,299			(12,674	)		576,850

Gross profit		—			640,321			23,901			(185	)		664,037
Selling and administrative expenses		4,751			439,652			16,824			—			461,227
Loss on sale of assets		—			269			—			—			269
Special charges		—			4,298			422			—			4,720

Operating (loss) income		(4,751	)		196,102			6,655			(185	)		197,821
Loss on repurchase and redemption of debt		9,693			—			—			—			9,693

(Loss) income before interest and taxes		(14,444	)		196,102			6,655			(185	)		188,128
Net interest expense		88,853			54,919			36			(52,515	)		91,293

(Loss) income before income taxes		(103,297	)		141,183			6,619			52,330			96,835
(Benefit from) provision for income taxes		(18,896	)		59,035			601			(72	)		40,668

(Loss) income from operations		(84,401	)		82,148			6,018			52,402			56,167
Equity (earnings) in subsidiary, net of tax		(140,568	)		(6,018	)		—			146,586			—

Net income	$	56,167		$	88,166		$	6,018		$	(94,184	)	$	56,167


Other comprehensive income, net of tax:
Change in cumulative translation adjustment		(227	)		—			(227	)		227			(227	)
Minimum pension liability		(2,222	)		(2,222	)		—			2,222			(2,222	)

Comprehensive income	$	53,718		$	85,944		$	5,791		$	(91,735	)	$	53,718

CONDENSED CONSOLIDATING BALANCE SHEET

2012


*In thousands*	Visant			Guarantors			Non- Guarantors		Eliminations			Total
ASSETS
Cash and cash equivalents	$	48,590		$	3,286		$	8,320	$	—		$	60,196
Accounts receivable, net		1,474			91,690			11,621		—			104,785
Inventories		—			106,704			5,057		(418	)		111,343
Salespersons overdrafts, net		—			22,912			1,232		—			24,144
Prepaid expenses and other current assets		1,777			14,861			1,314		—			17,952
Income tax receivable		2,928			—			—		—			2,928
Intercompany receivable		379			6,100			395		(6,874	)		—
Deferred income taxes		10,582			14,548			54		—			25,184

Total current assets		65,730			260,101			27,993		(7,292	)		346,532
Property, plant and equipment, net		55			200,500			3,110		—			203,665
Goodwill		—			894,787			24,159		—			918,946
Intangibles, net		—			390,391			10,932		—			401,323
Deferred financing costs, net		42,740			—			—		—			42,740
Deferred income taxes		—			—			2,472		—			2,472
Intercompany receivable		527,924			—			58,662		(586,586	)		—
Other assets		844			9,617			267		—			10,728
Investment in subsidiaries		742,380			103,083			—		(845,463	)		—

	$	1,379,673		$	1,858,479		$	127,595	$	(1,439,341	)	$	1,926,406

LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Accounts payable	$	5,710		$	44,428		$	4,963	$	2		$	55,103
Accrued employee compensation		6,952			20,883			3,676		—			31,511
Customer deposits		—			167,328			7,817		—			175,145
Commissions payable		—			11,649			696		—			12,345
Income taxes payable		51,917			(2,949	)		515		(162	)		49,321
Interest payable		34,403			111			—		—			34,514
Current portion of long-term debt and capital leases		10,668			4,556			12		—			15,236
Intercompany payable		1,982			(522	)		5,415		(6,875	)		—
Other accrued liabilities		3,539			21,357			1,256		—			26,152

Total current liabilities		115,171			266,841			24,350		(7,035	)		399,327
Long-term debt and capital leases, less current maturities		1,862,908			6,305			2		—			1,869,215
Intercompany payable		—			586,843			—		(586,843	)		—
Deferred income taxes		1,685			132,871			147		—			134,703
Pension liabilities, net		23,829			105,798			—		—			129,627
Other noncurrent liabilities		17,417			17,441			13		—			34,871

Total liabilities		2,021,010			1,116,099			24,512		(593,878	)		2,567,743
Mezzanine equity		1,216			—			—		—			1,216
Stockholder’s (deficit) equity		(642,553	)		742,380			103,083		(845,463	)		(642,553	)

	$	1,379,673		$	1,858,479		$	127,595	$	(1,439,341	)	$	1,926,406

CONDENSED CONSOLIDATING BALANCE SHEET

2011


*In thousands*	Visant			Guarantors			Non- Guarantors		Eliminations			Total
ASSETS
Cash and cash equivalents	$	30,138		$	2,334		$	3,542	$	—		$	36,014
Accounts receivable, net		1,099			96,626			15,113		—			112,838
Inventories		—			104,998			4,652		(360	)		109,290
Salespersons overdrafts, net		—			29,158			916		—			30,074
Prepaid expenses and other current assets		—			18,434			879		—			19,313
Income tax receivable		2,022			—			—		—			2,022
Intercompany receivable		—			12,400			—		(12,400	)		—
Deferred income taxes		3,006			18,806			84		—			21,896

Total current assets		36,265			282,756			25,186		(12,760	)		331,447
Property, plant and equipment, net		172			208,524			1,354		—			210,050
Goodwill		—			959,004			24,110		—			983,114
Intangibles, net		—			438,022			10,372		—			448,394
Deferred financing costs, net		52,486			—			—		—			52,486
Deferred income taxes		—			—			2,564		—			2,564
Intercompany receivable		592,610			14,303			56,229		(663,142	)		—
Other assets		847			10,429			257		—			11,533
Investment in subsidiaries		812,921			97,270			—		(910,191	)		—
Prepaid pension costs		—			4,906			—		—			4,906

	$	1,495,301		$	2,015,214		$	120,072	$	(1,586,093	)	$	2,044,494

LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Accounts payable	$	5,135		$	44,647		$	5,570	$	(2	)	$	55,350
Accrued employee compensation		6,579			21,405			2,563		—			30,547
Customer deposits		—			168,904			8,092		—			176,996
Commissions payable		—			20,651			714		—			21,365
Income taxes payable		28,478			1,414			62		(142	)		29,812
Interest payable		34,204			90			—		—			34,294
Current portion of long-term debt and capital leases		12			3,996			18		—			4,026
Intercompany payable		12,075			(4,275	)		4,598		(12,398	)		—
Other accrued liabilities		13,553			21,673			1,158		—			36,384

Total current liabilities		100,036			278,505			22,775		(12,542	)		388,774
Long-term debt and capital leases, less current maturities		1,905,214			8,351			14		—			1,913,579
Intercompany payable		14,303			649,057			—		(663,360	)		—
Deferred income taxes		(5,783	)		163,878			—		—			158,095
Pension liabilities, net		18,274			78,900			—		—			97,174
Other noncurrent liabilities		21,236			23,602			13		—			44,851

Total liabilities		2,053,280			1,202,293			22,802		(675,902	)		2,602,473
Mezzanine equity		578			—			—		—			578
Stockholder’s (deficit) equity		(558,557	)		812,921			97,270		(910,191	)		(558,557	)

	$	1,495,301		$	2,015,214		$	120,072	$	(1,586,093	)	$	2,044,494

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

2012


*In thousands*	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net (loss) income	$	(58,600	)	$	(47,272	)	$	5,980		$	41,292		$	(58,600	)
Other cash provided by operating activities		56,320			153,545			1,768			(41,292	)		170,341

Net cash (used in) provided by operating activities		(2,280	)		106,273			7,748			—			111,741
Purchases of property, plant and equipment		—			(49,781	)		(2,351	)		—			(52,132	)
Additions to intangibles		—			(2,077	)		(1,171	)		—			(3,248	)
Proceeds from sale of property and equipment		—			4,727			—			—			4,727
Other investing activities, net		—			(2,099	)		2,100			—			1

Net cash used in investing activities		—			(49,230	)		(1,422	)		—			(50,652	)
Short-term borrowings		107,000			—			—			—			107,000
Short-term repayments		(107,000	)		—			—			—			(107,000	)
Repayments of long-term debt and capital leases		(34,175	)		(4,508	)		(17	)		—			(38,700	)
Proceeds from issuance of long-term debt		—			2,094			—			—			2,094
Intercompany payable (receivable)		54,907			(54,907	)		—			—			—
Dividends		—			1,230			(1,230	)		—			—

Net cash provided by (used in) financing activities		20,732			(56,091	)		(1,247	)		—			(36,606	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(301	)		—			(301	)

Increase in cash and cash equivalents		18,452			952			4,778			—			24,182
Cash and cash equivalents, beginning of period		30,138			2,334			3,542			—			36,014

Cash and cash equivalents, end of period	$	48,590		$	3,286		$	8,320		$	—		$	60,196

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

2011


In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net (loss) income	$	(14,884	)	$	3,382		$	8,155		$	(11,537	)		(14,884	)
Other cash provided by (used in) operating activities		24,825			109,545			(8,495	)		11,538			137,413

Net cash provided by (used in) operating activities		9,941			112,927			(340	)		1			122,529
Purchases of property, plant and equipment		—			(54,648	)		(877	)		—			(55,525	)
Additions to intangibles		—			(212	)		—			—			(212	)
Proceeds from sale of property and equipment		—			6,734			—			—			6,734
Acquisition of business, net of cash acquired		—			(4,681	)		—			—			(4,681	)
Other investing activities, net		—			(1,233	)		1,233			—			—

Net cash (used in) provided by investing activities		—			(54,040	)		356			—			(53,684	)
Short-term borrowings		83,000			—			—			—			83,000
Short-term repayments		(83,000	)		—			—			—			(83,000	)
Repayments of long-term debt and capital leases		(72,479	)		(3,802	)		(16	)		—			(76,297	)
Proceeds from issuance of long-term debt		—			349			—			—			349
Intercompany payable (receivable)		62,461			(62,460	)		—			(1	)		—
Dividends		—			1,262			(1,262	)		—			—
Debt financing costs		(16,579	)		—			—			—			(16,579	)

Net cash used in financing activities		(26,597	)		(64,651	)		(1,278	)		(1	)		(92,527	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(501	)		—			(501	)

Decrease in cash and cash equivalents		(16,656	)		(5,764	)		(1,763	)		—			(24,183	)
Cash and cash equivalents, beginning of period		46,794			8,098			5,305			—			60,197

Cash and cash equivalents, end of period	$	30,138		$	2,334		$	3,542		$	—		$	36,014

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

2010


In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net income	$	56,167		$	88,166		$	6,018		$	(94,184	)	$	56,167
Other cash (used in) provided by operating activities		(17,216	)		81,238			(9,638	)		94,184			148,568

Net cash provided by (used in) operating activities		38,951			169,404			(3,620	)		—			204,735
Purchases of property, plant and equipment		—			(50,108	)		(115	)		—			(50,223	)
Additions to intangibles		—			(1,039	)		—			—			(1,039	)
Proceeds from sale of property and equipment		—			751			—			—			751
Acquisition of businesses, net of cash acquired		—			(9,896	)		—			—			(9,896	)
Other investing activities, net		—			9			—			—			9

Net cash used in investing activities		—			(60,283	)		(115	)		—			(60,398	)
Short-term borrowings		329,400			—			—			—			329,400
Short-term repayments		(329,400	)		—			—			—			(329,400	)
Repayment of long-term debt and capital leases		(820,721	)		(2,916	)		(561	)		—			(824,198	)
Proceeds from issuance of long-term debt		1,975,000			8,234			—			—			1,983,234
Intercompany payable (receivable)		111,217			(111,217	)		—			—			—
Distribution to shareholder		(1,303,731	)		—			—			—			(1,303,731	)
Debt financing costs and related expenses		(52,262	)		—			—			—			(52,262	)
Other financing activities		—			1,051			(1,051	)		—			—

Net cash used in financing activities		(90,497	)		(104,848	)		(1,612	)		—			(196,957	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(276	)		—			(276	)

(Decrease) increase in cash and cash equivalents		(51,546	)		4,273			(5,623	)		—			(52,896	)
Cash and cash equivalents, beginning of period		98,340			3,825			10,928			—			113,093

Cash and cash equivalents, end of period	$	46,794		$	8,098		$	5,305		$	—		$	60,197