10-Q

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended September 23, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from ___________________ to

Commission File No. 1-11257

CHECKPOINT SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

Pennsylvania	22-1895850
(State of Incorporation)	(IRS Employer Identification No.)
101 Wolf Drive, PO Box 188, Thorofare, New Jersey	08086
(Address of principal executive offices)	(Zip Code)

856-848-1800

(Registrant’s telephone number, including area code)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

As ofOctober 29, 2012, there were 40,594,789 shares of the Company’s Common Stock outstanding.

CHECKPOINT SYSTEMS, INC.

FORM 10-Q

Table of Contents

	Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Comprehensive Income (Loss)	5
Consolidated Statements of Equity	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3. Quantitative and Qualitative Disclosures About Market Risk	62
Item 4. Controls and Procedures	63
PART II. OTHER INFORMATION	63
Item 1. Legal Proceedings	63
Item 1A. Risk Factors	63
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3. Defaults Upon Senior Securities	65
Item 4. Mine Safety Disclosures	65
Item 5. Other Information	65
Item 6. Exhibits	66
SIGNATURES	67
INDEX TO EXHIBITS	68
Rule 13a-14(a)/15d-14(a) Certification of George Babich, Jr., Interim Chief Executive Officer and President
Rule 13a-14(a)/15d-14(a) Certification of Raymond D. Andrews, Senior Vice President and Chief Financial Officer
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document
XBRL Taxonomy Extension Definition Document

2

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(amounts in thousands)	September 23, 2012			December 25, 2011			*
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	75,124		$	93,481
Restricted cash	—			291
Accounts receivable, net of allowance of $15,107 and $12,627	179,034			208,889
Inventories	110,051			130,987
Other current assets	45,602			44,548
Deferred income taxes	7,776			7,720
Assets of discontinued operations held for sale	3,836			6,320
Total Current Assets	421,423			492,236
REVENUE EQUIPMENT ON OPERATING LEASE, net	1,804			1,920
PROPERTY, PLANT, AND EQUIPMENT, net	114,332			132,161
GOODWILL	222,958			286,103
OTHER INTANGIBLES, net	76,954			84,557
DEFERRED INCOME TAXES	26,946			27,241
OTHER ASSETS	13,363			20,263
TOTAL ASSETS	$	877,780		$	1,044,481
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term debt	$	4,360		$	21,778
Accounts payable	64,757			68,886
Accrued compensation and related taxes	29,507			27,620
Other accrued expenses	54,286			58,242
Income taxes	—			4,080
Unearned revenues	11,545			22,142
Restructuring reserve	15,780			17,612
Accrued pensions — current	4,429			4,453
Other current liabilities	28,727			32,867
Liabilities of discontinued operations held for sale	1,078			1,440
Total Current Liabilities	214,469			259,120
LONG-TERM DEBT, LESS CURRENT MATURITIES	111,335			128,684
ACCRUED PENSIONS	78,381			78,815
OTHER LONG-TERM LIABILITIES	32,651			29,894
DEFERRED INCOME TAXES	18,817			18,628
COMMITMENTS AND CONTINGENCIES
CHECKPOINT SYSTEMS, INC. STOCKHOLDERS’ EQUITY:
Preferred stock, no par value, 500,000 shares authorized, none issued	—			—
Common stock, par value $.10 per share, 100,000,000 shares authorized, issued 44,600,006 and 44,241,105 shares	4,460			4,424
Additional capital	423,165			418,211
Retained earnings	53,782			164,268
Common stock in treasury, at cost, 4,035,912 and 4,035,912 shares	(71,520		)	(71,520		)
Accumulated other comprehensive income, net of tax	11,370			12,741
TOTAL CHECKPOINT SYSTEMS, INC. STOCKHOLDERS’ EQUITY	421,257			528,124
NON-CONTROLLING INTERESTS	870			1,216
TOTAL EQUITY	422,127			529,340
TOTAL LIABILITIES AND EQUITY	$	877,780		$	1,044,481

* Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

See Notes to Consolidated Financial Statements

3

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands, except per share data)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
				(As Revised)						(As Revised)
Net revenues	$	188,163		$	215,049		$	548,856		$	613,745
Cost of revenues	116,149			133,961			347,626			377,588
Gross profit	72,014			81,088			201,230			236,157
Selling, general, and administrative expenses	59,950			67,802			197,325			219,294
Research and development	4,441			5,476			13,132			15,612
Restructuring expenses	4,112			17,279			27,096			20,371
Goodwill impairment	—			—			64,437			—
Acquisition costs	17			2			127			2,205
Other expense	—			289			745			587
Other operating income	—			2,590			—			19,262
Operating income (loss)	3,494			(7,170		)	(101,632		)	(2,650		)
Interest income	396			984			1,291			2,677
Interest expense	4,668			2,221			8,542			5,781
Other gain (loss), net	325			(783		)	29			(1,049		)
Loss from continuing operations before income taxes	(453		)	(9,190		)	(108,854		)	(6,803		)
Income taxes expense (benefit)	3,765			38,355			(810		)	38,788
Net loss from continuing operations	(4,218		)	(47,545		)	(108,044		)	(45,591		)
Loss from discontinued operations, net of tax expense of $0, $433, $0, and $0	(1,167		)	(1,069		)	(2,797		)	(1,874		)
Net loss	(5,385		)	(48,614		)	(110,841		)	(47,465		)
Less: (loss) earnings attributable to non-controlling interests	(51		)	48			(355		)	50
Net loss attributable to Checkpoint Systems, Inc.	$	(5,334	)	$	(48,662	)	$	(110,486	)	$	(47,515	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)

See Notes to Consolidated Financial Statements

4

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
				(As Revised)						(As Revised)
Net loss	$	(5,385	)	$	(48,614	)	$	(110,841	)	$	(47,465	)
Amortization of pension plan actuarial losses, net of tax	68			253			210			9
Change in realized and unrealized (losses) gains on derivative hedges, net of tax	(799		)	1,814			(801		)	52
Foreign currency translation adjustment	6,305			(12,423		)	(771		)	9,594
Comprehensive income (loss)	189			(58,970		)	(112,203		)	(37,810		)
Less: comprehensive (loss) income attributable to non-controlling interests	(65		)	48			(346		)	50
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.	$	254		$	(59,018	)	$	(111,857	)	$	(37,860	)

See Notes to Consolidated Financial Statements.

5

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(amounts in thousands)	Checkpoint Systems, Inc. Stockholders
	Common Stock			Additional Capital			Retained Earnings			Treasury Stock				Accumulated Other Comprehensive Income			Non-controlling Interests			Total Equity
	Shares	Amount								Shares	Amount
Balance, December 26, 2010 (As Revised)	43,843	$	4,384	$	407,383		$	230,837		4,036	$	(71,520	)	$	10,470		$	—		$	581,554
Net loss							(66,569		)								(57		)	(66,626		)
Exercise of stock-based compensation and awards released	398	40		2,170																2,210
Tax benefit on stock-based compensation				77																77
Stock-based compensation expense				7,408																7,408
Deferred compensation plan				1,173																1,173
Non-controlling interest of acquired entities																	1,271			1,271
Amortization of pension plan actuarial losses, net of tax														137						137
Change in realized and unrealized gains on derivative hedges, net of tax														1,165						1,165
Recognized loss on pension, net of tax														(2,571		)				(2,571		)
Foreign currency translation adjustment														3,540			2			3,542
Balance, December 25, 2011	44,241	$	4,424	$	418,211		$	164,268		4,036	$	(71,520	)	$	12,741		$	1,216		$	529,340
Net loss							(110,486		)								(355		)	(110,841		)
Exercise of stock-based compensation and awards released	359	36		886																922
Tax benefit on stock-based compensation				(424		)														(424		)
Stock-based compensation expense				3,822																3,822
Deferred compensation plan				670																670
Amortization of pension plan actuarial losses, net of tax														210						210
Change in realized and unrealized losses on derivative hedges, net of tax														(801		)				(801		)
Foreign currency translation adjustment														(780		)	9			(771		)
Balance, September 23, 2012	44,600	$	4,460	$	423,165		$	53,782		4,036	$	(71,520	)	$	11,370		$	870		$	422,127

See Notes to Consolidated Financial Statements

6

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(amounts in thousands)
Nine months (39 weeks) ended	September 23, 2012			September 25, 2011
Cash flows from operating activities:				(As Revised)
Net loss	$	(110,841	)	$	(47,465	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	25,184			27,367
Deferred taxes	(967		)	48,045
Stock-based compensation	3,737			6,208
Provision for losses on accounts receivable	3,400			2,237
Excess tax benefit on stock compensation	(97		)	(598		)
Gain on disposal of fixed assets	(1,069		)	(19		)
Intangible impairment	1,442			—
Goodwill impairment	64,807			—
Restructuring related asset impairment	6,156			7,479
Decrease (increase) in current assets, net of the effects of acquired companies:
Accounts receivable	32,875			(2,035		)
Inventories	19,634			(35,329		)
Other current assets	633			(29,507		)
(Decrease) increase in current liabilities, net of the effects of acquired companies:
Accounts payable	(4,562		)	4,242
Income taxes	(3,319		)	(2,869		)
Unearned revenues	(10,143		)	11,798
Restructuring reserve	(1,983		)	7,526
Other current and accrued liabilities	(3,696		)	7,855
Net cash provided by operating activities	21,191			4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(10,415		)	(14,424		)
Acquisitions of businesses, net of cash acquired	—			(75,937		)
Change in restricted cash	291			(82		)
Proceeds from sale of real estate	4,560			—
Other investing activities	1,148			408
Net cash used in investing activities	(4,416		)	(90,035		)
Cash flows from financing activities:
Proceeds from stock issuances	922			2,336
Excess tax benefit on stock compensation	97			598
Proceeds from short-term debt	3,451			16
Payment of short-term debt	(11,481		)	(1,612		)
Net change in factoring and bank overdrafts	(9,121		)	(2,391		)
Proceeds from long-term debt	3,000			63,750
Payment of long-term debt	(20,439		)	(47,701		)
Debt issuance costs	(2,113		)	—
Net cash (used in) provided by financing activities	(35,684		)	14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents	552			4,031
Net decrease in cash and cash equivalents	(18,357		)	(66,073		)
Cash and cash equivalents:
Beginning of period	93,481			172,473
End of period	$	75,124		$	106,400

See Notes to Consolidated Financial Statements

7

CHECKPOINT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Revision of Previously Issued Consolidated Financial Statements

Checkpoint Systems, Inc. (the "Company") is revising herein its historical financial statements for the three and nine months ended September 25, 2011. As previously disclosed in our Annual Report on Form 10-K for the year ended December 25, 2011, the revision is the result of the Company making corrections for the combined effect of financial statement errors attributable to the intentional misstatement of expenses due to the improper and fraudulent activities of a certain former employee of the Company's Canada sales subsidiary. The Company assessed the impact of these errors on its prior interim financial statements and concluded that these errors were not material, individually or in the aggregate to those financial statements. Although the effect of these errors was not material to any previously issued financial statements, the cumulative effect of correcting the newly identified errors in the prior year would have been material for the fiscal year 2011. Consequently, the Company has revised its prior period financial statements. All amounts in this Quarterly Report on Form 10-Q affected by the revision adjustments reflect such amounts as revised.

Description of Revision Adjustments

Set forth below is a description of the revision adjustments reflected in the revision of previously issued financial statements.

Overstatement of expenses due to the improper and fraudulent activities of a certain former employee of the Company’s Canada sales subsidiary - In December of 2011, we identified errors in our financial statements resulting from improper and fraudulent activities of a certain former employee of our Canada sales subsidiary as part of the transition of our Canadian operations into our shared service environment in North America. Subsequent to the discovery of such errors, we retained outside counsel to undertake an investigation with the assistance of forensic accountants and internal auditors. The results of this investigation concluded that in the period from 2005 through the fourth quarter of 2011, the then Controller of our Canadian operations was able to misappropriate cash through various schemes. The defalcation of cash was concealed by overriding internal controls at the subsidiary which had the effect of misstating certain accounts including cash, accounts receivable, and inventories as well as income taxes and non-income taxes payable and operating expenses. Based on this investigation, it was determined that improper and fraudulent activities by a certain employee of the subsidiary affected the financial reporting of the subsidiary and that the improper and fraudulent activities were contained within the Canada sales subsidiary.

The total cumulative gross financial statement impact of the improper and fraudulent activities was approximately $5.2 million and impacted fiscal years 2005 through 2011 of which $1.1 million was recovered by the Company from the perpetrator during the fourth quarter of 2011, resulting in a net cumulative financial statement impact of $4.1 million. The fiscal year 2011 financial statement impact was $0.2 million income due to the recovery of $1.1 million offset by expense of $0.9 million. We incurred additional expenses related to the improper and fraudulent activities of $0.7 million during 2012. The financial statement impacts of the improper and fraudulent Canadian activities have been included in other expense in the Consolidated Statements of Operations. We filed a claim during the second quarter of 2012 with our insurance provider for the unrecovered amount of the loss. On October 10, 2012, the Company received compensation of $4.7 million for the financial impact of the fraudulent Canadian activities from our insurance provider. The income from the settlement will be recorded in the fourth quarter of 2012 in other expense in the Consolidated Statement of Operations. For further information, refer to Note 15, "Subsequent Events".

The improper and fraudulent activities by a certain former employee of the subsidiary included (i) the misappropriation of cash including cash payments to improper vendors; (ii) the intentional overstatement of cash balances; (iii) the intentional understatement of accounts receivable and inventory reserve accounts; (iv) the intentional understatement of income taxes and non-income taxes payable; and (v) recording arbitrary balance sheet adjustments to increase cash and liabilities.

In addition to the revisions described above, the effects of discontinued operations presentation on previously reported amounts have been included in order to reconcile between previously reported amounts and the final amounts as revised in this Quarterly Report on Form 10-Q.

8

The following tables summarize the effects of the adjustments on basic (loss) earnings per share, diluted (loss) earnings per share, operating (loss) income, income taxes, (loss) earnings from continuing operations before income taxes, and net (loss) earnings attributable to Checkpoint Systems, Inc. for the three and nine months ended September 25, 2011.

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
Loss attributable to Checkpoint Systems, Inc. per share	Basic EPS			Diluted EPS			Basic EPS			Diluted EPS
As Previously Reported	$	(1.21	)	$	(1.21	)	$	(1.21	)	$	(1.21	)
Revision Adjustments:
Canada Adjustments	0.01			0.01			0.04			0.04
As Revised for Revision Adjustments	$	(1.20	)	$	(1.20	)	$	(1.17	)	$	(1.17	)
Discontinued Operations Adjustments	—			—			—			—
As Revised in this Quarterly Report on Form 10-Q	$	(1.20	)	$	(1.20	)	$	(1.17	)	$	(1.17	)

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	Net Loss Attributable to Checkpoint Systems, Inc.			Loss from Continuing  Operations Before Income Taxes			Net Loss Attributable to Checkpoint Systems, Inc.			Loss from Continuing  Operations Before Income Taxes
As Previously Reported	$	(49,259	)	$	(10,623	)	$	(49,050	)	$	(10,727	)
Revision Adjustments:
Canada Adjustments	597			797			1,535			2,050
As Revised for Revision Adjustments	$	(48,662	)	$	(9,826	)	$	(47,515	)	$	(8,677	)
Discontinued Operations Adjustments	—			636			—			1,874
As Revised in this Quarterly Report on Form 10-Q	$	(48,662	)	$	(9,190	)	$	(47,515	)	$	(6,803	)

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	Income Tax Expense			Operating Loss			Income Tax Expense		Operating Loss
As Previously Reported	$	38,588		$	(8,603	)	$	38,273	$	(6,574	)
Revision Adjustments:
Canada Adjustments	200			797			515		2,050
As Revised for Revision Adjustments	$	38,788		$	(7,806	)	$	38,788	$	(4,524	)
Discontinued Operations Adjustments	(433		)	636			—		1,874
As Revised in this Quarterly Report on Form 10-Q	$	38,355		$	(7,170	)	$	38,788	$	(2,650	)

9

Comparison of revised financial statements to financial statements as originally reported

The following tables compare our previously reported Consolidated Statements of Operations, Stockholders’ Equity, Comprehensive Income, and Cash Flows for the three and nine months ended September 25, 2011 to the corresponding financial statements for those years As Revised.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter
	(13 weeks) Ended
	September 25, 2011
(amounts in thousands, except per share data)	As Previously Reported			As Revised for Revision Adjustments			As Revised in this Quarterly Report on Form 10-Q
Net revenues	$	218,126		$	218,126		$	215,049
Cost of revenues	136,506			136,506			133,961
Gross profit	81,620			81,620			81,088
Selling, general, and administrative expenses	69,943			68,857			67,802
Research and development	5,476			5,476			5,476
Restructuring expenses	17,392			17,392			17,279
Acquisition costs	2			2			2
Other expense	—			289			289
Other operating income	2,590			2,590			2,590
Operating loss	(8,603		)	(7,806		)	(7,170		)
Interest income	984			984			984
Interest expense	2,221			2,221			2,221
Other gain (loss), net	(783		)	(783		)	(783		)
Loss from continuing operations before income taxes	(10,623		)	(9,826		)	(9,190		)
Income taxes	38,588			38,788			38,355
Net loss from continuing operations	(49,211		)	(48,614		)	(47,545		)
Loss from discontinued operations, net of tax expense of $0, $0, and $433	—			—			(1,069		)
Net loss	(49,211		)	(48,614		)	(48,614		)
Less: gain attributable to non-controlling interests	48			48			48
Net loss attributable to Checkpoint Systems, Inc.	$	(49,259	)	$	(48,662	)	$	(48,662	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.20	)	$	(1.17	)
Loss from discontinued operations, net of tax	—			—			(0.03		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.20	)	$	(1.20	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.20	)	$	(1.17	)
Loss from discontinued operations, net of tax	—			—			(0.03		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.20	)	$	(1.20	)

The As Revised in this Quarterly Report on Form 10-Q amounts include the effects of discontinued operations presentation on previously reported amounts. Refer to Note 14 to the Consolidated Financial Statements for discontinued operations presentation adjustments to previously reported amounts.

10

	Nine Months
	(39 weeks) Ended
	September 25, 2011
(amounts in thousands, except per share data)	As Previously Reported			As Revised for Revision Adjustments			As Revised in this Quarterly Report on Form 10-Q
Net revenues	$	622,730		$	622,730		$	613,745
Cost of revenues	385,244			385,244			377,588
Gross profit	237,486			237,486			236,157
Selling, general, and administrative expenses	225,021			222,384			219,294
Research and development	15,612			15,612			15,612
Restructuring expenses	20,484			20,484			20,371
Acquisition costs	2,205			2,205			2,205
Other expense	—			587			587
Other operating income	19,262			19,262			19,262
Operating loss	(6,574		)	(4,524		)	(2,650		)
Interest income	2,677			2,677			2,677
Interest expense	5,781			5,781			5,781
Other gain (loss), net	(1,049		)	(1,049		)	(1,049		)
Loss from continuing operations before income taxes	(10,727		)	(8,677		)	(6,803		)
Income taxes expense	38,273			38,788			38,788
Net loss from continuing operations	(49,000		)	(47,465		)	(45,591		)
Loss from discontinued operations, net of tax expense of $0, $0, and $0	—			—			(1,874		)
Net loss	(49,000		)	(47,465		)	(47,465		)
Less: gain attributable to non-controlling interests	50			50			50
Net loss attributable to Checkpoint Systems, Inc.	$	(49,050	)	$	(47,515	)	$	(47,515	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.17	)	$	(1.13	)
Loss from discontinued operations, net of tax	—			—			(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.17	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.17	)	$	(1.13	)
Loss from discontinued operations, net of tax	—			—			(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.17	)	$	(1.17	)

The As Revised in this Quarterly Report on Form 10-Q amounts include the effects of discontinued operations presentation on previously reported amounts. Refer to Note 14 to the Consolidated Financial Statements for discontinued operations presentation adjustments to previously reported amounts.

11

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	As Previously Reported			As Revised in this Quarterly Report on Form 10-Q			As Previously Reported			As Revised in this Quarterly Report on Form 10-Q
Net loss	$	(49,211	)	$	(48,614	)	$	(49,000	)	$	(47,465	)
Amortization of pension plan actuarial losses, net of tax	253			253			9			9
Change in realized and unrealized gains on derivative hedges, net of tax	1,814			1,814			52			52
Foreign currency translation adjustment	(12,464		)	(12,423		)	9,621			9,594
Comprehensive loss	(59,608		)	(58,970		)	(39,318		)	(37,810		)
Less: comprehensive income attributable to non-controlling interests	48			48			50			50
Comprehensive loss attributable to Checkpoint Systems, Inc.	$	(59,656	)	$	(59,018	)	$	(39,368	)	$	(37,860	)

There is no discontinued operations impact on the presentation of the As Revised in this Quarterly Report on Form 10-Q amounts.

12

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)	September 25, 2011
Nine months (39 weeks) ended	As Previously Reported			As Revised in this Quarterly Report on Form 10-Q
Cash flows from operating activities:
Net loss	$	(49,000	)	$	(47,465	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	27,367			27,367
Deferred taxes	47,530			48,045
Stock-based compensation	6,208			6,208
Provision for losses on accounts receivable	2,237			2,237
Excess tax benefit on stock compensation	(598		)	(598		)
Gain on disposal of fixed assets	(19		)	(19		)
Restructuring-related asset impairment	7,479			7,479
Increase in current assets, net of the effects of acquired companies:
Accounts receivable	(1,850		)	(2,035		)
Inventories	(35,199		)	(35,329		)
Other current assets	(29,458		)	(29,507		)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable	4,405			4,242
Income taxes	(2,850		)	(2,869		)
Unearned revenues	11,798			11,798
Restructuring reserve	7,526			7,526
Other current and accrued liabilities	7,150			7,855
Net cash provided by operating activities	2,726			4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(14,424		)	(14,424		)
Acquisition of businesses, net of cash acquired	(75,937		)	(75,937		)
Change in restricted cash	(82		)	(82		)
Other investing activities	408			408
Net cash used in investing activities	(90,035		)	(90,035		)
Cash flows from financing activities:
Proceeds from stock issuances	2,336			2,336
Excess tax benefit on stock compensation	598			598
Proceeds from short-term debt	16			16
Payment of short-term debt	(1,612		)	(1,612		)
Net change in factoring and bank overdrafts	(2,391		)	(2,391		)
Proceeds from long-term debt	63,750			63,750
Payment of long-term debt	(47,701		)	(47,701		)
Net cash provided by financing activities	14,996			14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents	4,116			4,031
Net decrease in cash and cash equivalents	(68,197		)	(66,073		)
Cash and cash equivalents:
Beginning of period	173,802			172,473
End of period	$	105,605		$	106,400

13

The Consolidated Financial Statements include the accounts of Checkpoint Systems, Inc. and its majority-owned subsidiaries (collectively, the “Company”). All inter-company transactions are eliminated in consolidation. The Consolidated Financial Statements and related notes are unaudited and do not contain all disclosures required by generally accepted accounting principles in annual financial statements. Refer to our Annual Report on Form 10-K for the fiscal year ended December 25, 2011 for the most recent disclosure of the Company’s accounting policies.

The Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position at September 23, 2012 and December 25, 2011 and our results of operations for the thirteen and thirty-nine weeks ended September 23, 2012 and September 25, 2011 and changes in cash flows for the thirty-nine weeks ended September 23, 2012 and September 25, 2011. The results of operations for the interim period should not be considered indicative of results to be expected for the full year.

Restricted Cash

We classify restricted cash as cash that cannot be made readily available for use. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits. During the third quarter ended September 23, 2012, we completed a project for which we had received a grant from the Chinese government that was recorded within restricted cash in the accompanying Consolidated Balance Sheet.

Accounts Receivable

At September 25, 2011, proceeds from the sale of accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaled $30.9 million. Proceeds from the initial sale of the accounts receivable are used to fund operations. This transaction meets the criteria for sale treatment in accordance with ASC 860 "Accounting for Transfers and Servicing of Financial Assets". We have presented the earnings recognized on the sale of the receivables separately under the line item captioned other operating income on our Consolidated Statements of Operations for the three and nine months ended September 25, 2011. There is no comparable amount for the three and nine months ended September 23, 2012.

Internal-Use Software

Included in fixed assets is the capitalized cost of internal-use software. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over their estimated useful lives, which generally range from three to five years. Costs incurred related to design or maintenance of internal-use software is expensed as incurred.

During 2009, we announced that we are in the initial stages of implementing a company-wide ERP system to handle the business and finance processes within our operations and corporate functions. The total amount of internal-use software costs capitalized since the beginning of the ERP implementation as of September 23, 2012 and December 25, 2011 were $22.3 million and $21.4 million, respectively. As of September 23, 2012, $18.1 million was recorded in machinery and equipment related to supporting software packages that were placed in service. The remaining costs of $4.2 million and $6.0 million as of September 23, 2012 and December 25, 2011, respectively, are capitalized as construction-in-progress until such time as the ERP system has been placed in service.

Assets Held For Sale

As a result of our restructuring plans, certain long-lived assets of our manufacturing facilities met held for sale criteria during the second quarter ended June 24, 2012 and $3.7 million of property, plant, and equipment, net was reclassified into other current assets on the Consolidated Balance Sheet. In the third quarter ended September 23, 2012, these long-lived assets of our manufacturing facilities were sold, resulting in a gain on sale of $0.8 million that was recognized in other exit costs within restructuring expenses on the Consolidated Statement of Operations.

14

Non-controlling Interests

On May 16, 2011, Checkpoint Holland Holding B.V., a wholly-owned subsidiary of the Company, acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

We have classified non-controlling interests as equity on our Consolidated Balance Sheets as of September 23, 2012 and December 25, 2011 and presented net income attributable to non-controlling interests separately on our Consolidated Statements of Operations for the three and nine months ended September 23, 2012 and September 25, 2011.

Warranty Reserves

We provide product warranties for our various products. These warranties vary in length depending on product and geographical region. We establish our warranty reserves based on historical data of warranty transactions.

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)
Nine months ended	September 23, 2012
Balance at beginning of year	$	5,857
Accruals for warranties issued, net	4,176
Settlements made	(4,182		)
Foreign currency translation adjustment	31
Balance at end of period	$	5,882

Recently Adopted Accounting Standards

In April 2011, the FASB issued ASU 2011-03 “Reconsideration of Effective Control for Repurchase Agreements” (ASU 2011-03). The amendments to Topic 860 (Transfers and Servicing) affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments do not affect other transfers of financial assets. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. ASU 2011-03 is effective for the first interim or annual periods beginning on or after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. This amendment should be applied prospectively to transactions or modifications of existing transactions that occur on or after December 26, 2011. The adoption of the standard has not had a material impact on our Consolidated Results of Operations and Financial Condition.

In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). The amendments to Topic 820 (Fair Value Measurement) establish common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United States and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for the first interim and annual periods beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. This amendment should be applied prospectively. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

15

In June 2011, the FASB issued ASU 2011-05 “Presentation of Comprehensive Income” (ASU 2011-05). The amendments to Topic 220 (Comprehensive Income) eliminate the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders' equity, require consecutive presentation of the statement of net income and other comprehensive income and require reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. In December 2011, the FASB issued ASU 2011-12, "Comprehensive Income -- Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in ASU 2011-05," to defer the effective date of the provision requiring entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. However, the remaining requirements of ASU 2011-05 are effective for the first interim and annual periods beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. Any required changes in presentation requirements and disclosures have been included in our Consolidated Financial Statements beginning with the first quarter ended March 25, 2012. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In September 2011, the FASB issued ASU 2011-08, "Intangibles – Goodwill and Other," (ASU 2011-08), which amends current guidance to allow a company to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The amendment also improves previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In September 2011, the FASB issued ASU 2011-09, "Compensation – Retirement Benefits – Multiemployer Plans (Subtopic 715-80)," (ASU 2011-09). ASU 2011-09 requires that employers provide additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. The additional quantitative and qualitative disclosures will provide users with more detailed information about an employer's involvement in multiemployer pension plans. ASU 2011-09 is effective for fiscal years ending after December 15, 2011. The adoption of this standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

New Accounting Pronouncements and Other Standards

In December 2011, the FASB issued ASU 2011-11, "Balance Sheet – Disclosures about Offsetting Assets and Liabilities (Topic 210-20)," (ASU 2011-11). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 is effective for fiscal years beginning on or after January 1, 2013, with retrospective application for all comparable periods presented. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

In July 2012, the FASB issued ASU 2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment," (ASU 2012-02). ASU 2012-02 amends the guidance in ASC 350-302 on testing indefinite-lived intangible assets, other than goodwill, for impairment by allowing an entity to perform a qualitative impairment assessment before proceeding to the two-step impairment test. If the entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not (i.e., a likelihood of more than 50 percent) impaired, the entity would not need to calculate the fair value of the asset. In addition, the ASU does not amend the requirement to test these assets for impairment between annual tests if there is a change in events or circumstances; however, it does revise the examples of events and circumstances that an entity should consider in interim periods. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption being permitted. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

16

In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements," (ASU 2012-04). ASU 2012-04 amends current guidance by clarifying the FASB Accountings Standards Codification (Codification), correcting unintended application of guidance, or making minor improvements to the Codification. These amendments are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, the amendments included in ASU 2012-04 intend to make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications. The amendments in ASU 2012-04 that will not have transition guidance will be effective upon issuance. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

Note 2. INVENTORIES

Inventories consist of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Raw materials	$	19,200	$	28,128
Work-in-process	6,900		10,481
Finished goods	83,951		92,378
Total	$	110,051	$	130,987

Note 3. GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $77.0 million and $84.6 million as of September 23, 2012 and December 25, 2011, respectively.

The following table reflects the components of intangible assets as of September 23, 2012 and December 25, 2011:

		September 23, 2012				December 25, 2011
(amounts in thousands)	Amortizable Life (years)	Gross Amount		Gross Accumulated Amortization		Gross Amount		Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6 to 20	$	81,320	$	48,311	$	81,348	$	43,945
Trade name	1 to 30	29,945		18,693		30,007		18,237
Patents, license agreements	3 to 14	60,133		49,424		60,249		47,704
Other	2 to 6	7,203		6,728		7,160		5,830
Total amortized finite-lived intangible assets		178,601		123,156		178,764		115,716
Indefinite-lived intangible assets:
Trade name		21,509		—		21,509		—
Total identifiable intangible assets		$	200,110	$	123,156	$	200,273	$	115,716

Amortization expense for the three and nine months ended September 23, 2012 was $2.4 million and $7.6 million, respectively.

Amortization expense for the three and nine months ended September 25, 2011 was $3.0 million and $8.6 million, respectively.

Estimated amortization expense for each of the five succeeding years is anticipated to be:

(amounts in thousands)
2012	$	10,466
2013	$	8,759
2014	$	8,271
2015	$	8,115
2016	$	7,852

17

The changes in the carrying amount of goodwill are as follows:

(amounts in thousands)	Shrink Management Solutions			Apparel Labeling Solutions			Retail Merchandising Solutions			Total
Balance as of December 26, 2010	$	165,324		$	3,915		$	62,086		$	231,325
Acquired during the year	—			58,008			—			58,008
Discontinued operations	(3,782		)	—			—			(3,782		)
Translation adjustments	269			661			(378		)	552
Balance as of December 25, 2011	$	161,811		$	62,584		$	61,708		$	286,103
Purchase accounting adjustment	—			1,624			—			1,624
Impairment losses	—			(64,437		)	—			(64,437		)
Translation adjustments	(322		)	229			(239		)	(332		)
Balance as of September 23, 2012	$	161,489		$	—		$	61,469		$	222,958

The following table reflects the components of goodwill as of September 23, 2012 and December 25, 2011:

	September 23, 2012						December 25, 2011
(amounts in thousands)	Gross Amount		Accumulated Impairment Losses		Goodwill, Net		Gross Amount		Accumulated Impairment Losses		Goodwill, Net
Shrink Management Solutions	$	211,047	$	49,558	$	161,489	$	213,836	$	52,025	$	161,811
Apparel Labeling Solutions	83,542		83,542		—		81,662		19,078		62,584
Retail Merchandising Solutions	131,618		70,149		61,469		130,640		68,932		61,708
Total goodwill	$	426,207	$	203,249	$	222,958	$	426,138	$	140,035	$	286,103

On January 28, 2011, Checkpoint Systems, Inc. and certain of its direct subsidiaries (collectively, the “Company”) entered into a Master Purchase Agreement. The Master Purchase Agreement outlines the general terms and conditions pursuant to which the Company agreed to acquire, through the acquisition of equity and/or assets, a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels (collectively, the “Shore to Shore businesses” or "Shore to Shore"). The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $66.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and includes the acquisition of the following:

• 100% of the voting equity interests of J&F International, Inc. (U.S.), Shore to Shore Far East (Hong Kong), Shore to Shore MIS (India), Shore to Shore Lacar SA (Guatemala), Adapt Identification (HK) Ltd., and W Print Europe Ltd. (UK);

• Assets of Shore to Shore, Inc. (U.S.), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., and Wing Hung Printing Co., Ltd. (U.S.);

• 51% of the voting equity interests of Shore to Shore PVT Ltd. (Sri Lanka);

• 50% of the voting equity interests of the Cybsa Adapt SA de CV (El Salvador) joint venture. In accordance with ASC 323 “Investments—Equity Method and Joint Ventures,” we have applied the Equity Method in recording this joint venture.

During the second quarter of 2012, we finalized the purchase accounting of the acquisition of the Shore to Shore businesses. At June 24, 2012, the financial statements reflected the final allocation of the purchase price based on estimated fair values at the date of acquisition, including $17.1 million in Property, Plant, and Equipment, $7.1 million in Accounts Receivable, and $2.2 million in Inventories. This final allocation resulted in acquired goodwill of $59.7 million, of which $9.8 million is tax deductible, and intangible assets of $10.5 million. The intangible assets were composed of a non-compete agreement ($0.3 million), customer lists ($9.8 million), and trade names ($0.4 million). The useful lives were 5 years for the non-compete agreement, 10 years for the customer lists, and 7.5 months for the trade names.

The purchase price included a payment to escrow of $17.5 million related to the 2010 performance of the acquired business. This amount is subject to adjustment pending final determination of the 2010 performance and could result in an additional purchase price payment of up to $6.3 million. We are currently involved in an arbitration process in order to require the seller to provide audited financial information related to the 2010 performance. When this information is received, the final adjustment to the purchase price will be recognized through earnings.

18

Acquisition costs incurred in connection with the transaction are recognized within acquisition costs in the Consolidated Statement of Operations and approximate $17 thousand and $0.1 million for the three and nine months ended September 23, 2012 and $2 thousand and $2.2 million for the three and nine months ended September 25, 2011, respectively.

As the Company acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash, we have classified the non-controlling interests as equity on our Consolidated Balance Sheet as of September 23, 2012 and December 25, 2011, and presented net income attributable to non-controlling interests separately on our Consolidated Statement of Operations for the three and nine months ended September 23, 2012 and September 25, 2011. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

We perform an assessment of goodwill by comparing each individual reporting unit’s carrying amount of net assets, including goodwill, to their fair value at least annually during the October month-end close and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our 2011 annual impairment test indicated no impairment of our goodwill assets.

During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent annual impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an assessment of goodwill was warranted. This resulted in the Company's assessment that the carrying value of the Apparel Labeling Solutions reporting unit exceeded its fair value. The basis of the fair value was determined by projecting future cash flows using assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of the evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate and through our stock price that we use to determine our market capitalization. As a result of our interim impairment test, a $64.4 million non-cash impairment charge was recorded as of June 24, 2012 in our Apparel Labeling Solutions segment. The goodwill impairment expense was due to the decline in estimated future Apparel Labeling Solutions cash flow impacted by our plan to refocus the business, coupled with recent declines in revenue and profitability. The impairment charge of the entire goodwill balance in our Apparel Labeling Solutions segment was recorded in goodwill impairment on the Consolidated Statement of Operations.

Our Shrink Management Solutions (SMS) segment is composed of four reporting units. The fair value of two of the four reporting units, Europe SMS and Asia Pacific SMS, exceeded their respective carrying values as of the date of the interim impairment test by approximately 10% and 8%, respectively. As of the date of our interim impairment test, the goodwill for these two reporting units totaled $72.0 million for Europe SMS and $12.0 million for Asia Pacific SMS. In determining the fair value of these reporting units, our projected cash flows did not contain significant growth assumptions. A 10% decline in operating results, or a 1.10% increase in our discount rates could result in future decreases in the fair values of these reporting units which could result in future impairments. The other reporting units within the SMS segment exceeded their respective carrying values by a significant margin.

Our Retail Merchandising Solutions (RMS) segment is composed of two reporting units. The fair value of one of the two reporting units, Europe RMS, exceeded its carrying value as of the date of the interim impairment test by approximately 11%. As of the date of our interim impairment test, the goodwill for the Europe RMS reporting unit totaled $59.3 million. In determining the fair value of this reporting unit, our projected cash flows did not contain significant growth assumptions. A 11% decline in operating results, or a 1.60% increase in our discount rate could result in a future decrease in the fair value of this reporting unit which could result in a future impairment. The other reporting unit within the Retail Merchandising segment exceeded its carrying value by a significant margin.

There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment in these reporting units.

19

As a result of interim impairment indicators in the second quarter of 2012, we performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in our Apparel Labeling Solutions reporting unit to their carrying amounts. The undiscounted cash flow analysis resulted in no impairment charge in the quarter ended June 24, 2012. There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment.

Note 4. DEBT

Short-term Borrowings and Current Portion of Long-term Debt

Short-term borrowings and current portion of long-term debt at September 23, 2012 and at December 25, 2011 consisted of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Overdraft	$	309	$	405
Full-recourse factoring liabilities	—		8,809
Term loans	2,436		9,125
Other short-term borrowings	1,078		2,529
Current portion of long-term debt	537		910
Total short-term borrowings and current portion of long-term debt	$	4,360	$	21,778

In September 2012, $7.4 million (€5.7 million) was paid in order to extinguish our existing short-term full-recourse factoring agreement in Germany. The arrangement was included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In June 2012, $8.0 million (HKD 61.8 million) was paid in order to extinguish our existing Hong Kong term loan. The term loan was included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In June 2012, $0.7 million (INR 37.2 million) was paid in order to extinguish an overdraft facility and other short-term loans assumed in connection with the acquisition of the Shore to Shore businesses. The loans were included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In February 2012, the Company entered into a $3.2 million Sri Lanka banking facility, which includes a $2.7 million term loan, and a combined $0.5 million sublimit for an overdraft/import line. As of September 23, 2012, $2.4 million and $0.4 million were outstanding on the term loan and overdraft/import line, respectively.

Long-Term Debt

Long-term debt as of September 23, 2012 and December 25, 2011 consisted of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Senior secured credit facility:
$69 million variable interest rate revolving credit facility maturing in 2014	$	44,206	$	52,248
Senior Secured Notes:
$22 million 4.00% fixed interest rate Series A senior secured notes maturing in 2015	22,038		25,000
$22 million 4.38% fixed interest rate Series B senior secured notes maturing in 2016	22,038		25,000
$22 million 4.75% fixed interest rate Series C senior secured notes maturing in 2017	22,038		25,000
Full-recourse factoring liabilities	998		1,333
Other capital leases with maturities through 2016	554		1,013
Total	111,872		129,594
Less current portion	537		910
Total long-term portion	$	111,335	$	128,684

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Senior Secured Credit Facility

On February 17, 2012, we received an amendment to our Senior Secured Credit Facility which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25, June 24 and September 23, 2012. In addition, the amendment prohibits the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received the amendment, we would have been in violation of the leverage ratio covenant as of March 25, 2012.  

On July 31, 2012, we received an additional amendment to our Senior Secured Credit Facility ("July 2012 Amendment"), which contained several modifications. The July 2012 Amendment reduced the total commitment of the Senior Secured Credit Facility from $125.0 million to $75.0 million. The July 2012 Amendment reduced the sublimit for the issuance of letters of credit from $25.0 million to $5.0 million. The July 2012 Amendment reduced the sublimit for swingline loans from $25.0 million to $5.0 million. The July 2012 Amendment increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendment waives the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendment permits divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions. The July 2012 Amendment also contains a provision whereby if our cash balance exceeds $65 million as of weekly measurement dates, we must prepay any additional borrowings made subsequent to the July 2012 Amendments. This provision is effective until we are in compliance with our original covenant requirements for two consecutive quarters. There were no required prepayments in the third quarter of 2012.

Absent the waiver and additional July 2012 Amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, the interest rate spread on the Senior Secured Credit Facility increases to a maximum of 4.25% over the Base Rate or 5.25% over the LIBOR rate. The “Base Rate” is the highest of (a) our lender’s prime rate, (b) the Federal Funds rate, plus 0.50%, and (c) a daily rate equal to the one-month LIBOR rate, plus 1.00%. The unused line fee will increase to a maximum of 1.00% per annum. The maximum is based in accordance with changes in our leverage ratio.

During the quarter ended September 23, 2012, the Company incurred $1.4 million in fees and expenses in connection with the July 2012 Amendment to the Senior Secured Credit Facility, which were capitalized and will be amortized over the term of the Senior Secured Credit Facility to interest expense on the Consolidated Statement of Operations. In connection with the reduction in borrowing capacity of the Senior Secured Credit Facility, the Company recognized $0.8 million of unamortized debt issuance costs. The cost was recognized in interest expense on the Consolidated Statement of Operations in the third quarter of 2012.

On September 21, 2012, the Company repaid $6.1 million on the Senior Secured Credit Facility. Pursuant to the terms of the July 2012 Amendment, the repayment permanently reduced the outstanding borrowing capacity from $75.0 million to $68.9 million. In connection with the reduction in borrowing capacity of the Senior Secured Credit Facility, the Company recognized $0.2 million of unamortized debt issuance costs. The cost was recognized in interest expense on the Consolidated Statement of Operations in the third quarter of 2012.

The Senior Secured Credit Facility includes an expansion option that will allow us, subject to certain conditions, to request an increase in the Senior Secured Credit Facility of up to an aggregate of $50.0 million, for a potential total commitment of $118.9 million. As of September 23, 2012, we were not eligible to elect to request the $50.0 million expansion option due to financial covenant restrictions.

As of September 23, 2012, $1.4 million issued in letters of credit were outstanding under the Senior Secured Credit Facility.

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All obligations of domestic borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. The obligations of foreign borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by certain of our foreign subsidiaries as well as the domestic guarantors. Collateral under the Senior Secured Credit Facility includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary. As a condition of the July 2012 Amendment, all domestic assets are also pledged as collateral. The approximate net book value of the collateral as of September 23, 2012 was $142 million.

Pursuant to the original terms of the Senior Secured Credit Facility, we are subject to various requirements, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Credit Facility also contains customary representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults. Upon a default under the Senior Secured Credit Facility, including the non-payment of principal or interest, our obligations under the Senior Secured Credit Facility may be accelerated and the assets securing such obligations may be sold. Certain of our wholly-owned subsidiaries with respect to the Company are guarantors of our obligations under the Senior Secured Credit Facility.

Senior Secured Notes

On February 17, 2012, we received an amendment to our Senior Secured Notes which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25, June 24 and September 23, 2012. In addition, the amendment prohibits the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received the amendment, we would have been in violation of the leverage ratio covenant as of March 25, 2012.  

On July 31, 2012, we received an additional amendment to our Senior Secured Notes ("July 2012 Amendment"), which contained several modifications. The July 2012 Amendment increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendment waives the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendment permits divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions.

Absent the waiver and additional July 2012 Amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, and until such time the financial covenants return to the original covenants for two consecutive quarters, the coupon rate on the Senior Secured Notes will increase to 5.75%, 6.13%, and 6.50% for the Series A Senior Secured Notes, Series B Senior Secured Notes, and Series C Senior Secured Notes, respectively.

During the quarter ended September 23, 2012, the Company incurred $1.4 million in fees and expenses in connection with the July 2012 Amendment to the Senior Secured Notes, of which $0.7 million were recognized in selling, general, and administrative expenses on the Consolidated Statement of Operations in the third quarter of fiscal 2012 and $0.7 million, which were capitalized and will be amortized over the term of the Senior Secured Notes to interest expense on the Consolidated Statement of Operations.

On September 21, 2012, the Company repaid $8.9 million in principal as well as a make-whole premium of $1.1 million related to the Senior Secured Notes. In connection with the repayment on the Senior Secured Notes, the Company recognized $0.1 million of unamortized debt issuance costs. The unamortized debt issuance costs and make whole premium fees were recognized in interest expense on the Consolidated Statement of Operations in the third quarter of fiscal 2012.

The Senior Secured Notes Agreement provides that for a three-year period ending on July 22, 2013, we may issue, and our lender may, in its sole discretion, purchase, additional fixed-rate senior secured notes and together with the Senior Secured Notes, up to an aggregate amount of $50.0 million. As of September 23, 2012, we were not eligible to elect to request the $50.0 million expansion option due to financial covenant restrictions.

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All obligations under the Senior Secured Notes are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. Collateral under the Senior Secured Notes includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary. As a condition of the July 2012 Amendment, all domestic assets are also pledged as collateral. The approximate net book value of the collateral as of September 23, 2012 was $142 million.

The original Senior Secured Notes Agreement is subject to covenants that are substantially similar to the covenants in the Senior Secured Credit Facility Agreement, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Notes Agreement also contains representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults that are substantially similar to those contained in the Senior Secured Credit Facility, and those that are customary for similar private placement transactions. Upon a default under the Senior Secured Notes Agreement, including the non-payment of principal or interest, our obligations under the Senior Secured Notes Agreement may be accelerated and the assets securing such obligations may be sold. Additionally, the Senior Secured Notes have a make-whole provision that requires the discounted value of the remaining payments on the Senior Secured Notes expected through the end term of each of the Senior Secured Notes to be paid in full upon early termination, acceleration, or prepayment.  Certain of our wholly-owned subsidiaries are also guarantors of our obligations under the Senior Secured Notes.

Full-recourse Factoring Arrangements

In December 2009, we entered into new full-recourse factoring arrangements in Europe. The arrangements are secured by trade receivables. The Company received a weighted average of 92.4% of the face amount of receivables that it desired to sell and the bank agreed, at its discretion, to buy. As of September 23, 2012 the factoring arrangements had a balance of $1.0 million (€0.8 million), of which $0.3 million (€0.3 million) was included in the current portion of long-term debt and $0.7 million (€0.5 million) was included in long-term borrowings in the accompanying Consolidated Balance Sheets since the receivables are collectible through 2016.

Note 5. STOCK-BASED COMPENSATION

Stock-based compensation cost recognized in operating results (included in selling, general, and administrative expenses) for the three and nine months ended September 23, 2012 was $1.0 million and $3.7 million ($1.0 million and $3.6 million, net of tax), respectively. For the three and nine months ended September 25, 2011, the total compensation expense was $1.4 million and $6.2 million ($1.1 million and $4.6 million, net of tax), respectively. The associated actual tax benefit realized for the tax deduction from option exercises of share-based payment units and awards released equaled $0.8 million and $1.1 million for the nine months ended September 23, 2012 and September 25, 2011, respectively.

Stock Options

Option activity under the principal option plans as of September 23, 2012 and changes during the nine months ended September 23, 2012 were as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 25, 2011	2,600,805		$	19.54	4.39	$	512
Granted	801,880		9.70
Exercised	(38,084	)	8.83
Forfeited or expired	(254,527	)	16.60
Outstanding at September 23, 2012	3,110,074		$	17.37	4.79	$	342
Vested and expected to vest at September 23, 2012	3,110,074		$	17.37	4.79	$	342
Exercisable at September 23, 2012	2,361,581		$	19.58	3.29	$	49

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The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of fiscal 2012 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 23, 2012. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the nine months ended September 23, 2012 and September 25, 2011 was $0.1 million and $1.1 million, respectively.

As of September 23, 2012, $2.4 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.2 years.

The fair value of share-based payment units was estimated using the Black-Scholes option pricing model. The table below presents the weighted-average expected life in years. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions and weighted-average fair values were as follows:

Nine months ended	September 23, 2012		September 25, 2011
Weighted-average fair value of grants	4.38		9.88
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	52.08	%	49.85	%
Expected life (in years)	5.06		4.96
Risk-free interest rate	0.750	%	2.178	%

Restricted Stock Units

Nonvested service based restricted stock units as of September 23, 2012 and changes during the nine months ended September 23, 2012 were as follows:

	Number of Shares		Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 25, 2011	617,672		0.79	$	21.29
Granted	210,795			$	10.72
Vested	(186,254	)		$	11.38
Forfeited	(68,046	)		$	17.34
Nonvested at September 23, 2012	574,167		1.04	$	21.09
Vested and expected to vest at September 23, 2012	574,167		1.04
Vested at September 23, 2012	61,250		—

The total fair value of restricted stock awards vested during the first nine months of 2012 was $2.1 million as compared to $3.3 million in the first nine months of 2011. As of September 23, 2012, there was $2.6 million of unrecognized stock-based compensation expense related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 1.6 years.

Other Compensation Arrangements

On March 15, 2010, we initiated a plan in which time-vested cash unit awards were granted to eligible employees. The time-vested cash unit awards under this plan vest evenly over two or three years from the date of grant. The total amount accrued related to the plan equaled $0.7 million at September 23, 2012, of which $0.3 million and $0.8 million was expensed for the three and nine months ended September 23, 2012. The total amount accrued related to the plan equaled $0.4 million at September 25, 2011, of which $0.2 million and $0.4 million was expensed for the three and nine months ended September 25, 2011. The associated liability is included in Accrued Compensation and Related Taxes in the accompanying Consolidated Balance Sheets.

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Note 6. SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest and income taxes for the nine months ended September 23, 2012 and September 25, 2011 were as follows:

(amounts in thousands)
Nine months ended	September 23, 2012		September 25, 2011
Interest	$	8,194	$	5,660
Income tax payments	$	8,229	$	9,309

In January 2011, the Company entered into an agreement to acquire the Shore to Shore businesses, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $66.7 million of cash from operations (with $27.8 million paid in the third quarter of 2011) and $9.2 million of borrowings under our Senior Secured Credit Facility. The acquisition payment, net of cash acquired, is reflected in the acquisition of businesses line within investing activities on the Consolidated Statement of Cash Flows.

At September 23, 2012 and September 25, 2011, the Company accrued $0.6 million and $3.0 million of capital expenditures, respectively. These amounts were excluded from the Consolidated Statements of Cash Flows at September 23, 2012 and September 25, 2011 since they represent non-cash investing activities. Accrued capital expenditures at September 23, 2012 and September 25, 2011 are included in accounts payable and other accrued expenses on the Consolidated Balance Sheets.

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Note 7. EARNINGS PER SHARE

The following data shows the amounts used in computing earnings per share and the effect on net earnings from continuing operations attributable to Checkpoint Systems, Inc. and the weighted-average number of shares of dilutive potential common stock:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands, except per share data)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
				(As Revised)						(As Revised)
Basic loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$	(4,167	)	$	(47,593	)	$	(107,689	)	$	(45,641	)
Diluted loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$	(4,167	)	$	(47,593	)	$	(107,689	)	$	(45,641	)
Shares:
Weighted-average number of common shares outstanding	40,521			40,134			40,415			40,038
Shares issuable under deferred compensation agreements	546			471			531			455
Basic weighted-average number of common shares outstanding	41,067			40,605			40,946			40,493
Common shares assumed upon exercise of stock options and awards	—			—			—			—
Shares issuable under deferred compensation arrangements	—			—			—			—
Dilutive weighted-average number of common shares outstanding	41,067			40,605			40,946			40,493
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)

Anti-dilutive potential common shares are not included in our earnings per share calculation. The Long-term Incentive Plan restricted stock units were excluded from our calculation due to the performance of vesting criteria not being met.

The number of anti-dilutive common share equivalents for the three and nine month periods ended September 23, 2012 and September 25, 2011 were as follows:

	Quarter		Nine Months
	(13 weeks) Ended		(39 weeks) Ended
(amounts in thousands)	September 23, 2012	September 25, 2011	September 23, 2012	September 25, 2011
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS(1)	3,296	2,601	3,068	2,250

⁽¹⁾  Adjustments for stock options and awards of 15 shares and 64 shares, respectively were anti-dilutive in the three and nine months ended 2012. Adjustments for stock options and awards of 227 shares and 384 shares, respectively, and deferred compensation arrangements of 6 shares and 5 shares, respectively, were anti-dilutive in the three and nine months ended 2011. These shares were therefore excluded from the earnings per share calculation due to our net loss for the periods.

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Note 8. INCOME TAXES

The effective tax rate for the thirty-nine weeks ended September 23, 2012 was 0.7% as compared to negative 570.2% for the thirty-nine weeks ended September 25, 2011. The increase in the effective tax rate for the thirty-nine weeks ended September 23, 2012 was due to the impairment charges and the valuation allowance position in the United States, discussed further below.

For the thirty-nine weeks ended September 23, 2012, included in the loss from earnings from continuing operations before income taxes were charges for impairments of goodwill and property, plant and equipment of $64.4 million and $6.2 million, respectively. Due to the unusual and infrequent nature of these charges, the $1.2 million tax benefit related to the asset impairments has been recorded discretely.

In accordance with ASC 740, “Accounting for Income Taxes”, we evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. ASC 740 requires that companies assess whether valuation allowances should be established against their deferred tax assets based on all available evidence, both positive and negative, using a “more likely than not” standard. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company's experience with loss carryforwards not expiring and tax planning alternatives. The Company operates and derives income across multiple jurisdictions. As the geographic footprint of the business changes, we may encounter losses in jurisdictions that have been historically profitable, and as a result might require additional valuation allowances to be recorded against certain deferred tax asset balances. At September 23, 2012 and December 25, 2011, we had net deferred tax assets of $11.3 million and $11.7 million respectively.

During the quarter ending September 25, 2011 a valuation allowance in the amount of $48.0 million was established related to all components of the domestic net deferred tax assets based on the determination after the above considerations that it was more likely than not that the deferred tax assets would not be fully realized. This charge was primarily a result of the trend of significant domestic losses experienced by the Company in recent years.

The Company has historically determined its interim tax provision using an estimated annual effective tax rate methodology. In calculating the tax provision for the three and six months ended June 24, 2012 and the three and nine months ended September 23, 2012, we have accounted for the U.S. operations by applying the discrete method. The Company determined that if the U.S. were included in the estimated annual effective tax rate, small changes in estimated pretax earnings would result in significant fluctuations in the tax rate. Therefore, the historical method would not provide a reliable estimate for the reporting periods ended June 24, 2012 and September 23, 2012.

Included in the Company's $45.6 million of other current assets is a current income tax receivable of $9.3 million. This amount represents estimated tax payments on account net of refunds received in the amount of $8.5 million and a tax benefit recorded on the Company's year to date pretax loss of $0.8 million. Included in the $28.7 million of other current liabilities is the Company's current deferred tax liability of $4.6 million.

The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate was $11.0 million and $13.2 million at September 23, 2012 and December 25, 2011, respectively. Penalties and tax-related interest expense are reported as a component of income tax expense. During the nine months ended September 23, 2012 we recognized a release ofinterest and penalties expense of $0.7 million compared to an interest and penalties expense of $0.2 million during the nine months ended September 25, 2011, in the Statement of Operations. At September 23, 2012 and December 25, 2011, the Company had accrued interest and penalties related to unrecognized tax benefits of $3.8 million and $4.6 million, respectively.

We file income tax returns in the U.S. and in various states, local and foreign jurisdictions. We are routinely examined by tax authorities in these jurisdictions. It is possible that these examinations may be resolved within twelve months. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the gross unrecognized tax benefits balance may decrease within the next twelve months by a range of

$2.3 million to $3.7 million.

We are currently under audit in the following major jurisdictions: Germany 2006 – 2009, Finland 2008 – 2009, and India 2008 – 2012.

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Note 9. PENSION BENEFITS

The components of net periodic benefit cost for the three and nine months ended September 23, 2012 and September 25, 2011 were as follows:

	Quarter				Nine Months
	(13 weeks) Ended				(39 weeks) Ended
(amounts in thousands)	September 23, 2012		September 25, 2011		September 23, 2012		September 25, 2011
Service cost	$	207	$	247	$	637	$	736
Interest cost	940		1,125		2,898		3,346
Expected return on plan assets	10		39		31		117
Amortization of actuarial loss	54		12		166		37
Amortization of transition obligation	13		33		42		98
Amortization of prior service costs	1		1		2		2
Net periodic pension cost	$	1,225	$	1,457	$	3,776	$	4,336

We expect the cash requirements for funding the pension benefits to be approximately $4.7 million during fiscal 2012, including $3.7 million which was funded during the nine months ended September 23, 2012.

Note 10. FAIR VALUE MEASUREMENT, FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair Value Measurement

We utilize the market approach to measure fair value for our financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The fair value hierarchy is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

Level 1 Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Because the Company’s derivatives are not listed on an exchange, the Company values these instruments using a valuation model with pricing inputs that are observable in the market or that can be derived principally from or corroborated by observable market data. The Company’s methodology also incorporates the impact of both the Company’s and the counterparty’s credit standing.

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The following tables represent our assets and liabilities measured at fair value on a recurring basis as of September 23, 2012 and December 25, 2011 and the basis for that measurement:

(amounts in thousands)	Total Fair Value Measurement September 23, 2012		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency forward exchange contracts	$	36	$	—	$	36	$	—
Foreign currency revenue forecast contracts	170		—		170		—
Total assets	$	206	$	—	$	206	$	—
Foreign currency forward exchange contracts	$	339	$	—	$	339	$	—
Foreign currency revenue forecast contracts	—		—		—		—
Total liabilities	$	339	$	—	$	339	$	—

(amounts in thousands)	Total Fair Value Measurement December 25, 2011		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency forward exchange contracts	$	463	$	—	$	463	$	—
Foreign currency revenue forecast contracts	1,120		—		1,120		—
Total assets	$	1,583	$	—	$	1,583	$	—
Foreign currency forward exchange contracts	$	415	$	—	$	415	$	—
Foreign currency revenue forecast contracts	—		—		—		—
Total liabilities	$	415	$	—	$	415	$	—

The following table provides a summary of the activity associated with all of our designated cash flow hedges (foreign currency) reflected in accumulated other comprehensive income for the nine months ended September 23, 2012:

(amounts in thousands)	September 23, 2012
Beginning balance, net of tax	$	1,542
Changes in fair value gain, net of tax	499
Reclassification to earnings, net of tax	(1,300		)
Ending balance, net of tax	$	741

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We believe that the fair values of our current assets and current liabilities (cash, restricted cash, accounts receivable, accounts payable, and other current liabilities) approximate their reported carrying amounts. The carrying values and the estimated fair values of non-current financial assets and liabilities that qualify as financial instruments and are not measured at fair value on a recurring basis at September 23, 2012 and December 25, 2011 are summarized in the following table:

	September 23, 2012				December 25, 2011
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt (including current maturities and excluding capital leases and factoring)(1)
Senior secured credit facility	$	44,206	$	44,206	$	52,248	$	52,248
Senior secured notes	$	66,114	$	66,012	$	75,000	$	75,686

⁽¹⁾  The carrying amounts are reported on the balance sheet under the indicated captions.

Long-term debt is carried at the original offering price, less any payments of principal. Rates currently available to us for long-term borrowings with similar terms and remaining maturities are used to estimate the fair value of existing borrowings as the present value of expected cash flows. The related fair value measurement has generally been classified as Level 2.

Financial Instruments and Risk Management

We manufacture products in the U.S., Europe, and the Asia Pacific region for both the local marketplace and for export to our foreign subsidiaries. The foreign subsidiaries, in turn, sell these products to customers in their respective geographic areas of operation, generally in local currencies. This method of sale and resale gives rise to the risk of gains or losses as a result of currency exchange rate fluctuations on inter-company receivables and payables. Additionally, the sourcing of product in one currency and the sales of product in a different currency can cause gross margin fluctuations due to changes in currency exchange rates.

Our major market risk exposures are movements in foreign currency and interest rates. We have historically not used financial instruments to minimize our exposure to currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries. We have used third-party borrowings in foreign currencies to hedge a portion of our net investments in and cash flows derived from our foreign subsidiaries. A reduction in our third party foreign currency borrowings will result in an increase of foreign currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries.

We enter into forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts are entered into with major financial institutions, thereby minimizing the risk of credit loss. We will consider using interest rate derivatives to manage interest rate risks when there is a disproportionate ratio of floating and fixed-rate debt. We do not hold or issue derivative financial instruments for speculative or trading purposes. We are subject to other foreign exchange market risk exposure resulting from anticipated non-financial instrument foreign currency cash flows which are difficult to reasonably predict, and have therefore not been included in the table of fair values. All listed items described are non-trading.

30

The following table presents the fair values of derivative instruments included within the Consolidated Balance Sheets as of September 23, 2012 and December 25, 2011:

	September 23, 2012						December 25, 2011
	Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives
(amounts in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign currency revenue forecast contracts	Other current assets	$	170	Other current liabilities	$	—	Other current assets	$	1,120	Other current liabilities	$	—
Total derivatives designated as hedging instruments		170			—			1,120			—
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts	Other current assets	36		Other current liabilities	339		Other current assets	463		Other current liabilities	415
Total derivatives not designated as hedging instruments		36			339			463			415
Total derivatives		$	206		$	339		$	1,583		$	415

The following tables present the amounts affecting the Consolidated Statement of Operations for the three months ended September 23, 2012 and September 25, 2011:

	September 23, 2012								September 25, 2011
(amounts in thousands)	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income		Amount of Forward Points Recognized in Other Gain (Loss), net		Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income			Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$	(298	)	Cost of sales	$	543	$	11	$	1,390	Cost of sales	$	(720	)	$	(188	)
Total designated cash flow hedges	$	(298	)		$	543	$	11	$	1,390		$	(720	)	$	(188	)

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The following tables present the amounts affecting the Consolidated Statement of Operations for the nine months ended September 23, 2012 and September 25, 2011:

	September 23, 2012							September 25, 2011
(amounts in thousands)	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income		Amount of Forward Points Recognized in Other Gain (Loss), net		Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income			Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$	524	Cost of sales	$	1,322	$	89	$	(1,334	)	Cost of sales	$	(1,214	)	$	(293	)
Total designated cash flow hedges	$	524		$	1,322	$	89	$	(1,334	)		$	(1,214	)	$	(293	)

Quarter

Nine Months

(13 weeks) Ended

(39 weeks) Ended

September 23, 2012

September 25, 2011

September 23, 2012

September 25, 2011

(amounts in thousands)

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Derivatives not designated as hedging instruments:

Foreign exchange forwards and options

$

(81

)

Other gain (loss), net

$

185

Other gain (loss), net

$

193

Other gain (loss), net

$

(216

)

Other gain (loss), net

We selectively purchase currency forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts guarantee a predetermined exchange rate at the time the contract is purchased. This allows us to shift the effect of positive or negative currency fluctuations to a third party. Transaction gains or losses resulting from these contracts are recognized at the end of each reporting period. We use the fair value method of accounting, recording realized and unrealized gains and losses on these contracts. These gains and losses are included in other gain (loss), net on our Consolidated Statements of Operations. As of September 23, 2012, we had currency forward exchange contracts with notional amounts totaling approximately $13.7 million. The fair values of the forward exchange contracts were reflected as a $36 thousand asset and a $0.3 million liability and are included in other current assets and other current liabilities in the accompanying balance sheets. The contracts are in the various local currencies covering primarily our operations in the U.S., the Caribbean, and Western Europe. Historically, we have not purchased currency forward exchange contracts where it is not economically efficient, specifically for our operations in South America and Asia, with the exception of Japan.

Beginning in the second quarter of 2008, we entered into various foreign currency contracts to reduce our exposure to forecasted Euro-denominated inter-company revenues. These contracts were designated as cash flow hedges. The foreign currency contracts mature at various dates from October 2012 to March 2013. The purpose of these cash flow hedges is to eliminate the currency risk associated with Euro-denominated forecasted inter-company revenues due to changes in exchange rates. These cash flow hedging instruments are marked to market and the changes are recorded in other comprehensive income. Amounts recorded in other comprehensive income are recognized in cost of goods sold as the inventory is sold to external parties. Any hedge ineffectiveness is charged to other gain (loss), net on our Consolidated Statements of Operations. As of September 23, 2012, the fair value of these cash flow hedges were reflected as a $0.2 million asset and is included in other current assets in the accompanying Consolidated Balance Sheets. The total notional amount of these hedges is $7.2 million (€5.4 million) and the unrealized gain recorded in other comprehensive income was $0.9 million (net of taxes of $40 thousand), of which $0.9 million (net of taxes of $40 thousand) is expected to be reclassified to earnings over the next twelve months. During the three and nine months ended September 23, 2012, a $0.5 million and $1.3 million benefit related to these foreign currency hedges was recorded to cost of goods sold as the inventory was sold to external parties, respectively. The Company recognized zero and $40 thousand of hedge ineffectiveness during the three and nine months ended September 23, 2012.

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Note 11. PROVISION FOR RESTRUCTURING

During the second quarter of 2012, in conjunction with our strategic shift, we launched a new profit improvement initiative, Project LEAN, which is designed to restructure the Company to support a more focused product range while positioning Checkpoint to return to profitable growth. Project LEAN will be reported as part of the Global Restructuring Plan. This plan focuses on consolidating certain manufacturing facilities and administrative functions to improve efficiency.

The expanded Global Restructuring Plan including Project LEAN and the SG&A Restructuring Plan will impact over 2,400 existing employees. Total costs of the Global Restructuring Plan including Project LEAN and the SG&A Restructuring Plan are expected to approximate $70 million to $75 million by the end of 2013, with $52 million to $55 million in total anticipated costs for the Global Restructuring Plan and approximately $19 million of costs incurred for the SG&A Restructuring Plan, which is substantially complete.

Restructuring expense for the three and nine months ended September 23, 2012 and September 25, 2011 was as follows:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	2,442			5,972			16,661			5,972
Asset impairments	859			7,479			6,156			7,479
Other exit costs	1,174			—			3,680			—
SG&A Restructuring Plan
Severance and other employee-related charges	(288		)	3,661			608			6,120
Other exit costs	—			216			66			826
Manufacturing Restructuring Plan
Severance and other employee-related charges	—			(49		)	—			(90		)
Other exit costs	(75		)	—			(75		)	64
Total	$	4,112		$	17,279		$	27,096		$	20,371

Restructuring accrual activity for the nine months ended September 23, 2012 was as follows:

(amounts in thousands)	Accrual at Beginning of Year		Charged to Earnings		Charge Reversed to Earnings			Cash Payments			Exchange Rate Changes			Accrual at September 23, 2012
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	9,710		18,106		(1,445		)	(13,969		)	89			12,491
Other exit costs(1)	—		3,680		—			(3,151		)	—			529
SG&A Restructuring Plan
Severance and other employee-related charges	6,718		805		(197		)	(4,860		)	(13		)	2,453
Other exit costs(2)	1,109		66		—			(859		)	(9		)	307
Manufacturing Restructuring Plan
Other exit costs	75		—		(75		)	—			—			—
Total	$	17,612	$	22,657	$	(1,717	)	$	(22,839	)	$	67		$	15,780

⁽¹⁾  During the first nine months of 2012, there was a net charge to earnings of $3.7 million primarily due to lease termination costs, inventory and equipment moving costs, restructuring agent costs, legal costs, and gains/losses on sale of assets in connection with the restructuring plan.

⁽²⁾  During the first nine months of 2012, there was a net charge to earnings of $0.1 million primarily due to lease termination costs, and inventory and equipment moving costs, in connection with the restructuring plan.

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Global Restructuring Plan (including LEAN)

During September 2011, we initiated the Global Restructuring Plan focused on further reducing our overall operating expenses by including manufacturing and other cost reduction initiatives, such as consolidating certain manufacturing facilities and administrative functions to improve efficiencies. This plan was further expanded in the first quarter of 2012 and again during the second quarter of 2012 to include Project LEAN. The first phase of this plan was implemented in the third quarter of 2011 with the remaining phases of the plan expected to be substantially complete by the end of 2013.

For the nine months ended September 23, 2012, the net charge to earnings of $26.5 million represents the current year activity related to the Global Restructuring Plan including Project LEAN. The anticipated total costs related to the plan are expected to approximate $52 million to $55 million, of which $45.9 million have been incurred. The total number of employees planned to be affected by the Global Restructuring Plan including Project LEAN is 2,296, of which 1,263 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

SG&A Restructuring Plan

During 2009, we initiated the SG&A Restructuring Plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan substantially completed by the end of the first quarter of 2012.

For the nine months ended September 23, 2012, the net charge to earnings of $0.7 million represents the current year activity related to the SG&A Restructuring Plan. The implementation of the SG&A Restructuring Plan is substantially complete, with total costs incurred of approximately $19 million. The total number of employees planned to be affected by the SG&A Restructuring Plan is 369, of which 363 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

Manufacturing Restructuring Plan

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our Apparel Labeling Solutions (ALS) business, formerly Check-Net^®, and to support incremental improvements in our EAS systems and labels businesses. For the nine months ended September 23, 2012, there was a $0.1 million charge reversed to earnings recorded in connection with the Manufacturing Restructuring Plan.

The total number of employees planned to be affected by the Manufacturing Restructuring Plan is 420, all of which have been terminated. As of September 23, 2012 the implementation of the Manufacturing Restructuring Plan is substantially complete, with total costs incurred of $4.1 million.

Note 12. CONTINGENT LIABILITIES AND SETTLEMENTS

We are involved in certain legal actions, all of which have arisen in the ordinary course of business. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on our Consolidated Results of Operations and/or Financial Condition, except as disclosed in our Annual Report on Form 10-K for the year ended December 25, 2011 for which there have been no material changes.

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Note 13. BUSINESS SEGMENTS

	Quarter								Nine Months
	(13 weeks) Ended								(39 weeks) Ended
(amounts in thousands)	September 23, 2012				September 25, 2011				September 23, 2012				September 25, 2011
					(As Revised)								(As Revised)
Business segment net revenue:
Shrink Management Solutions	$	133,859			$	147,719			$	374,033			$	415,620
Apparel Labeling Solutions	41,759				49,488				133,907				144,705
Retail Merchandising Solutions	12,545				17,842				40,916				53,420
Total revenues	$	188,163			$	215,049			$	548,856			$	613,745
Business segment gross profit:
Shrink Management Solutions	$	56,026			$	57,978			$	151,525			$	166,434
Apparel Labeling Solutions	10,101				14,733				31,626				44,213
Retail Merchandising Solutions	5,887				8,377				18,079				25,510
Total gross profit	72,014				81,088				201,230				236,157
Operating expenses	68,520			(1)	88,258			(2)	302,862			(3)	238,807			(4)
Interest (expense) income, net	(4,272		)		(1,237		)		(7,251		)		(3,104		)
Other gain (loss), net	325				(783		)		29				(1,049		)
Loss from continuing operations before income taxes	$	(453	)		$	(9,190	)		$	(108,854	)		$	(6,803	)

⁽¹⁾  Includes a $4.1 million restructuring charge and a $17 thousand acquisition charge.

⁽²⁾  Includes a $17.3 million restructuring charge, a $0.3 million charge related to improper and fraudulent Canadian activities and a $2 thousand acquisition charge.

⁽³⁾  Includes a $64.4 million goodwill impairment charge, a $27.1 million restructuring charge, a $2.9 million charge related to our CEO transition, a $0.7 million charge for forensic and legal fees associated with the improper and fraudulent Canadian activities, and a $0.1 million acquisition charge.

⁽⁴⁾  Includes a $20.4 million restructuring charge, a $2.2 million acquisition charge, and a $0.6 million charge related to improper and fraudulent Canadian activities.

Note 14. DISCONTINUED OPERATIONS

We evaluate our businesses and product lines periodically for their strategic fit within our operations. Beginning in December of 2011, we began to actively market our Banking Security Systems Integration business unit included in our Shrink Management Solutions segment. As a result of this divestiture decision, we are accounting for this business as discontinued operations.  The classification of this business as discontinued operations was determined to be a triggering event for testing impairment.  As a result of this impairment test, we determined that there was a $3.4 million impairment charge in the goodwill reporting unit of our Shrink Management Solutions segment and a $2.8 million impairment of customer relationship intangible assets.  These impairment charges were included in discontinued operations on the Consolidated Statement of Operations during the fourth quarter ended December 25, 2011.

During the second quarter of 2012, we performed an impairment test based on updated fair value information regarding the Banking Security Systems Integration business unit. As a result of this impairment test, we determined that there was a $0.4 million impairment charge in the goodwill reporting unit of our Shrink Management Solutions segment and a $0.7 million impairment of customer relationship intangible assets. During the third quarter of 2012, we performed an impairment test based on final negotiations of the selling price for the Banking Security Systems Integration business unit. As a result of this impairment test, we determined that there was a $0.8 million additional impairment of customer relationship intangible assets. These impairment charges were included in discontinued operations on the Consolidated Statement of Operations during the second and third quarters ended June 24, 2012 and September 23, 2012, respectively.

On October 1, 2012, we completed the sale of this business. For further information, refer to Note 15, "Subsequent Events".

35

The Company’s discontinued operations reflect the operating results for the disposal group.  The results for the three and nine months ended September 23, 2012 and September 25, 2011 have been reclassified to show the results of operations for the Banking Security Systems Integration business unit as discontinued operations, net of tax, on the Consolidated Statement of Operations. Below is a summary of these results:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Net revenue	$	2,808		$	3,077		$	10,504		$	8,985
Gross profit	355			532			1,431			1,329
Selling, general, and administrative expenses	752			1,055			2,416			3,090
Restructuring expenses	—			113			—			113
Intangible impairment	770			—			1,442			—
Goodwill impairment	—			—			370			—
Operating loss	(1,167		)	(636		)	(2,797		)	(1,874		)
Loss from discontinued operations before income taxes	(1,167		)	(636		)	(2,797		)	(1,874		)
Loss from discontinued operations, net of tax(1)	$	(1,167	)	$	(1,069	)	$	(2,797	)	$	(1,874	)

⁽¹⁾  As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations for the three and nine months ended September 23, 2012, and the nine months ended September 25, 2011.

The assets and liabilities associated with this business have been adjusted to fair value, less costs to sell, and reclassified into assets of discontinued operations held for sale and liabilities of discontinued operations held for sale, as appropriate, on the Consolidated Balance Sheet. As of September 23, 2012 and December 25, 2011 the classification was as follows:

(amounts in thousands)	September 23, 2012		December 25, 2011
Accounts receivable, net	$	1,525	$	1,519
Inventories	1,045		1,087
Property, plant, and equipment, net	18		11
Goodwill	—		370
Other intangibles, net	312		1,754
Other assets	936		1,579
Assets of discontinued operations held for sale	$	3,836	$	6,320
Accounts payable	$	372	$	551
Accrued compensation and related taxes	—		40
Other accrued expenses	284		599
Unearned revenues	421		169
Restructuring reserve	—		78
Other liabilities	1		3
Liabilities of discontinued operations held for sale	$	1,078	$	1,440

Net cash flows of our discontinued operations from each of the categories of operating, investing and financing activities were not significant.

36

Note 15. SUBSEQUENT EVENTS

On October 1, 2012, the Company completed the sale of the Banking Security Systems Integration business unit for $3.5 million subject to closing adjustments related to a non-compete agreement and third-party consents plus a working capital adjustment for which the final calculation is yet to be determined. The working capital adjustment is determined based on the difference between $2.5 million and the final calculation of the working capital of the Banking Security Systems Integration business unit as of October 1, 2012. On October 1, 2012, the Company received cash proceeds of $1.5 million and a promissory note of $1.6 million from the purchaser. The note receivable is due in consecutive monthly installments beginning on November 1, 2012, with the last scheduled payment due on October 1, 2017. The promissory note bears interest at the 30 day LIBOR rate plus 5.5%. The selling price is also subject to a contingent consideration payment up to a maximum amount of $0.9 million. The contingent payment is based on the purchaser's revenues for the first year of its ownership of the Banking Security Systems Integration business unit. If these revenues exceed $10 million, the Company is entitled to a contingent payment amount of 10% of the revenues above $10 million, subject to certain adjustments, not to exceed a total contingent consideration payment of $0.9 million. The gain or loss on sale of the Banking Security Systems Integration business unit will be recorded through discontinued operations on the Consolidated Statement of Operations during the fourth quarter ended December 30, 2012.

We filed a claim during the second quarter of 2012 with our insurance provider for the unrecovered amount of our loss related to the improper and fraudulent Canadian activities that impacted our fiscal years 2005 through 2011. The total cumulative gross financial statement impact of the improper and fraudulent activities was approximately $5.2 million of which $1.1 million was recovered by the Company from the perpetrator during the fourth quarter of 2011, resulting in a net cumulative financial statement impact of $4.1 million. We incurred expenses related to the improper and fraudulent activities of $0.7 million during 2012. On October 10, 2012, the Company received compensation of $4.7 million for the financial impact of the fraudulent Canadian activities from our insurance provider. The income from the settlement will be recorded in the fourth quarter of 2012 in other expense in the Consolidated Statement of Operations.

37

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS

Information Relating to Forward-Looking Statements

This report includes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this quarterly report on Form 10-Q which express that we "believe," "anticipate," "expect" or "plan to" as well as other statements which are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect to future events and financial performance, and are subject to certain risks and uncertainties which could cause actual results to differ materially from historical results or those anticipated. Such risks, uncertainties and assumptions include, but are not limited, to the following: the impact upon operations of legal compliance matters or internal controls review, improvement and remediation, including the detection of wrongdoing, improper activities, or circumvention of internal controls; our ability to integrate acquisitions and to achieve our financial and operational goals for our acquisitions; changes in international business conditions; foreign currency exchange rate and interest rate fluctuations; lower than anticipated demand by retailers and other customers for our products; slower commitments of retail customers to chain-wide installations and/or source tagging adoption or expansion; possible increases in per unit product manufacturing costs due to less than full utilization of manufacturing capacity as a result of slowing economic conditions or other factors; our ability to provide and market innovative and cost-effective products; the development of new competitive technologies; our ability to maintain our intellectual property; competitive pricing pressures causing profit erosion; the availability and pricing of component parts and raw materials; possible increases in the payment time for receivables as a result of economic conditions or other market factors; changes in regulations or standards applicable to our products; the ability to successfully implement global cost reductions in operating expenses including field service, sales, and general and administrative expense, and our manufacturing and supply chain operations without significantly impacting revenue and profits; our ability to maintain effective internal control over financial reporting, including the ability to remediate the material weakness discovered during the year ended December 25, 2011; and risks generally associated with our company-wide implementation of an enterprise resource planning (ERP) system. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about potential factors that could affect our business and financial results is included in our Annual Report on Form 10-K for the year ended December 25, 2011, and our other Securities and Exchange Commission filings.

Overview

We are a multinational manufacturer and marketer of identification, tracking, security and merchandising solutions primarily for the retail industry. We provide technology-driven integrated supply chain solutions to brand, track, and secure goods for retailers and consumer product manufacturers worldwide. We are a leading provider of, and earn revenues primarily from the sale of Shrink Management Solutions, Apparel Labeling Solutions and Retail Merchandising Solutions. Shrink Management Solutions consists of electronic article surveillance (EAS) systems and EAS consumables including Alpha solutions, store monitoring solutions (CheckView^®), and radio frequency identification (RFID) systems, software, tags and labels. Apparel Labeling Solutions includes our web-enabled apparel labeling solutions platform and network of service bureaus to manage the printing of variable information on price and promotional tickets, adhesive labels, fabric and woven tags and labels, and apparel branding tags. Retail Merchandising Solutions consists of hand-held labeling systems (HLS) and retail display systems (RDS). Applications of these products include primarily retail security, asset and merchandise visibility, automatic identification, and pricing and promotional labels and signage. Operating directly in 30 countries, we have a global network of subsidiaries and distributors, and provide customer service and technical support around the world.

Our results are heavily dependent upon sales to the retail market. Our customers are dependent upon retail sales, which are susceptible to economic cycles and seasonal fluctuations. Furthermore, as approximately two-thirds of our revenues and operations are located outside the U.S., fluctuations in foreign currency exchange rates have a significant impact on reported results.

38

As a result of a comprehensive and strategic operational review during the second quarter of 2012, we have redefined our strategic focus. We will transform our operations from a product protection business to a provider of inventory management solutions that will enable retailers to enhance profitability by managing product loss due to shrinkage, improving working capital, and increasing sales. This new strategy will continue to focus on being the recognized global leader in shrink management and merchandise visibility solutions to the retail and apparel industries and streamline and direct our Apparel Labeling business to leverage our strategic advantage in variable data management in support of RFID merchandise visibility solutions. Additionally, as part of our strategic repositioning, we will consider the divestiture of certain product lines and businesses that are not strategically important to our redefined strategy.

Our Apparel Labeling business, which was assembled over the past few years through numerous acquisitions to support our penetration into the apparel industry and to support the growth of our RFID strategy, needs a more narrow focus. We will achieve this by right-sizing the Apparel Labeling footprint in order to profitably provide on-time, high quality products to our apparel customers so that retailers can effectively merchandise their products. Simultaneously, we will reduce our Apparel Labeling product offering to only those that are also necessary to support our RFID strategy.

Our operations and results depend significantly on global market worldwide economic conditions, which have experienced deterioration in recent years. In response to these market conditions, we continue to focus on providing customers with innovative products that will be valuable in addressing shrink, which is particularly important during a difficult economic environment. We have also implemented initiatives to reduce costs and improve working capital to mitigate the effects of the economy on our business. We believe that these restructuring initiatives coupled with the strength of our core business and our ability to generate positive cash flow will sustain us through this challenging period.

During 2009, we initiated the SG&A Restructuring Plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan substantially completed by the end of the first quarter of 2012. In the third quarter of 2011, the Company approved the Global Restructuring Plan, an expansion of our previous SG&A Restructuring Plan to include manufacturing and other cost reduction initiatives.

During the second quarter of 2012, in conjunction with our strategic shift, we launched a new profit improvement initiative, Project LEAN, which is designed to restructure the Company to support a more focused product range while positioning Checkpoint to return to profitable growth. Project LEAN will be reported as part of the Global Restructuring Plan.

The expanded Global Restructuring Plan including Project LEAN and the SG&A Restructuring Plan will impact over 2,400 existing employees.  Total costs of the two plans are expected to approximate $70 million to $75 million by the end of 2013, with $52 million to $55 million in total anticipated costs for the Global Restructuring Plan including Project LEAN and approximately $19 million of costs incurred for the SG&A Restructuring Plan, which is substantially complete. Total annual savings of the two plans are expected to approximate $100 million to $105 million by end of 2013, with $81 million to $85 million in total anticipated savings for the Global Restructuring Plan including Project LEAN and $19 million to $20 million in total anticipated savings for the SG&A Restructuring Plan. Through our Global Restructuring Plan including Project LEAN, we plan to stabilize sales, actively manage margins, dramatically reduce operating expenses, more effectively manage working capital and improve global cash management control.

On February 17, 2012, we received amendments to our Senior Secured Credit Facility and Senior Secured Notes ("Debt Agreements") which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25th, June 24th and September 23, 2012. In addition, the amendments prohibit the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received these amendments, we would have been in violation of the leverage ratio covenant as of March 25, 2012.

On July 31, 2012, we received additional amendments to our Debt Agreements ("July 2012 Amendments"), which contained several modifications. The July 2012 Amendments reduced the total commitment of the Senior Secured Credit Facility from $125.0 million to $75.0 million. The July 2012 Amendments reduced the sublimit for the issuance of letters of credit of the Senior Secured Credit Facility from $25.0 million to $5.0 million. The July 2012 Amendments reduced the sublimit for swingline loans of the Senior Secured Credit Facility from $25.0 million to $5.0 million. The July 2012 Amendments increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendments waive the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendments permit divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions.

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The July 2012 Amendments also contain a provision whereby if our cash balance exceeds $65 million as of weekly measurement dates, we must prepay any additional borrowings made subsequent to the July 2012 Amendments. This provision is effective until we are in compliance with our original covenant requirements for two consecutive quarters. There were no required prepayments in the third quarter of 2012.

Absent the waiver and additional July 2012 Amendments, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, the interest rate spread on the Senior Secured Credit Facility increases to a maximum of 4.25% over the Base Rate or 5.25% over the LIBOR rate. The “Base Rate” is the highest of (a) our lender's prime rate, (b) the Federal Funds rate, plus 0.50%, and (c) a daily rate equal to the one-month LIBOR rate, plus 1.0%. The unused line fee will increase to a maximum of 1.00% per annum. The maximum is based in accordance with changes in our leverage ratio.

During the Waiver Period, and until such time the financial covenants return to the original covenants for two consecutive quarters, the coupon rate on the Senior Secured Notes will increase to 5.75%, 6.13%, and 6.50% for the Series A Senior Secured Notes, Series B Senior Secured Notes, and Series C Senior Secured Notes, respectively.

In January 2011, the Company entered into an agreement to acquire the business of Shore to Shore, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition settled in May 2011 for a purchase price of approximately $78.7 million. During the second quarter of 2012, we finalized the purchase accounting for the acquisition and the financial statements reflect the final allocations of the purchase price based on estimated fair values at the date of acquisition. The results from the acquisition and related goodwill are included in the Apparel Labeling Solutions segment. This acquisition will allow us to strengthen and expand our core apparel labeling offering and provides us with additional capacity in key geographical locations.

Future financial results will be dependent upon our ability to successfully implement our redefined strategic focus, expand the functionality of our existing product lines, develop or acquire new products for sale through our global distribution channels, convert new large chain retailers to our solutions for shrink management, merchandise visibility and apparel labeling, and reduce the cost of our products and infrastructure to respond to competitive pricing pressures.

We believe that our base of recurring revenue (revenues from the sale of consumables into the installed base of security systems, apparel tags and labels, and hand-held labeling tools and services from monitoring and maintenance), repeat customer business, the anticipated effect of our restructuring activities, and our borrowing capacity should provide us with adequate cash flow and liquidity to execute our business plan.

Revision of Previously Issued Consolidated Financial Statements

As previously disclosed in our Annual Report on Form 10-K for the year ended December 25, 2011, in December of 2011, we identified errors in our financial statements resulting from improper and fraudulent activities of a certain former employee of our Canada sales subsidiary as part of the transition of our Canadian operations into our shared service environment in North America. The total cumulative gross financial statement impact of the improper and fraudulent activities was approximately $5.2 million and impacted fiscal years 2005 through 2011 of which $1.1 million was recovered by the Company from the perpetrator during the fourth quarter of 2011, resulting in a net cumulative financial statement impact of $4.1 million. We incurred additional expenses related to the improper and fraudulent activities of $0.7 million during 2012. The financial statement impacts of the improper and fraudulent Canadian activities have been included in other expense in the Consolidated Statements of Operations. We filed a claim in the second quarter of 2012 with our insurance provider for the unrecovered amount of the loss. On October 10, 2012, the Company received compensation of $4.7 million for the financial impact of the fraudulent Canadian activities from our insurance provider. The income from the settlement will be recorded in the fourth quarter of 2012 in other expense in the Consolidated Statement of Operations. For further information, refer to Note 15, "Subsequent Events".

All amounts in this Quarterly Report on Form 10-Q affected by the revision adjustments reflect such amounts as revised. In addition to the revisions described above, the effects of discontinued operations presentation on previously reported amounts have been included in order to reconcile between previously reported amounts and the final amounts as revised in this Quarterly Report on Form 10-Q.

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Our management assessed the effectiveness of our internal control over financial reporting as of December 25, 2011, and identified a material weakness related to our controls to detect management override of controls at certain of our foreign subsidiaries that were not integrated into our shared services environments in the United States and Europe. Specifically, the monitoring controls over certain locations, including internal audits, periodic reviews of segregation of duties and review of the effectiveness of key balance sheet reconciliations were not designed to prevent or detect management override of controls that could circumvent internal control over financial reporting. As a result of this material weakness, our management concluded that our internal control over financial reporting was ineffective as of September 23, 2012. The remediation of the material weakness has progressed as expected and is anticipated to be completed in 2012. See Part I-Item 4: Controls and Procedures.

Critical Accounting Policies and Estimates

We have presented our Critical Accounting Policies and Estimates in Part II - Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 25, 2011. Except as outlined below, there have been no material changes to our Critical Accounting Policies and Estimates set forth in our Annual Report on Form 10-K for the fiscal year ended December 25, 2011.

Valuation of Long-Lived Assets. Our long-lived assets include property, plant, and equipment, goodwill, and identified intangible assets.With the exception of goodwill and indefinite-lived intangible assets, long-lived assets are depreciated or amortized over their estimateduseful lives, and are reviewed for impairment whenever changes in circumstances indicate the carrying value may not be recoverable.Recoverability is determined based upon our estimates of future undiscounted cash flows. If the carrying value is determined to be notrecoverable, an impairment charge would be necessary to reduce the recorded value of the assets to their fair value. The fair value of thelong-lived assets other than goodwill is based upon appraisals, quoted market prices of similar assets, or discounted cash flows.

Goodwill and indefinite-lived intangible assets are subject to tests for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We test for impairment on an annual basis as of fiscal month end of October of each fiscal year, relying on a number of factors including operating results, business plans, and anticipated future cash flows. Our management uses its judgment in assessing whether goodwill has become impaired between annual impairment tests. Reporting units are primarily determined as the geographic areas comprising our business segments, except in situations when aggregation of the reporting units is appropriate. Recoverability of goodwill is evaluated using a two-step process. The first step involves acomparison of the fair value of a reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value, then the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the fair value of that goodwill, an impairment loss is recognized in anamount equal to the excess.

The implied fair value of our reporting units is dependent upon our estimate of future discounted cash flows and other factors. Our estimates of future cash flows include assumptions concerning future operating performance and economic conditions and may differ from actual future cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate, and through our stock price that we use to determine our market capitalization. Therefore, changes in the stock price may also affect the result of the impairment test. Market capitalization is determined by multiplying the number of shares outstanding on the assessment date by the average market price of our common stock over a 30-day period before each assessment date. We use this 30-day duration to consider inherent market fluctuations that may affect any individual closing price. We believe that our market capitalization alone does not fully capture the fair value of our business as a whole, or the substantial value that an acquirer would obtain from its ability to obtain control of our business. The difference between the sum total of the fair value of our reporting units and our market capitalization represents the control premium. As of the date of our goodwill impairment test, management has assessed our control premium to be within a reasonable range.

We have not made any changes to our methodology used in our annual impairment test since the adoption of ASC 350. Determination of the fair value of a reporting unit is a matter of judgment and involves the use of estimates and assumptions, which are based on management's best estimates at the time.

We use an income approach (discounted cash flow approach) for the determination of fair value of our reporting units. Our projected cash flows incorporate many assumptions, the most significant of which include variables such as future sales, growth rates, operating margin, and the discount rates applied.

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Assumptions related to revenue, growth rates and operating margin are based on management's annual and ongoing forecasting, budgeting and planning processes and represent our best estimate of the future results of operations across the company. These estimates are subject to many assumptions, such as the economic environment across the segments in which we operate, end demand for our products, and competitor actions. The use of different assumptions would increase or decrease estimated discounted future cash flows and could increase or decrease an impairment charge. If the use of these assets or the projections of future cash flows change in the future, we may be required to record impairment charges. An erosion of future business results in any of the business units or significant declines in our stock price could result in an impairment to goodwill or other long-lived assets. These risks are discussed in Part 1- Item 1A - "Risk Factors", contained in our Annual Report on Form 10-K for the year ended December 25, 2011.

During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent annual impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an interim assessment of goodwill was warranted. This resulted in the Company's assessment that the carrying value of the Apparel Labeling Solutions reporting unit exceeded its fair value. The basis of the fair value was determined by projecting future cash flows using assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of the evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate and through our stock price that we use to determine our market capitalization. As a result of our interim impairment test, a $64.4 million non-cash goodwill impairment charge was recorded as of June 24, 2012 in our Apparel Labeling Solutions segment. The goodwill impairment expense was due to the decline in estimated future Apparel Labeling Solutions cash flow impacted by our plan to refocus the business coupled with recent declines in revenue and profitability. The impairment charge of the entire goodwill balance in our Apparel Labeling Solutions segment was recorded in goodwill impairment on the Consolidated Statement of Operations.

Our Shrink Management Solutions (SMS) segment is composed of four reporting units. The fair value of two of the four reporting units, Europe SMS and Asia Pacific SMS, exceeded their respective carrying values as of the date of the interim impairment test by approximately 10% and 8%, respectively. As of the date of our interim impairment test, the goodwill for these two reporting units totaled $72.0 million for Europe SMS and $12.0 million for Asia Pacific SMS. In determining the fair value of these reporting units, our projected cash flows did not contain significant growth assumptions. A 10% decline in operating results, or a 1.10% increase in our discount rates could result in future decreases in the fair values of these reporting units which could result in future impairments. The other reporting units within the SMS segment exceeded their respective carrying values by a significant margin.

Our Retail Merchandising Solutions (RMS) segment is composed of two reporting units. The fair value of one of the two reporting units, Europe RMS, exceeded its carrying value as of the date of the interim impairment test by approximately 11%. As of the date of our interim impairment test, the goodwill for the Europe RMS reporting unit totaled $59.3 million. In determining the fair value of this reporting unit, our projected cash flows did not contain significant growth assumptions. A 11% decline in operating results, or a 1.60% increase in our discount rate could result in a future decrease in the fair value of this reporting unit which could result in a future impairment. The other reporting unit within the Retail Merchandising segment exceeded its carrying value by a significant margin.

There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment in these reporting units.

As a result of interim impairment indicators in the second quarter of 2012, we performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in our Apparel Labeling Solutions reporting unit to their carrying amounts. The undiscounted cash flow analysis resulted in no impairment charge in the quarter ended June 24, 2012. There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment.

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Results of Operations

All comparisons are with the prior year period, unless otherwise stated.

Net Revenues

Our unit volume is driven by product offerings, number of direct sales personnel, recurring sales and, to some extent, pricing. Our base of installed systems provides a source of recurring revenues from the sale of disposable tags, labels, and service revenues.

Our customers are substantially dependent on retail sales, which are seasonal, subject to significant fluctuations, and difficult to predict. In addition, current economic trends have particularly affected our customers, and consequently our net revenues have been, and may continue to be impacted in the future. Historically, we have experienced lower sales in the first half of each year.

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Analysis of Statement of Operations

Thirteen Weeks Ended September 23, 2012 Compared to Thirteen Weeks Ended September 25, 2011

The following table presents for the periods indicated certain items in the Consolidated Statement of Operations as a percentage of total revenues and the percentage change in dollar amounts of such items compared to the indicated prior period:

	Percentage of Total Revenue				Percentage Change In Dollar Amount
	September 23,		September 25,		(Fiscal 2012)
	2012		2011		vs.
Quarter ended	(Fiscal 2012)		(Fiscal 2011)		(Fiscal 2011)
			(As Revised)
Net revenues
Shrink Management Solutions	71.1	%	68.7	%	(9.4	)%
Apparel Labeling Solutions	22.2		23.0		(15.6	)
Retail Merchandising Solutions	6.7		8.3		(29.7	)
Net revenues	100.0		100.0		(12.5	)
Cost of revenues	61.7		62.3		(13.3	)
Total gross profit	38.3		37.7		(11.2	)
Selling, general, and administrative expenses	31.9		31.5		(11.6	)
Research and development	2.3		2.6		(18.9	)
Restructuring expenses	2.2		8.0		(76.2	)
Acquisition costs	—		—		N/A
Other expense	—		0.1		(100.0	)
Other operating income	—		1.2		(100.0	)
Operating income (loss)	1.9		(3.3	)	(148.7	)
Interest income	0.2		0.4		(59.8	)
Interest expense	2.5		1.0		110.2
Other gain (loss), net	0.2		(0.4	)	(141.5	)
Loss from continuing operations before income taxes	(0.2	)	(4.3	)	(95.1	)
Income taxes expense	2.0		17.8		(90.2	)
Net loss from continuing operations	(2.2	)	(22.1	)	(91.1	)
Loss from discontinued operations, net of tax	(0.6	)	(0.5	)	9.2
Net loss	(2.8	)	(22.6	)	(88.9	)
Less: loss attributable to non-controlling interests	—		—		(206.3	)
Net loss attributable to Checkpoint Systems, Inc.	(2.8	)%	(22.6	)%	(89.0	)

N/A – Comparative percentages are not meaningful.

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Net Revenues

Revenues for the third quarter of 2012 compared to the third quarter of 2011 decreased $26.9 million, or 12.5%, from $215.1 million to $188.2 million. Foreign currency translation had a negative impact on revenues of approximately $10.1 million, or 4.7%, in the third quarter of 2012 as compared to the third quarter of 2011.

(amounts in millions)
					Dollar Amount Change			Percentage Change
	September 23,		September 25,		(Fiscal 2012)			(Fiscal 2012)
	2012		2011		vs.			vs.
Quarter ended	(Fiscal 2012)		(Fiscal 2011)		(Fiscal 2011)			(Fiscal 2011)
			(As Revised)
Net Revenues:
Shrink Management Solutions	$	133.9	$	147.8	$	(13.9	)	(9.4	)%
Apparel Labeling Solutions	41.8		49.5		(7.7		)	(15.6	)
Retail Merchandising Solutions	12.5		17.8		(5.3		)	(29.7	)
Net Revenues	$	188.2	$	215.1	$	(26.9	)	(12.5	)%

Shrink Management Solutions

Shrink Management Solutions (SMS) revenues decreased $13.9 million, or 9.4%, during the third quarter of 2012 compared to the third quarter of 2011. Foreign currency translation had a negative impact of approximately $6.6 million. The remaining decrease of $7.3 million in Shrink Management Solutions was due to organic declines in CheckView^®, Alpha^®, and EAS consumables. These decreases were partially offset by increases in EAS systems and Merchandise Visibility (RFID).

The CheckView^® revenue decrease in the third quarter of 2012 as compared to the third quarter of 2011 was due to lower volume of installations and on-going services with existing customers in the U.S., International Americas, and Europe. CheckView^® has been dependent on new store openings and capital spending of our customers, all of which have been adversely impacted, and may continue to be impacted by current economic trends.

Alpha^® revenues decreased in the third quarter of 2012 as compared to the third quarter of 2011 due to worsened market conditions in Europe, Asia, and the U.S. for high theft prevention products during the third quarter of 2012. This factor was partially offset by stronger demand for Alpha^® products in International Americas. We expect global Alpha revenues to increase in 2013 as a result of an increased focus on execution as well as increased attention on marketing of existing and new products.

The EAS consumables revenues decrease in the third quarter of 2012 as compared to the third quarter of 2011 was primarily due to a decline in Hard Tag @ Source^™ revenues, which were below levels of one year ago when we experienced high volumes associated with the initial program roll-out to a major European retailer. Also contributing to the decrease was a decline in EAS label volumes with certain customers in the U.S., Asia, and Europe. Economic uncertainty and soft markets present an ongoing challenge to our revenue growth in consumables. These declines were partially offset by increased orders in International Americas.

The EAS systems revenues increase in the third quarter of 2012 as compared to the third quarter of 2011 was driven by new customer wins in Asia, Europe, and the U.S., and also due to new product installations with existing customers. For several of these customers, installations will continue through 2012 and into 2013.

Merchandise Visibility (RFID) revenues increased in the third quarter of 2012 as compared to the third quarter of 2011, as the business continues to gain traction with installations at several major retailers. The increase was due primarily to a roll-out with RFID enabled technology in Europe, which did not occur in the third quarter of 2011, as well as increased RFID business in the U.S. We expect RFID revenues to increase in 2013 as a result of the conversion of certain current pilots into installation contracts and the expansion of certain installation contracts to additional stores.

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Apparel Labeling Solutions

Apparel Labeling Solutions revenues decreased $7.7 million, or 15.6%, in the third quarter of 2012 as compared to the third quarter of 2011. Foreign currency translation had a negative impact of approximately $1.9 million. The remaining decrease of $5.8 million was primarily due to declines in sales volumes across all geographies, delays in peak season ordering and changes in product mix. The weakness in these markets is broad based. A large portion of our Europe customer base includes hyper-markets and mainstream apparel retailers which have seen a significant impact from the economic downturn. In the U.S., retailers are recovering slowly. As a result, we have seen a cautious approach to purchases from apparel vendors.

Retail Merchandising Solutions

Retail Merchandising Solutions revenues decreased $5.3 million, or 29.7%, in the third quarter of 2012 as compared to the third quarter of 2011. After considering the foreign currency translation negative impact of $1.6 million, the $3.7 million decrease in revenues is primarily related to the impact of the movement of a portion of this business to a distributor model and a decrease in Hand-held Labeling Solutions (HLS). We anticipate HLS will face difficult revenue trends in the remainder of 2012 due to the continued shifts in market demand for HLS products.

Gross Profit

During the third quarter of 2012, gross profit decreased $9.1 million, or 11.2%, from $81.1 million to $72.0 million. The negative impact of foreign currency translation on gross profit was approximately $2.6 million. Gross profit, as a percentage of net revenues, increased from 37.7% to 38.3%.

Shrink Management Solutions

Shrink Management Solutions gross profit as a percentage of Shrink Management Solutions revenues increased from 39.2% in the third quarter of 2011 to 41.9% in the third quarter of 2012. The increase in the gross profit percentage of Shrink Management Solutions was due primarily to higher margins in EAS systems and EAS consumables, partially offset by lower margins in CheckView^®. The increase in EAS Systems margins was due to product mix, as well as favorable manufacturing variances and decreased field service costs, primarily related to our restructuring efforts. The increase in EAS Consumables margins was due to decreased costs related to the shutdown of certain EAS label manufacturing operations and lower inventory costs. The decline in CheckView^® margins was due to customer product and service mix, as well as operational inefficiencies.

Apparel Labeling Solutions

Apparel Labeling Solutions gross profit as a percentage of Apparel Labeling Solutions revenues decreased to 24.2% in the third quarter of 2012, from 29.8% in the third quarter of 2011. The decrease in the gross profit percentage of Apparel Labeling Solutions was primarily due to unfavorable manufacturing variances and increased inventory costs. The impact of the Shore to Shore acquisition continued to negatively impact margins. During the third quarter of 2012, we successfully implemented the initial phases of restructuring in Asia and North America and began to see positive gross margin impact late in the third quarter of 2012.

Retail Merchandising Solutions

The Retail Merchandising Solutions gross profit as a percentage of Retail Merchandising Solutions revenues decreased to 46.9% in the third quarter of 2012 from 47.0% in the third quarter of 2011. The decrease in Retail Merchandising Solutions gross profit percentage was due primarily to the impact of the movement of a portion of this business to a distributor model.

Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses decreased $7.9 million, or 11.6%, during the third quarter of 2012 compared to the third quarter of 2011. Foreign currency translation decreased SG&A expenses by approximately $3.0 million. The SG&A and enhanced Global Restructuring programs reduced expenses by $6.1 million, partially offset by an increase in performance incentive accruals for employees other than senior management. Additionally, decreases in bad debt expense and long-term incentive compensation adjustments also contributed to the overall decrease.

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Research and Development Expenses

Research and development (R&D) expenses were $4.4 million, or 2.3% of revenues, in the third quarter of 2012 and $5.5 million, or 2.6% of revenues in the third quarter of 2011.

Restructuring Expenses

Restructuring expenses were $4.1 million, or 2.2% of revenues in the third quarter of 2012 compared to $17.3 million or 8.0% of revenues in the third quarter of 2011.

Acquisition Costs

Acquisition costs for the third quarter of 2012 were $17 thousand compared to $2 thousand for the third quarter in 2011.

Other Expense

Other expense was $0.3 million in the third quarter of 2011, without a comparable charge in 2012. The amount in the third quarter of 2011 represents the income statement impacts of the improper and fraudulent activities of a certain former employee of the Company’s Canada sales subsidiary.

Other Operating Income

Other operating income was $2.6 million, or 1.2% of revenues in the third quarter of 2011 without comparable income in 2012. The third quarter of 2011 other operating income was attributable to the sale of customer related receivables associated with the renewal and extension of sales-type lease arrangements which was completed in 2011.

Interest Income and Interest Expense

Interest income for the third quarter of 2012 decreased $0.6 million from the comparable quarter in 2011. The decrease in interest income was primarily due to lower cash balances and decreased interest income recognized for sales-type leases during the third quarter of 2012 compared to the third quarter of 2011.

Interest expense for the third quarter of 2012 increased $2.4 million from the comparable quarter in 2011. The increase in interest expense was primarily due to the amendment of our Senior Secured Credit Facility and Senior Secured Notes, as well as a make-whole premium of $1.1 million on the Senior Secured Notes.

Other Gain (Loss), net

Other gain (loss), net was a net gain of $0.3 million in the third quarter of 2012 compared to a net loss of $0.8 million in the third quarter of 2011. The increase was primarily due to a $0.3 million foreign exchange gain during the third quarter of 2012 compared to a $0.9 million foreign exchange loss in the third quarter of 2011.

Income Taxes

The effective tax rate for the third quarter of 2012 was negative 831.1% as compared to negative 417.4% for the third quarter of 2011. The decrease in the third quarter 2012 tax rate was due to the impairment charges and the valuation allowance position in the U.S. The Company has historically determined its interim tax provision using an estimated annual effective tax rate methodology. In calculating the tax provision for the third quarter of 2012, we have accounted for the U.S. operations by applying the discrete method. The Company determined that if the U.S. were included in the estimated annual effective tax rate, small changes in estimated pretax earnings would result in significant fluctuations in the tax rate. Therefore, the historical method would not provide a reliable estimate for the reporting period ended September 23, 2012.

Loss from Discontinued Operations

Loss from discontinued operations, net of tax, was $1.2 million and $1.1 million in the third quarter of 2012 and 2011, respectively. In December of 2011, we began actively marketing our Banking Security Systems Integration business unit included in our Shrink Management Solutions segment. As a result of this divestiture decision, we are accounting for this business as discontinued operations. The loss from discontinued operations in the third quarter of 2012 includes a non-cash impairment charge of $0.8 million, net of tax.

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Net Loss Attributable to Checkpoint Systems, Inc.

Net loss attributable to Checkpoint Systems, Inc. was $5.3 million, or $0.13 per diluted share, during the third quarter of 2012 compared to $48.7 million, or $1.20 per diluted share, during the third quarter of 2011. The weighted-average number of shares used in the diluted earnings per share computation were 41.1 million and 40.6 million for the third quarters of 2012 and 2011, respectively.

Thirty-Nine Weeks Ended September 23, 2012 Compared to Thirty-Nine Weeks Ended September 25, 2011

The following table presents for the periods indicated certain items in the Consolidated Statement of Operations as a percentage of total revenues and the percentage change in dollar amounts of such items compared to the indicated prior period:

	Percentage of Total Revenue				Percentage Change In Dollar Amount
					Fiscal 2012
	September 23, 2012		September 25, 2011		vs
Nine months (39 weeks) ended	(Fiscal 2012)		(Fiscal 2011)		Fiscal 2011
			(As Revised)
Net revenues
Shrink Management Solutions	68.1	%	67.7	%	(10.0	)%
Apparel Labeling Solutions	24.4		23.6		(7.5	)
Retail Merchandising Solutions	7.5		8.7		(23.4	)
Net revenues	100.0		100.0		(10.6	)
Cost of revenues	63.3		61.5		(7.9	)
Total gross profit	36.7		38.5		(14.8	)
Selling, general, and administrative expenses	36.0		35.7		(10.0	)
Research and development	2.4		2.5		(15.9	)
Restructuring expenses	4.9		3.3		33.0
Goodwill impairment	11.8		—		N/A
Acquisition costs	—		0.4		(94.2	)
Other expense	0.1		0.1		26.9
Other operating income	—		3.1		(100.0	)
Operating loss	(18.5	)	(0.4	)	N/A
Interest income	0.2		0.4		(51.8	)
Interest expense	1.5		0.9		47.8
Other gain (loss), net	—		(0.2	)	(102.8	)
Loss from continuing operations before income taxes	(19.8	)	(1.1	)	N/A
Income taxes (benefit) expense	(0.1	)	6.3		(102.1	)
Net loss from continuing operations	(19.7	)	(7.4	)	137.0
Loss from discontinued operations, net of tax	(0.5	)	(0.3	)	49.3
Net loss	(20.2	)	(7.7	)	133.5
Less: loss attributable to non-controlling interests	(0.1	)	—		N/A
Net loss attributable to Checkpoint Systems, Inc.	(20.1	)%	(7.7	)%	132.5	%

N/A – Comparative percentages are not meaningful.

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Net Revenues

Revenues for the first nine months of 2012 compared to the first nine months of 2011 decreased $64.9 million, or 10.6%, from $613.8 million to $548.9 million. Foreign currency translation had a negative impact on revenues of approximately $22.4 million, or 3.7%, in the first nine months of 2012 as compared to the first nine months of 2011.

(amounts in millions)
					Dollar Amount Change			Percentage Change
	September 23,		September 25,		(Fiscal 2012)			(Fiscal 2012)
	2012		2011		vs.			vs.
(39 weeks) Ended	(Fiscal 2012)		(Fiscal 2011)		(Fiscal 2011)			(Fiscal 2011)
			(As Revised)
Net Revenues:
Shrink Management Solutions	$	374.1	$	415.7	$	(41.6	)	(10.0	)%
Apparel Labeling Solutions	133.9		144.7		(10.8		)	(7.5	)
Retail Merchandising Solutions	40.9		53.4		(12.5		)	(23.4	)
Net Revenues	$	548.9	$	613.8	$	(64.9	)	(10.6	)%

Shrink Management Solutions

Shrink Management Solutions (SMS) revenues decreased $41.6 million, or 10.0%, during the first nine months of 2012 compared to the first nine months of 2011. Foreign currency translation had a negative impact of approximately $14.2 million. The remaining decrease of $27.4 million in Shrink Management Solutions was due to declines in CheckView^®, Alpha^®,and EAS consumables. These decreases were partially offset by increases in Merchandise Visibility (RFID) and EAS systems.

The CheckView^® revenue decrease in the first nine months of 2012 as compared to the first nine months of 2011 was due to lower volumes of installations and on-going services with existing customers. CheckView^® has been dependent on new store openings and capital spending of our customers, all of which have been adversely impacted, and may continue to be impacted by current economic trends.

Alpha^® revenues decreased in the first nine months of 2012 as compared to the first nine months of 2011 due to worsened market conditions in Europe, the U.S., and Asia for high theft prevention products during the first nine months of 2012. This factor was partially offset by a strong demand for Alpha^® products in the International Americas. We expect global Alpha revenues to increase in 2013 as a result of an increased focus on execution as well as increased attention on marketing of existing and new products.

The EAS consumables revenues decrease in the first nine months of 2012 as compared to the first nine months of 2011 was primarily due to a decline in Hard Tag @ Source^™ revenues, which were below levels of one year ago when we experienced high volumes associated with the initial program roll-out to a major European retailer. Also contributing to the decrease was a decline in EAS label volumes with certain customers in Europe, Asia, and the U.S. Economic uncertainty and soft markets present an ongoing challenge to our revenue growth in consumable products. These declines were partially offset by increased orders in International Americas.

The Merchandise Visibility (RFID) revenues increased in the first nine months of 2012 as compared to the first nine months of 2011, as the business continues to gain traction with installations at several major retailers. The increase was primarily due to a roll-out with RFID enabled technology in Europe in the first nine months of 2012, which did not occur in the first nine months of 2011, as well as increased business in the U.S. We expect RFID revenues to increase in 2013 as a result of the conversion of certain current pilots into installation contracts and the expansion of certain installation contracts to additional stores.

The EAS systems revenues increased in the first nine months of 2012 as compared to the first nine months of 2011. The increase was primarily driven by new customer wins in Asia, Europe, and the U.S., as well as higher levels of business with existing customers in the U.S. and International Americas. For several of these customers, installations will continue through 2012 and into 2013. These were partially offset by declines in Europe resulting from the lower volume of new product installations with existing customers. Historically, new store openings are a significant contributor to EAS systems revenues. These have been scaled back in the first nine months by many of our European based customers, who have increased their focus on margin improvement at existing stores.

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Apparel Labeling Solutions

Apparel Labeling Solutions revenues decreased $10.8 million, or 7.5%, in the first nine months of 2012 as compared to the first nine months of 2011. After considering the foreign currency translation negative impact of approximately $4.6 million, the remaining decrease of $6.2 million was due to a $24.5 million decline in organic revenues, primarily due to declines in sales volumes across Europe, the U.S., and International Americas. The weakness in these markets is broad based. A large portion of our Europe customer base includes hyper-markets and mainstream apparel retailers which have seen a significant impact from the economic downturn. In the U.S., retailers are recovering slowly. As a result, we have seen a cautious approach to purchases from apparel vendors that resulted in delays in peak season ordering. This decline in revenues was partially offset by the inclusion of $18.3 million in revenues attributable to the Shore to Shore businesses, which we acquired in May 2011.

Retail Merchandising Solutions

Retail Merchandising Solutions revenues decreased $12.5 million, or 23.4%, in the first nine months of 2012 as compared to the first nine months of 2011. After considering the foreign currency translation negative impact of $3.6 million, the $8.9 million decrease in revenues is primarily related to the impact of the movement of a portion of this business to a distributor model and a decrease in Hand-held Labeling Solutions (HLS). We anticipate HLS will face difficult revenue trends in the remainder of 2012 due to the continued shifts in market demand for HLS products.

Gross Profit

During the first nine months of 2012, gross profit decreased $34.9 million, or 14.8%, from $236.1 million to $201.2 million. The negative impact of foreign currency translation on gross profit was approximately $6.2 million. Gross profit, as a percentage of net revenues, decreased from 38.5% to 36.7%.

Shrink Management Solutions

Shrink Management Solutions gross profit as a percentage of Shrink Management Solutions revenues increased from 40.0% in the first nine months of 2011 to 40.5% in the first nine months of 2012. The increase in the gross profit percentage of Shrink Management Solutions was due primarily to higher margins in EAS systems and Alpha. The increase was partially offset by lower margins in CheckView^® and EAS consumables. EAS systems margins increased due to favorable manufacturing variances and decreased field service costs, primarily related to our restructuring efforts. Alpha margins increased due to decreased inventory costs as well as reduced shipping costs. The decline in CheckView^® margins was primarily due to customer product and service mix, as well as operational inefficiencies. EAS consumables margins were lower due to the costs incurred related to the shutdown of certain EAS label manufacturing operations and lower volumes impacting capacity utilization. Also impacting EAS consumables margins is the decline in higher margin Hard Tag @ Source revenues.

Apparel Labeling Solutions

Apparel Labeling Solutions gross profit as a percentage of Apparel Labeling Solutions revenues decreased to 23.6% in the first nine months of 2012, from 30.6% in the first nine months of 2011. Recent actions to restructure and right size our manufacturing footprint contributed to a temporary reduction in gross margins, including an impact on inventory reserves. The impact of the Shore to Shore acquisition, and unfavorable manufacturing variances driven by excess capacity at certain facilities also contributed to the decline. During the third quarter of 2012 we successfully implemented the initial phases of restructuring in Asia and North America and began to see positive gross margin impact late in the third quarter of 2012.

Retail Merchandising Solutions

The Retail Merchandising Solutions gross profit as a percentage of Retail Merchandising Solutions revenues decreased to 44.2% in the first nine months of 2012 from 47.8% in the first nine months of 2011. The decrease in Retail Merchandising Solutions gross profit percentage was primarily due to the impact of the movement of a portion of this business to a distributor model. Further, lower margins were caused by unfavorable manufacturing variances related to lower volumes in HLS in the first nine months of 2012 and lower margins in Retail Display Solutions (RDS) resulting primarily from inventory adjustments.

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Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses decreased $22.0 million, or 10.0%, during the first nine months of 2012 compared to the first nine months of 2011. Foreign currency translation decreased SG&A expenses by approximately $7.2 million. The SG&A and enhanced Global Restructuring programs reduced expenses by $17.4 million. The Shore to Shore acquisition increased SG&A expense by $4.8 million. Also contributing to the decrease were declines in consulting, operations and shared services expenses resulting from the second quarter of 2011 North American and Caribbean implementation of our company wide ERP system, reductions in temporary staff added in the second quarter of 2011 to add capabilities required for future process and cost improvement initiatives, and decreased commissions expenses associated with the renewal/extension of sales-type leases in the second quarter of 2011. Partially offsetting the decrease were increases in performance incentive accruals for employees other than senior management, bad debt expense, an increase in legal costs due primarily to litigation matters, and costs associated with the CEO transition were partially offset by incentive compensation adjustments.

Research and Development Expenses

Research and development (R&D) expenses were $13.1 million, or 2.4% of revenues, in the first nine months of 2012 and $15.6 million, or 2.5% of revenues in the first nine months of 2011.

Restructuring Expenses

Restructuring expenses were $27.1 million, or 4.9% of revenues in the first nine months of 2012 compared to $20.4 million or 3.3% of revenues in the first nine months of 2011.

Goodwill Impairment

Goodwill impairment expense was $64.4 million in the first nine months of 2012, without a comparable charge in the first nine months of 2011. The non-cash impairment expense in the first nine months of 2012 is detailed in the “Goodwill Impairment” section following “Liquidity and Capital Resources.”

Acquisition Costs

Acquisition Costs for the first nine months of 2012 were $127 thousand compared to $2.2 million for the first nine months in 2011. The decrease in acquisition costs was primarily due to the closing of the acquisition of the Shore to Shore businesses in May 2011.

Other Expense

Other expense was $0.7 million in the first nine months of 2012 compared to $0.6 million in the first nine months of 2011. These amounts represent the income statement impacts of the improper and fraudulent activities of a certain former employee of the Company’s Canada sales subsidiary. During the first nine months of 2012, these expenses represent legal and forensic costs incurred in connection with the Canada matter.

Other Operating Income

Other operating income was $19.3 million, or 3.1% of revenues in the first nine months of 2011 without comparable income in 2012. The 2011 other operating income was attributable to the sale of customer related receivables associated with the renewal and extension of sales-type lease arrangements which was completed in 2011.

Interest Income and Interest Expense

Interest income for the first nine months of 2012 decreased $1.4 million from the comparable nine months in 2011. The decrease in interest income was primarily due to lower cash balances and decreased interest income recognized for sales-type leases during the first nine months of 2012 compared to the first nine months of 2011.

Interest expense for the first nine months of 2012 increased $2.8 million from the comparable nine months in 2011. The increase in interest expense was primarily due to the amendment of our Senior Secured Credit Facility and Senior Secured Secured Notes, as well as a make-whole premium of $1.1 million on the Senior Secured Notes.

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Other Gain (Loss), net

Other gain (loss), net was a net gain of $29 thousand in the first nine months of 2012 compared to a net loss of $1.0 million in the first nine months of 2011. There was $0.4 million of other income partially offset by a $0.3 million foreign exchange loss during the first nine months of 2012 compared to a $1.6 million foreign exchange loss partially offset by $0.6 million of other income during the first nine months of 2011.

Income Taxes

The effective tax rate for the first nine months of 2012 was 0.7% as compared to negative 570.2% for the first nine months of 2011. The increase in the 2012 tax rate was due to the impairment charges and the valuation allowance position in the U.S. The Company has historically determined its interim tax provision using an estimated annual effective tax rate methodology. In calculating the tax provision for the first nine months of 2012, we have accounted for the U.S. operations by applying the discrete method. The Company determined that if the U.S. were included in the estimated annual effective tax rate, small changes in estimated pretax earnings would result in significant fluctuations in the tax rate. Therefore, the historical method would not provide a reliable estimate for the reporting period ended September 23, 2012.

Loss from Discontinued Operations

Loss from discontinued operations, net of tax, was $2.8 million and $1.9 million in the first nine months of 2012 and 2011, respectively. In December of 2011, we began actively marketing our Banking Security Systems Integration business unit included in our Shrink Management Solutions segment. As a result of this divestiture decision, we are accounting for this business as discontinued operations. The loss from discontinued operations in the first nine months of 2012 includes a non-cash impairment charge of $1.8 million, net of tax.

Net Loss Attributable to Checkpoint Systems, Inc.

Net loss attributable to Checkpoint Systems, Inc. was $110.5 million, or $2.70 per diluted share, during the first nine months of 2012 compared to $47.5 million, or $1.17 per diluted share, during the first nine months of 2011. The weighted-average number of shares used in the diluted earnings per share computation were 40.9 million and 40.5 million for the first nine months of 2012 and 2011, respectively.

Liquidity and Capital Resources

As we continue to implement our strategic plan in a volatile global economic environment, our focus will remain on operating our business in a manner that addresses the reality of the current economic marketplace without sacrificing the capability to effectively execute our strategy when economic conditions and the retail environment stabilize. Our liquidity needs have been, and are expected to continue to be driven by acquisitions, capital investments, product development costs, potential future restructuring related to the rationalization of the business, and working capital requirements. In 2012 our focus has been and will continue to be on cost control, including restructuring, and working capital management. We have met our liquidity needs primarily through cash generated from operations. The impacts of our restructuring activities and on-going economic conditions have put pressure on our debt covenants during 2012. We are addressing the covenant violations discussed below by managing worldwide cash levels and obtaining debt covenant waivers and amendments to facilitate timely execution of our worldwide restructuring efforts. Based on an analysis of liquidity utilizing conservative assumptions for the next twelve months, we believe that cash on hand from operating activities and funding available under our credit agreements should be adequate to service debt and working capital needs, meet our capital investment requirements, other potential restructuring requirements, and product development requirements.

On February 17, 2012, we received amendments to our Senior Secured Credit Facility and Senior Secured Notes ("Debt Agreements") which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25th, June 24th and September 23, 2012. In addition, the amendments prohibit the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received these amendments, we would have been in violation of the leverage ratio covenant as of March 25, 2012.

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On July 31, 2012, we received additional amendments to our Debt Agreements ("July 2012 Amendments"), which contained several modifications. The July 2012 Amendments reduced the total commitment of the Senior Secured Credit Facility from $125.0 million to $75.0 million. The July 2012 Amendments reduced the sublimit for the issuance of letters of credit of the Senior Secured Credit Facility from $25.0 million to $5.0 million. The July 2012 Amendments reduced the sublimit for swingline loans of the Senior Secured Credit Facility from $25.0 million to $5.0 million. The July 2012 Amendments increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendments waive the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendments permit divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions. The July 2012 Amendments also contain a provision whereby if our cash balance exceeds $65 million as of weekly measurement dates, we must prepay any additional borrowings made subsequent to the July 2012 Amendments. This provision is effective until we are in compliance with our original covenant requirements for two consecutive quarters. There were no required prepayments in the third quarter of 2012.

Absent the waiver and additional July 2012 Amendments, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, the interest rate spread on the Senior Secured Credit Facility increases to a maximum of 4.25% over the Base Rate or 5.25% over the LIBOR rate. The “Base Rate” is the highest of (a) our lender's prime rate, (b) the Federal Funds rate, plus 0.50%, and (c) a daily rate equal to the one-month LIBOR rate, plus 1.0%. The unused line fee will increase to a maximum of 1.00% per annum. The maximum is based in accordance with changes in our leverage ratio.

During the Waiver Period, and until such time the financial covenants return to the original covenants for two consecutive quarters, the coupon rate on the Senior Secured Notes will increase to 5.75%, 6.13%, and 6.50% for the Series A Senior Secured Notes, Series B Senior Secured Notes, and Series C Senior Secured Notes, respectively.

The ongoing financial and credit crisis has reduced credit availability and liquidity for many companies. We believe, however, that our base of recurring revenue (revenues from the sale of consumables into the installed base of security systems, apparel tags and labels, and hand-held labeling tools and services from monitoring and maintenance), repeat customer business, the anticipated effect of our restructuring activities, and our cash position and borrowing capacity should provide us with adequate cash flow and liquidity to execute our business plan and sustain us through this challenging period. We are working to reduce our liquidity risk by accelerating efforts to improve working capital while reducing expenses in areas that will not adversely impact the future potential of our business. We evaluate the risk and creditworthiness of all existing and potential counterparties for all debt, investment, and derivative transactions and instruments. Our policy allows us to enter into transactions with nationally recognized financial institutions with a credit rating of “A” or higher as reported by one of the credit rating agencies that is a nationally recognized statistical rating organization by the U.S. Securities and Exchange Commission. The maximum exposure permitted to any single counterparty is $50.0 million. Counterparty credit ratings and credit exposure are monitored monthly and reviewed quarterly by our Treasury Risk Committee.

As of September 23, 2012, our cash and cash equivalents were $75.1 million compared to $93.5 million as of December 25, 2011. Cash and cash equivalents changed in 2012 primarily due to $35.7 million of cash used in financing activities, $4.4 million of cash used in investing activities, and a $0.6 million effect of foreign currency, partially offset by $21.2 million of cash provided by operating activities.

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Cash provided by operating activities was $16.3 million higher during the first nine months of 2012 compared to the first nine months of 2011. In the first nine months of 2012 compared to the first nine months of 2011, our cash from operating activities was impacted positively by a decrease in inventories, accounts receivable, and other current assets, which was partially offset by a decrease in unearned revenues, other current liabilities, the restructuring reserve, and accounts payable compared to the first nine months of 2011. Inventory fluctuations are due to decreased customer orders during 2012 in comparison with 2011 combined with a focus on improving inventory levels. We anticipate a reduction of the levels of inventory to improve working capital over the remainder of 2012. Accounts receivable decreased primarily due to decreased sales during the first nine months of 2012 compared to the first nine months of 2011 and a concerted effort to improve collections. The fluctuation in other current assets is associated with an decrease in current income tax receivable. Unearned revenues decreased primarily due to the decrease of future contracted customer orders during the first nine months of 2012. Other current liabilities decreased due to the timing of payments during the third quarter of 2012. The restructuring reserve decreased due to to making cash payments on the existing plans. Accounts payable decreased primarily due to decreased customer orders during the first nine months of 2012 compared to the first nine months of 2011.

Cash used in investing activities was $85.6 million less during the first nine months of 2012 compared to the first nine months of 2011. This was primarily due to the Shore to Shore acquisition that took place in the second quarter of 2011.

Cash used in financing activities was $50.7 million greater in the first nine months of 2012 compared to the first nine months of 2011. The increase was due primarily to the reductions of debt levels during the first nine months of 2012 compared to an increase in borrowings in the first nine months of 2011. In addition, the company incurred $2.1 million in debt issuance costs during the first nine months of 2012 in connection with the July 2012 Amendments to the Senior Secured Credit Facility and Senior Secured Notes.

Our percentage of total debt to total equity as of September 23, 2012, was 27.4% compared to 28.4% as of December 25, 2011. As of September 23, 2012, our working capital was $207.0 million compared to $233.1 million as of December 25, 2011.

We continue to reinvest in the Company through our investment in technology and process improvement. Our investment in R&D amounted to $13.1 million and $15.6 million during the first nine months of 2012 and the first nine months of 2011, respectively. These amounts are reflected in cash used in operations, as we expense our R&D as it is incurred. We anticipate spending approximately $5 million on R&D to support achievement of our strategic plan during the remainder of 2012.

We have various unfunded pension plans outside the U.S. These plans have significant pension costs and liabilities that are developed from actuarial valuations. For the first nine months of 2012, our contribution to these plans was $3.7 million. Our total funding expectation for 2012 is $4.7 million. We believe our current cash position and cash generated from operations will be adequate to fund these requirements.

Acquisition of property, plant, and equipment during the first nine months of 2012 totaled $10.4 million compared to $14.4 million during the same period in 2011. During the first nine months of 2012, our acquisition of property, plant, and equipment included $0.9 million of capitalized internal-use software costs related to an ERP system implementation, compared to $5.5 million during the first nine months of 2011. We anticipate our remaining capital expenditures, used primarily to upgrade information technology and improve our production capabilities, to approximate $2 million in 2012.

In September 2012, $7.4 million (€5.7 million) was paid in order to extinguish our existing short-term full-recourse factoring agreement in Germany. The arrangement was included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In June 2012, $8.0 million (HKD 61.8 million) was paid in order to extinguish our existing Hong Kong term loan. The term loan was included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In June 2012, $0.7 million (INR 37.2 million) was paid in order to extinguish an overdraft facility and other short-term loans assumed in connection with the acquisition of the Shore to Shore businesses. The loans were included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In February 2012, we entered into a $3.2 million Sri Lanka banking facility, which includes a $2.7 million term loan, and a combined $0.5 million sublimit for an overdraft/import line. As of September 23, 2012, $2.4 million and $0.4 million were outstanding on the term loan and overdraft/import cash line.

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In January 2011, we entered into an agreement to acquire the business of Shore to Shore, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $66.7 million of cash from operations (with $27.8 million paid in the third quarter of 2011) and $9.2 million of borrowings under our Senior Secured Credit Facility. The acquisition payment, net of cash acquired, is reflected in the acquisition of businesses line within investing activities on the Consolidated Statement of Cash Flows.

In December 2009, we entered into new full-recourse factoring arrangements in Europe. The arrangements are secured by trade receivables. The Company received a weighted average of 92.4% of the face amount of receivables that it desired to sell and the bank agreed, at its discretion, to buy. As of September 23, 2012 the factoring arrangements had a balance of $1.0 million (€0.8 million), of which $0.3 million (€0.3 million) was included in the current portion of long-term debt and $0.7 million (€0.5 million) was included in long-term borrowings in the accompanying Consolidated Balance Sheets since the receivables are collectible through 2016.

Senior Secured Credit Facility

On February 17, 2012, we received an amendment to our Senior Secured Credit Facility which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25, June 24 and September 23, 2012. In addition, the amendment prohibits the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received the amendment, we would have been in violation of the leverage ratio covenant as of March 25, 2012.  

On July 31, 2012, we received an additional amendment to our Senior Secured Credit Facility ("July 2012 Amendment"), which contained several modifications. The July 2012 Amendment reduced the total commitment of the Senior Secured Credit Facility from $125.0 million to $75.0 million. The July 2012 Amendment reduced the sublimit for the issuance of letters of credit from $25.0 million to $5.0 million. The July 2012 Amendment reduced the sublimit for swingline loans from $25.0 million to $5.0 million. The July 2012 Amendment increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendment waives the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendment permits divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions. The July 2012 Amendment also contains a provision whereby if our cash balance exceeds $65 million as of weekly measurement dates, we must prepay any additional borrowings made subsequent to the amendments. This provision is effective until we are in compliance with our original covenant requirements for two consecutive quarters. There were no required prepayments in the third quarter of 2012.

Absent the waiver and additional July 2012 Amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, the interest rate spread on the Senior Secured Credit Facility increases to a maximum of 4.25% over the Base Rate or 5.25% over the LIBOR rate. The “Base Rate” is the highest of (a) our lender’s prime rate, (b) the Federal Funds rate, plus 0.50%, and (c) a daily rate equal to the one-month LIBOR rate, plus 1.00%. The unused line fee will increase to a maximum of 1.00% per annum. The maximum is based in accordance with changes in our leverage ratio.

During the quarter ended September 23, 2012, the Company incurred $1.4 million in fees and expenses in connection with the July 2012 Amendment to the Senior Secured Credit Facility, which were capitalized and will be amortized over the term of the Senior Secured Credit Facility to interest expense on the Consolidated Statement of Operations. In connection with the reduction in borrowing capacity of the Senior Secured Credit Facility, the Company recognized $0.8 million of unamortized debt issuance costs. The cost was recognized in interest expense on the Consolidated Statement of Operations in the third quarter of 2012.

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On September 21, 2012, the Company repaid $6.1 million on the Senior Secured Credit Facility. Pursuant to the terms of the July 2012 Amendment, the repayment permanently reduced the outstanding borrowing capacity from $75.0 million to $68.9 million. In connection with the reduction in borrowing capacity of the Senior Secured Credit Facility, the Company recognized $0.2 million of unamortized debt issuance costs. The cost was recognized in interest expense on the Consolidated Statement of Operations in the third quarter of 2012.

The Senior Secured Credit Facility includes an expansion option that will allow us, subject to certain conditions, to request an increase in the Senior Secured Credit Facility of up to an aggregate of $50.0 million, for a potential total commitment of $118.9 million. As of September 23, 2012, we were not eligible to elect to request the $50.0 million expansion option due to financial covenant restrictions.

As of September 23, 2012, $1.4 million issued in letters of credit were outstanding under the Senior Secured Credit Facility.

All obligations of domestic borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. The obligations of foreign borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by certain of our foreign subsidiaries as well as the domestic guarantors. Collateral under the Senior Secured Credit Facility includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary. As a condition of the July 2012 Amendment, all domestic assets are also pledged as collateral. The approximate net book value of the collateral as of September 23, 2012 was $142 million.

Pursuant to the original terms of the Senior Secured Credit Facility, we are subject to various requirements, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Credit Facility also contains customary representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults. Upon a default under the Senior Secured Credit Facility, including the non-payment of principal or interest, our obligations under the Senior Secured Credit Facility may be accelerated and the assets securing such obligations may be sold. Certain of our wholly-owned subsidiaries with respect to the Company are guarantors of our obligations under the Senior Secured Credit Facility.

Senior Secured Notes

On February 17, 2012, we received an amendment to our Senior Secured Notes which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25, June 24 and September 23, 2012. In addition, the amendment prohibits the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received the amendment, we would have been in violation of the leverage ratio covenant as of March 25, 2012.  

On July 31, 2012, we received an additional amendment to our Senior Secured Notes ("July 2012 Amendment"), which contained several modifications. The July 2012 Amendment increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendment waives the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendment permits divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions.

Absent the waiver and additional July 2012 Amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, and until such time the financial covenants return to the original covenants for two consecutive quarters, the coupon rate on the Senior Secured Notes will increase to 5.75%, 6.13%, and 6.50% for the Series A Senior Secured Notes, Series B Senior Secured Notes, and Series C Senior Secured Notes, respectively.

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During the quarter ended September 23, 2012, the Company incurred $1.4 million in fees and expenses in connection with the July 2012 Amendment to the Senior Secured Notes, of which $0.7 million were recognized in selling, general, and administrative expenses on the Consolidated Statement of Operations in the third quarter of fiscal 2012 and $0.7 million, which were capitalized and amortized over the term of the Senior Secured Notes to interest expense on the Consolidated Statement of Operations.

On September 21, 2012, the Company repaid $8.9 million in principal as well as a make-whole premium of $1.1 million related to the Senior Secured Notes. In connection with the repayment on the Senior Secured Notes, the Company recognized $0.1 million of unamortized debt issuance costs. The unamortized debt issuance costs and make whole premium fees were recognized in interest expense on the Consolidated Statement of Operations in the third quarter of fiscal 2012.

The Senior Secured Notes Agreement provides that for a three-year period ending on July 22, 2013, we may issue, and our lender may, in its sole discretion, purchase, additional fixed-rate senior secured notes and together with the Senior Secured Notes, up to an aggregate amount of $50.0 million. As of September 23, 2012, we were not eligible to elect to request the $50.0 million expansion option due to financial covenant restrictions.

All obligations under the Senior Secured Notes are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. Collateral under the Senior Secured Notes includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary. As a condition of the July 2012 Amendment, all domestic assets are also pledged as collateral. The approximate net book value of the collateral as of September 23, 2012 was $142 million.

The original Senior Secured Notes Agreement is subject to covenants that are substantially similar to the covenants in the Senior Secured Credit Facility Agreement, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Notes Agreement also contains representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults that are substantially similar to those contained in the Senior Secured Credit Facility, and those that are customary for similar private placement transactions. Upon a default under the Senior Secured Notes Agreement, including the non-payment of principal or interest, our obligations under the Senior Secured Notes Agreement may be accelerated and the assets securing such obligations may be sold. Additionally, the Senior Secured Notes have a make-whole provision that requires the discounted value of the remaining payments on the Senior Secured Notes expected through the end term of each of the Senior Secured Notes to be paid in full upon early termination, acceleration, or prepayment.  Certain of our wholly-owned subsidiaries are also guarantors of our obligations under the Senior Secured Notes.

We have never paid a cash dividend (except for a nominal cash distribution in April 1997 to redeem the rights outstanding under our 1988 Shareholders’ Rights Plan). The payment of cash dividends is subject to certain restrictions in our Debt Agreements. We do not anticipate paying any cash dividends in the near future.

Provisions for Restructuring

During the second quarter of 2012, in conjunction with our strategic shift, we launched a new profit improvement initiative, Project LEAN, which is designed to restructure the Company to support a more focused product range while positioning Checkpoint to return to profitable growth. Project LEAN will be reported as part of the Global Restructuring Plan.

The expanded Global Restructuring Plan including Project LEAN and the SG&A Restructuring Plan will impact over 2,400existing employees. Total costs of the Global Restructuring Plan and the SG&A Restructuring Plan are expected to approximate $70 million to $75 million by the end of 2013, with $52 million to $55 million in total anticipated costs for the Global Restructuring Plan including Project LEAN and approximately $19 million of costs incurred for the SG&A Restructuring Plan, which is substantially complete. Total annual savings of the two plans are expected to approximate $100 million to $105 million by the end of 2013, with $81 million to $85 million in total anticipated savings for the Global Restructuring Plan including Project LEAN and $19 million to $20 million in total anticipated savings for the SG&A Restructuring Plan. Through our Global Restructuring Plan including Project LEAN, we plan to stabilize sales, actively manage margins, dramatically reduce operating expenses, more effectively manage working capital and improve global cash management control.

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Restructuring expense for the three and nine months ended September 23, 2012 and September 25, 2011 was as follows:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	2,442			5,972			16,661			5,972
Asset Impairments	859			7,479			6,156			7,479
Other exit costs	1,174			—			3,680			—
SG&A Restructuring Plan
Severance and other employee-related charges	(288		)	3,661			608			6,120
Other exit costs	—			216			66			826
Manufacturing Restructuring Plan
Severance and other employee-related charges	—			(49		)	—			(90		)
Other exit costs	(75		)	—			(75		)	64
Total	$	4,112		$	17,279		$	27,096		$	20,371

Restructuring accrual activity for the nine months ended September 23, 2012 was as follows:

(amounts in thousands)	Accrual at Beginning of Year		Charged to Earnings		Charge Reversed to Earnings			Cash Payments			Exchange Rate Changes			Accrual at September 23, 2012
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	9,710		18,106		(1,445		)	(13,969		)	89			12,491
Other exit costs(1)	—		3,680		—			(3,151		)	—			529
SG&A Restructuring Plan
Severance and other employee-related charges	6,718		805		(197		)	(4,860		)	(13		)	2,453
Other exit costs(2)	1,109		66		—			(859		)	(9		)	307
Manufacturing Restructuring Plan
Other exit costs	75		—		(75		)	—			—			—
Total	$	17,612	$	22,657	$	(1,717	)	$	(22,839	)	$	67		$	15,780

⁽¹⁾  During the first nine months of 2012, there was a net charge to earnings of $3.7 million primarily due to lease termination costs, inventory and equipment moving costs, restructuring agent costs, legal costs, and gains/losses on sale of assets.

⁽²⁾  During the first nine months of 2012, there was a net charge to earnings of $0.1 million primarily due to lease termination costs, legal costs, and outplacement costs.

Global Restructuring Plan (including LEAN)

During September 2011, we initiated the Global Restructuring Plan focused on further reducing our overall operating expenses by including manufacturing and other cost reduction initiatives, such as consolidating certain manufacturing facilities and administrative functions to improve efficiencies. This plan was further expanded in the first quarter of 2012 and again during the second quarter of 2012 to include Project LEAN.  The first phase of this plan was implemented in the third quarter of 2011 with the remaining phases of the plan expected to be substantially complete by the end of 2013.

For the nine months ended September 23, 2012, the net charge to earnings of $26.5 million represents the current year activity related to the Global Restructuring Plan including Project LEAN. The anticipated total costs related to the plan are expected to approximate $52 million to $55 million, of which $45.9 million have been incurred. The total number of employees planned to be affected by the Global Restructuring Plan including Project LEAN is 2,296, of which 1,263 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

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SG&A Restructuring Plan

During 2009, we initiated the SG&A Restructuring Plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan substantially completed by the end of the first quarter of 2012.

For the nine months ended September 23, 2012, the net charge to earnings of $0.7 million represents the current year activity related to the SG&A Restructuring Plan. The implementation of the SG&A Restructuring Plan is substantially complete, with total costs incurred of approximately $19 million. The total number of employees planned to be affected by the SG&A Restructuring Plan is 369, of which 363 have been terminated. Termination benefits are planned to be paid one month to 24months after termination.

Manufacturing Restructuring Plan

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our Apparel Labeling Solutions (ALS) business, formerly Check-Net^®, and to support incremental improvements in our EAS systems and labels businesses. For the nine months ended September 23, 2012, there was a $0.1 million charge reversed to earnings recorded in connection with the Manufacturing Restructuring Plan.

The total number of employees planned to be affected by the Manufacturing Restructuring Plan is 420, all of which have been terminated. As of September 23, 2012 the implementation of the Manufacturing Restructuring Plan is substantially complete, with total costs incurred of $4.1 million.

Goodwill Impairments

We perform an assessment of goodwill by comparing each individual reporting unit’s carrying amount of net assets, including goodwill, to their fair value at least annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our 2011 annual impairment test indicated no impairment of our goodwill assets.

During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent annual impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an assessment of goodwill was warranted. This resulted in the our assessment that the carrying value of the Apparel Labeling Solutions reporting unit exceeded its fair value. The basis of the fair value was determined by projecting future cash flows using assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of the evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate and through our stock price that we use to determine our market capitalization. As a result of our interim impairment test, a $64.4 million non-cash impairment charge was recorded as of June 24, 2012 in our Apparel Labeling Solutions segment. The goodwill impairment expense was due to the decline in estimated future Apparel Labeling Solutions cash flow impacted by our plan to refocus the business, coupled with recent declines in revenue and profitability. The impairment charge was recorded in goodwill impairment on the Consolidated Statement of Operations. There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment in our reporting units.

Long-Lived Asset Impairment

As a result of interim impairment indicators in the second quarter of 2012, we performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in our Apparel Labeling Solutions reporting unit to their carrying amounts. The undiscounted cash flow analysis resulted in no impairment charge in the quarter of 2012. There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment.

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Off-Balance Sheet Arrangements

We do not utilize material off-balance sheet arrangements apart from operating leases that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. We use operating leases as an alternative to purchasing certain property, plant, and equipment. There have been no material changes to the discussion of these rental commitments under non-cancelable operation leases presented in our Annual Report on Form 10-K for the year ended December 25, 2011.

Contractual Obligations

There have been no material changes to the table entitled “Contractual Obligations” presented in our Annual Report on Form 10-K for the year ended December 25, 2011. The table of contractual obligations excludes our gross liability for uncertain tax positions, including accrued interest and penalties, which totaled $15.4 million as of September 23, 2012, and $17.9 million as of December 25, 2011, because we cannot predict with reasonable reliability the timing of cash settlements to the respective taxing authorities.

Recently Adopted Accounting Standards

In April 2011, the FASB issued ASU 2011-03 “Reconsideration of Effective Control for Repurchase Agreements” (ASU 2011-03). The amendments to Topic 860 (Transfers and Servicing) affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments do not affect other transfers of financial assets. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. ASU 2011-03 is effective for the first interim or annual periods beginning on or after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. This amendment should be applied prospectively to transactions or modifications of existing transactions that occur on or after December 26, 2011. The adoption of the standard has not had a material impact on our Consolidated Results of Operations and Financial Condition.

In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). The amendments to Topic 820 (Fair Value Measurement) establish common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United States and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for the first interim and annual periods beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. This amendment should be applied prospectively. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In June 2011, the FASB issued ASU 2011-05 “Presentation of Comprehensive Income” (ASU 2011-05). The amendments to Topic 220 (Comprehensive Income) eliminate the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders' equity, require consecutive presentation of the statement of net income and other comprehensive income and require reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. In December 2011, the FASB issued ASU 2011-12, "Comprehensive Income -- Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in ASU 2011-05," to defer the effective date of the provision requiring entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. However, the remaining requirements of ASU 2011-05 are effective for the first interim and annual periods beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. Any required changes in presentation requirements and disclosures have been included in our Consolidated Financial Statements beginning with the first quarter ended March 25, 2012. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In September 2011, the FASB issued ASU 2011-08, "Intangibles – Goodwill and Other," (ASU 2011-08), which amends current guidance to allow a company to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The amendment also improves previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

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In September 2011, the FASB issued ASU 2011-09, "Compensation – Retirement Benefits – Multiemployer Plans (Subtopic 715-80)," (ASU 2011-09). ASU 2011-09 requires that employers provide additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. The additional quantitative and qualitative disclosures will provide users with more detailed information about an employer's involvement in multiemployer pension plans. ASU 2011-09 is effective for fiscal years ending after December 15, 2011. The adoption of this standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

New Accounting Pronouncements and Other Standards

In December 2011, the FASB issued ASU 2011-11, "Balance Sheet – Disclosures about Offsetting Assets and Liabilities (Topic 210-20)," (ASU 2011-11). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 is effective for fiscal years beginning on or after January 1, 2013, with retrospective application for all comparable periods presented. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

In July 2012, the FASB issued ASU 2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment," (ASU 2012-02). ASU 2012-02 amends the guidance in ASC 350-302 on testing indefinite-lived intangible assets, other than goodwill, for impairment by allowing an entity to perform a qualitative impairment assessment before proceeding to the two-step impairment test. If the entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not (i.e., a likelihood of more than 50 percent) impaired, the entity would not need to calculate the fair value of the asset. In addition, the ASU does not amend the requirement to test these assets for impairment between annual tests if there is a change in events or circumstances; however, it does revise the examples of events and circumstances that an entity should consider in interim periods. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption being permitted. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements," (ASU 2012-04). ASU 2012-04 amends current guidance by clarifying the FASB Accountings Standards Codification (Codification), correcting unintended application of guidance, or making minor improvements to the Codification. These amendments are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, the amendments included in ASU 2012-04 intend to make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications. The amendments in ASU 2012-04 that will not have transition guidance will be effective upon issuance. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except as noted below, there have been no significant changes to the market risks as disclosed in Part II - Item 7A. - “Quantitative And Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 25, 2011.

Exposure to Foreign Currency

We manufacture products in the U.S., Europe, and the Asia Pacific region for both the local marketplace and for export to our foreign subsidiaries. The foreign subsidiaries, in turn, sell these products to customers in their respective geographic areas of operation, generally in local currencies. This method of sale and resale gives rise to the risk of gains or losses as a result of currency exchange rate fluctuations on inter-company receivables and payables. Additionally, the sourcing of product in one currency and the sales of product in a different currency can cause gross margin fluctuations due to changes in currency exchange rates.

We selectively purchase currency forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts guarantee a predetermined exchange rate at the time the contract is purchased. This allows us to shift the effect of positive or negative currency fluctuations to a third party. Transaction gains or losses resulting from these contracts are recognized at the end of each reporting period. We use the fair value method of accounting, recording realized and unrealized gains and losses on these contracts. These gains and losses are included in other gain (loss), net on our Consolidated Statements of Operations. As of September 23, 2012, we had currency forward exchange contracts with notional amounts totaling approximately $13.7 million. The fair values of the forward exchange contracts were reflected as a $36 thousand asset and a $0.3 million liability and are included in other current assets and other current liabilities in the accompanying balance sheets. The contracts are in the various local currencies covering primarily our operations in the U.S., the Caribbean, and Western Europe. Historically, we have not purchased currency forward exchange contracts where it is not economically efficient, specifically for our operations in South America and Asia, with the exception of Japan.

Hedging Activity

Beginning in the second quarter of 2008, we entered into various foreign currency contracts to reduce our exposure to forecasted Euro-denominated inter-company revenues. These contracts were designated as cash flow hedges. The foreign currency contracts mature at various dates from October 2012 to March 2013. The purpose of these cash flow hedges is to eliminate the currency risk associated with Euro-denominated forecasted inter-company revenues due to changes in exchange rates. These cash flow hedging instruments are marked to market and the changes are recorded in other comprehensive income. Amounts recorded in other comprehensive income are recognized in cost of goods sold as the inventory is sold to external parties. Any hedge ineffectiveness is charged to other gain (loss), net on our Consolidated Statements of Operations. As of September 23, 2012, the fair value of these cash flow hedges were reflected as a $0.2 million asset and is included in other current assets in the accompanying Consolidated Balance Sheets. The total notional amount of these hedges is $7.2 million (€5.4 million) and the unrealized gain recorded in other comprehensive income was $0.9 million (net of taxes of $40 thousand), of which $0.9 million (net of taxes of $40 thousand) is expected to be reclassified to earnings over the next twelve months. During the three and nine months ended September 23, 2012, a $0.5 million and $1.3 million benefit related to these foreign currency hedges was recorded to cost of goods sold as the inventory was sold to external parties, respectively. The Company recognized zero and $40 thousand of hedge ineffectiveness during the three and nine months ended September 23, 2012.

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Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As described in more detail in our Annual Report on Form 10-K for the year ended December 25, 2011, during December of 2011, we identified a material weakness in our internal control over financial reporting. We did not maintain effective controls to prevent or detect management override of controls at certain foreign subsidiaries that were not integrated into our shared services environments in the United States and Europe. Specifically, the monitoring controls over certain locations, including internal audits, periodic reviews of segregation of duties and review of the effectiveness of key balance sheet reconciliations were not designed to prevent or detect management override of controls that could circumvent internal controls over financial reporting.

As required by Rule 13a-15(b) of the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, due to the material weakness in our control over financial reporting disclosed in our Annual Report on Form 10-K for the year ended December 25, 2011, our disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on additional analysis and other post-closing procedures designed to ensure that our Consolidated Financial Statements will be presented in accordance with generally accepted accounting principles, management believes, notwithstanding the material weakness, that the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In light of the material weakness, management has increased the frequency and scope of our program of detailed reviews of financial transactions and reconciliations at all of our subsidiaries based on a formal, rotational review program to be conducted by qualified individuals including internal audit personnel. We believe that the measures described above will remeditate the identified material weakness and strengthen our internal control over financial reporting.

Management has implemented these changes in our internal controls over financial reporting during the nine months ended September 23, 2012 including the development and implementation of an enhanced comprehensive risk-based internal audit plan that covers each of our consolidated subsidiaries.  We have already conducted the majority of the audits scheduled for fiscal year 2012 including addressing the related findings and developing and executing remediation plans.  The audit committee is monitoring the detailed plan to remediate the material weakness and the timetable for its implementation. The remediation of the material weakness has progressed as expected and is anticipated to be completed in 2012.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are involved in certain legal and regulatory actions, all of which have arisen in the ordinary course of business. There have been no material developments to the actions described in Part I - Item 3 - “Legal Proceedings” contained in our Annual Report on Form 10-K for the year ended December 25, 2011, and there are no material pending legal proceedings other than as described therein.

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Item 1A. RISK FACTORS

Other than as we have disclosed in our Quarterly Reports on Form 10-Q and those updates included below, there have been no material changes from December 25, 2011 to the significant risk factors and uncertainties known to us that, if they were to occur, could materially adversely affect our business, financial condition, operating results and/or cash flow. For a discussion of our risk factors, refer to Part I - Item 1A - “Risk Factors”, contained in our Annual Report on Form 10-K for the year ended December 25, 2011.

We have entered into a senior secured credit facility agreement and senior secured notes agreement that restrict certain activities, and failure to comply with these agreements may have an adverse effect on our financial condition, results of operations and cash flows.

We maintain a senior secured credit facility and senior secured notes that contain restrictive financial covenants, including financial covenants that require us to comply with specified financial ratios. We may have to curtail some of our operations to comply with these covenants. In addition, our senior secured credit facility and senior secured notes agreements contain other affirmative and negative covenants that could restrict our operating and financing activities. These provisions limit our ability to, among other things, incur future indebtedness, contingent obligations or liens, guarantee indebtedness, make certain investments and capital expenditures, sell stock or assets and pay dividends, and consummate certain mergers or acquisitions. Because of the restrictions on our ability to create or assume liens, we may find it difficult to secure additional indebtedness if required. Furthermore, if we fail to comply with the requirements of the senior secured credit facility and/or senior secured notes agreements, we may be in default, and we may not be able to obtain the necessary amendments to the respective agreements or waivers of an event of default. Upon an event of default, if the respective agreements are not amended or the event of default is not waived, the lenders could declare all amounts outstanding, together with accrued interest, to be immediately due and payable. If this happens, we may not be able to make those payments or borrow sufficient funds from alternative sources to make those payments. Even if we were to obtain additional financing, that financing may be on unfavorable terms. The impacts of our restructuring initiatives and on-going economic conditions have put pressure on our debt covenants during 2012.

During the first quarter of 2012, we pursued an amendment to temporarily increase the leverage ratio through the end of the third quarter of 2012. This amendment was approved and deemed effective as of February 17, 2012.

On July 31, 2012, we reached an agreement with our lenders to amend our debt agreements to facilitate our ability to execute our redefined strategy and expanded restructuring plan. The July 2012 Amendment increased the required leverage ratio covenant, which is now based on adjusted EBITDA, and decreased the required fixed charge coverage ratio through the first quarter of 2013, and includes a waiver of the fixed charge coverage ratio through the third quarter of 2012 and a decrease for the fourth quarter of 2012. Absent the waiver and additional amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

An impairment in the carrying value of goodwill or other assets could negatively affect our consolidated results of operations and net worth.

Pursuant to accounting principles generally accepted in the United States, we are required to annually assess our goodwill, intangibles and other long-lived assets to determine if they are impaired. In addition, interim reviews must be performed whenever events or changes in circumstances indicate that impairment may have occurred. If the testing performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets in the period the determination is made. Disruptions to our business, end market conditions and protracted economic weakness, unexpected significant declines in operating results of reporting units, divestitures and market capitalization declines may result in additional charges for goodwill and other asset impairments. We have significant intangible assets, including goodwill with an indefinite life, which are susceptible to valuation adjustments as a result of changes in such factors and conditions. We assess the potential impairment of goodwill and indefinite lived intangible assets on an annual basis, as well as when interim events or changes in circumstances indicate that the carrying value may not be recoverable. We assess definite lived intangible assets when events or changes in circumstances indicate that the carrying value may not be recoverable.

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Our 2011 annual impairment test indicated no impairment of our goodwill or intangible assets. During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an assessment of goodwill was warranted. This resulted in our assessment that the carrying value of the Apparel Labeling Solutions reporting unit exceeded its fair value. The basis of the fair value was determined by projecting future cash flows using assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of the evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate and through our stock price that we use to determine our market capitalization. As a result of our interim impairment test, a $64.4 million non-cash goodwill impairment charge was recorded as of June 24, 2012 in our Apparel Labeling Solutions segment. The goodwill impairment expense was due to the decline in estimated future Apparel Labeling Solutions cash flow impacted by our plan to refocus the business, coupled with recent declines in revenue and profitability. There were no additional impairment indicators during the third quarter ended September 23, 2012.

Although our analysis regarding the fair values of the goodwill and indefinite lived intangible assets for the remaining reporting units indicates that they exceed their respective carrying values, materially different assumptions regarding the future performance of our businesses or significant declines in our stock price could result in additional goodwill and intangible impairment losses. Specifically, an unanticipated deterioration in revenues and gross margins generated by our Shrink Management Solutions and Retail Merchandising Solutions segments could trigger future impairment in those segments. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment.

Regulations that impose disclosure requirements regarding the use of “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in our products will result in additional cost and expense and could result in other significant adverse effects.

Rules adopted by the SEC implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act impose diligence and disclosure requirements regarding the use of “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in our products. Compliance with these rules may result in additional cost and expense, including for due diligence to determine and verify the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes, or sources of supply as a consequence of such verification activities. These rules may also affect the sourcing and availability of minerals used in the manufacture of our products to the extent that there may be only a limited number of suppliers offering “conflict free” metals that can be used in our products. There can be no assurance that we will be able to obtain such metals in sufficient quantities or at competitive prices. Also, since our supply chain is complex, we may face reputational challenges with our customers, stockholders and other stakeholders if we are unable to sufficiently verify the origins of the metals used in our products. We may also encounter customers who require that all of the components of our products be certified as conflict free. If we are not able to meet customer requirements, such customers may choose to disqualify us as a supplier, which could impact our sales and the value of portions of our inventory.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not Applicable.

Item 5. OTHER INFORMATION

None.

65

Item 6. EXHIBITS

Exhibit 31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS	XBRL Instance Document*
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document*
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Document*

* Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filings.

66

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.

	CHECKPOINT SYSTEMS, INC.
November 1, 2012	/s/ Raymond D. Andrews
	Raymond D. Andrews
	Senior Vice President and Chief Financial Officer

67

INDEX TO EXHIBITS

Exhibit 31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS	XBRL Instance Document*
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document*
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Document*

* Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filings.

68

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, George Babich, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Checkpoint Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

		By: /s/ George Babich, Jr.
		Name: George Babich, Jr.
		Title: Interim Chief Executive Officer and President
Date:	November 1, 2012

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Raymond D. Andrews, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Checkpoint Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

		By: /s/ Raymond D. Andrews
		Name: Raymond D. Andrews
		Title: Senior Vice President and Chief Financial Officer
Date:	November 1, 2012

EX-32.1

EXHIBIT 32.1

CERTIFICATION FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

The undersigned executive officers of the Registrant hereby certify that this Quarterly Report on Form 10-Q for the quarter ended September 23, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

By: /s/ George Babich, Jr.

Name: George Babich, Jr.

Title: Interim Chief Executive Officer and President

By: /s/ Raymond D. Andrews

Name: Raymond D. Andrews

Title: Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request. This certification accompanies the Report and shall not be treated as having been filed as part of the Report.

Date: November 1, 2012

XML

Summary Of Significant Accounting Polices (Effects Of Adjustment On Net (Loss) Earnings Attributable To Parent And (Loss) Income From Continuing Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Net Loss Attributable to Checkpoint Systems, Inc.	$ (5,334)	$ (48,662)	$ (110,486)	$ (47,515)
Loss from Continuing Operations Before Income Taxes	(453)	(9,190)	(108,854)	(6,803)
As Previously Reported [Member]
Net Loss Attributable to Checkpoint Systems, Inc.		(49,259)		(49,050)
Loss from Continuing Operations Before Income Taxes		(10,623)		(10,727)
Canada Adjustments [Member]
Net Loss Attributable to Checkpoint Systems, Inc.		597		1,535
Loss from Continuing Operations Before Income Taxes		797		2,050
As Revised For Revision Adjustments [Member]
Net Loss Attributable to Checkpoint Systems, Inc.		(48,662)		(47,515)
Loss from Continuing Operations Before Income Taxes		(9,826)		(8,677)
Discontinued Operations Adjustments [Member]
Net Loss Attributable to Checkpoint Systems, Inc.		0		0
Loss from Continuing Operations Before Income Taxes		$ 636		$ 1,874

XML

Debt (Senior Secured Credit Facility) (Details) (USD $)	9 Months Ended					9 Months Ended			6 Months Ended	9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012 Senior Secured Credit Facility [Member]	Sep. 23, 2012 Letter Of Credit [Member]	Sep. 23, 2012 Swingline Loan [Member]	Sep. 23, 2012 Senior Secured Notes [Member]	Sep. 23, 2012 Maximum [Member]	Sep. 23, 2012 Maximum [Member] Senior Secured Notes [Member]	Jun. 24, 2012 Minimum [Member]	Sep. 23, 2012 Minimum [Member] Senior Secured Notes [Member]	Sep. 23, 2012 July 2012 Amendment to the Senior Secured Credit Facility [Member]	Sep. 23, 2012 Repayment of Senior Secured Credit Facility [Member]	Sep. 23, 2012 Debt Covenant Compliance July 2012 [Member]
Debt Instrument [Line Items]
Payments of Debt Issuance Costs	$ 2,113,000	$ 0	$ 1,400,000			$ 700,000
Repayments of Debt, Maturing in More than Three Months			6,100,000			8,900,000
Line of Credit Facility, Borrowing Capacity, Description	75,000,000												68,900,000
Write off of Deferred Debt Issuance Cost											800,000	200,000
Original letters of credit sublimit			25,000,000
Original Total Commitment			125,000,000
Expansion option under credit facility			50,000,000
Potential total commitment with expansion option			118,900,000
Letters of credit sublimit			5,000,000
Original swingline loans sublimit					25,000,000
Letters of credit outstanding				1,400,000
Swingline loans sublimit					5,000,000
Percentage of stock pledge of domestic subsidiaries			100.00%			100.00%
Percentage of stock pledge of all first-tier foreign subsidiaries			65.00%			65.00%
Book value of collateral of bank facility			$ 142,000,000			$ 142,000,000
Leverage ratio							2.75	2.75
Fixed charge coverage ratio									1.25	1.25

XML

Goodwill And Other Intangible Assets (Estimated Future Amortization Expense) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 23, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
2012	$ 10,466
2013	8,759
2014	8,271
2015	8,115
2016	$ 7,852

XML

Fair Value Measurement, Financial Instruments And Risk Management (Carrying And Fair Values Of Non-Current Financial Assets And Liabilities Not Measured At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012		Dec. 25, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior secured notes, Carrying Amount	$ 111,872		$ 129,594
Senior Secured Credit Facility [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior secured credit facility, Carrying Amount	44,206	[1]	52,248	[1]
Senior Secured Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior secured notes, Carrying Amount	66,114	[1]	75,000	[1]
Estimated Fair Value [Member] | Senior Secured Credit Facility [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior secured credit facility, Estimated Fair Value	44,206	[1]	52,248	[1]
Estimated Fair Value [Member] | Senior Secured Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior secured notes, Estimated Fair Value	$ 66,012	[1]	$ 75,686	[1]

[1] The carrying amounts are reported on the balance sheet under the indicated captions.

XML

Debt (Senior Secured Notes) (Details) (USD $)	9 Months Ended							6 Months Ended	9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012 Senior Secured Credit Facility [Member]	Sep. 23, 2012 Senior Secured Notes [Member]	Sep. 23, 2012 High [Member] Shelf Notes [Member]	Sep. 23, 2012 Maximum [Member]	Sep. 23, 2012 Maximum [Member] Senior Secured Notes [Member]	Jun. 24, 2012 Minimum [Member]	Sep. 23, 2012 Minimum [Member] Senior Secured Notes [Member]	Sep. 23, 2012 July 2012 Amendment to the Senior Secured Credit Facility [Member]	Sep. 23, 2012 Repayment of Senior Secured Notes [Member]
Debt Instrument [Line Items]
Debt fees and expenses				$ 1,400,000
Debt Related Commitment Fees and Debt Issuance Costs	700,000
Make-Whole Premium				1,100,000
Write off of Deferred Debt Issuance Cost										800,000	100,000
Additional fixed rate senior secured note					50,000,000
Percentage of stock pledge of domestic subsidiaries			100.00%	100.00%
Percentage of stock pledge of all first-tier foreign subsidiaries			65.00%	65.00%
Book value of collateral of bank facility			142,000,000	142,000,000
Leverage ratio						2.75	2.75
Fixed charge coverage ratio								1.25	1.25
Payments of Debt Issuance Costs	2,113,000	0	1,400,000	700,000
Repayments of Debt, Maturing in More than Three Months			$ 6,100,000	$ 8,900,000

XML

Discontinued Operations (Selected Financial Information Included In Earnings) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended					9 Months Ended				12 Months Ended
	Sep. 23, 2012		Jun. 24, 2012	Sep. 25, 2011		Sep. 23, 2012		Sep. 25, 2011		Dec. 25, 2011
Discontinued Operations and Disposal Groups [Abstract]
Net revenue	$ 2,808			$ 3,077		$ 10,504		$ 8,985
Gross profit	355			532		1,431		1,329
Selling, general, and administrative expenses	752			1,055		2,416		3,090
Restructuring expenses	0			113		0		113
Intangible impairment	770		672	0		1,442		0		2,800
Goodwill impairment	0			0		370		0
Operating loss	(1,167)			(636)		(2,797)		(1,874)
Loss from discontinued operations before income taxes	(1,167)			(636)		(2,797)		(1,874)
Loss from discontinued operations, net of tax	$ (1,167)	[1]		$ (1,069)	[1]	$ (2,797)	[1]	$ (1,874)	[1]

[1] As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations for the three and nine months ended September 23, 2012, and the nine months ended September 25, 2011.

XML

Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)	0 Months Ended	3 Months Ended			6 Months Ended	9 Months Ended		12 Months Ended
	May 16, 2011	Sep. 23, 2012	Jun. 24, 2012	Sep. 25, 2011	Jun. 24, 2012	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net		$ 76,954,000				$ 76,954,000		$ 84,557,000	[1]
Amortization expense		2,400,000		3,000,000		7,600,000	8,600,000
Settlement date of acquisition	5/16/2011
Business acquisition, purchase price	78,700,000
Cash acquired on acquisition	1,900,000
Assumption of debt	4,200,000
Business acquisition, purchase price allocation, property, plant and equipment			17,100,000		17,100,000
Business acquisition, purchase price allocation, accounts receivable			7,100,000		7,100,000
Business acquisition, purchase price allocation, inventories			2,200,000		2,200,000
Business acquisition, purchase price allocated to goodwill			59,700,000		59,700,000
Business acquisition, purchase price allocation, goodwill, expected tax deductible amount			9,800,000		9,800,000
Business acquisition, purchase price allocated to intangible assets			10,500,000		10,500,000
Cash payment to escrow	17,500,000			27,800,000			27,800,000
Additional purchase price contingent on performance of acquired businesses	6,300,000
Acquisition costs		17,000		2,000		127,000	2,205,000
Impairment of Long-Lived Assets Held-for-use					0
Acquisition related goodwill								3,782,000
Goodwill impairment		0		0		64,437,000	0
Impairment of definite-lived customer relationships		770,000	672,000	0		1,442,000	0	2,800,000
Non-Compete Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price allocated to intangible assets			300,000		300,000
Useful life of intangible assets					5 years
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price allocated to intangible assets			9,800,000		9,800,000
Useful life of intangible assets					10 years
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price allocated to intangible assets			400,000		400,000
Useful life of intangible assets					7 months 15 days
J&F International, Inc. (U.S.) [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		100.00%				100.00%
Shore To Shore Far East (Hong Kong) [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		100.00%				100.00%
Shore To Shore MIS (India) [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		100.00%				100.00%
Shore To Shore Lacar SA (Guatemala) [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		100.00%				100.00%
Adapt Identification (HK) Ltd. [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		100.00%				100.00%
W Print Europe Ltd. (UK) [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		100.00%				100.00%
Shore To Shore PVT Ltd. [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired	51.00%	51.00%				51.00%
Purchase price, cash	1,700,000
Cybasa Adapt SA de CV (El Salvador) [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of voting interests acquired		50.00%				50.00%
Apparel Labeling Solutions [Member]
Finite-Lived Intangible Assets [Line Items]
Acquisition related goodwill								0
Goodwill impairment					64,437,000	64,437,000
Shrink Management Solutions [Member]
Finite-Lived Intangible Assets [Line Items]
Number of reporting unit					4
Number of reporting units whose fair value exceeded their carrying value by an insignificant amount					2
Decline in operating results needed to possibly result in future impairment percentage					10.00%
Increase in discount rate needed to possibly result in future impairment					1.10%
Acquisition related goodwill								3,782,000
Goodwill impairment						0
Shrink Management Solutions, Europe [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of fair value of reporting unit over carrying value					10.00%
Goodwill balance of those reporting units whose fair value exceeded their carrying value by an insignificant amount					72,000,000
Shrink Management Solutions, Asia Pacific [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of fair value of reporting unit over carrying value					8.00%
Goodwill balance of those reporting units whose fair value exceeded their carrying value by an insignificant amount					12,000,000
Retail Merchandising Solutions [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of fair value of reporting unit over carrying value					11.00%
Number of reporting unit					2
Number of reporting units whose fair value exceeded their carrying value by an insignificant amount					1
Goodwill balance of those reporting units whose fair value exceeded their carrying value by an insignificant amount					59,300,000
Decline in operating results needed to possibly result in future impairment percentage					11.00%
Increase in discount rate needed to possibly result in future impairment					1.60%
Acquisition related goodwill								0
Goodwill impairment						0
Purchase Price Funded By Cash [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price	66,700,000
Purchase Price Funded By Senior Secured Credit Facility [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price	9,200,000
Banking Security Systems Integration business unit [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment			$ 370,000					$ 3,400,000

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

XML

Fair Value Measurement, Financial Instruments And Risk Management (Tables)

9 Months Ended

Sep. 23, 2012

Fair Value Disclosures [Abstract]

Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following tables represent our assets and liabilities measured at fair value on a recurring basis as of September 23, 2012 and December 25, 2011 and the basis for that measurement:

(amounts in thousands)	Total Fair Value Measurement September 23, 2012		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency forward exchange contracts	$	36	$	—	$	36	$	—
Foreign currency revenue forecast contracts	170		—		170		—
Total assets	$	206	$	—	$	206	$	—
Foreign currency forward exchange contracts	$	339	$	—	$	339	$	—
Foreign currency revenue forecast contracts	—		—		—		—
Total liabilities	$	339	$	—	$	339	$	—

(amounts in thousands)	Total Fair Value Measurement December 25, 2011		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency forward exchange contracts	$	463	$	—	$	463	$	—
Foreign currency revenue forecast contracts	1,120		—		1,120		—
Total assets	$	1,583	$	—	$	1,583	$	—
Foreign currency forward exchange contracts	$	415	$	—	$	415	$	—
Foreign currency revenue forecast contracts	—		—		—		—
Total liabilities	$	415	$	—	$	415	$	—

Summary Of Activity Associated With All Designated Cash Flow Hedges Reflected In AOCI

The following table provides a summary of the activity associated with all of our designated cash flow hedges (foreign currency) reflected in accumulated other comprehensive income for the nine months ended September 23, 2012:

(amounts in thousands)	September 23, 2012
Beginning balance, net of tax	$	1,542
Changes in fair value gain, net of tax	499
Reclassification to earnings, net of tax	(1,300		)
Ending balance, net of tax	$	741

Carrying And Fair Values Of Non-Current Financial Assets And Liabilities Not Measured At Fair Value On A Recurring Basis

The carrying values and the estimated fair values of non-current financial assets and liabilities that qualify as financial instruments and are not measured at fair value on a recurring basis at September 23, 2012 and December 25, 2011 are summarized in the following table:

	September 23, 2012				December 25, 2011
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt (including current maturities and excluding capital leases and factoring)(1)
Senior secured credit facility	$	44,206	$	44,206	$	52,248	$	52,248
Senior secured notes	$	66,114	$	66,012	$	75,000	$	75,686

⁽¹⁾  The carrying amounts are reported on the balance sheet under the indicated captions.

Fair Values Of Derivative Instruments Included Within The Consolidated Balance Sheets

The following table presents the fair values of derivative instruments included within the Consolidated Balance Sheets as of September 23, 2012 and December 25, 2011:

	September 23, 2012						December 25, 2011
	Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives
(amounts in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign currency revenue forecast contracts	Other current assets	$	170	Other current liabilities	$	—	Other current assets	$	1,120	Other current liabilities	$	—
Total derivatives designated as hedging instruments		170			—			1,120			—
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts	Other current assets	36		Other current liabilities	339		Other current assets	463		Other current liabilities	415
Total derivatives not designated as hedging instruments		36			339			463			415
Total derivatives		$	206		$	339		$	1,583		$	415

Amounts Affecting The Consolidated Statement Of Operations

The following tables present the amounts affecting the Consolidated Statement of Operations for the three months ended September 23, 2012 and September 25, 2011:

	September 23, 2012								September 25, 2011
(amounts in thousands)	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income		Amount of Forward Points Recognized in Other Gain (Loss), net		Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income			Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$	(298	)	Cost of sales	$	543	$	11	$	1,390	Cost of sales	$	(720	)	$	(188	)
Total designated cash flow hedges	$	(298	)		$	543	$	11	$	1,390		$	(720	)	$	(188	)

	September 23, 2012							September 25, 2011
(amounts in thousands)	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income		Amount of Forward Points Recognized in Other Gain (Loss), net		Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income			Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$	524	Cost of sales	$	1,322	$	89	$	(1,334	)	Cost of sales	$	(1,214	)	$	(293	)
Total designated cash flow hedges	$	524		$	1,322	$	89	$	(1,334	)		$	(1,214	)	$	(293	)

Effect Of Non-Designated Hedging Instruments On Financial Performance

Quarter

Nine Months

(13 weeks) Ended

(39 weeks) Ended

September 23, 2012

September 25, 2011

September 23, 2012

September 25, 2011

(amounts in thousands)

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Derivatives not designated as hedging instruments:

Foreign exchange forwards and options

$

(81

)

Other gain (loss), net

$

185

Other gain (loss), net

$

193

Other gain (loss), net

$

(216

)

Other gain (loss), net

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Discontinued Operations (Selected Financial Information Included In Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012	Dec. 25, 2011
Discontinued Operations and Disposal Groups [Abstract]
Accounts receivable, net	$ 1,525	$ 1,519
Inventories	1,045	1,087
Property, plant, and equipment , net	18	11
Goodwill	0	370
Other intangibles, net	312	1,754
Other assets	936	1,579
Assets of discontinued operations held for sale	3,836	6,320	[1]
Accounts payable	372	551
Accrued compensation and related taxes	0	40
Other accrued expenses	284	599
Unearned revenues	421	169
Restructuring reserve	0	78
Other liabilities	1	3
Liabilities of discontinued operations held for sale	$ 1,078	$ 1,440	[1]

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Provision For Restructuring (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 23, 2012
Restructuring Cost and Reserve [Line Items]
Charged to earnings	$ 22,657,000
Combined Global and SG&A Restructuring Plans [Member]
Restructuring Cost and Reserve [Line Items]
Minimum number of employees affected by restructuring plan	2,400
Global Restructuring Plan (including LEAN) [Member]
Restructuring Cost and Reserve [Line Items]
Charged to earnings	26,497,000
Costs incurred	45,900,000
Total number of employees affected by restructuring	2,296
Number of employees terminated	1,263
Termination benefits payment period, minimum (months)	1
Termination benefits payment period, maximum (months)	24
SG&A Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Charged to earnings	674,000
Costs incurred	18,800,000
Total number of employees affected by restructuring	369
Number of employees terminated	363
Termination benefits payment period, minimum (months)	1
Termination benefits payment period, maximum (months)	24
Manufacturing Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Charged to earnings	(75,000)
Costs incurred	4,100,000
Total number of employees affected by restructuring	420
RestructuringAndRelatedCost420PositionsEliminatedInceptionToDate	all of which have been terminated
Maximum [Member] | Combined Global and SG&A Restructuring Plans [Member]
Restructuring Cost and Reserve [Line Items]
Anticipated total costs	75,000,000
Maximum [Member] | Global Restructuring Plan (including LEAN) [Member]
Restructuring Cost and Reserve [Line Items]
Anticipated total costs	55,000,000
Minimum [Member] | Combined Global and SG&A Restructuring Plans [Member]
Restructuring Cost and Reserve [Line Items]
Anticipated total costs	70,000,000
Minimum [Member] | Global Restructuring Plan (including LEAN) [Member]
Restructuring Cost and Reserve [Line Items]
Anticipated total costs	52,000,000
Other Exit Costs [Member] | Global Restructuring Plan (including LEAN) [Member]
Restructuring Cost and Reserve [Line Items]
Charged to earnings	3,680,000	[1]
Other Exit Costs [Member] | SG&A Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Charged to earnings	66,000	[2]
Other Exit Costs [Member] | Manufacturing Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Charged to earnings	$ 0

[1] During the first nine months of 2012, there was a net charge to earnings of $3.7 million primarily due to lease termination costs, inventory and equipment moving costs, restructuring agent costs, legal costs, and gains/losses on sale of assets in connection with the restructuring plan.

[2] During the first nine months of 2012, there was a net charge to earnings of $0.1 million primarily due to lease termination costs, and inventory and equipment moving costs, in connection with the restructuring plan.

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Debt (Full-Recourse Factoring Arrangements) (Details)	Sep. 23, 2012 USD ($)	Sep. 23, 2012 EUR (€)	Dec. 25, 2011 USD ($)	Dec. 31, 2009
Debt Disclosure [Abstract]
Weighted average percentage of the face amount of receivables				92.40%
Full-recourse factoring arrangements	$ 998,000	€ 800,000	$ 1,333,000
Current portion of full-recourse factoring agreements	300,000	300,000
Long-term portion of full-recourse factoring agreements	$ 700,000	€ 500,000

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Business Segments (Details) (USD $)	0 Months Ended	3 Months Ended					9 Months Ended				84 Months Ended
	Oct. 10, 2012	Sep. 23, 2012		Mar. 25, 2012	Sep. 25, 2011		Sep. 23, 2012		Sep. 25, 2011		Dec. 25, 2011
Segment Reporting Information [Line Items]
Total revenues		$ 188,163,000			$ 215,049,000		$ 548,856,000		$ 613,745,000
Total gross profit		72,014,000			81,088,000		201,230,000		236,157,000
Operating expenses		68,520,000	[1]		88,258,000	[2]	302,862,000	[3]	238,807,000	[4]
Interest (expense) income, net		(4,272,000)			(1,237,000)		(7,251,000)		(3,104,000)
Other gain (loss), net		325,000			(783,000)		29,000		(1,049,000)
Loss from continuing operations before income taxes		(453,000)			(9,190,000)		(108,854,000)		(6,803,000)
Goodwill impairment		0			0		64,437,000		0
Restructuring charge		4,112,000			17,279,000		27,096,000		20,371,000
CEO transition charge							2,900,000
Acquisition costs		17,000			2,000		127,000		2,205,000
Charges related to improper and fraudulent Canadian activities	4,700,000	0		745,000	289,000		745,000		587,000		4,100,000
Segment, Shrink Management Solutions [Member]
Segment Reporting Information [Line Items]
Total revenues		133,859,000			147,719,000		374,033,000		415,620,000
Total gross profit		56,026,000			57,978,000		151,525,000		166,434,000
Segment, Apparel Labeling Solutions [Member]
Segment Reporting Information [Line Items]
Total revenues		41,759,000			49,488,000		133,907,000		144,705,000
Total gross profit		10,101,000			14,733,000		31,626,000		44,213,000
Segment, Retail Merchandising Solutions [Member]
Segment Reporting Information [Line Items]
Total revenues		12,545,000			17,842,000		40,916,000		53,420,000
Total gross profit		$ 5,887,000			$ 8,377,000		$ 18,079,000		$ 25,510,000

[1] Includes a $4.1 million restructuring charge and a $17 thousand acquisition charge.

[2] Includes a $17.3 million restructuring charge, a $0.3 million charge related to improper and fraudulent Canadian activities and a $2 thousand acquisition charge.

[3] Includes a $64.4 million goodwill impairment charge, a $27.1 million restructuring charge, a $2.9 million charge related to our CEO transition, a $0.7 million charge for forensic and legal fees associated with the improper and fraudulent Canadian activities, and a $0.1 million acquisition charge.

[4] Includes a $20.4 million restructuring charge, a $2.2 million acquisition charge, and a $0.6 million charge related to improper and fraudulent Canadian activities.

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Discontinued Operations (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 23, 2012	Jun. 24, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill impairment	$ 0		$ 0	$ 64,437	$ 0
Intangible impairment	770	672	0	1,442	0	2,800
Banking Security Systems Integration business unit [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill impairment		$ 370				$ 3,400

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Fair Value Measurement, Financial Instruments And Risk Management (Fair Values Of Derivative Instruments Included Within The Consolidated Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012	Dec. 25, 2011
Derivatives, Fair Value [Line Items]
Asset Derivatives	$ 206	$ 1,583
Liability Derivatives	339	415
Foreign Currency Revenue Forecast Contracts [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	170	1,120
Liability Derivatives	0	0
Foreign Currency Forward Exchange Contracts [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	36	463
Liability Derivatives	339	415
Derivatives Designated As Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	170	1,120
Liability Derivatives	0	0
Derivatives Designated As Hedging Instruments [Member] | Foreign Currency Revenue Forecast Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	170	1,120
Derivatives Designated As Hedging Instruments [Member] | Foreign Currency Revenue Forecast Contracts [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives	0	0
Derivatives Not Designated As Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	36	463
Liability Derivatives	339	415
Derivatives Not Designated As Hedging Instruments [Member] | Foreign Currency Forward Exchange Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	36	463
Derivatives Not Designated As Hedging Instruments [Member] | Foreign Currency Forward Exchange Contracts [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives	$ 339	$ 415

XML

Summary Of Significant Accounting Polices (Tables)

9 Months Ended

Sep. 23, 2012

Accounting Policies [Abstract]

Effects Of Adjustment On Loss Per Share

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
Loss attributable to Checkpoint Systems, Inc. per share	Basic EPS			Diluted EPS			Basic EPS			Diluted EPS
As Previously Reported	$	(1.21	)	$	(1.21	)	$	(1.21	)	$	(1.21	)
Revision Adjustments:
Canada Adjustments	0.01			0.01			0.04			0.04
As Revised for Revision Adjustments	$	(1.20	)	$	(1.20	)	$	(1.17	)	$	(1.17	)
Discontinued Operations Adjustments	—			—			—			—
As Revised in this Quarterly Report on Form 10-Q	$	(1.20	)	$	(1.20	)	$	(1.17	)	$	(1.17	)

Effects Of Adjustment On Net Loss Attributable To Parent And (Loss) Income From Continuing Operations

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	Net Loss Attributable to Checkpoint Systems, Inc.			Loss from Continuing  Operations Before Income Taxes			Net Loss Attributable to Checkpoint Systems, Inc.			Loss from Continuing  Operations Before Income Taxes
As Previously Reported	$	(49,259	)	$	(10,623	)	$	(49,050	)	$	(10,727	)
Revision Adjustments:
Canada Adjustments	597			797			1,535			2,050
As Revised for Revision Adjustments	$	(48,662	)	$	(9,826	)	$	(47,515	)	$	(8,677	)
Discontinued Operations Adjustments	—			636			—			1,874
As Revised in this Quarterly Report on Form 10-Q	$	(48,662	)	$	(9,190	)	$	(47,515	)	$	(6,803	)

Effects Of Adjustment On Income Tax Expense And Operating Loss

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	Income Tax Expense			Operating Loss			Income Tax Expense		Operating Loss
As Previously Reported	$	38,588		$	(8,603	)	$	38,273	$	(6,574	)
Revision Adjustments:
Canada Adjustments	200			797			515		2,050
As Revised for Revision Adjustments	$	38,788		$	(7,806	)	$	38,788	$	(4,524	)
Discontinued Operations Adjustments	(433		)	636			—		1,874
As Revised in this Quarterly Report on Form 10-Q	$	38,355		$	(7,170	)	$	38,788	$	(2,650	)

Consolidated Statements Of Operations

CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter
	(13 weeks) Ended
	September 25, 2011
(amounts in thousands, except per share data)	As Previously Reported			As Revised for Revision Adjustments			As Revised in this Quarterly Report on Form 10-Q
Net revenues	$	218,126		$	218,126		$	215,049
Cost of revenues	136,506			136,506			133,961
Gross profit	81,620			81,620			81,088
Selling, general, and administrative expenses	69,943			68,857			67,802
Research and development	5,476			5,476			5,476
Restructuring expenses	17,392			17,392			17,279
Acquisition costs	2			2			2
Other expense	—			289			289
Other operating income	2,590			2,590			2,590
Operating loss	(8,603		)	(7,806		)	(7,170		)
Interest income	984			984			984
Interest expense	2,221			2,221			2,221
Other gain (loss), net	(783		)	(783		)	(783		)
Loss from continuing operations before income taxes	(10,623		)	(9,826		)	(9,190		)
Income taxes	38,588			38,788			38,355
Net loss from continuing operations	(49,211		)	(48,614		)	(47,545		)
Loss from discontinued operations, net of tax expense of $0, $0, and $433	—			—			(1,069		)
Net loss	(49,211		)	(48,614		)	(48,614		)
Less: gain attributable to non-controlling interests	48			48			48
Net loss attributable to Checkpoint Systems, Inc.	$	(49,259	)	$	(48,662	)	$	(48,662	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.20	)	$	(1.17	)
Loss from discontinued operations, net of tax	—			—			(0.03		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.20	)	$	(1.20	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.20	)	$	(1.17	)
Loss from discontinued operations, net of tax	—			—			(0.03		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.20	)	$	(1.20	)

The As Revised in this Quarterly Report on Form 10-Q amounts include the effects of discontinued operations presentation on previously reported amounts. Refer to Note 14 to the Consolidated Financial Statements for discontinued operations presentation adjustments to previously reported amounts.

	Nine Months
	(39 weeks) Ended
	September 25, 2011
(amounts in thousands, except per share data)	As Previously Reported			As Revised for Revision Adjustments			As Revised in this Quarterly Report on Form 10-Q
Net revenues	$	622,730		$	622,730		$	613,745
Cost of revenues	385,244			385,244			377,588
Gross profit	237,486			237,486			236,157
Selling, general, and administrative expenses	225,021			222,384			219,294
Research and development	15,612			15,612			15,612
Restructuring expenses	20,484			20,484			20,371
Acquisition costs	2,205			2,205			2,205
Other expense	—			587			587
Other operating income	19,262			19,262			19,262
Operating loss	(6,574		)	(4,524		)	(2,650		)
Interest income	2,677			2,677			2,677
Interest expense	5,781			5,781			5,781
Other gain (loss), net	(1,049		)	(1,049		)	(1,049		)
Loss from continuing operations before income taxes	(10,727		)	(8,677		)	(6,803		)
Income taxes expense	38,273			38,788			38,788
Net loss from continuing operations	(49,000		)	(47,465		)	(45,591		)
Loss from discontinued operations, net of tax expense of $0, $0, and $0	—			—			(1,874		)
Net loss	(49,000		)	(47,465		)	(47,465		)
Less: gain attributable to non-controlling interests	50			50			50
Net loss attributable to Checkpoint Systems, Inc.	$	(49,050	)	$	(47,515	)	$	(47,515	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.17	)	$	(1.13	)
Loss from discontinued operations, net of tax	—			—			(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.17	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.17	)	$	(1.13	)
Loss from discontinued operations, net of tax	—			—			(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.17	)	$	(1.17	)

Consolidated Statements Of Comprehensive Loss

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	As Previously Reported			As Revised in this Quarterly Report on Form 10-Q			As Previously Reported			As Revised in this Quarterly Report on Form 10-Q
Net loss	$	(49,211	)	$	(48,614	)	$	(49,000	)	$	(47,465	)
Amortization of pension plan actuarial losses, net of tax	253			253			9			9
Change in realized and unrealized gains on derivative hedges, net of tax	1,814			1,814			52			52
Foreign currency translation adjustment	(12,464		)	(12,423		)	9,621			9,594
Comprehensive loss	(59,608		)	(58,970		)	(39,318		)	(37,810		)
Less: comprehensive income attributable to non-controlling interests	48			48			50			50
Comprehensive loss attributable to Checkpoint Systems, Inc.	$	(59,656	)	$	(59,018	)	$	(39,368	)	$	(37,860	)

Consolidated Statements Of Cash Flows

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)	September 25, 2011
Nine months (39 weeks) ended	As Previously Reported			As Revised in this Quarterly Report on Form 10-Q
Cash flows from operating activities:
Net loss	$	(49,000	)	$	(47,465	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	27,367			27,367
Deferred taxes	47,530			48,045
Stock-based compensation	6,208			6,208
Provision for losses on accounts receivable	2,237			2,237
Excess tax benefit on stock compensation	(598		)	(598		)
Gain on disposal of fixed assets	(19		)	(19		)
Restructuring-related asset impairment	7,479			7,479
Increase in current assets, net of the effects of acquired companies:
Accounts receivable	(1,850		)	(2,035		)
Inventories	(35,199		)	(35,329		)
Other current assets	(29,458		)	(29,507		)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable	4,405			4,242
Income taxes	(2,850		)	(2,869		)
Unearned revenues	11,798			11,798
Restructuring reserve	7,526			7,526
Other current and accrued liabilities	7,150			7,855
Net cash provided by operating activities	2,726			4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(14,424		)	(14,424		)
Acquisition of businesses, net of cash acquired	(75,937		)	(75,937		)
Change in restricted cash	(82		)	(82		)
Other investing activities	408			408
Net cash used in investing activities	(90,035		)	(90,035		)
Cash flows from financing activities:
Proceeds from stock issuances	2,336			2,336
Excess tax benefit on stock compensation	598			598
Proceeds from short-term debt	16			16
Payment of short-term debt	(1,612		)	(1,612		)
Net change in factoring and bank overdrafts	(2,391		)	(2,391		)
Proceeds from long-term debt	63,750			63,750
Payment of long-term debt	(47,701		)	(47,701		)
Net cash provided by financing activities	14,996			14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents	4,116			4,031
Net decrease in cash and cash equivalents	(68,197		)	(66,073		)
Cash and cash equivalents:
Beginning of period	173,802			172,473
End of period	$	105,605		$	106,400

Schedule Of Movement Of Warranty Reserves

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)
Nine months ended	September 23, 2012
Balance at beginning of year	$	5,857
Accruals for warranties issued, net	4,176
Settlements made	(4,182		)
Foreign currency translation adjustment	31
Balance at end of period	$	5,882

XML

Goodwill And Other Intangible Assets (Schedule Of Components Of Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012		Dec. 25, 2011		Dec. 26, 2010
Goodwill [Line Items]
Gross Amount	$ 426,207		$ 426,138
Accumulated Impairment Losses	203,249		140,035
Goodwill, Net	222,958	[1]	286,103	[1]	231,325
Shrink Management Solutions [Member]
Goodwill [Line Items]
Gross Amount	211,047		213,836
Accumulated Impairment Losses	49,558		52,025
Goodwill, Net	161,489		161,811		165,324
Apparel Labeling Solutions [Member]
Goodwill [Line Items]
Gross Amount	83,542		81,662
Accumulated Impairment Losses	83,542		19,078
Goodwill, Net	0		62,584		3,915
Retail Merchandising Solutions [Member]
Goodwill [Line Items]
Gross Amount	131,618		130,640
Accumulated Impairment Losses	70,149		68,932
Goodwill, Net	$ 61,469		$ 61,708		$ 62,086

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Summary Of Significant Accounting Polices (Consolidated Statements Of Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011
Net loss	$ (5,385)	$ (48,614)	$ (110,841)	$ (47,465)	$ (66,626)
Amortization of pension plan actuarial losses, net of tax	68	253	210	9	137
Change in realized and unrealized (losses) gains on derivative hedges, net of tax	(799)	1,814	(801)	52	1,165
Foreign currency translation adjustment	6,305	(12,423)	(771)	9,594	3,542
Comprehensive income (loss)	189	(58,970)	(112,203)	(37,810)
Less: comprehensive income attributable to non-controlling interests	(65)	48	(346)	50
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.	254	(59,018)	(111,857)	(37,860)
As Previously Reported [Member]
Net loss		(49,211)		(49,000)
Amortization of pension plan actuarial losses, net of tax		253		9
Change in realized and unrealized (losses) gains on derivative hedges, net of tax		1,814		52
Foreign currency translation adjustment		(12,464)		9,621
Comprehensive income (loss)		(59,608)		(39,318)
Less: comprehensive income attributable to non-controlling interests		48		50
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.		(59,656)		(39,368)
As Revised In This Quarterly Report On Form 10-Q [Member]
Net loss		(48,614)		(47,465)
Amortization of pension plan actuarial losses, net of tax		253		9
Change in realized and unrealized (losses) gains on derivative hedges, net of tax		1,814		52
Foreign currency translation adjustment		(12,423)		9,594
Comprehensive income (loss)		(58,970)		(37,810)
Less: comprehensive income attributable to non-controlling interests		48		50
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.		$ (59,018)		$ (37,860)

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Provision For Restructuring (Schedule Of Restructuring Accrual Activity) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 23, 2012
Restructuring Cost and Reserve [Line Items]
Accrual at Beginning of Year	$ 17,612
Charged to Earnings	22,657
Charge Reversed to Earnings	(1,717)
Cash Payments	(22,839)
Exchange Rate Changes	67
Accrual at 9/23/2012	15,780
Global Restructuring Plan (including LEAN) [Member]
Restructuring Cost and Reserve [Line Items]
Charged to Earnings	26,497
Global Restructuring Plan (including LEAN) [Member] | Severance And Other Employee-Related Charges [Member]
Restructuring Cost and Reserve [Line Items]
Accrual at Beginning of Year	9,710
Charged to Earnings	18,106
Charge Reversed to Earnings	(1,445)
Cash Payments	(13,969)
Exchange Rate Changes	89
Accrual at 9/23/2012	12,491
Global Restructuring Plan (including LEAN) [Member] | Other Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Accrual at Beginning of Year	0	[1]
Charged to Earnings	3,680	[1]
Charge Reversed to Earnings	0	[1]
Cash Payments	(3,151)	[1]
Exchange Rate Changes	0	[1]
Accrual at 9/23/2012	529	[1]
SG&A Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Charged to Earnings	674
SG&A Restructuring Plan [Member] | Severance And Other Employee-Related Charges [Member]
Restructuring Cost and Reserve [Line Items]
Accrual at Beginning of Year	6,718
Charged to Earnings	805
Charge Reversed to Earnings	(197)
Cash Payments	(4,860)
Exchange Rate Changes	(13)
Accrual at 9/23/2012	2,453
SG&A Restructuring Plan [Member] | Other Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Accrual at Beginning of Year	1,109	[2]
Charged to Earnings	66	[2]
Charge Reversed to Earnings	0	[2]
Cash Payments	(859)	[2]
Exchange Rate Changes	(9)	[2]
Accrual at 9/23/2012	307	[2]
Manufacturing Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Charged to Earnings	(75)
Manufacturing Restructuring Plan [Member] | Other Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Accrual at Beginning of Year	75
Charged to Earnings	0
Charge Reversed to Earnings	(75)
Cash Payments	0
Exchange Rate Changes	0
Accrual at 9/23/2012	$ 0

[1] During the first nine months of 2012, there was a net charge to earnings of $3.7 million primarily due to lease termination costs, inventory and equipment moving costs, restructuring agent costs, legal costs, and gains/losses on sale of assets in connection with the restructuring plan.

[2] During the first nine months of 2012, there was a net charge to earnings of $0.1 million primarily due to lease termination costs, and inventory and equipment moving costs, in connection with the restructuring plan.

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Summary Of Significant Accounting Polices (Narrative) (Details) (USD $)	0 Months Ended	3 Months Ended				9 Months Ended		12 Months Ended	84 Months Ended					9 Months Ended
	Oct. 10, 2012	Sep. 23, 2012	Mar. 25, 2012	Dec. 25, 2011	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011	Dec. 25, 2011	Jun. 24, 2012	Sep. 23, 2012 Machinery And Equipment [Member]	Sep. 23, 2012 Construction-In-Progress [Member]	Dec. 25, 2011 Construction-In-Progress [Member]	Sep. 23, 2012 Internal-Use Software [Member]	Sep. 23, 2012 Shore To Shore PVT Ltd. [Member]	May 16, 2011 Shore To Shore PVT Ltd. [Member]
Summary Of Significant Accounting Policies [Line Items]
Total amount of expense for all years of fraud activities			$ 745,000					$ 900,000	$ 5,200,000
Amount of income of fraud activities, net of recovery				1,100,000				200,000
Amount of expense of fraud activities, net of recovery	4,700,000	0	745,000		289,000	745,000	587,000		4,100,000
Proceeds from sale of lease receivables							30,900,000
Minimum estimated useful life, years														3
Maximum estimated useful life, years														5
Total amount of internal-use software costs capitalized		22,300,000		21,400,000		22,300,000		21,400,000	21,400,000
Value of supporting software packages capitalized											18,100,000
Remaining costs capitalized as construction-in-progress												4,200,000	6,000,000
Assets held for sale										3,700,000
Long Lived Assets Held-for-sale, Gain (Loss) on Sale		800,000				800,000
Voting interest acquired															51.00%	51.00%
Purchase price of cash from operations																$ 1,700,000

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Debt (Short-Term Borrowings And Current Portion Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012	Dec. 25, 2011
Debt Disclosure [Abstract]
Overdraft	$ 309	$ 405
Full-recourse factoring liabilities	0	8,809
Term loans	2,436	9,125
Other short-term borrowings	1,078	2,529
Current portion of long-term debt	537	910
Total short-term borrowings and current portion of long-term debt	$ 4,360	$ 21,778	[1]

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Fair Value Measurement, Financial Instruments And Risk Management (Narrative) (Details)	3 Months Ended		9 Months Ended		12 Months Ended			3 Months Ended	9 Months Ended
	Sep. 23, 2012 USD ($)	Sep. 25, 2011 USD ($)	Sep. 23, 2012 USD ($)	Sep. 25, 2011 USD ($)	Dec. 25, 2011 USD ($)	Sep. 23, 2012 Foreign Currency Forward Exchange Contracts [Member] USD ($)	Dec. 25, 2011 Foreign Currency Forward Exchange Contracts [Member] USD ($)	Sep. 23, 2012 Foreign Currency Revenue Forecast Contracts [Member] USD ($)	Sep. 23, 2012 Foreign Currency Revenue Forecast Contracts [Member] USD ($)	Sep. 23, 2012 Foreign Currency Revenue Forecast Contracts [Member] EUR (€)	Dec. 25, 2011 Foreign Currency Revenue Forecast Contracts [Member] USD ($)
Fair Value Disclosures [Line Items]
Notional amount of derivatives not designated as hedging instruments						$ 13,700,000
Assets	206,000		206,000		1,583,000	36,000	463,000	170,000	170,000		1,120,000
Liabilities	339,000		339,000		415,000	339,000	415,000	0	0		0
Notional amount of derivatives								7,200,000	7,200,000	5,400,000
Unrealized gain recorded in other comprehensive income	(799,000)	1,814,000	(801,000)	52,000	1,165,000				900,000
Tax of unrealized loss recorded in other comprehensive Income									40,000
Unrealized loss from cash flow hedge expected to be reclassified to earnings over the next 12 months	900,000		900,000
Unrealized loss from cash flow hedge reclassified to earnings, tax			40,000
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net								500,000	1,300,000
Hedge ineffectiveness	$ 0		$ 40,000

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Stock-Based Compensation (Nonvested Service Based Restricted Stock Units) (Details) (Restricted Stock Units (RSUs) [Member], USD $)	9 Months Ended
	Sep. 23, 2012 Y
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Nonvested at beginning of period	617,672
Number of Shares, Granted	210,795
Number of Shares, Vested	(186,254)
Number of Shares, Forfeited	(68,046)
Number of Shares, Nonvested at end of period	574,167
Number of Shares, Vested and expected to vest	574,167
Number of Shares, Vested at end of period	61,250
Weighted-Average Vest Date, Nonvested at beginning in years	0.79
Weighted-Average Vest Date, Nonvested at end in years	1.04
Weighted-Average Vest Date, Vested and expected to vest in years	1.04
Weighted-Average Vest Date, Vested in years	0.00
Weighted-Average Grant Date Fair Value, Nonvested at beginning of period	$ 21.29
Weighted-Average Grant Date Fair Value, Granted	$ 10.72
Weighted-Average Grant Date Fair Value, Vested	$ 11.38
Weighted-Average Grant Date Fair Value, Forfeited	$ 17.34
Weighted-Average Grant Date Fair Value, Nonvested at end of period	$ 21.09

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Goodwill And Other Intangible Assets (Components Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 23, 2012 Y	Dec. 25, 2011
Finite-Lived Intangible Assets [Line Items]
Total amortized finite-lived intangible assets, Gross Amount	$ 178,601	$ 178,764
Total identifiable intangible assets, Gross Amount	200,110	200,273
Amortized finite-lived intangible assets, Gross Accumulated Amortization	123,156	115,716
Total identifiable assets accumulated amortization	123,156	115,716
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Amortizable Life Minimum (years)	6
Finite-lived intangible assets, Amortizable Life Maximum (years)	20
Finite-lived customer lists, Gross Amount	81,320	81,348
Amortized finite-lived intangible assets, Gross Accumulated Amortization	48,311	43,945
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Amortizable Life Minimum (years)	1
Finite-lived intangible assets, Amortizable Life Maximum (years)	30
Finite-lived trade name, Gross Amount	29,945	30,007
Indefinite-lived trade names, Gross Amount	21,509	21,509
Amortized finite-lived intangible assets, Gross Accumulated Amortization	18,693	18,237
Patents, License Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Amortizable Life Minimum (years)	3
Finite-lived intangible assets, Amortizable Life Maximum (years)	14
Finite-lived patents, license agreements, Gross Amount	60,133	60,249
Amortized finite-lived intangible assets, Gross Accumulated Amortization	49,424	47,704
Other Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Amortizable Life Minimum (years)	2
Finite-lived intangible assets, Amortizable Life Maximum (years)	6
Finite-lived other intangibles, Gross Amount	7,203	7,160
Amortized finite-lived intangible assets, Gross Accumulated Amortization	$ 6,728	$ 5,830

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Summary Of Significant Accounting Polices

9 Months Ended

Sep. 23, 2012

Accounting Policies [Abstract]

Summary Of Significant Accounting Polices

SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Revision of Previously Issued Consolidated Financial Statements

Checkpoint Systems, Inc. (the "Company") is revising herein its historical financial statements for the three and nine months ended September 25, 2011. As previously disclosed in our Annual Report on Form 10-K for the year ended December 25, 2011, the revision is the result of the Company making corrections for the combined effect of financial statement errors attributable to the intentional misstatement of expenses due to the improper and fraudulent activities of a certain former employee of the Company's Canada sales subsidiary. The Company assessed the impact of these errors on its prior interim financial statements and concluded that these errors were not material, individually or in the aggregate to those financial statements. Although the effect of these errors was not material to any previously issued financial statements, the cumulative effect of correcting the newly identified errors in the prior year would have been material for the fiscal year 2011. Consequently, the Company has revised its prior period financial statements. All amounts in this Quarterly Report on Form 10-Q affected by the revision adjustments reflect such amounts as revised.

Description of Revision Adjustments

Set forth below is a description of the revision adjustments reflected in the revision of previously issued financial statements.

Overstatement of expenses due to the improper and fraudulent activities of a certain former employee of the Company’s Canada sales subsidiary - In December of 2011, we identified errors in our financial statements resulting from improper and fraudulent activities of a certain former employee of our Canada sales subsidiary as part of the transition of our Canadian operations into our shared service environment in North America. Subsequent to the discovery of such errors, we retained outside counsel to undertake an investigation with the assistance of forensic accountants and internal auditors. The results of this investigation concluded that in the period from 2005 through the fourth quarter of 2011, the then Controller of our Canadian operations was able to misappropriate cash through various schemes. The defalcation of cash was concealed by overriding internal controls at the subsidiary which had the effect of misstating certain accounts including cash, accounts receivable, and inventories as well as income taxes and non-income taxes payable and operating expenses. Based on this investigation, it was determined that improper and fraudulent activities by a certain employee of the subsidiary affected the financial reporting of the subsidiary and that the improper and fraudulent activities were contained within the Canada sales subsidiary.

The total cumulative gross financial statement impact of the improper and fraudulent activities was approximately $5.2 million and impacted fiscal years 2005 through 2011 of which $1.1 million was recovered by the Company from the perpetrator during the fourth quarter of 2011, resulting in a net cumulative financial statement impact of $4.1 million. The fiscal year 2011 financial statement impact was $0.2 million income due to the recovery of $1.1 million offset by expense of $0.9 million. We incurred additional expenses related to the improper and fraudulent activities of $0.7 million during 2012. The financial statement impacts of the improper and fraudulent Canadian activities have been included in other expense in the Consolidated Statements of Operations. We filed a claim during the second quarter of 2012 with our insurance provider for the unrecovered amount of the loss. On October 10, 2012, the Company received compensation of $4.7 million for the financial impact of the fraudulent Canadian activities from our insurance provider. The income from the settlement will be recorded in the fourth quarter of 2012 in other expense in the Consolidated Statement of Operations. For further information, refer to Note 15, "Subsequent Events".

The improper and fraudulent activities by a certain former employee of the subsidiary included (i) the misappropriation of cash including cash payments to improper vendors; (ii) the intentional overstatement of cash balances; (iii) the intentional understatement of accounts receivable and inventory reserve accounts; (iv) the intentional understatement of income taxes and non-income taxes payable; and (v) recording arbitrary balance sheet adjustments to increase cash and liabilities.

In addition to the revisions described above, the effects of discontinued operations presentation on previously reported amounts have been included in order to reconcile between previously reported amounts and the final amounts as revised in this Quarterly Report on Form 10-Q.

The following tables summarize the effects of the adjustments on basic (loss) earnings per share, diluted (loss) earnings per share, operating (loss) income, income taxes, (loss) earnings from continuing operations before income taxes, and net (loss) earnings attributable to Checkpoint Systems, Inc. for the three and nine months ended September 25, 2011.

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
Loss attributable to Checkpoint Systems, Inc. per share	Basic EPS			Diluted EPS			Basic EPS			Diluted EPS
As Previously Reported	$	(1.21	)	$	(1.21	)	$	(1.21	)	$	(1.21	)
Revision Adjustments:
Canada Adjustments	0.01			0.01			0.04			0.04
As Revised for Revision Adjustments	$	(1.20	)	$	(1.20	)	$	(1.17	)	$	(1.17	)
Discontinued Operations Adjustments	—			—			—			—
As Revised in this Quarterly Report on Form 10-Q	$	(1.20	)	$	(1.20	)	$	(1.17	)	$	(1.17	)

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	Net Loss Attributable to Checkpoint Systems, Inc.			Loss from Continuing  Operations Before Income Taxes			Net Loss Attributable to Checkpoint Systems, Inc.			Loss from Continuing  Operations Before Income Taxes
As Previously Reported	$	(49,259	)	$	(10,623	)	$	(49,050	)	$	(10,727	)
Revision Adjustments:
Canada Adjustments	597			797			1,535			2,050
As Revised for Revision Adjustments	$	(48,662	)	$	(9,826	)	$	(47,515	)	$	(8,677	)
Discontinued Operations Adjustments	—			636			—			1,874
As Revised in this Quarterly Report on Form 10-Q	$	(48,662	)	$	(9,190	)	$	(47,515	)	$	(6,803	)

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	Income Tax Expense			Operating Loss			Income Tax Expense		Operating Loss
As Previously Reported	$	38,588		$	(8,603	)	$	38,273	$	(6,574	)
Revision Adjustments:
Canada Adjustments	200			797			515		2,050
As Revised for Revision Adjustments	$	38,788		$	(7,806	)	$	38,788	$	(4,524	)
Discontinued Operations Adjustments	(433		)	636			—		1,874
As Revised in this Quarterly Report on Form 10-Q	$	38,355		$	(7,170	)	$	38,788	$	(2,650	)

Comparison of revised financial statements to financial statements as originally reported

The following tables compare our previously reported Consolidated Statements of Operations, Stockholders’ Equity, Comprehensive Income, and Cash Flows for the three and nine months ended September 25, 2011 to the corresponding financial statements for those years As Revised.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter
	(13 weeks) Ended
	September 25, 2011
(amounts in thousands, except per share data)	As Previously Reported			As Revised for Revision Adjustments			As Revised in this Quarterly Report on Form 10-Q
Net revenues	$	218,126		$	218,126		$	215,049
Cost of revenues	136,506			136,506			133,961
Gross profit	81,620			81,620			81,088
Selling, general, and administrative expenses	69,943			68,857			67,802
Research and development	5,476			5,476			5,476
Restructuring expenses	17,392			17,392			17,279
Acquisition costs	2			2			2
Other expense	—			289			289
Other operating income	2,590			2,590			2,590
Operating loss	(8,603		)	(7,806		)	(7,170		)
Interest income	984			984			984
Interest expense	2,221			2,221			2,221
Other gain (loss), net	(783		)	(783		)	(783		)
Loss from continuing operations before income taxes	(10,623		)	(9,826		)	(9,190		)
Income taxes	38,588			38,788			38,355
Net loss from continuing operations	(49,211		)	(48,614		)	(47,545		)
Loss from discontinued operations, net of tax expense of $0, $0, and $433	—			—			(1,069		)
Net loss	(49,211		)	(48,614		)	(48,614		)
Less: gain attributable to non-controlling interests	48			48			48
Net loss attributable to Checkpoint Systems, Inc.	$	(49,259	)	$	(48,662	)	$	(48,662	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.20	)	$	(1.17	)
Loss from discontinued operations, net of tax	—			—			(0.03		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.20	)	$	(1.20	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.20	)	$	(1.17	)
Loss from discontinued operations, net of tax	—			—			(0.03		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.20	)	$	(1.20	)

The As Revised in this Quarterly Report on Form 10-Q amounts include the effects of discontinued operations presentation on previously reported amounts. Refer to Note 14 to the Consolidated Financial Statements for discontinued operations presentation adjustments to previously reported amounts.

	Nine Months
	(39 weeks) Ended
	September 25, 2011
(amounts in thousands, except per share data)	As Previously Reported			As Revised for Revision Adjustments			As Revised in this Quarterly Report on Form 10-Q
Net revenues	$	622,730		$	622,730		$	613,745
Cost of revenues	385,244			385,244			377,588
Gross profit	237,486			237,486			236,157
Selling, general, and administrative expenses	225,021			222,384			219,294
Research and development	15,612			15,612			15,612
Restructuring expenses	20,484			20,484			20,371
Acquisition costs	2,205			2,205			2,205
Other expense	—			587			587
Other operating income	19,262			19,262			19,262
Operating loss	(6,574		)	(4,524		)	(2,650		)
Interest income	2,677			2,677			2,677
Interest expense	5,781			5,781			5,781
Other gain (loss), net	(1,049		)	(1,049		)	(1,049		)
Loss from continuing operations before income taxes	(10,727		)	(8,677		)	(6,803		)
Income taxes expense	38,273			38,788			38,788
Net loss from continuing operations	(49,000		)	(47,465		)	(45,591		)
Loss from discontinued operations, net of tax expense of $0, $0, and $0	—			—			(1,874		)
Net loss	(49,000		)	(47,465		)	(47,465		)
Less: gain attributable to non-controlling interests	50			50			50
Net loss attributable to Checkpoint Systems, Inc.	$	(49,050	)	$	(47,515	)	$	(47,515	)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.17	)	$	(1.13	)
Loss from discontinued operations, net of tax	—			—			(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.17	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(1.21	)	$	(1.17	)	$	(1.13	)
Loss from discontinued operations, net of tax	—			—			(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(1.21	)	$	(1.17	)	$	(1.17	)

The As Revised in this Quarterly Report on Form 10-Q amounts include the effects of discontinued operations presentation on previously reported amounts. Refer to Note 14 to the Consolidated Financial Statements for discontinued operations presentation adjustments to previously reported amounts.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
	September 25, 2011						September 25, 2011
(amounts in thousands)	As Previously Reported			As Revised in this Quarterly Report on Form 10-Q			As Previously Reported			As Revised in this Quarterly Report on Form 10-Q
Net loss	$	(49,211	)	$	(48,614	)	$	(49,000	)	$	(47,465	)
Amortization of pension plan actuarial losses, net of tax	253			253			9			9
Change in realized and unrealized gains on derivative hedges, net of tax	1,814			1,814			52			52
Foreign currency translation adjustment	(12,464		)	(12,423		)	9,621			9,594
Comprehensive loss	(59,608		)	(58,970		)	(39,318		)	(37,810		)
Less: comprehensive income attributable to non-controlling interests	48			48			50			50
Comprehensive loss attributable to Checkpoint Systems, Inc.	$	(59,656	)	$	(59,018	)	$	(39,368	)	$	(37,860	)

There is no discontinued operations impact on the presentation of the As Revised in this Quarterly Report on Form 10-Q amounts.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)	September 25, 2011
Nine months (39 weeks) ended	As Previously Reported			As Revised in this Quarterly Report on Form 10-Q
Cash flows from operating activities:
Net loss	$	(49,000	)	$	(47,465	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	27,367			27,367
Deferred taxes	47,530			48,045
Stock-based compensation	6,208			6,208
Provision for losses on accounts receivable	2,237			2,237
Excess tax benefit on stock compensation	(598		)	(598		)
Gain on disposal of fixed assets	(19		)	(19		)
Restructuring-related asset impairment	7,479			7,479
Increase in current assets, net of the effects of acquired companies:
Accounts receivable	(1,850		)	(2,035		)
Inventories	(35,199		)	(35,329		)
Other current assets	(29,458		)	(29,507		)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable	4,405			4,242
Income taxes	(2,850		)	(2,869		)
Unearned revenues	11,798			11,798
Restructuring reserve	7,526			7,526
Other current and accrued liabilities	7,150			7,855
Net cash provided by operating activities	2,726			4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(14,424		)	(14,424		)
Acquisition of businesses, net of cash acquired	(75,937		)	(75,937		)
Change in restricted cash	(82		)	(82		)
Other investing activities	408			408
Net cash used in investing activities	(90,035		)	(90,035		)
Cash flows from financing activities:
Proceeds from stock issuances	2,336			2,336
Excess tax benefit on stock compensation	598			598
Proceeds from short-term debt	16			16
Payment of short-term debt	(1,612		)	(1,612		)
Net change in factoring and bank overdrafts	(2,391		)	(2,391		)
Proceeds from long-term debt	63,750			63,750
Payment of long-term debt	(47,701		)	(47,701		)
Net cash provided by financing activities	14,996			14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents	4,116			4,031
Net decrease in cash and cash equivalents	(68,197		)	(66,073		)
Cash and cash equivalents:
Beginning of period	173,802			172,473
End of period	$	105,605		$	106,400

The Consolidated Financial Statements include the accounts of Checkpoint Systems, Inc. and its majority-owned subsidiaries (collectively, the “Company”). All inter-company transactions are eliminated in consolidation. The Consolidated Financial Statements and related notes are unaudited and do not contain all disclosures required by generally accepted accounting principles in annual financial statements. Refer to our Annual Report on Form 10-K for the fiscal year ended December 25, 2011 for the most recent disclosure of the Company’s accounting policies.

The Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position at September 23, 2012 and December 25, 2011 and our results of operations for the thirteen and thirty-nine weeks ended September 23, 2012 and September 25, 2011 and changes in cash flows for the thirty-nine weeks ended September 23, 2012 and September 25, 2011. The results of operations for the interim period should not be considered indicative of results to be expected for the full year.

Restricted Cash

We classify restricted cash as cash that cannot be made readily available for use. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits. During the third quarter ended September 23, 2012, we completed a project for which we had received a grant from the Chinese government that was recorded within restricted cash in the accompanying Consolidated Balance Sheet.

Accounts Receivable

At September 25, 2011, proceeds from the sale of accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaled $30.9 million. Proceeds from the initial sale of the accounts receivable are used to fund operations. This transaction meets the criteria for sale treatment in accordance with ASC 860 "Accounting for Transfers and Servicing of Financial Assets". We have presented the earnings recognized on the sale of the receivables separately under the line item captioned other operating income on our Consolidated Statements of Operations for the three and nine months ended September 25, 2011. There is no comparable amount for the three and nine months ended September 23, 2012.

Internal-Use Software

Included in fixed assets is the capitalized cost of internal-use software. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over their estimated useful lives, which generally range from three to five years. Costs incurred related to design or maintenance of internal-use software is expensed as incurred.

During 2009, we announced that we are in the initial stages of implementing a company-wide ERP system to handle the business and finance processes within our operations and corporate functions. The total amount of internal-use software costs capitalized since the beginning of the ERP implementation as of September 23, 2012 and December 25, 2011 were $22.3 million and $21.4 million, respectively. As of September 23, 2012, $18.1 million was recorded in machinery and equipment related to supporting software packages that were placed in service. The remaining costs of $4.2 million and $6.0 million as of September 23, 2012 and December 25, 2011, respectively, are capitalized as construction-in-progress until such time as the ERP system has been placed in service.

Assets Held For Sale

As a result of our restructuring plans, certain long-lived assets of our manufacturing facilities met held for sale criteria during the second quarter ended June 24, 2012 and $3.7 million of property, plant, and equipment, net was reclassified into other current assets on the Consolidated Balance Sheet. In the third quarter ended September 23, 2012, these long-lived assets of our manufacturing facilities were sold, resulting in a gain on sale of $0.8 million that was recognized in other exit costs within restructuring expenses on the Consolidated Statement of Operations.

Non-controlling Interests

On May 16, 2011, Checkpoint Holland Holding B.V., a wholly-owned subsidiary of the Company, acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

We have classified non-controlling interests as equity on our Consolidated Balance Sheets as of September 23, 2012 and December 25, 2011 and presented net income attributable to non-controlling interests separately on our Consolidated Statements of Operations for the three and nine months ended September 23, 2012 and September 25, 2011.

Warranty Reserves

We provide product warranties for our various products. These warranties vary in length depending on product and geographical region. We establish our warranty reserves based on historical data of warranty transactions.

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)
Nine months ended	September 23, 2012
Balance at beginning of year	$	5,857
Accruals for warranties issued, net	4,176
Settlements made	(4,182		)
Foreign currency translation adjustment	31
Balance at end of period	$	5,882

Recently Adopted Accounting Standards

In April 2011, the FASB issued ASU 2011-03 “Reconsideration of Effective Control for Repurchase Agreements” (ASU 2011-03). The amendments to Topic 860 (Transfers and Servicing) affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments do not affect other transfers of financial assets. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. ASU 2011-03 is effective for the first interim or annual periods beginning on or after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. This amendment should be applied prospectively to transactions or modifications of existing transactions that occur on or after December 26, 2011. The adoption of the standard has not had a material impact on our Consolidated Results of Operations and Financial Condition.

In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). The amendments to Topic 820 (Fair Value Measurement) establish common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United States and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for the first interim and annual periods beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. This amendment should be applied prospectively. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In June 2011, the FASB issued ASU 2011-05 “Presentation of Comprehensive Income” (ASU 2011-05). The amendments to Topic 220 (Comprehensive Income) eliminate the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders' equity, require consecutive presentation of the statement of net income and other comprehensive income and require reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. In December 2011, the FASB issued ASU 2011-12, "Comprehensive Income -- Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in ASU 2011-05," to defer the effective date of the provision requiring entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. However, the remaining requirements of ASU 2011-05 are effective for the first interim and annual periods beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. Any required changes in presentation requirements and disclosures have been included in our Consolidated Financial Statements beginning with the first quarter ended March 25, 2012. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In September 2011, the FASB issued ASU 2011-08, "Intangibles – Goodwill and Other," (ASU 2011-08), which amends current guidance to allow a company to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The amendment also improves previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, which for us was December 26, 2011, the first day of our 2012 fiscal year. The adoption of the standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

In September 2011, the FASB issued ASU 2011-09, "Compensation – Retirement Benefits – Multiemployer Plans (Subtopic 715-80)," (ASU 2011-09). ASU 2011-09 requires that employers provide additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. The additional quantitative and qualitative disclosures will provide users with more detailed information about an employer's involvement in multiemployer pension plans. ASU 2011-09 is effective for fiscal years ending after December 15, 2011. The adoption of this standard has not had a material effect on our Consolidated Results of Operations and Financial Condition.

New Accounting Pronouncements and Other Standards

In December 2011, the FASB issued ASU 2011-11, "Balance Sheet – Disclosures about Offsetting Assets and Liabilities (Topic 210-20)," (ASU 2011-11). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 is effective for fiscal years beginning on or after January 1, 2013, with retrospective application for all comparable periods presented. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

In July 2012, the FASB issued ASU 2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment," (ASU 2012-02). ASU 2012-02 amends the guidance in ASC 350-302 on testing indefinite-lived intangible assets, other than goodwill, for impairment by allowing an entity to perform a qualitative impairment assessment before proceeding to the two-step impairment test. If the entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not (i.e., a likelihood of more than 50 percent) impaired, the entity would not need to calculate the fair value of the asset. In addition, the ASU does not amend the requirement to test these assets for impairment between annual tests if there is a change in events or circumstances; however, it does revise the examples of events and circumstances that an entity should consider in interim periods. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption being permitted. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements," (ASU 2012-04). ASU 2012-04 amends current guidance by clarifying the FASB Accountings Standards Codification (Codification), correcting unintended application of guidance, or making minor improvements to the Codification. These amendments are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, the amendments included in ASU 2012-04 intend to make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications. The amendments in ASU 2012-04 that will not have transition guidance will be effective upon issuance. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of this standard is not expected to have a material effect on our Consolidated Results of Operations and Financial Condition.

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Supplemental Cash Flow Information (Details) (USD $)	0 Months Ended	9 Months Ended
	May 16, 2011	Sep. 23, 2012	Sep. 25, 2011
Supplemental Cash Flow Information [Abstract]
Interest		$ 8,194,000	$ 5,660,000
Income tax payments		8,229,000	9,309,000
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price	78,700,000
Cash acquired on acquisition	1,900,000
Business acquisition, contingent consideration, potential cash payment	17,500,000		27,800,000
Assumption of debt	4,200,000
Capital Expenditures Incurred but Not yet Paid		600,000	3,000,000
Purchase Price Funded By Cash [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price	66,700,000
Purchase Price Funded By Senior Secured Credit Facility [Member]
Finite-Lived Intangible Assets [Line Items]
Business acquisition, purchase price	$ 9,200,000

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Summary Of Significant Accounting Polices (Consolidated Statements Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended				12 Months Ended
	Sep. 23, 2012		Sep. 25, 2011		Dec. 25, 2011
Cash flows from operating activities:
Net loss	$ (110,841)		$ (47,465)		$ (66,626)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	25,184		27,367
Deferred taxes	(967)		48,045
Stock-based compensation	3,737		6,208
Provision for losses on accounts receivable	3,400		2,237
Excess tax benefit on stock compensation	(97)		(598)
Gain on disposal of fixed assets	(1,069)		(19)
Restructuring related asset impairment	6,156		7,479
Increase in current assets, net of the effects of acquired companies:
Accounts receivable	32,875		(2,035)
Inventories	19,634		(35,329)
Other current assets	633		(29,507)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable	(4,562)		4,242
Income taxes	(3,319)		(2,869)
Unearned revenues	(10,143)		11,798
Restructuring reserve	(1,983)		7,526
Other current and accrued liabilities	(3,696)		7,855
Net cash provided by operating activities	21,191		4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(10,415)		(14,424)
Acquisitions of businesses, net of cash acquired	0		(75,937)
Change in restricted cash	291		(82)
Other investing activities	1,148		408
Net cash used in investing activities	(4,416)		(90,035)
Cash flows from financing activities:
Proceeds from stock issuances	922		2,336
Excess tax benefit on stock compensation	97		598
Proceeds from short-term debt	3,451		16
Payment of short-term debt	(11,481)		(1,612)
Net change in factoring and bank overdrafts	(9,121)		(2,391)
Proceeds from long-term debt	3,000		63,750
Payment of long-term debt	(20,439)		(47,701)
Net cash (used in) provided by financing activities	(35,684)		14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents	552		4,031
Net decrease in cash and cash equivalents	(18,357)		(66,073)
Cash and cash equivalents:
Beginning of period	93,481	[1]	172,473		172,473
End of period	75,124		106,400	[1]	93,481	[1]
As Previously Reported [Member]
Cash flows from operating activities:
Net loss			(49,000)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			27,367
Deferred taxes			47,530
Stock-based compensation			6,208
Provision for losses on accounts receivable			2,237
Excess tax benefit on stock compensation			(598)
Gain on disposal of fixed assets			(19)
Restructuring related asset impairment			7,479
Increase in current assets, net of the effects of acquired companies:
Accounts receivable			(1,850)
Inventories			(35,199)
Other current assets			(29,458)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable			4,405
Income taxes			(2,850)
Unearned revenues			11,798
Restructuring reserve			7,526
Other current and accrued liabilities			7,150
Net cash provided by operating activities			2,726
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles			(14,424)
Acquisitions of businesses, net of cash acquired			(75,937)
Change in restricted cash			(82)
Other investing activities			408
Net cash used in investing activities			(90,035)
Cash flows from financing activities:
Proceeds from stock issuances			2,336
Excess tax benefit on stock compensation			598
Proceeds from short-term debt			16
Payment of short-term debt			(1,612)
Net change in factoring and bank overdrafts			(2,391)
Proceeds from long-term debt			63,750
Payment of long-term debt			(47,701)
Net cash (used in) provided by financing activities			14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents			4,116
Net decrease in cash and cash equivalents			(68,197)
Cash and cash equivalents:
Beginning of period			173,802		173,802
End of period			105,605
As Revised in this Quarterly Report on Form 10-Q [Member]
Cash flows from operating activities:
Net loss			(47,465)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			27,367
Deferred taxes			48,045
Stock-based compensation			6,208
Provision for losses on accounts receivable			2,237
Excess tax benefit on stock compensation			(598)
Gain on disposal of fixed assets			(19)
Restructuring related asset impairment			7,479
Increase in current assets, net of the effects of acquired companies:
Accounts receivable			(2,035)
Inventories			(35,329)
Other current assets			(29,507)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable			4,242
Income taxes			(2,869)
Unearned revenues			11,798
Restructuring reserve			7,526
Other current and accrued liabilities			7,855
Net cash provided by operating activities			4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles			(14,424)
Acquisitions of businesses, net of cash acquired			(75,937)
Change in restricted cash			(82)
Other investing activities			408
Net cash used in investing activities			(90,035)
Cash flows from financing activities:
Proceeds from stock issuances			2,336
Excess tax benefit on stock compensation			598
Proceeds from short-term debt			16
Payment of short-term debt			(1,612)
Net change in factoring and bank overdrafts			(2,391)
Proceeds from long-term debt			63,750
Payment of long-term debt			(47,701)
Net cash (used in) provided by financing activities			14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents			4,031
Net decrease in cash and cash equivalents			(66,073)
Cash and cash equivalents:
Beginning of period			172,473		172,473
End of period			$ 106,400

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 23, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Activity Under The Principal Option Plans

Option activity under the principal option plans as of September 23, 2012 and changes during the nine months ended September 23, 2012 were as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 25, 2011	2,600,805		$	19.54	4.39	$	512
Granted	801,880		9.70
Exercised	(38,084	)	8.83
Forfeited or expired	(254,527	)	16.60
Outstanding at September 23, 2012	3,110,074		$	17.37	4.79	$	342
Vested and expected to vest at September 23, 2012	3,110,074		$	17.37	4.79	$	342
Exercisable at September 23, 2012	2,361,581		$	19.58	3.29	$	49

Assumptions And Weighted-Average Fair Values Of Share-Based Payment Units Under Black-Scholes Option Pricing Model

The assumptions and weighted-average fair values were as follows:

Nine months ended	September 23, 2012		September 25, 2011
Weighted-average fair value of grants	4.38		9.88
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	52.08	%	49.85	%
Expected life (in years)	5.06		4.96
Risk-free interest rate	0.750	%	2.178	%

Nonvested Service Based Restricted Stock Units

Nonvested service based restricted stock units as of September 23, 2012 and changes during the nine months ended September 23, 2012 were as follows:

	Number of Shares		Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 25, 2011	617,672		0.79	$	21.29
Granted	210,795			$	10.72
Vested	(186,254	)		$	11.38
Forfeited	(68,046	)		$	17.34
Nonvested at September 23, 2012	574,167		1.04	$	21.09
Vested and expected to vest at September 23, 2012	574,167		1.04
Vested at September 23, 2012	61,250		—

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Debt (Tables)

9 Months Ended

Sep. 23, 2012

Debt Disclosure [Abstract]

Short-Term Borrowings And Current Portion Of Long-Term Debt

Short-term borrowings and current portion of long-term debt at September 23, 2012 and at December 25, 2011 consisted of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Overdraft	$	309	$	405
Full-recourse factoring liabilities	—		8,809
Term loans	2,436		9,125
Other short-term borrowings	1,078		2,529
Current portion of long-term debt	537		910
Total short-term borrowings and current portion of long-term debt	$	4,360	$	21,778

Schedule Of Long-Term Debt

Long-term debt as of September 23, 2012 and December 25, 2011 consisted of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Senior secured credit facility:
$69 million variable interest rate revolving credit facility maturing in 2014	$	44,206	$	52,248
Senior Secured Notes:
$22 million 4.00% fixed interest rate Series A senior secured notes maturing in 2015	22,038		25,000
$22 million 4.38% fixed interest rate Series B senior secured notes maturing in 2016	22,038		25,000
$22 million 4.75% fixed interest rate Series C senior secured notes maturing in 2017	22,038		25,000
Full-recourse factoring liabilities	998		1,333
Other capital leases with maturities through 2016	554		1,013
Total	111,872		129,594
Less current portion	537		910
Total long-term portion	$	111,335	$	128,684

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Debt (Debt Covenant Compliance) (Details) (USD $) In Millions, unless otherwise specified		3 Months Ended	12 Months Ended	6 Months Ended	9 Months Ended						9 Months Ended
	Sep. 23, 2012	Mar. 25, 2012 Debt Covenant Compliance February 2012 [Member]	Dec. 25, 2011 Debt Covenant Compliance February 2012 [Member]	Jun. 24, 2012 Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Senior Secured Credit Facility [Member] Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Letter of Credit [Member]	Sep. 23, 2012 Series A Senior Secured Notes [Member] Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Series B Senior Secured Notes [Member] Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Series C Senior Secured Notes [Member] Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Maximum [Member]	Sep. 23, 2012 Maximum [Member] Senior Secured Notes [Member]	Sep. 23, 2012 Maximum [Member] Senior Secured Credit Facility [Member] Debt Covenant Compliance July 2012 [Member]	Sep. 23, 2012 Maximum [Member] Senior Secured Credit Facility [Member] Debt Covenant Compliance July 2012, Base Rate [Member]	Sep. 23, 2012 Maximum [Member] Senior Secured Credit Facility [Member] Debt Covenant Compliance July 2012, LIBOR Rate [Member]
Line of Credit Facility, Current Borrowing Capacity	$ 75.0				$ 68.9
Letters of Credit Outstanding, Amount							1.4
Leverage Ratio			2.75								2.75	2.75
Debt instrument, basis spread on variable rate						0.50%								4.25%	5.25%
Debt instrument, description of variable rate basis					a daily rate equal to the one-month LIBOR rate, plus 1.00%
Line of credit facility, unused capacity, commitment fee percentage													1.00%
Adjusted leverage ratio Q1 2012		3.00
Adjusted leverage ratio Q2 2012		3.35		5.25
Adjusted leverage ratio Q3 2012		3.25		6.50
Amended total commitment						75.0
Adjusted leverage ratio Q4 2012				5.50
Adjusted leverage ratio Q1 2013				3.50
Adjusted leverage ratio Q2 2013				2.75
Cash restructuring excluded from EBITDA calculation					25.0
Fixed charge covenant Q4 2012				1.00
Interest rate								5.75%	6.13%	6.50%
Cash balance threshold for repayment	$ 65

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Summary Of Significant Accounting Policies (Schedule Of Movement Of Warranty Reserves) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 23, 2012
Accounting Policies [Abstract]
Balance at beginning of year	$ 5,857
Accruals for warranties issued, net	4,176
Settlements made	(4,182)
Foreign currency translation adjustment	31
Balance at end of period	$ 5,882

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 23, 2012

Supplemental Cash Flow Information [Abstract]

Schedule Of Cash Payments For Interest And Income Taxes

Cash payments for interest and income taxes for the nine months ended September 23, 2012 and September 25, 2011 were as follows:

(amounts in thousands)
Nine months ended	September 23, 2012		September 25, 2011
Interest	$	8,194	$	5,660
Income tax payments	$	8,229	$	9,309

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Earnings Per Share (Tables)

9 Months Ended

Sep. 23, 2012

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share

The following data shows the amounts used in computing earnings per share and the effect on net earnings from continuing operations attributable to Checkpoint Systems, Inc. and the weighted-average number of shares of dilutive potential common stock:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands, except per share data)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
				(As Revised)						(As Revised)
Basic loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$	(4,167	)	$	(47,593	)	$	(107,689	)	$	(45,641	)
Diluted loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$	(4,167	)	$	(47,593	)	$	(107,689	)	$	(45,641	)
Shares:
Weighted-average number of common shares outstanding	40,521			40,134			40,415			40,038
Shares issuable under deferred compensation agreements	546			471			531			455
Basic weighted-average number of common shares outstanding	41,067			40,605			40,946			40,493
Common shares assumed upon exercise of stock options and awards	—			—			—			—
Shares issuable under deferred compensation arrangements	—			—			—			—
Dilutive weighted-average number of common shares outstanding	41,067			40,605			40,946			40,493
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)

Schedule Of Anti-Dilutive Common Share Equivalents

The number of anti-dilutive common share equivalents for the three and nine month periods ended September 23, 2012 and September 25, 2011 were as follows:

	Quarter		Nine Months
	(13 weeks) Ended		(39 weeks) Ended
(amounts in thousands)	September 23, 2012	September 25, 2011	September 23, 2012	September 25, 2011
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS(1)	3,296	2,601	3,068	2,250

⁽¹⁾  Adjustments for stock options and awards of 15 shares and 64 shares, respectively were anti-dilutive in the three and nine months ended 2012. Adjustments for stock options and awards of 227 shares and 384 shares, respectively, and deferred compensation arrangements of 6 shares and 5 shares, respectively, were anti-dilutive in the three and nine months ended 2011. These shares were therefore excluded from the earnings per share calculation due to our net loss for the periods.

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 23, 2012		Sep. 25, 2011
Cash flows from operating activities:
Net loss	$ (110,841)		$ (47,465)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	25,184		27,367
Deferred taxes	(967)		48,045
Stock-based compensation	3,737		6,208
Provision for losses on accounts receivable	3,400		2,237
Excess tax benefit on stock compensation	(97)		(598)
Gain on disposal of fixed assets	(1,069)		(19)
Intangible impairment	1,442		0
Goodwill impairment	64,807		0
Restructuring related asset impairment	6,156		7,479
Decrease (increase) in current assets, net of the effects of acquired companies:
Accounts receivable	32,875		(2,035)
Inventories	19,634		(35,329)
Other current assets	633		(29,507)
(Decrease) increase in current liabilities, net of the effects of acquired companies:
Accounts payable	(4,562)		4,242
Income taxes	(3,319)		(2,869)
Unearned revenues	(10,143)		11,798
Restructuring reserve	(1,983)		7,526
Other current and accrued liabilities	(3,696)		7,855
Net cash provided by operating activities	21,191		4,935
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(10,415)		(14,424)
Acquisitions of businesses, net of cash acquired	0		(75,937)
Change in restricted cash	291		(82)
Proceeds from sale of real estate	4,560		0
Other investing activities	1,148		408
Net cash used in investing activities	(4,416)		(90,035)
Cash flows from financing activities:
Proceeds from stock issuances	922		2,336
Excess tax benefit on stock compensation	97		598
Proceeds from short-term debt	3,451		16
Payment of short-term debt	(11,481)		(1,612)
Net change in factoring and bank overdrafts	(9,121)		(2,391)
Proceeds from long-term debt	3,000		63,750
Payment of long-term debt	(20,439)		(47,701)
Debt issuance costs	(2,113)		0
Net cash (used in) provided by financing activities	(35,684)		14,996
Effect of foreign currency rate fluctuations on cash and cash equivalents	552		4,031
Net decrease in cash and cash equivalents	(18,357)		(66,073)
Cash and cash equivalents:
Beginning of period	93,481	[1]	172,473
End of period	$ 75,124		$ 106,400	[1]

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Pension Benefits (Tables)

9 Months Ended

Sep. 23, 2012

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Components Of Net Periodic Benefit Cost

The components of net periodic benefit cost for the three and nine months ended September 23, 2012 and September 25, 2011 were as follows:

	Quarter				Nine Months
	(13 weeks) Ended				(39 weeks) Ended
(amounts in thousands)	September 23, 2012		September 25, 2011		September 23, 2012		September 25, 2011
Service cost	$	207	$	247	$	637	$	736
Interest cost	940		1,125		2,898		3,346
Expected return on plan assets	10		39		31		117
Amortization of actuarial loss	54		12		166		37
Amortization of transition obligation	13		33		42		98
Amortization of prior service costs	1		1		2		2
Net periodic pension cost	$	1,225	$	1,457	$	3,776	$	4,336

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Summary Of Significant Accounting Polices (Effects Of Adjustment On Income Tax (Benefit) Expense And Operating (Loss) Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Income Tax Expense		$ 38,355		$ 38,788
Operating Loss	3,494	(7,170)	(101,632)	(2,650)
As Previously Reported [Member]
Income Tax Expense		38,588		38,273
Operating Loss		(8,603)		(6,574)
Canada Adjustments [Member]
Income Tax Expense		200		515
Operating Loss		797		2,050
As Revised For Revision Adjustments [Member]
Income Tax Expense		38,788		38,788
Operating Loss		(7,806)		(4,524)
Discontinued Operations Adjustments [Member]
Income Tax Expense		(433)		0
Operating Loss		$ 636		$ 1,874

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Debt (Schedule Of Long-Term Debt) (Details)															9 Months Ended		9 Months Ended		9 Months Ended
	Sep. 23, 2012 USD ($)	Sep. 23, 2012 EUR (€)	Dec. 25, 2011 USD ($)		Sep. 23, 2012 Senior Secured Credit Facility [Member] USD ($)		Dec. 25, 2011 Senior Secured Credit Facility [Member] USD ($)		Sep. 23, 2012 Senior Secured Notes [Member] USD ($)		Dec. 25, 2011 Senior Secured Notes [Member] USD ($)		Sep. 23, 2012 $69 Million Variable Interest Rate Revolving Credit Facility Maturing In 2014 [Member] Senior Secured Credit Facility [Member] USD ($)	Dec. 25, 2011 $69 Million Variable Interest Rate Revolving Credit Facility Maturing In 2014 [Member] Senior Secured Credit Facility [Member] USD ($)	Sep. 23, 2012 $22 Million 4.00% Fixed Interest Rate Series A Senior Secured Notes Maturing In 2015 [Member] Senior Secured Notes [Member] USD ($)	Dec. 25, 2011 $22 Million 4.00% Fixed Interest Rate Series A Senior Secured Notes Maturing In 2015 [Member] Senior Secured Notes [Member] USD ($)	Sep. 23, 2012 $22 Million 4.38% Fixed Interest Rate Series B Senior Secured Notes Maturing In 2016 [Member] Senior Secured Notes [Member] USD ($)	Dec. 25, 2011 $22 Million 4.38% Fixed Interest Rate Series B Senior Secured Notes Maturing In 2016 [Member] Senior Secured Notes [Member] USD ($)	Sep. 23, 2012 $22 Million 4.75% Fixed Interest Rate Series C Senior Secured Notes Maturing In 2017 [Member] Senior Secured Notes [Member] USD ($)	Dec. 25, 2011 $22 Million 4.75% Fixed Interest Rate Series C Senior Secured Notes Maturing In 2017 [Member] Senior Secured Notes [Member] USD ($)
Debt Instrument [Line Items]
Long-term revolving credit facility					$ 44,206,000	[1]	$ 52,248,000	[1]					$ 44,206,000	$ 52,248,000
Full-recourse factoring liabilities	998,000	800,000	1,333,000
Other capital leases with maturities through 2016	554,000		1,013,000
Long-term debt	111,872,000		129,594,000						66,114,000	[1]	75,000,000	[1]			22,038,000	25,000,000	22,038,000	25,000,000	22,038,000	25,000,000
Less current portion	537,000		910,000
Total long-term portion	111,335,000		128,684,000	[2]
Face value													$ 69,000,000		$ 22,000,000		$ 22,000,000		$ 22,000,000
Interest rate															4.00%		4.38%		4.75%
Maturity date															2015		2016		2017

[1] The carrying amounts are reported on the balance sheet under the indicated captions.

[2] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Fair Value Measurement, Financial Instruments And Risk Management (Amounts Affecting Consolidated Statement Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Cash Flow Hedges [Member]
Fair Value Disclosures [Line Items]
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	$ (298)	$ 1,390	$ 524	$ (1,334)
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	543	(720)	1,322	(1,214)
Amount of Forward Points Recognized in Other Gain (Loss), net	11	(188)	89	(293)
Cash Flow Hedges [Member] | Foreign Currency Revenue Forecast Contracts [Member]
Fair Value Disclosures [Line Items]
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	(298)	1,390	524	(1,334)
Amount of Forward Points Recognized in Other Gain (Loss), net	11	(188)	89	(293)
Cash Flow Hedges [Member] | Cost Of Sales [Member] | Foreign Currency Revenue Forecast Contracts [Member]
Fair Value Disclosures [Line Items]
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	543	(720)	1,322	(1,214)
Derivatives Not Designated As Hedging Instruments [Member] | Other Gain (Loss), Net [Member] | Foreign Exchange Forwards And Options [Member]
Fair Value Disclosures [Line Items]
Amount Gain (Loss) Recognized in Income on Derivatives	$ (81)	$ 185	$ 193	$ (216)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012		Dec. 25, 2011
CURRENT ASSETS:
Cash and cash equivalents	$ 75,124		$ 93,481	[1]
Restricted cash	0		291	[1]
Accounts receivable, net of allowance of $15,107 and $12,627	179,034		208,889	[1]
Inventories	110,051		130,987	[1]
Other current assets	45,602		44,548	[1]
Deferred income taxes	7,776		7,720	[1]
Assets of discontinued operations held for sale	3,836		6,320	[1]
Total Current Assets	421,423		492,236	[1]
REVENUE EQUIPMENT ON OPERATING LEASE, net	1,804		1,920	[1]
PROPERTY, PLANT, AND EQUIPMENT, net	114,332		132,161	[1]
GOODWILL	222,958	[1]	286,103	[1]
OTHER INTANGIBLES, net	76,954		84,557	[1]
DEFERRED INCOME TAXES	26,946		27,241	[1]
OTHER ASSETS	13,363		20,263	[1]
TOTAL ASSETS	877,780		1,044,481	[1]
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term debt	4,360		21,778	[1]
Accounts payable	64,757		68,886	[1]
Accrued compensation and related taxes	29,507		27,620	[1]
Other accrued expenses	54,286		58,242	[1]
Income taxes	0		4,080	[1]
Unearned revenues	11,545		22,142	[1]
Restructuring reserve	15,780		17,612	[1]
Accrued pensions - current	4,429		4,453	[1]
Other current liabilities	28,727		32,867	[1]
Liabilities of discontinued operations held for sale	1,078		1,440	[1]
Total Current Liabilities	214,469		259,120	[1]
LONG-TERM DEBT, LESS CURRENT MATURITIES	111,335		128,684	[1]
ACCRUED PENSIONS	78,381		78,815	[1]
OTHER LONG-TERM LIABILITIES	32,651		29,894	[1]
DEFERRED INCOME TAXES	18,817		18,628	[1]
COMMITMENTS AND CONTINGENCIES				[1]
CHECKPOINT SYSTEMS, INC. STOCKHOLDERS' EQUITY:
Preferred stock, no par value, 500,000 shares authorized, none issued	0		0	[1]
Common stock, par value $.10 per share, 100,000,000 shares authorized, issued 44,600,006 and 44,241,105 shares	4,460		4,424	[1]
Additional capital	423,165		418,211	[1]
Retained earnings	53,782		164,268	[1]
Common stock in treasury, at cost, 4,035,912 and 4,035,912 shares	(71,520)		(71,520)	[1]
Accumulated other comprehensive income, net of tax	11,370		12,741	[1]
TOTAL CHECKPOINT SYSTEMS, INC. STOCKHOLDERS' EQUITY	421,257		528,124	[1]
NON-CONTROLLING INTERESTS	870		1,216	[1]
TOTAL EQUITY	422,127		529,340	[1]
TOTAL LIABILITIES AND EQUITY	$ 877,780		$ 1,044,481	[1]

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012	Dec. 25, 2011
Inventory Disclosure [Abstract]
Raw materials	$ 19,200	$ 28,128
Work-in-process	6,900	10,481
Finished goods	83,951	92,378
Total	$ 110,051	$ 130,987	[1]

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011
Net loss	$ (5,385)	$ (48,614)	$ (110,841)	$ (47,465)	$ (66,626)
Amortization of pension plan actuarial losses, net of tax	68	253	210	9	137
Change in realized and unrealized (losses) gains on derivative hedges, net of tax	(799)	1,814	(801)	52	1,165
Foreign currency translation adjustment	6,305	(12,423)	(771)	9,594	3,542
Comprehensive income (loss)	189	(58,970)	(112,203)	(37,810)
Less: comprehensive (loss) income attributable to non-controlling interests	(65)	48	(346)	50
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.	$ 254	$ (59,018)	$ (111,857)	$ (37,860)

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Stock-Based Compensation (Stock Option Activity Under The Principal Option Plans) (Details) (Stock Options And Awards [Member], USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 23, 2012 Y
Stock Options And Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding at beginning of period	2,600,805
Number of Shares, Granted	801,880
Number of Shares, Exercised	(38,084)
Number of Shares, Forfeited or expired	(254,527)
Number of Shares, Outstanding at end of period	3,110,074
Number of Shares, Vested and expected to vest	3,110,074
Number of Shares, Exercisable	2,361,581
Weighted-Average Exercise Price, Outstanding at beginning of period	$ 19.54
Weighted-Average Exercise Price, Granted	$ 9.70
Weighted-Average Exercise Price, Exercised	$ 8.83
Weighted-Average Exercise Price, Forfeited or expired	$ 16.60
Weighted-Average Exercise Price, Outstanding at end of period	$ 17.37
Weighted-Average Exercise Price, Vested and expected to vest	$ 17.37
Weighted-Average Exercise Price, Exercisable	$ 19.58
Weighted-Average Remaining Contractual Term, Outstanding at beginning of period in years	4.39
Weighted-Average Remaining Contractual Term, Outstanding at end of period in years	4.79
Weighted-Average Remaining Contractual Term, Vested and expected to vest in years	4.79
Weighted-Average Remaining Contractual Term, Exercisable	3.29
Aggregate Intrinsic Value, Outstanding at beginning of period	$ 512
Aggregate Intrinsic Value, Outstanding at end of period	342
Aggregate Intrinsic Value, Vested and expected to vest	342
Aggregate Intrinsic Value, Exercisable	$ 49

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Business Segments (Tables)

9 Months Ended

Sep. 23, 2012

Segment Reporting [Abstract]

Schedule Of Earnings From Business Segments

	Quarter								Nine Months
	(13 weeks) Ended								(39 weeks) Ended
(amounts in thousands)	September 23, 2012				September 25, 2011				September 23, 2012				September 25, 2011
					(As Revised)								(As Revised)
Business segment net revenue:
Shrink Management Solutions	$	133,859			$	147,719			$	374,033			$	415,620
Apparel Labeling Solutions	41,759				49,488				133,907				144,705
Retail Merchandising Solutions	12,545				17,842				40,916				53,420
Total revenues	$	188,163			$	215,049			$	548,856			$	613,745
Business segment gross profit:
Shrink Management Solutions	$	56,026			$	57,978			$	151,525			$	166,434
Apparel Labeling Solutions	10,101				14,733				31,626				44,213
Retail Merchandising Solutions	5,887				8,377				18,079				25,510
Total gross profit	72,014				81,088				201,230				236,157
Operating expenses	68,520			(1)	88,258			(2)	302,862			(3)	238,807			(4)
Interest (expense) income, net	(4,272		)		(1,237		)		(7,251		)		(3,104		)
Other gain (loss), net	325				(783		)		29				(1,049		)
Loss from continuing operations before income taxes	$	(453	)		$	(9,190	)		$	(108,854	)		$	(6,803	)

⁽¹⁾  Includes a $4.1 million restructuring charge and a $17 thousand acquisition charge.

⁽²⁾  Includes a $17.3 million restructuring charge, a $0.3 million charge related to improper and fraudulent Canadian activities and a $2 thousand acquisition charge.

⁽³⁾  Includes a $64.4 million goodwill impairment charge, a $27.1 million restructuring charge, a $2.9 million charge related to our CEO transition, a $0.7 million charge for forensic and legal fees associated with the improper and fraudulent Canadian activities, and a $0.1 million acquisition charge.

⁽⁴⁾  Includes a $20.4 million restructuring charge, a $2.2 million acquisition charge, and a $0.6 million charge related to improper and fraudulent Canadian activities.

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Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011
Income Taxes [Line Items]
Effective tax rate			0.70%	(570.20%)
Goodwill impairment	$ 0	$ 0	$ 64,437,000	$ 0
Restructuring related asset impairment			6,156,000	7,479,000
Tax effect of discrete items			(1,200,000)
Net deferred tax assets	11,300,000		11,300,000		11,700,000
Valuation allowance		48,000,000		48,000,000
Other Assets, Current	45,602,000		45,602,000		44,548,000	[1]
Current income tax receivable	9,300,000		9,300,000
Estimated tax payments	8,500,000		8,500,000
Income tax benefit			800,000
Other Liabilities, Current	28,727,000		28,727,000		32,867,000	[1]
Current deferred tax liability	4,600,000		4,600,000
Unrecognized tax benefit, if recognized, would affect the effective tax rate	11,000,000		11,000,000		13,200,000
Interest and penalties expense			700,000	(200,000)
Accrued interest and penalties related to unrecognized tax benefits	3,800,000		3,800,000		4,600,000
Expected change of gross unrecognized tax benefits, minimum	2,300,000		2,300,000
Expected change of gross unrecognized tax benefits, maximum	$ 3,700,000		$ 3,700,000
Maximum [Member] | Germany [Member]
Income Taxes [Line Items]
Open tax years currently under audit			2009
Maximum [Member] | Finland [Member]
Income Taxes [Line Items]
Open tax years currently under audit			2009
Maximum [Member] | India [Member]
Income Taxes [Line Items]
Open tax years currently under audit			2012
Minimum [Member] | Germany [Member]
Income Taxes [Line Items]
Open tax years currently under audit			2006
Minimum [Member] | Finland [Member]
Income Taxes [Line Items]
Open tax years currently under audit			2008
Minimum [Member] | India [Member]
Income Taxes [Line Items]
Open tax years currently under audit			2008

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Discontinued Operations

9 Months Ended

Sep. 23, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

We evaluate our businesses and product lines periodically for their strategic fit within our operations. Beginning in December of 2011, we began to actively market our Banking Security Systems Integration business unit included in our Shrink Management Solutions segment. As a result of this divestiture decision, we are accounting for this business as discontinued operations.  The classification of this business as discontinued operations was determined to be a triggering event for testing impairment.  As a result of this impairment test, we determined that there was a $3.4 million impairment charge in the goodwill reporting unit of our Shrink Management Solutions segment and a $2.8 million impairment of customer relationship intangible assets.  These impairment charges were included in discontinued operations on the Consolidated Statement of Operations during the fourth quarter ended December 25, 2011.

During the second quarter of 2012, we performed an impairment test based on updated fair value information regarding the Banking Security Systems Integration business unit. As a result of this impairment test, we determined that there was a $0.4 million impairment charge in the goodwill reporting unit of our Shrink Management Solutions segment and a $0.7 million impairment of customer relationship intangible assets. During the third quarter of 2012, we performed an impairment test based on final negotiations of the selling price for the Banking Security Systems Integration business unit. As a result of this impairment test, we determined that there was a $0.8 million additional impairment of customer relationship intangible assets. These impairment charges were included in discontinued operations on the Consolidated Statement of Operations during the second and third quarters ended June 24, 2012 and September 23, 2012, respectively.

On October 1, 2012, we completed the sale of this business. For further information, refer to Note 15, "Subsequent Events".

The Company’s discontinued operations reflect the operating results for the disposal group.  The results for the three and nine months ended September 23, 2012 and September 25, 2011 have been reclassified to show the results of operations for the Banking Security Systems Integration business unit as discontinued operations, net of tax, on the Consolidated Statement of Operations. Below is a summary of these results:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Net revenue	$	2,808		$	3,077		$	10,504		$	8,985
Gross profit	355			532			1,431			1,329
Selling, general, and administrative expenses	752			1,055			2,416			3,090
Restructuring expenses	—			113			—			113
Intangible impairment	770			—			1,442			—
Goodwill impairment	—			—			370			—
Operating loss	(1,167		)	(636		)	(2,797		)	(1,874		)
Loss from discontinued operations before income taxes	(1,167		)	(636		)	(2,797		)	(1,874		)
Loss from discontinued operations, net of tax(1)	$	(1,167	)	$	(1,069	)	$	(2,797	)	$	(1,874	)

⁽¹⁾  As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations for the three and nine months ended September 23, 2012, and the nine months ended September 25, 2011.

The assets and liabilities associated with this business have been adjusted to fair value, less costs to sell, and reclassified into assets of discontinued operations held for sale and liabilities of discontinued operations held for sale, as appropriate, on the Consolidated Balance Sheet. As of September 23, 2012 and December 25, 2011 the classification was as follows:

(amounts in thousands)	September 23, 2012		December 25, 2011
Accounts receivable, net	$	1,525	$	1,519
Inventories	1,045		1,087
Property, plant, and equipment, net	18		11
Goodwill	—		370
Other intangibles, net	312		1,754
Other assets	936		1,579
Assets of discontinued operations held for sale	$	3,836	$	6,320
Accounts payable	$	372	$	551
Accrued compensation and related taxes	—		40
Other accrued expenses	284		599
Unearned revenues	421		169
Restructuring reserve	—		78
Other liabilities	1		3
Liabilities of discontinued operations held for sale	$	1,078	$	1,440

Net cash flows of our discontinued operations from each of the categories of operating, investing and financing activities were not significant.

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Discontinued Operations (Tables)

9 Months Ended

Sep. 23, 2012

Discontinued Operations and Disposal Groups [Abstract]

Selected Financial Information Included In Earnings And Balance Sheet

As of September 23, 2012 and December 25, 2011 the classification was as follows:

(amounts in thousands)	September 23, 2012		December 25, 2011
Accounts receivable, net	$	1,525	$	1,519
Inventories	1,045		1,087
Property, plant, and equipment, net	18		11
Goodwill	—		370
Other intangibles, net	312		1,754
Other assets	936		1,579
Assets of discontinued operations held for sale	$	3,836	$	6,320
Accounts payable	$	372	$	551
Accrued compensation and related taxes	—		40
Other accrued expenses	284		599
Unearned revenues	421		169
Restructuring reserve	—		78
Other liabilities	1		3
Liabilities of discontinued operations held for sale	$	1,078	$	1,440

The Company’s discontinued operations reflect the operating results for the disposal group.  The results for the three and nine months ended September 23, 2012 and September 25, 2011 have been reclassified to show the results of operations for the Banking Security Systems Integration business unit as discontinued operations, net of tax, on the Consolidated Statement of Operations. Below is a summary of these results:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Net revenue	$	2,808		$	3,077		$	10,504		$	8,985
Gross profit	355			532			1,431			1,329
Selling, general, and administrative expenses	752			1,055			2,416			3,090
Restructuring expenses	—			113			—			113
Intangible impairment	770			—			1,442			—
Goodwill impairment	—			—			370			—
Operating loss	(1,167		)	(636		)	(2,797		)	(1,874		)
Loss from discontinued operations before income taxes	(1,167		)	(636		)	(2,797		)	(1,874		)
Loss from discontinued operations, net of tax(1)	$	(1,167	)	$	(1,069	)	$	(2,797	)	$	(1,874	)

⁽¹⁾  As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations for the three and nine months ended September 23, 2012, and the nine months ended September 25, 2011.

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Summary Of Significant Accounting Polices (Policy)

9 Months Ended

Sep. 23, 2012

Accounting Policies [Abstract]

Restricted Cash

Restricted Cash

We classify restricted cash as cash that cannot be made readily available for use. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits. During the third quarter ended September 23, 2012, we completed a project for which we had received a grant from the Chinese government that was recorded within restricted cash in the accompanying Consolidated Balance Sheet.

Accounts Receivable

Accounts Receivable

At September 25, 2011, proceeds from the sale of accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaled $30.9 million. Proceeds from the initial sale of the accounts receivable are used to fund operations. This transaction meets the criteria for sale treatment in accordance with ASC 860 "Accounting for Transfers and Servicing of Financial Assets". We have presented the earnings recognized on the sale of the receivables separately under the line item captioned other operating income on our Consolidated Statements of Operations for the three and nine months ended September 25, 2011. There is no comparable amount for the three and nine months ended September 23, 2012.

Internal-Use Software

Internal-Use Software

Included in fixed assets is the capitalized cost of internal-use software. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over their estimated useful lives, which generally range from three to five years. Costs incurred related to design or maintenance of internal-use software is expensed as incurred.

During 2009, we announced that we are in the initial stages of implementing a company-wide ERP system to handle the business and finance processes within our operations and corporate functions. The total amount of internal-use software costs capitalized since the beginning of the ERP implementation as of September 23, 2012 and December 25, 2011 were $22.3 million and $21.4 million, respectively. As of September 23, 2012, $18.1 million was recorded in machinery and equipment related to supporting software packages that were placed in service. The remaining costs of $4.2 million and $6.0 million as of September 23, 2012 and December 25, 2011, respectively, are capitalized as construction-in-progress until such time as the ERP system has been placed in service.

Assets Held For Sale

Assets Held For Sale

As a result of our restructuring plans, certain long-lived assets of our manufacturing facilities met held for sale criteria during the second quarter ended June 24, 2012 and $3.7 million of property, plant, and equipment, net was reclassified into other current assets on the Consolidated Balance Sheet. In the third quarter ended September 23, 2012, these long-lived assets of our manufacturing facilities were sold, resulting in a gain on sale of $0.8 million that was recognized in other exit costs within restructuring expenses on the Consolidated Statement of Operations.

Noncontrolling Interests

Non-controlling Interests

On May 16, 2011, Checkpoint Holland Holding B.V., a wholly-owned subsidiary of the Company, acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

We have classified non-controlling interests as equity on our Consolidated Balance Sheets as of September 23, 2012 and December 25, 2011 and presented net income attributable to non-controlling interests separately on our Consolidated Statements of Operations for the three and nine months ended September 23, 2012 and September 25, 2011.

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Fair Value Measurement, Financial Instruments And Risk Management (Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 23, 2012	Dec. 25, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 206	$ 1,583
Liabilities	339	415
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Liabilities	0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	206	1,583
Liabilities	339	415
Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Liabilities	0	0
Foreign Currency Forward Exchange Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	36	463
Liabilities	339	415
Foreign Currency Forward Exchange Contracts [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Liabilities	0	0
Foreign Currency Forward Exchange Contracts [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	36	463
Liabilities	339	415
Foreign Currency Forward Exchange Contracts [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Liabilities	0	0
Foreign Currency Revenue Forecast Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	170	1,120
Liabilities	0	0
Foreign Currency Revenue Forecast Contracts [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Liabilities	0	0
Foreign Currency Revenue Forecast Contracts [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	170	1,120
Liabilities	0	0
Foreign Currency Revenue Forecast Contracts [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Liabilities	$ 0	$ 0

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Consolidated Statements Of Equity (USD $) In Thousands	Total		Common Stock [Member]	Additional Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]	Non-Controlling Interests [Member]
Balance at Dec. 26, 2010	$ 581,554		$ 4,384	$ 407,383	$ 230,837	$ (71,520)	$ 10,470	$ 0
Balance, shares at Dec. 26, 2010			43,843			4,036
Net loss	(66,626)				(66,569)			(57)
Exercise of stock-based compensation and awards released	2,210		40	2,170
Exercise of stock-based compensation and awards released, shares			398
Tax benefit on stock-based compensation	77			77
Stock-based compensation expense	7,408			7,408
Deferred compensation plan	1,173			1,173
Non-controlling interests of acquired entities	1,271							1,271
Amortization of pension plan actuarial losses, net of tax	137						137
Change in realized and unrealized losses on derivative hedges, net of tax	1,165						1,165
Recognized loss on pension, net of tax	(2,571)						(2,571)
Foreign currency translation adjustment	3,542						3,540	2
Balance at Dec. 25, 2011	529,340	[1]	4,424	418,211	164,268	(71,520)	12,741	1,216
Balance, shares at Dec. 25, 2011			44,241			4,036
Net loss	(110,841)				(110,486)			(355)
Exercise of stock-based compensation and awards released	922		36	886
Exercise of stock-based compensation and awards released, shares			359
Tax benefit on stock-based compensation	(424)			(424)
Stock-based compensation expense	3,822			3,822
Deferred compensation plan	670			670
Amortization of pension plan actuarial losses, net of tax	210						210
Change in realized and unrealized losses on derivative hedges, net of tax	(801)						(801)
Foreign currency translation adjustment	(771)						(780)	9
Balance at Sep. 23, 2012	$ 422,127		$ 4,460	$ 423,165	$ 53,782	$ (71,520)	$ 11,370	$ 870
Balance, shares at Sep. 23, 2012			44,600			4,036

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 23, 2012	Dec. 25, 2011
Allowance for doubtful accounts receivable	$ 15,107	$ 12,627
Preferred Stock, No Par Value	$ 0	$ 0
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.1	$ 0.1
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	44,600,006	44,241,105
Treasury stock, shares	4,035,912	4,035,912

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Pension Benefits

9 Months Ended

Sep. 23, 2012

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Pension Benefits

PENSION BENEFITS

The components of net periodic benefit cost for the three and nine months ended September 23, 2012 and September 25, 2011 were as follows:

	Quarter				Nine Months
	(13 weeks) Ended				(39 weeks) Ended
(amounts in thousands)	September 23, 2012		September 25, 2011		September 23, 2012		September 25, 2011
Service cost	$	207	$	247	$	637	$	736
Interest cost	940		1,125		2,898		3,346
Expected return on plan assets	10		39		31		117
Amortization of actuarial loss	54		12		166		37
Amortization of transition obligation	13		33		42		98
Amortization of prior service costs	1		1		2		2
Net periodic pension cost	$	1,225	$	1,457	$	3,776	$	4,336

We expect the cash requirements for funding the pension benefits to be approximately $4.7 million during fiscal 2012, including $3.7 million which was funded during the nine months ended September 23, 2012.

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Document And Entity Information	9 Months Ended
	Sep. 23, 2012	Oct. 29, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 23, 2012
Entity Registrant Name	CHECKPOINT SYSTEMS INC
Entity Central Index Key	0000215419
Current Fiscal Year End Date	--12-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		40,594,789
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Fair Value Measurement, Financial Instruments And Risk Management

9 Months Ended

Sep. 23, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurement, Financial Instruments And Risk Management

FAIR VALUE MEASUREMENT, FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair Value Measurement

We utilize the market approach to measure fair value for our financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The fair value hierarchy is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

Level 1 Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Because the Company’s derivatives are not listed on an exchange, the Company values these instruments using a valuation model with pricing inputs that are observable in the market or that can be derived principally from or corroborated by observable market data. The Company’s methodology also incorporates the impact of both the Company’s and the counterparty’s credit standing.

The following tables represent our assets and liabilities measured at fair value on a recurring basis as of September 23, 2012 and December 25, 2011 and the basis for that measurement:

(amounts in thousands)	Total Fair Value Measurement September 23, 2012		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency forward exchange contracts	$	36	$	—	$	36	$	—
Foreign currency revenue forecast contracts	170		—		170		—
Total assets	$	206	$	—	$	206	$	—
Foreign currency forward exchange contracts	$	339	$	—	$	339	$	—
Foreign currency revenue forecast contracts	—		—		—		—
Total liabilities	$	339	$	—	$	339	$	—

(amounts in thousands)	Total Fair Value Measurement December 25, 2011		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency forward exchange contracts	$	463	$	—	$	463	$	—
Foreign currency revenue forecast contracts	1,120		—		1,120		—
Total assets	$	1,583	$	—	$	1,583	$	—
Foreign currency forward exchange contracts	$	415	$	—	$	415	$	—
Foreign currency revenue forecast contracts	—		—		—		—
Total liabilities	$	415	$	—	$	415	$	—

The following table provides a summary of the activity associated with all of our designated cash flow hedges (foreign currency) reflected in accumulated other comprehensive income for the nine months ended September 23, 2012:

(amounts in thousands)	September 23, 2012
Beginning balance, net of tax	$	1,542
Changes in fair value gain, net of tax	499
Reclassification to earnings, net of tax	(1,300		)
Ending balance, net of tax	$	741

We believe that the fair values of our current assets and current liabilities (cash, restricted cash, accounts receivable, accounts payable, and other current liabilities) approximate their reported carrying amounts. The carrying values and the estimated fair values of non-current financial assets and liabilities that qualify as financial instruments and are not measured at fair value on a recurring basis at September 23, 2012 and December 25, 2011 are summarized in the following table:

	September 23, 2012				December 25, 2011
(amounts in thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt (including current maturities and excluding capital leases and factoring)(1)
Senior secured credit facility	$	44,206	$	44,206	$	52,248	$	52,248
Senior secured notes	$	66,114	$	66,012	$	75,000	$	75,686

⁽¹⁾  The carrying amounts are reported on the balance sheet under the indicated captions.

Long-term debt is carried at the original offering price, less any payments of principal. Rates currently available to us for long-term borrowings with similar terms and remaining maturities are used to estimate the fair value of existing borrowings as the present value of expected cash flows. The related fair value measurement has generally been classified as Level 2.

Financial Instruments and Risk Management

We manufacture products in the U.S., Europe, and the Asia Pacific region for both the local marketplace and for export to our foreign subsidiaries. The foreign subsidiaries, in turn, sell these products to customers in their respective geographic areas of operation, generally in local currencies. This method of sale and resale gives rise to the risk of gains or losses as a result of currency exchange rate fluctuations on inter-company receivables and payables. Additionally, the sourcing of product in one currency and the sales of product in a different currency can cause gross margin fluctuations due to changes in currency exchange rates.

Our major market risk exposures are movements in foreign currency and interest rates. We have historically not used financial instruments to minimize our exposure to currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries. We have used third-party borrowings in foreign currencies to hedge a portion of our net investments in and cash flows derived from our foreign subsidiaries. A reduction in our third party foreign currency borrowings will result in an increase of foreign currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries.

We enter into forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts are entered into with major financial institutions, thereby minimizing the risk of credit loss. We will consider using interest rate derivatives to manage interest rate risks when there is a disproportionate ratio of floating and fixed-rate debt. We do not hold or issue derivative financial instruments for speculative or trading purposes. We are subject to other foreign exchange market risk exposure resulting from anticipated non-financial instrument foreign currency cash flows which are difficult to reasonably predict, and have therefore not been included in the table of fair values. All listed items described are non-trading.

The following table presents the fair values of derivative instruments included within the Consolidated Balance Sheets as of September 23, 2012 and December 25, 2011:

	September 23, 2012						December 25, 2011
	Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives
(amounts in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign currency revenue forecast contracts	Other current assets	$	170	Other current liabilities	$	—	Other current assets	$	1,120	Other current liabilities	$	—
Total derivatives designated as hedging instruments		170			—			1,120			—
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts	Other current assets	36		Other current liabilities	339		Other current assets	463		Other current liabilities	415
Total derivatives not designated as hedging instruments		36			339			463			415
Total derivatives		$	206		$	339		$	1,583		$	415

The following tables present the amounts affecting the Consolidated Statement of Operations for the three months ended September 23, 2012 and September 25, 2011:

	September 23, 2012								September 25, 2011
(amounts in thousands)	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income		Amount of Forward Points Recognized in Other Gain (Loss), net		Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income			Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$	(298	)	Cost of sales	$	543	$	11	$	1,390	Cost of sales	$	(720	)	$	(188	)
Total designated cash flow hedges	$	(298	)		$	543	$	11	$	1,390		$	(720	)	$	(188	)

The following tables present the amounts affecting the Consolidated Statement of Operations for the nine months ended September 23, 2012 and September 25, 2011:

	September 23, 2012							September 25, 2011
(amounts in thousands)	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income		Amount of Forward Points Recognized in Other Gain (Loss), net		Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income			Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$	524	Cost of sales	$	1,322	$	89	$	(1,334	)	Cost of sales	$	(1,214	)	$	(293	)
Total designated cash flow hedges	$	524		$	1,322	$	89	$	(1,334	)		$	(1,214	)	$	(293	)

Quarter

Nine Months

(13 weeks) Ended

(39 weeks) Ended

September 23, 2012

September 25, 2011

September 23, 2012

September 25, 2011

(amounts in thousands)

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Amount of Gain (Loss) Recognized in Income on Derivatives

Location of Gain (Loss) Recognized in Income on Derivatives

Derivatives not designated as hedging instruments:

Foreign exchange forwards and options

$

(81

)

Other gain (loss), net

$

185

Other gain (loss), net

$

193

Other gain (loss), net

$

(216

)

Other gain (loss), net

We selectively purchase currency forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts guarantee a predetermined exchange rate at the time the contract is purchased. This allows us to shift the effect of positive or negative currency fluctuations to a third party. Transaction gains or losses resulting from these contracts are recognized at the end of each reporting period. We use the fair value method of accounting, recording realized and unrealized gains and losses on these contracts. These gains and losses are included in other gain (loss), net on our Consolidated Statements of Operations. As of September 23, 2012, we had currency forward exchange contracts with notional amounts totaling approximately $13.7 million. The fair values of the forward exchange contracts were reflected as a $36 thousand asset and a $0.3 million liability and are included in other current assets and other current liabilities in the accompanying balance sheets. The contracts are in the various local currencies covering primarily our operations in the U.S., the Caribbean, and Western Europe. Historically, we have not purchased currency forward exchange contracts where it is not economically efficient, specifically for our operations in South America and Asia, with the exception of Japan.

Beginning in the second quarter of 2008, we entered into various foreign currency contracts to reduce our exposure to forecasted Euro-denominated inter-company revenues. These contracts were designated as cash flow hedges. The foreign currency contracts mature at various dates from October 2012 to March 2013. The purpose of these cash flow hedges is to eliminate the currency risk associated with Euro-denominated forecasted inter-company revenues due to changes in exchange rates. These cash flow hedging instruments are marked to market and the changes are recorded in other comprehensive income. Amounts recorded in other comprehensive income are recognized in cost of goods sold as the inventory is sold to external parties. Any hedge ineffectiveness is charged to other gain (loss), net on our Consolidated Statements of Operations. As of September 23, 2012, the fair value of these cash flow hedges were reflected as a $0.2 million asset and is included in other current assets in the accompanying Consolidated Balance Sheets. The total notional amount of these hedges is $7.2 million (€5.4 million) and the unrealized gain recorded in other comprehensive income was $0.9 million (net of taxes of $40 thousand), of which $0.9 million (net of taxes of $40 thousand) is expected to be reclassified to earnings over the next twelve months. During the three and nine months ended September 23, 2012, a $0.5 million and $1.3 million benefit related to these foreign currency hedges was recorded to cost of goods sold as the inventory was sold to external parties, respectively. The Company recognized zero and $40 thousand of hedge ineffectiveness during the three and nine months ended September 23, 2012.

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Subsequent Events (Details) (USD $)	0 Months Ended	3 Months Ended				9 Months Ended		12 Months Ended	84 Months Ended	0 Months Ended
	Oct. 10, 2012	Sep. 23, 2012	Mar. 25, 2012	Dec. 25, 2011	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011	Dec. 25, 2011	Dec. 25, 2011	Oct. 10, 2012 Subsequent Event [Member]	Oct. 01, 2012 Subsequent Event [Member] Banking Security Systems Integration business unit [Member]	Oct. 01, 2012 Subsequent Event [Member] Banking Security Systems Integration business unit [Member] Maximum [Member]	Oct. 01, 2012 Subsequent Event [Member] Banking Security Systems Integration business unit [Member] Minimum [Member]
Subsequent Event [Line Items]
Divestiture of business, sale price											$ 3,500,000
Divestiture of business, working capital adjustment, basis											2,500,000
Cash proceeds from divestiture of business											1,500,000
Proceeds from divestiture of business, promissory note, amount											1,600,000
Proceeds from divestiture of business, promissory note, variable rate basis											30 day LIBOR
Proceeds from Divestiture of Business, promissory note, basis spread on variable rate											5.50%
Divestiture of business, contingent consideration, potential cash payment												900,000
Divestiture of business, contingent consideration, basis for amount, revenues													10,000,000
Divestiture of business, contingent consideration, payment percentage											10.00%
Total amount of expense for all years of fraud activities			745,000					900,000	5,200,000
Amount of income of fraud activities, net of recovery				1,100,000				200,000
Amount of expense of fraud activities, net of recovery	$ 4,700,000	$ 0	$ 745,000		$ 289,000	$ 745,000	$ 587,000		$ 4,100,000	$ 4,700,000

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended					9 Months Ended				12 Months Ended	84 Months Ended
	Oct. 10, 2012	Sep. 23, 2012		Mar. 25, 2012	Sep. 25, 2011		Sep. 23, 2012		Sep. 25, 2011		Dec. 25, 2011	Dec. 25, 2011
Net revenues		$ 188,163			$ 215,049		$ 548,856		$ 613,745
Cost of revenues		116,149			133,961		347,626		377,588
Gross profit		72,014			81,088		201,230		236,157
Selling, general and administrative expenses		59,950			67,802		197,325		219,294
Research and development		4,441			5,476		13,132		15,612
Restructuring expenses		4,112			17,279		27,096		20,371
Goodwill impairment		0			0		64,437		0
Acquisition costs		17			2		127		2,205
Other expense	4,700	0		745	289		745		587			4,100
Other operating income		0			2,590		0		19,262
Operating income (loss)		3,494			(7,170)		(101,632)		(2,650)
Interest income		396			984		1,291		2,677
Interest expense		4,668			2,221		8,542		5,781
Other gain (loss), net		325			(783)		29		(1,049)
Loss from continuing operations before income taxes		(453)			(9,190)		(108,854)		(6,803)
Income taxes expense (benefit)		3,765			38,355		(810)		38,788
Net loss from continuing operations		(4,218)			(47,545)		(108,044)		(45,591)
Loss from discontinued operations, net of tax expense of $0, $433, $0, and $0		(1,167)	[1]		(1,069)	[1]	(2,797)	[1]	(1,874)	[1]
Net loss		(5,385)			(48,614)		(110,841)		(47,465)		(66,626)
Less: (loss) earnings attributable to non-controlling interests		(51)			48		(355)		50
Net loss attributable to Checkpoint Systems, Inc.		$ (5,334)			$ (48,662)		$ (110,486)		$ (47,515)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)		$ (0.1)			$ (1.17)		$ (2.63)		$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)		$ (0.03)			$ (0.03)		$ (0.07)		$ (0.04)
Basic loss attributable to Checkpoint Systems, Inc. per share		$ (0.13)			$ (1.2)		$ (2.7)		$ (1.17)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)		$ (0.1)			$ (1.17)		$ (2.63)		$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)		$ (0.03)			$ (0.03)		$ (0.07)		$ (0.04)
Diluted loss attributable to Checkpoint Systems, Inc. per share		$ (0.13)			$ (1.2)		$ (2.7)		$ (1.17)

[1] As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations for the three and nine months ended September 23, 2012, and the nine months ended September 25, 2011.

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Debt

9 Months Ended

Sep. 23, 2012

Debt Disclosure [Abstract]

Debt

DEBT

Short-term Borrowings and Current Portion of Long-term Debt

Short-term borrowings and current portion of long-term debt at September 23, 2012 and at December 25, 2011 consisted of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Overdraft	$	309	$	405
Full-recourse factoring liabilities	—		8,809
Term loans	2,436		9,125
Other short-term borrowings	1,078		2,529
Current portion of long-term debt	537		910
Total short-term borrowings and current portion of long-term debt	$	4,360	$	21,778

In September 2012, $7.4 million (€5.7 million) was paid in order to extinguish our existing short-term full-recourse factoring agreement in Germany. The arrangement was included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In June 2012, $8.0 million (HKD 61.8 million) was paid in order to extinguish our existing Hong Kong term loan. The term loan was included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In June 2012, $0.7 million (INR 37.2 million) was paid in order to extinguish an overdraft facility and other short-term loans assumed in connection with the acquisition of the Shore to Shore businesses. The loans were included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In February 2012, the Company entered into a $3.2 million Sri Lanka banking facility, which includes a $2.7 million term loan, and a combined $0.5 million sublimit for an overdraft/import line. As of September 23, 2012, $2.4 million and $0.4 million were outstanding on the term loan and overdraft/import line, respectively.

Long-Term Debt

Long-term debt as of September 23, 2012 and December 25, 2011 consisted of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Senior secured credit facility:
$69 million variable interest rate revolving credit facility maturing in 2014	$	44,206	$	52,248
Senior Secured Notes:
$22 million 4.00% fixed interest rate Series A senior secured notes maturing in 2015	22,038		25,000
$22 million 4.38% fixed interest rate Series B senior secured notes maturing in 2016	22,038		25,000
$22 million 4.75% fixed interest rate Series C senior secured notes maturing in 2017	22,038		25,000
Full-recourse factoring liabilities	998		1,333
Other capital leases with maturities through 2016	554		1,013
Total	111,872		129,594
Less current portion	537		910
Total long-term portion	$	111,335	$	128,684

Senior Secured Credit Facility

On February 17, 2012, we received an amendment to our Senior Secured Credit Facility which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25, June 24 and September 23, 2012. In addition, the amendment prohibits the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received the amendment, we would have been in violation of the leverage ratio covenant as of March 25, 2012.  

On July 31, 2012, we received an additional amendment to our Senior Secured Credit Facility ("July 2012 Amendment"), which contained several modifications. The July 2012 Amendment reduced the total commitment of the Senior Secured Credit Facility from $125.0 million to $75.0 million. The July 2012 Amendment reduced the sublimit for the issuance of letters of credit from $25.0 million to $5.0 million. The July 2012 Amendment reduced the sublimit for swingline loans from $25.0 million to $5.0 million. The July 2012 Amendment increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendment waives the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendment permits divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions. The July 2012 Amendment also contains a provision whereby if our cash balance exceeds $65 million as of weekly measurement dates, we must prepay any additional borrowings made subsequent to the July 2012 Amendments. This provision is effective until we are in compliance with our original covenant requirements for two consecutive quarters. There were no required prepayments in the third quarter of 2012.

Absent the waiver and additional July 2012 Amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, the interest rate spread on the Senior Secured Credit Facility increases to a maximum of 4.25% over the Base Rate or 5.25% over the LIBOR rate. The “Base Rate” is the highest of (a) our lender’s prime rate, (b) the Federal Funds rate, plus 0.50%, and (c) a daily rate equal to the one-month LIBOR rate, plus 1.00%. The unused line fee will increase to a maximum of 1.00% per annum. The maximum is based in accordance with changes in our leverage ratio.

During the quarter ended September 23, 2012, the Company incurred $1.4 million in fees and expenses in connection with the July 2012 Amendment to the Senior Secured Credit Facility, which were capitalized and will be amortized over the term of the Senior Secured Credit Facility to interest expense on the Consolidated Statement of Operations. In connection with the reduction in borrowing capacity of the Senior Secured Credit Facility, the Company recognized $0.8 million of unamortized debt issuance costs. The cost was recognized in interest expense on the Consolidated Statement of Operations in the third quarter of 2012.

On September 21, 2012, the Company repaid $6.1 million on the Senior Secured Credit Facility. Pursuant to the terms of the July 2012 Amendment, the repayment permanently reduced the outstanding borrowing capacity from $75.0 million to $68.9 million. In connection with the reduction in borrowing capacity of the Senior Secured Credit Facility, the Company recognized $0.2 million of unamortized debt issuance costs. The cost was recognized in interest expense on the Consolidated Statement of Operations in the third quarter of 2012.

The Senior Secured Credit Facility includes an expansion option that will allow us, subject to certain conditions, to request an increase in the Senior Secured Credit Facility of up to an aggregate of $50.0 million, for a potential total commitment of $118.9 million. As of September 23, 2012, we were not eligible to elect to request the $50.0 million expansion option due to financial covenant restrictions.

As of September 23, 2012, $1.4 million issued in letters of credit were outstanding under the Senior Secured Credit Facility.

All obligations of domestic borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. The obligations of foreign borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by certain of our foreign subsidiaries as well as the domestic guarantors. Collateral under the Senior Secured Credit Facility includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary. As a condition of the July 2012 Amendment, all domestic assets are also pledged as collateral. The approximate net book value of the collateral as of September 23, 2012 was $142 million.

Pursuant to the original terms of the Senior Secured Credit Facility, we are subject to various requirements, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Credit Facility also contains customary representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults. Upon a default under the Senior Secured Credit Facility, including the non-payment of principal or interest, our obligations under the Senior Secured Credit Facility may be accelerated and the assets securing such obligations may be sold. Certain of our wholly-owned subsidiaries with respect to the Company are guarantors of our obligations under the Senior Secured Credit Facility.

Senior Secured Notes

On February 17, 2012, we received an amendment to our Senior Secured Notes which increased the required leverage ratio covenant of adjusted EBITDA to total debt from 2.75 to 3.00, 3.35 and 3.25 for the periods ended March 25, June 24 and September 23, 2012. In addition, the amendment prohibits the Company from consummating any acquisitions from February 17, 2012 through the fiscal quarter ending September 23, 2012. Had we not received the amendment, we would have been in violation of the leverage ratio covenant as of March 25, 2012.  

On July 31, 2012, we received an additional amendment to our Senior Secured Notes ("July 2012 Amendment"), which contained several modifications. The July 2012 Amendment increased the required leverage ratio covenant of adjusted EBITDA to total debt to 5.25, 6.50, 5.50, 3.50, and 2.75 for the periods ended June 24, 2012, September 23, 2012, December 30, 2012, March 31, 2013, and June 30, 2013 and thereafter. Cash restructuring of up to $25.0 million is excluded from the calculation of EBITDA beginning in the fiscal quarter ending June 24, 2012. The July 2012 Amendment waives the fixed charge covenant from June 24, 2012 through September 23, 2012 (the "Waiver Period"), decreases it to 1.00 for the period ended December 30, 2012, and returns to 1.25 for periods thereafter. In addition, the July 2012 Amendment permits divestitures, acquisitions and transfers of assets to non-credit parties, under certain conditions.

Absent the waiver and additional July 2012 Amendment, we would have been in violation of the June 24, 2012 leverage ratio and fixed charge coverage covenants. We are in compliance with the amended leverage ratio covenant as of September 23, 2012. The fixed charge covenant was waived for the quarter ended September 23, 2012. Absent the waiver, we would have been in violation of the fixed charge covenant as of September 23, 2012. Although we cannot provide full assurance, we project to be in compliance with all of our covenants for all periods subsequent to the fiscal quarter ended September 23, 2012.

During the Waiver Period, and until such time the financial covenants return to the original covenants for two consecutive quarters, the coupon rate on the Senior Secured Notes will increase to 5.75%, 6.13%, and 6.50% for the Series A Senior Secured Notes, Series B Senior Secured Notes, and Series C Senior Secured Notes, respectively.

During the quarter ended September 23, 2012, the Company incurred $1.4 million in fees and expenses in connection with the July 2012 Amendment to the Senior Secured Notes, of which $0.7 million were recognized in selling, general, and administrative expenses on the Consolidated Statement of Operations in the third quarter of fiscal 2012 and $0.7 million, which were capitalized and will be amortized over the term of the Senior Secured Notes to interest expense on the Consolidated Statement of Operations.

On September 21, 2012, the Company repaid $8.9 million in principal as well as a make-whole premium of $1.1 million related to the Senior Secured Notes. In connection with the repayment on the Senior Secured Notes, the Company recognized $0.1 million of unamortized debt issuance costs. The unamortized debt issuance costs and make whole premium fees were recognized in interest expense on the Consolidated Statement of Operations in the third quarter of fiscal 2012.

The Senior Secured Notes Agreement provides that for a three-year period ending on July 22, 2013, we may issue, and our lender may, in its sole discretion, purchase, additional fixed-rate senior secured notes and together with the Senior Secured Notes, up to an aggregate amount of $50.0 million. As of September 23, 2012, we were not eligible to elect to request the $50.0 million expansion option due to financial covenant restrictions.

All obligations under the Senior Secured Notes are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. Collateral under the Senior Secured Notes includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary. As a condition of the July 2012 Amendment, all domestic assets are also pledged as collateral. The approximate net book value of the collateral as of September 23, 2012 was $142 million.

The original Senior Secured Notes Agreement is subject to covenants that are substantially similar to the covenants in the Senior Secured Credit Facility Agreement, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Notes Agreement also contains representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults that are substantially similar to those contained in the Senior Secured Credit Facility, and those that are customary for similar private placement transactions. Upon a default under the Senior Secured Notes Agreement, including the non-payment of principal or interest, our obligations under the Senior Secured Notes Agreement may be accelerated and the assets securing such obligations may be sold. Additionally, the Senior Secured Notes have a make-whole provision that requires the discounted value of the remaining payments on the Senior Secured Notes expected through the end term of each of the Senior Secured Notes to be paid in full upon early termination, acceleration, or prepayment.  Certain of our wholly-owned subsidiaries are also guarantors of our obligations under the Senior Secured Notes.

Full-recourse Factoring Arrangements

In December 2009, we entered into new full-recourse factoring arrangements in Europe. The arrangements are secured by trade receivables. The Company received a weighted average of 92.4% of the face amount of receivables that it desired to sell and the bank agreed, at its discretion, to buy. As of September 23, 2012 the factoring arrangements had a balance of $1.0 million (€0.8 million), of which $0.3 million (€0.3 million) was included in the current portion of long-term debt and $0.7 million (€0.5 million) was included in long-term borrowings in the accompanying Consolidated Balance Sheets since the receivables are collectible through 2016.

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Goodwill And Other Intangible Assets

9 Months Ended

Sep. 23, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $77.0 million and $84.6 million as of September 23, 2012 and December 25, 2011, respectively.

The following table reflects the components of intangible assets as of September 23, 2012 and December 25, 2011:

		September 23, 2012				December 25, 2011
(amounts in thousands)	Amortizable Life (years)	Gross Amount		Gross Accumulated Amortization		Gross Amount		Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6 to 20	$	81,320	$	48,311	$	81,348	$	43,945
Trade name	1 to 30	29,945		18,693		30,007		18,237
Patents, license agreements	3 to 14	60,133		49,424		60,249		47,704
Other	2 to 6	7,203		6,728		7,160		5,830
Total amortized finite-lived intangible assets		178,601		123,156		178,764		115,716
Indefinite-lived intangible assets:
Trade name		21,509		—		21,509		—
Total identifiable intangible assets		$	200,110	$	123,156	$	200,273	$	115,716

Amortization expense for the three and nine months ended September 23, 2012 was $2.4 million and $7.6 million, respectively.

Amortization expense for the three and nine months ended September 25, 2011 was $3.0 million and $8.6 million, respectively.

Estimated amortization expense for each of the five succeeding years is anticipated to be:

(amounts in thousands)
2012	$	10,466
2013	$	8,759
2014	$	8,271
2015	$	8,115
2016	$	7,852

The changes in the carrying amount of goodwill are as follows:

(amounts in thousands)	Shrink Management Solutions			Apparel Labeling Solutions			Retail Merchandising Solutions			Total
Balance as of December 26, 2010	$	165,324		$	3,915		$	62,086		$	231,325
Acquired during the year	—			58,008			—			58,008
Discontinued operations	(3,782		)	—			—			(3,782		)
Translation adjustments	269			661			(378		)	552
Balance as of December 25, 2011	$	161,811		$	62,584		$	61,708		$	286,103
Purchase accounting adjustment	—			1,624			—			1,624
Impairment losses	—			(64,437		)	—			(64,437		)
Translation adjustments	(322		)	229			(239		)	(332		)
Balance as of September 23, 2012	$	161,489		$	—		$	61,469		$	222,958

The following table reflects the components of goodwill as of September 23, 2012 and December 25, 2011:

	September 23, 2012						December 25, 2011
(amounts in thousands)	Gross Amount		Accumulated Impairment Losses		Goodwill, Net		Gross Amount		Accumulated Impairment Losses		Goodwill, Net
Shrink Management Solutions	$	211,047	$	49,558	$	161,489	$	213,836	$	52,025	$	161,811
Apparel Labeling Solutions	83,542		83,542		—		81,662		19,078		62,584
Retail Merchandising Solutions	131,618		70,149		61,469		130,640		68,932		61,708
Total goodwill	$	426,207	$	203,249	$	222,958	$	426,138	$	140,035	$	286,103

On January 28, 2011, Checkpoint Systems, Inc. and certain of its direct subsidiaries (collectively, the “Company”) entered into a Master Purchase Agreement. The Master Purchase Agreement outlines the general terms and conditions pursuant to which the Company agreed to acquire, through the acquisition of equity and/or assets, a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels (collectively, the “Shore to Shore businesses” or "Shore to Shore"). The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $66.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and includes the acquisition of the following:

• 100% of the voting equity interests of J&F International, Inc. (U.S.), Shore to Shore Far East (Hong Kong), Shore to Shore MIS (India), Shore to Shore Lacar SA (Guatemala), Adapt Identification (HK) Ltd., and W Print Europe Ltd. (UK);

• Assets of Shore to Shore, Inc. (U.S.), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., and Wing Hung Printing Co., Ltd. (U.S.);

• 51% of the voting equity interests of Shore to Shore PVT Ltd. (Sri Lanka);

• 50% of the voting equity interests of the Cybsa Adapt SA de CV (El Salvador) joint venture. In accordance with ASC 323 “Investments—Equity Method and Joint Ventures,” we have applied the Equity Method in recording this joint venture.

During the second quarter of 2012, we finalized the purchase accounting of the acquisition of the Shore to Shore businesses. At June 24, 2012, the financial statements reflected the final allocation of the purchase price based on estimated fair values at the date of acquisition, including $17.1 million in Property, Plant, and Equipment, $7.1 million in Accounts Receivable, and $2.2 million in Inventories. This final allocation resulted in acquired goodwill of $59.7 million, of which $9.8 million is tax deductible, and intangible assets of $10.5 million. The intangible assets were composed of a non-compete agreement ($0.3 million), customer lists ($9.8 million), and trade names ($0.4 million). The useful lives were 5 years for the non-compete agreement, 10 years for the customer lists, and 7.5 months for the trade names.

The purchase price included a payment to escrow of $17.5 million related to the 2010 performance of the acquired business. This amount is subject to adjustment pending final determination of the 2010 performance and could result in an additional purchase price payment of up to $6.3 million. We are currently involved in an arbitration process in order to require the seller to provide audited financial information related to the 2010 performance. When this information is received, the final adjustment to the purchase price will be recognized through earnings.

Acquisition costs incurred in connection with the transaction are recognized within acquisition costs in the Consolidated Statement of Operations and approximate $17 thousand and $0.1 million for the three and nine months ended September 23, 2012 and $2 thousand and $2.2 million for the three and nine months ended September 25, 2011, respectively.

As the Company acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash, we have classified the non-controlling interests as equity on our Consolidated Balance Sheet as of September 23, 2012 and December 25, 2011, and presented net income attributable to non-controlling interests separately on our Consolidated Statement of Operations for the three and nine months ended September 23, 2012 and September 25, 2011. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

We perform an assessment of goodwill by comparing each individual reporting unit’s carrying amount of net assets, including goodwill, to their fair value at least annually during the October month-end close and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our 2011 annual impairment test indicated no impairment of our goodwill assets.

During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent annual impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an assessment of goodwill was warranted. This resulted in the Company's assessment that the carrying value of the Apparel Labeling Solutions reporting unit exceeded its fair value. The basis of the fair value was determined by projecting future cash flows using assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of the evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate and through our stock price that we use to determine our market capitalization. As a result of our interim impairment test, a $64.4 million non-cash impairment charge was recorded as of June 24, 2012 in our Apparel Labeling Solutions segment. The goodwill impairment expense was due to the decline in estimated future Apparel Labeling Solutions cash flow impacted by our plan to refocus the business, coupled with recent declines in revenue and profitability. The impairment charge of the entire goodwill balance in our Apparel Labeling Solutions segment was recorded in goodwill impairment on the Consolidated Statement of Operations.

Our Shrink Management Solutions (SMS) segment is composed of four reporting units. The fair value of two of the four reporting units, Europe SMS and Asia Pacific SMS, exceeded their respective carrying values as of the date of the interim impairment test by approximately 10% and 8%, respectively. As of the date of our interim impairment test, the goodwill for these two reporting units totaled $72.0 million for Europe SMS and $12.0 million for Asia Pacific SMS. In determining the fair value of these reporting units, our projected cash flows did not contain significant growth assumptions. A 10% decline in operating results, or a 1.10% increase in our discount rates could result in future decreases in the fair values of these reporting units which could result in future impairments. The other reporting units within the SMS segment exceeded their respective carrying values by a significant margin.

Our Retail Merchandising Solutions (RMS) segment is composed of two reporting units. The fair value of one of the two reporting units, Europe RMS, exceeded its carrying value as of the date of the interim impairment test by approximately 11%. As of the date of our interim impairment test, the goodwill for the Europe RMS reporting unit totaled $59.3 million. In determining the fair value of this reporting unit, our projected cash flows did not contain significant growth assumptions. A 11% decline in operating results, or a 1.60% increase in our discount rate could result in a future decrease in the fair value of this reporting unit which could result in a future impairment. The other reporting unit within the Retail Merchandising segment exceeded its carrying value by a significant margin.

There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment in these reporting units.

As a result of interim impairment indicators in the second quarter of 2012, we performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in our Apparel Labeling Solutions reporting unit to their carrying amounts. The undiscounted cash flow analysis resulted in no impairment charge in the quarter ended June 24, 2012. There were no additional impairment indicators in the third quarter of 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment.

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Subsequent Events

9 Months Ended

Sep. 23, 2012

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On October 1, 2012, the Company completed the sale of the Banking Security Systems Integration business unit for $3.5 million subject to closing adjustments related to a non-compete agreement and third-party consents plus a working capital adjustment for which the final calculation is yet to be determined. The working capital adjustment is determined based on the difference between $2.5 million and the final calculation of the working capital of the Banking Security Systems Integration business unit as of October 1, 2012. On October 1, 2012, the Company received cash proceeds of $1.5 million and a promissory note of $1.6 million from the purchaser. The note receivable is due in consecutive monthly installments beginning on November 1, 2012, with the last scheduled payment due on October 1, 2017. The promissory note bears interest at the 30 day LIBOR rate plus 5.5%. The selling price is also subject to a contingent consideration payment up to a maximum amount of $0.9 million. The contingent payment is based on the purchaser's revenues for the first year of its ownership of the Banking Security Systems Integration business unit. If these revenues exceed $10 million, the Company is entitled to a contingent payment amount of 10% of the revenues above $10 million, subject to certain adjustments, not to exceed a total contingent consideration payment of $0.9 million. The gain or loss on sale of the Banking Security Systems Integration business unit will be recorded through discontinued operations on the Consolidated Statement of Operations during the fourth quarter ended December 30, 2012.

We filed a claim during the second quarter of 2012 with our insurance provider for the unrecovered amount of our loss related to the improper and fraudulent Canadian activities that impacted our fiscal years 2005 through 2011. The total cumulative gross financial statement impact of the improper and fraudulent activities was approximately $5.2 million of which $1.1 million was recovered by the Company from the perpetrator during the fourth quarter of 2011, resulting in a net cumulative financial statement impact of $4.1 million. We incurred expenses related to the improper and fraudulent activities of $0.7 million during 2012. On October 10, 2012, the Company received compensation of $4.7 million for the financial impact of the fraudulent Canadian activities from our insurance provider. The income from the settlement will be recorded in the fourth quarter of 2012 in other expense in the Consolidated Statement of Operations.

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Provision For Restructuring

9 Months Ended

Sep. 23, 2012

Restructuring and Related Activities [Abstract]

Provision For Restructuring

PROVISION FOR RESTRUCTURING

During the second quarter of 2012, in conjunction with our strategic shift, we launched a new profit improvement initiative, Project LEAN, which is designed to restructure the Company to support a more focused product range while positioning Checkpoint to return to profitable growth. Project LEAN will be reported as part of the Global Restructuring Plan. This plan focuses on consolidating certain manufacturing facilities and administrative functions to improve efficiency.

The expanded Global Restructuring Plan including Project LEAN and the SG&A Restructuring Plan will impact over 2,400 existing employees. Total costs of the Global Restructuring Plan including Project LEAN and the SG&A Restructuring Plan are expected to approximate $70 million to $75 million by the end of 2013, with $52 million to $55 million in total anticipated costs for the Global Restructuring Plan and approximately $19 million of costs incurred for the SG&A Restructuring Plan, which is substantially complete.

Restructuring expense for the three and nine months ended September 23, 2012 and September 25, 2011 was as follows:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	2,442			5,972			16,661			5,972
Asset impairments	859			7,479			6,156			7,479
Other exit costs	1,174			—			3,680			—
SG&A Restructuring Plan
Severance and other employee-related charges	(288		)	3,661			608			6,120
Other exit costs	—			216			66			826
Manufacturing Restructuring Plan
Severance and other employee-related charges	—			(49		)	—			(90		)
Other exit costs	(75		)	—			(75		)	64
Total	$	4,112		$	17,279		$	27,096		$	20,371

Restructuring accrual activity for the nine months ended September 23, 2012 was as follows:

(amounts in thousands)	Accrual at Beginning of Year		Charged to Earnings		Charge Reversed to Earnings			Cash Payments			Exchange Rate Changes			Accrual at September 23, 2012
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	9,710		18,106		(1,445		)	(13,969		)	89			12,491
Other exit costs(1)	—		3,680		—			(3,151		)	—			529
SG&A Restructuring Plan
Severance and other employee-related charges	6,718		805		(197		)	(4,860		)	(13		)	2,453
Other exit costs(2)	1,109		66		—			(859		)	(9		)	307
Manufacturing Restructuring Plan
Other exit costs	75		—		(75		)	—			—			—
Total	$	17,612	$	22,657	$	(1,717	)	$	(22,839	)	$	67		$	15,780

⁽¹⁾  During the first nine months of 2012, there was a net charge to earnings of $3.7 million primarily due to lease termination costs, inventory and equipment moving costs, restructuring agent costs, legal costs, and gains/losses on sale of assets in connection with the restructuring plan.

⁽²⁾  During the first nine months of 2012, there was a net charge to earnings of $0.1 million primarily due to lease termination costs, and inventory and equipment moving costs, in connection with the restructuring plan.

Global Restructuring Plan (including LEAN)

During September 2011, we initiated the Global Restructuring Plan focused on further reducing our overall operating expenses by including manufacturing and other cost reduction initiatives, such as consolidating certain manufacturing facilities and administrative functions to improve efficiencies. This plan was further expanded in the first quarter of 2012 and again during the second quarter of 2012 to include Project LEAN. The first phase of this plan was implemented in the third quarter of 2011 with the remaining phases of the plan expected to be substantially complete by the end of 2013.

For the nine months ended September 23, 2012, the net charge to earnings of $26.5 million represents the current year activity related to the Global Restructuring Plan including Project LEAN. The anticipated total costs related to the plan are expected to approximate $52 million to $55 million, of which $45.9 million have been incurred. The total number of employees planned to be affected by the Global Restructuring Plan including Project LEAN is 2,296, of which 1,263 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

SG&A Restructuring Plan

During 2009, we initiated the SG&A Restructuring Plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan substantially completed by the end of the first quarter of 2012.

For the nine months ended September 23, 2012, the net charge to earnings of $0.7 million represents the current year activity related to the SG&A Restructuring Plan. The implementation of the SG&A Restructuring Plan is substantially complete, with total costs incurred of approximately $19 million. The total number of employees planned to be affected by the SG&A Restructuring Plan is 369, of which 363 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

Manufacturing Restructuring Plan

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our Apparel Labeling Solutions (ALS) business, formerly Check-Net^®, and to support incremental improvements in our EAS systems and labels businesses. For the nine months ended September 23, 2012, there was a $0.1 million charge reversed to earnings recorded in connection with the Manufacturing Restructuring Plan.

The total number of employees planned to be affected by the Manufacturing Restructuring Plan is 420, all of which have been terminated. As of September 23, 2012 the implementation of the Manufacturing Restructuring Plan is substantially complete, with total costs incurred of $4.1 million.

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Earnings Per Share

9 Months Ended

Sep. 23, 2012

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The following data shows the amounts used in computing earnings per share and the effect on net earnings from continuing operations attributable to Checkpoint Systems, Inc. and the weighted-average number of shares of dilutive potential common stock:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands, except per share data)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
				(As Revised)						(As Revised)
Basic loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$	(4,167	)	$	(47,593	)	$	(107,689	)	$	(45,641	)
Diluted loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$	(4,167	)	$	(47,593	)	$	(107,689	)	$	(45,641	)
Shares:
Weighted-average number of common shares outstanding	40,521			40,134			40,415			40,038
Shares issuable under deferred compensation agreements	546			471			531			455
Basic weighted-average number of common shares outstanding	41,067			40,605			40,946			40,493
Common shares assumed upon exercise of stock options and awards	—			—			—			—
Shares issuable under deferred compensation arrangements	—			—			—			—
Dilutive weighted-average number of common shares outstanding	41,067			40,605			40,946			40,493
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Basic loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations	$	(0.10	)	$	(1.17	)	$	(2.63	)	$	(1.13	)
Loss from discontinued operations, net of tax	(0.03		)	(0.03		)	(0.07		)	(0.04		)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$	(0.13	)	$	(1.20	)	$	(2.70	)	$	(1.17	)

Anti-dilutive potential common shares are not included in our earnings per share calculation. The Long-term Incentive Plan restricted stock units were excluded from our calculation due to the performance of vesting criteria not being met.

The number of anti-dilutive common share equivalents for the three and nine month periods ended September 23, 2012 and September 25, 2011 were as follows:

	Quarter		Nine Months
	(13 weeks) Ended		(39 weeks) Ended
(amounts in thousands)	September 23, 2012	September 25, 2011	September 23, 2012	September 25, 2011
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS(1)	3,296	2,601	3,068	2,250

⁽¹⁾  Adjustments for stock options and awards of 15 shares and 64 shares, respectively were anti-dilutive in the three and nine months ended 2012. Adjustments for stock options and awards of 227 shares and 384 shares, respectively, and deferred compensation arrangements of 6 shares and 5 shares, respectively, were anti-dilutive in the three and nine months ended 2011. These shares were therefore excluded from the earnings per share calculation due to our net loss for the periods.

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Stock-Based Compensation (Assumption And Weighted-Average Fair Values Used In The Black Scholes Model) (Details) (USD $)	9 Months Ended
	Sep. 23, 2012 Y	Sep. 25, 2011 Y
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Weighted-average fair value of grants	$ 4.38	$ 9.88
Expected dividend yield	0.00%	0.00%
Expected volatility	52.08%	49.85%
Expected life (in years)	5.06	4.96
Risk-free interest rate	0.75%	2.178%

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Stock-Based Compensation

9 Months Ended

Sep. 23, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Stock-based compensation cost recognized in operating results (included in selling, general, and administrative expenses) for the three and nine months ended September 23, 2012 was $1.0 million and $3.7 million ($1.0 million and $3.6 million, net of tax), respectively. For the three and nine months ended September 25, 2011, the total compensation expense was $1.4 million and $6.2 million ($1.1 million and $4.6 million, net of tax), respectively. The associated actual tax benefit realized for the tax deduction from option exercises of share-based payment units and awards released equaled $0.8 million and $1.1 million for the nine months ended September 23, 2012 and September 25, 2011, respectively.

Stock Options

Option activity under the principal option plans as of September 23, 2012 and changes during the nine months ended September 23, 2012 were as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 25, 2011	2,600,805		$	19.54	4.39	$	512
Granted	801,880		9.70
Exercised	(38,084	)	8.83
Forfeited or expired	(254,527	)	16.60
Outstanding at September 23, 2012	3,110,074		$	17.37	4.79	$	342
Vested and expected to vest at September 23, 2012	3,110,074		$	17.37	4.79	$	342
Exercisable at September 23, 2012	2,361,581		$	19.58	3.29	$	49

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of fiscal 2012 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 23, 2012. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the nine months ended September 23, 2012 and September 25, 2011 was $0.1 million and $1.1 million, respectively.

As of September 23, 2012, $2.4 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.2 years.

The fair value of share-based payment units was estimated using the Black-Scholes option pricing model. The table below presents the weighted-average expected life in years. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions and weighted-average fair values were as follows:

Nine months ended	September 23, 2012		September 25, 2011
Weighted-average fair value of grants	4.38		9.88
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	52.08	%	49.85	%
Expected life (in years)	5.06		4.96
Risk-free interest rate	0.750	%	2.178	%

Restricted Stock Units

Nonvested service based restricted stock units as of September 23, 2012 and changes during the nine months ended September 23, 2012 were as follows:

	Number of Shares		Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 25, 2011	617,672		0.79	$	21.29
Granted	210,795			$	10.72
Vested	(186,254	)		$	11.38
Forfeited	(68,046	)		$	17.34
Nonvested at September 23, 2012	574,167		1.04	$	21.09
Vested and expected to vest at September 23, 2012	574,167		1.04
Vested at September 23, 2012	61,250		—

The total fair value of restricted stock awards vested during the first nine months of 2012 was $2.1 million as compared to $3.3 million in the first nine months of 2011. As of September 23, 2012, there was $2.6 million of unrecognized stock-based compensation expense related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 1.6 years.

Other Compensation Arrangements

On March 15, 2010, we initiated a plan in which time-vested cash unit awards were granted to eligible employees. The time-vested cash unit awards under this plan vest evenly over two or three years from the date of grant. The total amount accrued related to the plan equaled $0.7 million at September 23, 2012, of which $0.3 million and $0.8 million was expensed for the three and nine months ended September 23, 2012. The total amount accrued related to the plan equaled $0.4 million at September 25, 2011, of which $0.2 million and $0.4 million was expensed for the three and nine months ended September 25, 2011. The associated liability is included in Accrued Compensation and Related Taxes in the accompanying Consolidated Balance Sheets.

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Supplemental Cash Flow Information

9 Months Ended

Sep. 23, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest and income taxes for the nine months ended September 23, 2012 and September 25, 2011 were as follows:

(amounts in thousands)
Nine months ended	September 23, 2012		September 25, 2011
Interest	$	8,194	$	5,660
Income tax payments	$	8,229	$	9,309

In January 2011, the Company entered into an agreement to acquire the Shore to Shore businesses, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $66.7 million of cash from operations (with $27.8 million paid in the third quarter of 2011) and $9.2 million of borrowings under our Senior Secured Credit Facility. The acquisition payment, net of cash acquired, is reflected in the acquisition of businesses line within investing activities on the Consolidated Statement of Cash Flows.

At September 23, 2012 and September 25, 2011, the Company accrued $0.6 million and $3.0 million of capital expenditures, respectively. These amounts were excluded from the Consolidated Statements of Cash Flows at September 23, 2012 and September 25, 2011 since they represent non-cash investing activities. Accrued capital expenditures at September 23, 2012 and September 25, 2011 are included in accounts payable and other accrued expenses on the Consolidated Balance Sheets.

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Income Taxes

9 Months Ended

Sep. 23, 2012

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The effective tax rate for the thirty-nine weeks ended September 23, 2012 was 0.7% as compared to negative 570.2% for the thirty-nine weeks ended September 25, 2011. The increase in the effective tax rate for the thirty-nine weeks ended September 23, 2012 was due to the impairment charges and the valuation allowance position in the United States, discussed further below.

For the thirty-nine weeks ended September 23, 2012, included in the loss from earnings from continuing operations before income taxes were charges for impairments of goodwill and property, plant and equipment of $64.4 million and $6.2 million, respectively. Due to the unusual and infrequent nature of these charges, the $1.2 million tax benefit related to the asset impairments has been recorded discretely.

In accordance with ASC 740, “Accounting for Income Taxes”, we evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. ASC 740 requires that companies assess whether valuation allowances should be established against their deferred tax assets based on all available evidence, both positive and negative, using a “more likely than not” standard. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company's experience with loss carryforwards not expiring and tax planning alternatives. The Company operates and derives income across multiple jurisdictions. As the geographic footprint of the business changes, we may encounter losses in jurisdictions that have been historically profitable, and as a result might require additional valuation allowances to be recorded against certain deferred tax asset balances. At September 23, 2012 and December 25, 2011, we had net deferred tax assets of $11.3 million and $11.7 million respectively.

During the quarter ending September 25, 2011 a valuation allowance in the amount of $48.0 million was established related to all components of the domestic net deferred tax assets based on the determination after the above considerations that it was more likely than not that the deferred tax assets would not be fully realized. This charge was primarily a result of the trend of significant domestic losses experienced by the Company in recent years.

The Company has historically determined its interim tax provision using an estimated annual effective tax rate methodology. In calculating the tax provision for the three and six months ended June 24, 2012 and the three and nine months ended September 23, 2012, we have accounted for the U.S. operations by applying the discrete method. The Company determined that if the U.S. were included in the estimated annual effective tax rate, small changes in estimated pretax earnings would result in significant fluctuations in the tax rate. Therefore, the historical method would not provide a reliable estimate for the reporting periods ended June 24, 2012 and September 23, 2012.

Included in the Company's $45.6 million of other current assets is a current income tax receivable of $9.3 million. This amount represents estimated tax payments on account net of refunds received in the amount of $8.5 million and a tax benefit recorded on the Company's year to date pretax loss of $0.8 million. Included in the $28.7 million of other current liabilities is the Company's current deferred tax liability of $4.6 million.

The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate was $11.0 million and $13.2 million at September 23, 2012 and December 25, 2011, respectively. Penalties and tax-related interest expense are reported as a component of income tax expense. During the nine months ended September 23, 2012 we recognized a release ofinterest and penalties expense of $0.7 million compared to an interest and penalties expense of $0.2 million during the nine months ended September 25, 2011, in the Statement of Operations. At September 23, 2012 and December 25, 2011, the Company had accrued interest and penalties related to unrecognized tax benefits of $3.8 million and $4.6 million, respectively.

We file income tax returns in the U.S. and in various states, local and foreign jurisdictions. We are routinely examined by tax authorities in these jurisdictions. It is possible that these examinations may be resolved within twelve months. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the gross unrecognized tax benefits balance may decrease within the next twelve months by a range of

$2.3 million to $3.7 million.

We are currently under audit in the following major jurisdictions: Germany 2006 – 2009, Finland 2008 – 2009, and India 2008 – 2012.

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Earnings Per Share (Schedule Of Anti-Dilutive Common Share Equivalents) (Details)	3 Months Ended				9 Months Ended
	Sep. 23, 2012		Sep. 25, 2011		Sep. 23, 2012		Sep. 25, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS	3,296,000	[1]	2,601,000	[1]	3,068,000	[1]	2,250,000	[1]
Stock Options And Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS	15,000		227,000		64,000		384,000
Deferred Compensation Arrangement [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS			6,000				5,000

[1] Adjustments for stock options and awards of 15 shares and 64 shares, respectively were anti-dilutive in the three and nine months ended 2012. Adjustments for stock options and awards of 227 shares and 384 shares, respectively, and deferred compensation arrangements of 6 shares and 5 shares, respectively, were anti-dilutive in the three and nine months ended 2011. These shares were therefore excluded from the earnings per share calculation due to our net loss for the periods.

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Pension Benefits (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
Service cost	$ 207,000	$ 247,000	$ 637,000	$ 736,000
Interest cost	940,000	1,125,000	2,898,000	3,346,000
Expected return on plan assets	10,000	39,000	31,000	117,000
Amortization of actuarial loss	54,000	12,000	166,000	37,000
Amortization of transition obligation	13,000	33,000	42,000	98,000
Amortization of prior service costs	1,000	1,000	2,000	2,000
Net periodic pension cost	1,225,000	1,457,000	3,776,000	4,336,000
Estimated employer contributions	4,700,000		4,700,000
Pension contributions			$ 3,700,000

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Earnings Per Share (Schedule Of Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Earnings Per Share [Abstract]
Basic loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$ (4,167)	$ (47,593)	$ (107,689)	$ (45,641)
Diluted loss from continuing operations attributable to Checkpoint Systems, Inc. available to common stockholders	$ (4,167)	$ (47,593)	$ (107,689)	$ (45,641)
Weighted average number of common shares outstanding	40,521	40,134	40,415	40,038
Shares issuable under deferred compensation agreements	546	471	531	455
Basic weighted- average number of common shares outstanding	41,067	40,605	40,946	40,493
Common shares assumed upon exercise of stock options and awards	0	0	0	0
Shares issuable under deferred compensation arrangements	0	0	0	0
Dilutive weighted-average number of common shares outstanding	41,067	40,605	40,946	40,493
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)	$ (0.1)	$ (1.17)	$ (2.63)	$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)	$ (0.03)	$ (0.03)	$ (0.07)	$ (0.04)
Basic loss attributable to Checkpoint Systems, Inc. per share	$ (0.13)	$ (1.2)	$ (2.7)	$ (1.17)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)	$ (0.1)	$ (1.17)	$ (2.63)	$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)	$ (0.03)	$ (0.03)	$ (0.07)	$ (0.04)
Diluted loss attributable to Checkpoint Systems, Inc. per share	$ (0.13)	$ (1.2)	$ (2.7)	$ (1.17)

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Provision For Restructuring (Tables)

9 Months Ended

Sep. 23, 2012

Restructuring and Related Activities [Abstract]

Schedule Of Restructuring Expense

Restructuring expense for the three and nine months ended September 23, 2012 and September 25, 2011 was as follows:

	Quarter						Nine Months
	(13 weeks) Ended						(39 weeks) Ended
(amounts in thousands)	September 23, 2012			September 25, 2011			September 23, 2012			September 25, 2011
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	2,442			5,972			16,661			5,972
Asset impairments	859			7,479			6,156			7,479
Other exit costs	1,174			—			3,680			—
SG&A Restructuring Plan
Severance and other employee-related charges	(288		)	3,661			608			6,120
Other exit costs	—			216			66			826
Manufacturing Restructuring Plan
Severance and other employee-related charges	—			(49		)	—			(90		)
Other exit costs	(75		)	—			(75		)	64
Total	$	4,112		$	17,279		$	27,096		$	20,371

Schedule Of Restructuring Accrual Activity

Restructuring accrual activity for the nine months ended September 23, 2012 was as follows:

(amounts in thousands)	Accrual at Beginning of Year		Charged to Earnings		Charge Reversed to Earnings			Cash Payments			Exchange Rate Changes			Accrual at September 23, 2012
Global Restructuring Plan (including LEAN)
Severance and other employee-related charges	9,710		18,106		(1,445		)	(13,969		)	89			12,491
Other exit costs(1)	—		3,680		—			(3,151		)	—			529
SG&A Restructuring Plan
Severance and other employee-related charges	6,718		805		(197		)	(4,860		)	(13		)	2,453
Other exit costs(2)	1,109		66		—			(859		)	(9		)	307
Manufacturing Restructuring Plan
Other exit costs	75		—		(75		)	—			—			—
Total	$	17,612	$	22,657	$	(1,717	)	$	(22,839	)	$	67		$	15,780

⁽¹⁾  During the first nine months of 2012, there was a net charge to earnings of $3.7 million primarily due to lease termination costs, inventory and equipment moving costs, restructuring agent costs, legal costs, and gains/losses on sale of assets in connection with the restructuring plan.

⁽²⁾  During the first nine months of 2012, there was a net charge to earnings of $0.1 million primarily due to lease termination costs, and inventory and equipment moving costs, in connection with the restructuring plan.

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Debt (Short-Term Borrowings And Current Portion Of Long-Term Debt) (Narrative) (Details)							3 Months Ended
	Sep. 23, 2012 USD ($)	Dec. 25, 2011 USD ($)		Sep. 25, 2011 USD ($)		Dec. 26, 2010 USD ($)	Sep. 23, 2012 Full-Recourse Factoring Agreement [Member] USD ($)	Sep. 23, 2012 Full-Recourse Factoring Agreement [Member] EUR (€)	Jun. 24, 2012 Hong Kong Banking Facility [Member] Term Loan [Member] USD ($)	Jun. 24, 2012 Hong Kong Banking Facility [Member] Term Loan [Member] HKD	Jun. 24, 2012 Shore To Shore Businesses [Member] Overdraft Facility and Other Short-Term Loans [Member] USD ($)	Jun. 24, 2012 Shore To Shore Businesses [Member] Overdraft Facility and Other Short-Term Loans [Member] INR	Feb. 29, 2012 Sri Lanka [Member] USD ($)	Sep. 23, 2012 Sri Lanka Banking Facility [Member] Term Loan [Member] USD ($)	Feb. 29, 2012 Sri Lanka Banking Facility [Member] Term Loan [Member] USD ($)	Sep. 23, 2012 Sri Lanka Banking Facility [Member] Overdraft/Import Line [Member] USD ($)	Feb. 29, 2012 Sri Lanka Banking Facility [Member] Overdraft/Import Line [Member] USD ($)
Debt Instrument [Line Items]
Extinguishment of Debt, Amount							$ 7,400,000	€ 5,700,000	$ 8,000,000	61,800,000	$ 700,000	37,200,000
Cash and Cash Equivalents, at Carrying Value	75,124,000	93,481,000	[1]	106,400,000	[1]	172,473,000
Borrowing availability under credit facility													3,200,000		2,700,000		500,000
Amount outstanding under credit facility														$ 2,400,000		$ 400,000

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Business Segments

9 Months Ended

Sep. 23, 2012

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

	Quarter								Nine Months
	(13 weeks) Ended								(39 weeks) Ended
(amounts in thousands)	September 23, 2012				September 25, 2011				September 23, 2012				September 25, 2011
					(As Revised)								(As Revised)
Business segment net revenue:
Shrink Management Solutions	$	133,859			$	147,719			$	374,033			$	415,620
Apparel Labeling Solutions	41,759				49,488				133,907				144,705
Retail Merchandising Solutions	12,545				17,842				40,916				53,420
Total revenues	$	188,163			$	215,049			$	548,856			$	613,745
Business segment gross profit:
Shrink Management Solutions	$	56,026			$	57,978			$	151,525			$	166,434
Apparel Labeling Solutions	10,101				14,733				31,626				44,213
Retail Merchandising Solutions	5,887				8,377				18,079				25,510
Total gross profit	72,014				81,088				201,230				236,157
Operating expenses	68,520			(1)	88,258			(2)	302,862			(3)	238,807			(4)
Interest (expense) income, net	(4,272		)		(1,237		)		(7,251		)		(3,104		)
Other gain (loss), net	325				(783		)		29				(1,049		)
Loss from continuing operations before income taxes	$	(453	)		$	(9,190	)		$	(108,854	)		$	(6,803	)

⁽¹⁾  Includes a $4.1 million restructuring charge and a $17 thousand acquisition charge.

⁽²⁾  Includes a $17.3 million restructuring charge, a $0.3 million charge related to improper and fraudulent Canadian activities and a $2 thousand acquisition charge.

⁽³⁾  Includes a $64.4 million goodwill impairment charge, a $27.1 million restructuring charge, a $2.9 million charge related to our CEO transition, a $0.7 million charge for forensic and legal fees associated with the improper and fraudulent Canadian activities, and a $0.1 million acquisition charge.

⁽⁴⁾  Includes a $20.4 million restructuring charge, a $2.2 million acquisition charge, and a $0.6 million charge related to improper and fraudulent Canadian activities.

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Inventories (Tables)

9 Months Ended

Sep. 23, 2012

Inventory Disclosure [Abstract]

Schedule Of Inventories

Inventories consist of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Raw materials	$	19,200	$	28,128
Work-in-process	6,900		10,481
Finished goods	83,951		92,378
Total	$	110,051	$	130,987

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Goodwill And Other Intangible Assets (Changes In Carrying Amount Of Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended			12 Months Ended		9 Months Ended	12 Months Ended	6 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Sep. 23, 2012		Sep. 25, 2011	Sep. 23, 2012		Sep. 25, 2011	Dec. 25, 2011		Sep. 23, 2012 Shrink Management Solutions [Member]	Dec. 25, 2011 Shrink Management Solutions [Member]	Jun. 24, 2012 Apparel Labeling Solutions [Member]	Sep. 23, 2012 Apparel Labeling Solutions [Member]	Dec. 25, 2011 Apparel Labeling Solutions [Member]	Sep. 23, 2012 Retail Merchandising Solutions [Member]	Dec. 25, 2011 Retail Merchandising Solutions [Member]
Goodwill [Roll Forward]
Beginning Balance				$ 286,103	[1]	$ 231,325	$ 231,325		$ 161,811	$ 165,324	$ 62,584	$ 62,584	$ 3,915	$ 61,708	$ 62,086
Acquired during the year							58,008			0			58,008		0
Discontinued operations							(3,782)			(3,782)			0		0
Purchase accounting adjustment				1,624					0			1,624		0
Impairment losses	0		0	(64,437)		0			0		(64,437)	(64,437)		0
Translation adjustments				(332)			552		(322)	269		229	661	(239)	(378)
Ending Balance	$ 222,958	[1]		$ 222,958	[1]		$ 286,103	[1]	$ 161,489	$ 161,811		$ 0	$ 62,584	$ 61,469	$ 61,708

[1] Derived from the Company’s audited Consolidated Financial Statements at December 25, 2011.

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Summary Of Significant Accounting Polices (Consolidated Statements Of Operations) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended					9 Months Ended				12 Months Ended	84 Months Ended
	Oct. 10, 2012	Sep. 23, 2012		Mar. 25, 2012	Sep. 25, 2011		Sep. 23, 2012		Sep. 25, 2011		Dec. 25, 2011	Dec. 25, 2011
Net revenues		$ 188,163			$ 215,049		$ 548,856		$ 613,745
Cost of revenues		116,149			133,961		347,626		377,588
Gross profit		72,014			81,088		201,230		236,157
Selling, general and administrative expenses		59,950			67,802		197,325		219,294
Research and development		4,441			5,476		13,132		15,612
Restructuring expenses		4,112			17,279		27,096		20,371
Acquisition costs		17			2		127		2,205
Other expense	4,700	0		745	289		745		587			4,100
Other operating income		0			2,590		0		19,262
Operating income (loss)		3,494			(7,170)		(101,632)		(2,650)
Interest income		396			984		1,291		2,677
Interest expense		4,668			2,221		8,542		5,781
Other gain (loss), net		325			(783)		29		(1,049)
Loss from continuing operations before income taxes		(453)			(9,190)		(108,854)		(6,803)
Income taxes (benefit) expense		3,765			38,355		(810)		38,788
Net loss from continuing operations		(4,218)			(47,545)		(108,044)		(45,591)
Loss from discontinued operations, net of tax expense of $0, $0, and $433 for quarter ended and $0, $0, and $0 for six months ended		(1,167)	[1]		(1,069)	[1]	(2,797)	[1]	(1,874)	[1]
Net loss		(5,385)			(48,614)		(110,841)		(47,465)		(66,626)
Less: income attributable to non-controlling interests		(51)			48		(355)		50
Net loss attributable to Checkpoint Systems, Inc.		(5,334)			(48,662)		(110,486)		(47,515)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)		$ (0.1)			$ (1.17)		$ (2.63)		$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)		$ (0.03)			$ (0.03)		$ (0.07)		$ (0.04)
Basic loss attributable to Checkpoint Systems, Inc. per share		$ (0.13)			$ (1.2)		$ (2.7)		$ (1.17)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)		$ (0.1)			$ (1.17)		$ (2.63)		$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)		$ (0.03)			$ (0.03)		$ (0.07)		$ (0.04)
Diluted loss attributable to Checkpoint Systems, Inc. per share		$ (0.13)			$ (1.2)		$ (2.7)		$ (1.17)
As Previously Reported [Member]
Net revenues					218,126				622,730
Cost of revenues					136,506				385,244
Gross profit					81,620				237,486
Selling, general and administrative expenses					69,943				225,021
Research and development					5,476				15,612
Restructuring expenses					17,392				20,484
Acquisition costs					2				2,205
Other expense					0				0
Other operating income					2,590				19,262
Operating income (loss)					(8,603)				(6,574)
Interest income					984				2,677
Interest expense					2,221				5,781
Other gain (loss), net					(783)				(1,049)
Loss from continuing operations before income taxes					(10,623)				(10,727)
Income taxes (benefit) expense					38,588				38,273
Net loss from continuing operations					(49,211)				(49,000)
Loss from discontinued operations, net of tax expense of $0, $0, and $433 for quarter ended and $0, $0, and $0 for six months ended					0				0
Net loss					(49,211)				(49,000)
Less: income attributable to non-controlling interests					48				50
Net loss attributable to Checkpoint Systems, Inc.					(49,259)				(49,050)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)					$ (1.21)				$ (1.21)
Loss from discontinued operations, net of tax (in dollars per share)					$ 0				$ 0
Basic loss attributable to Checkpoint Systems, Inc. per share					$ (1.21)				$ (1.21)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)					$ (1.21)				$ (1.21)
Loss from discontinued operations, net of tax (in dollars per share)					$ 0				$ 0
Diluted loss attributable to Checkpoint Systems, Inc. per share					$ (1.21)				$ (1.21)
As Revised For Revision Adjustments [Member]
Net revenues					218,126				622,730
Cost of revenues					136,506				385,244
Gross profit					81,620				237,486
Selling, general and administrative expenses					68,857				222,384
Research and development					5,476				15,612
Restructuring expenses					17,392				20,484
Acquisition costs					2				2,205
Other expense					289				587
Other operating income					2,590				19,262
Operating income (loss)					(7,806)				(4,524)
Interest income					984				2,677
Interest expense					2,221				5,781
Other gain (loss), net					(783)				(1,049)
Loss from continuing operations before income taxes					(9,826)				(8,677)
Income taxes (benefit) expense					38,788				38,788
Net loss from continuing operations					(48,614)				(47,465)
Loss from discontinued operations, net of tax expense of $0, $0, and $433 for quarter ended and $0, $0, and $0 for six months ended					0				0
Net loss					(48,614)				(47,465)
Less: income attributable to non-controlling interests					48				50
Net loss attributable to Checkpoint Systems, Inc.					(48,662)				(47,515)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)					$ (1.20)				$ (1.17)
Loss from discontinued operations, net of tax (in dollars per share)					$ 0				$ 0
Basic loss attributable to Checkpoint Systems, Inc. per share					$ (1.2)				$ (1.17)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)					$ (1.20)				$ (1.17)
Loss from discontinued operations, net of tax (in dollars per share)					$ 0				$ 0
Diluted loss attributable to Checkpoint Systems, Inc. per share					$ (1.2)				$ (1.17)
As Revised In This Quarterly Report On Form 10-Q [Member]
Net revenues					215,049				613,745
Cost of revenues					133,961				377,588
Gross profit					81,088				236,157
Selling, general and administrative expenses					67,802				219,294
Research and development					5,476				15,612
Restructuring expenses					17,279				20,371
Acquisition costs					2				2,205
Other expense					289				587
Other operating income					2,590				19,262
Operating income (loss)					(7,170)				(2,650)
Interest income					984				2,677
Interest expense					2,221				5,781
Other gain (loss), net					(783)				(1,049)
Loss from continuing operations before income taxes					(9,190)				(6,803)
Income taxes (benefit) expense					38,355				38,788
Net loss from continuing operations					(47,545)				(45,591)
Loss from discontinued operations, net of tax expense of $0, $0, and $433 for quarter ended and $0, $0, and $0 for six months ended					(1,069)				(1,874)
Net loss					(48,614)				(47,465)
Less: income attributable to non-controlling interests					48				50
Net loss attributable to Checkpoint Systems, Inc.					$ (48,662)				$ (47,515)
Basic loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)					$ (1.17)				$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)					$ (0.03)				$ (0.04)
Basic loss attributable to Checkpoint Systems, Inc. per share					$ (1.2)				$ (1.17)
Diluted loss attributable to Checkpoint Systems, Inc. per share:
Loss from continuing operations (in dollars per share)					$ (1.17)				$ (1.13)
Loss from discontinued operations, net of tax (in dollars per share)					$ (0.03)				$ (0.04)
Diluted loss attributable to Checkpoint Systems, Inc. per share					$ (1.2)				$ (1.17)

[1] As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations for the three and nine months ended September 23, 2012, and the nine months ended September 25, 2011.

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Consolidated Statements Of Operations (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Discontinued operations, tax expense	$ 0	$ 433	$ 0	$ 0
As Previously Reported
Discontinued operations, tax expense		0		0
As Revised For Revision Adjustments [Member]
Discontinued operations, tax expense		$ 0		$ 0

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Inventories

9 Months Ended

Sep. 23, 2012

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

Inventories consist of the following:

(amounts in thousands)	September 23, 2012		December 25, 2011
Raw materials	$	19,200	$	28,128
Work-in-process	6,900		10,481
Finished goods	83,951		92,378
Total	$	110,051	$	130,987

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Stock-Based Compensation (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1.0	$ 1.4	$ 3.7	$ 6.2
Share-based compensation expense net of tax	1.0	1.1	3.6	4.6
Tax benefit from option exercise			0.8	1.1
Stock Options And Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of options exercised			0.1	1.1
Unrecognized compensation cost	2.4		2.4
Weighted-average period over which unrecognized compensation cost will be recognized (years)			2.2
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	2.6		2.6
Weighted-average period over which unrecognized compensation cost will be recognized (years)			1.6
Total fair value of restricted stock awards			2.1	3.3
Time-Vested Cash Unit Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation arrangement liability, current and noncurrent	0.7	0.4	0.7	0.4
Deferred compensation arrangement with individual, share-based compensation expense	$ 0.3	$ 0.2	$ 0.8	$ 0.4

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Fair Value Measurement, Financial Instruments And Risk Management (Summary Of Activity Associated With Cash Flow Hedges Reflected In AOCI) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 23, 2012
Fair Value Disclosures [Abstract]
Beginning balance, net of tax	$ 1,542
Changes in fair value gain, net of tax	499
Reclassification to earnings, net of tax	(1,300)
Ending balance, net of tax	$ 741

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Goodwill And Other Intangible Assets (Tables)

9 Months Ended

Sep. 23, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Components Of Intangible Assets

The following table reflects the components of intangible assets as of September 23, 2012 and December 25, 2011:

		September 23, 2012				December 25, 2011
(amounts in thousands)	Amortizable Life (years)	Gross Amount		Gross Accumulated Amortization		Gross Amount		Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6 to 20	$	81,320	$	48,311	$	81,348	$	43,945
Trade name	1 to 30	29,945		18,693		30,007		18,237
Patents, license agreements	3 to 14	60,133		49,424		60,249		47,704
Other	2 to 6	7,203		6,728		7,160		5,830
Total amortized finite-lived intangible assets		178,601		123,156		178,764		115,716
Indefinite-lived intangible assets:
Trade name		21,509		—		21,509		—
Total identifiable intangible assets		$	200,110	$	123,156	$	200,273	$	115,716

Estimated Future Amortization Expense

Estimated amortization expense for each of the five succeeding years is anticipated to be:

(amounts in thousands)
2012	$	10,466
2013	$	8,759
2014	$	8,271
2015	$	8,115
2016	$	7,852

Changes In Carrying Amount Of Goodwill

The changes in the carrying amount of goodwill are as follows:

(amounts in thousands)	Shrink Management Solutions			Apparel Labeling Solutions			Retail Merchandising Solutions			Total
Balance as of December 26, 2010	$	165,324		$	3,915		$	62,086		$	231,325
Acquired during the year	—			58,008			—			58,008
Discontinued operations	(3,782		)	—			—			(3,782		)
Translation adjustments	269			661			(378		)	552
Balance as of December 25, 2011	$	161,811		$	62,584		$	61,708		$	286,103
Purchase accounting adjustment	—			1,624			—			1,624
Impairment losses	—			(64,437		)	—			(64,437		)
Translation adjustments	(322		)	229			(239		)	(332		)
Balance as of September 23, 2012	$	161,489		$	—		$	61,469		$	222,958

Schedule Of Components Of Goodwill

The following table reflects the components of goodwill as of September 23, 2012 and December 25, 2011:

	September 23, 2012						December 25, 2011
(amounts in thousands)	Gross Amount		Accumulated Impairment Losses		Goodwill, Net		Gross Amount		Accumulated Impairment Losses		Goodwill, Net
Shrink Management Solutions	$	211,047	$	49,558	$	161,489	$	213,836	$	52,025	$	161,811
Apparel Labeling Solutions	83,542		83,542		—		81,662		19,078		62,584
Retail Merchandising Solutions	131,618		70,149		61,469		130,640		68,932		61,708
Total goodwill	$	426,207	$	203,249	$	222,958	$	426,138	$	140,035	$	286,103

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Provision For Restructuring (Schedule Of Restructuring Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Restructuring Cost and Reserve [Line Items]
Asset impairments			$ 6,156	$ 7,479
Total	4,112	17,279	27,096	20,371
Global Restructuring Plan (including LEAN) [Member]
Restructuring Cost and Reserve [Line Items]
Severance and other employee-related charges	2,442	5,972	16,661	5,972
Asset impairments	859	7,479	6,156	7,479
Other exit costs	1,174	0	3,680	0
SG&A Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Severance and other employee-related charges	(288)	3,661	608	6,120
Other exit costs	0	216	66	826
Manufacturing Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Severance and other employee-related charges	0	(49)	0	(90)
Other exit costs	$ (75)	$ 0	$ (75)	$ 64

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Summary Of Significant Accounting Polices (Effects Of Adjustment On Earnings (Loss) Per Share) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 23, 2012	Sep. 25, 2011	Sep. 23, 2012	Sep. 25, 2011
Basic loss attributable to Checkpoint Systems, Inc. per share	$ (0.13)	$ (1.2)	$ (2.7)	$ (1.17)
Earnings Per Share, Diluted	$ (0.13)	$ (1.2)	$ (2.7)	$ (1.17)
As Previously Reported [Member]
Basic loss attributable to Checkpoint Systems, Inc. per share		$ (1.21)		$ (1.21)
Earnings Per Share, Diluted		$ (1.21)		$ (1.21)
Canada Adjustments [Member]
Basic loss attributable to Checkpoint Systems, Inc. per share		$ 0.01		$ 0.04
Earnings Per Share, Diluted		$ 0.01		$ 0.04
As Revised For Revision Adjustments [Member]
Basic loss attributable to Checkpoint Systems, Inc. per share		$ (1.2)		$ (1.17)
Earnings Per Share, Diluted		$ (1.2)		$ (1.17)
Discontinued Operations Adjustments [Member]
Basic loss attributable to Checkpoint Systems, Inc. per share		$ 0		$ 0
Earnings Per Share, Diluted		$ 0		$ 0

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Contingent Liabilities And Settlements

9 Months Ended

Sep. 23, 2012

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities And Settlements

CONTINGENT LIABILITIES AND SETTLEMENTS

We are involved in certain legal actions, all of which have arisen in the ordinary course of business. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on our Consolidated Results of Operations and/or Financial Condition, except as disclosed in our Annual Report on Form 10-K for the year ended December 25, 2011 for which there have been no material changes.