Visant 10-Q 2014 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2014

or

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

For the transition period from                    to                    

Commission File Number	Registrant, State of Incorporation, Address of Principal Executive Offices and Telephone Number	I.R.S. Employer Identification No.
333-120386	VISANT CORPORATION	90-0207604

(Incorporated in Delaware)

357 Main Street

Armonk, New York 10504

Telephone: (914) 595-8200

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 requirement for the past 90 days.    Yes  ¨    No  ¨

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	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  ¨    No  x

As of May 6, 2014, there were 1,000 shares of common stock, par value $.01 per share, of Visant Corporation outstanding (all of which are indirectly, beneficially owned by Visant Holding Corp.).

The registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months.

FILING FORMAT

This Quarterly Report on Form 10-Q is being filed by Visant Corporation (“Visant”). Unless the context indicates otherwise, any reference in this report to the “Company”, “we”, “our” or “us” refers to Visant together with its consolidated subsidiaries.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited)		1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March  29, 2014 and March 30, 2013		1
	Condensed Consolidated Balance Sheets as of March 29, 2014 and December 28, 2013		2
	Condensed Consolidated Statements of Cash Flows for the three months ended March 29, 2014 and March  30, 2013		3
	Notes to Condensed Consolidated Financial Statements		4
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		33
ITEM 4.	Controls and Procedures		33
	PART II – OTHER INFORMATION
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		34
ITEM 5.	Other Information		34
ITEM 6.	Exhibits		34
Signatures

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VISANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	Three months ended
In thousands	March 29, 2014			March 30, 2013
Net sales	$	243,594		$	244,936
Cost of products sold		122,021			120,892
Gross profit		121,573			124,044
Selling and administrative expenses		97,142			110,097
(Gain) loss on disposal of fixed assets		(203	)		23
Special charges		1,747			857
Operating income		22,887			13,067
Interest expense, net		38,795			39,380
Loss before income taxes		(15,908	)		(26,313	)
Benefit from income taxes		(6,007	)		(11,378	)
Net loss	$	(9,901	)	$	(14,935	)
Comprehensive loss	$	(9,285	)	$	(14,258	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VISANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

In thousands, except share amounts	March 29, 2014			December 28, 2013
ASSETS
Cash and cash equivalents	$	122,914		$	96,042
Accounts receivable, net		130,201			108,201
Inventories		130,516			104,349
Salespersons overdrafts, net of allowance of $8,937 and $9,174, respectively		21,928			24,321
Prepaid expenses and other current assets		24,015			18,770
Income tax receivable		3,452			3,462
Deferred income taxes		26,243			21,053
Total current assets		459,269			376,198
Property, plant and equipment		545,122			543,063
Less accumulated depreciation		(361,496	)		(353,972	)
Property, plant and equipment, net		183,626			189,091
Goodwill		926,728			926,823
Intangibles, net		363,487			367,567
Deferred financing costs, net		30,712			33,118
Deferred income taxes		2,256			2,316
Other assets		14,270			11,162
Total assets	$	1,980,348		$	1,906,275
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDER’S DEFICIT
Accounts payable	$	60,699		$	45,867
Accrued employee compensation and related taxes		27,881			35,391
Commissions payable		19,871			10,908
Customer deposits		223,883			169,919
Income taxes payable		3,240			3,310
Current portion of long-term debt and capital leases		4,283			4,778
Interest payable		52,103			33,702
Other accrued liabilities		29,312			29,194
Total current liabilities		421,272			333,069
Long-term debt and capital leases - less current maturities		1,868,343			1,868,147
Deferred income taxes		144,842			147,059
Pension liabilities, net		50,305			51,926
Other noncurrent liabilities		37,573			38,812
Total liabilities		2,522,335			2,439,013
Mezzanine equity		11			11
Preferred stock $.01 par value; authorized 300,000 shares; none issued and outstanding at March 29, 2014 and December 28, 2013		—			—
Common stock $.01 par value; authorized 1,000 shares; 1,000 shares issued and outstanding at March 29, 2014 and December 28, 2013		—			—
Additional paid-in-capital		61,019			60,983
Accumulated deficit		(562,919	)		(553,018	)
Accumulated other comprehensive loss		(40,098	)		(40,714	)
Total stockholder’s deficit		(541,998	)		(532,749	)
Total liabilities, mezzanine equity and stockholder’s deficit	$	1,980,348		$	1,906,275

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VISANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three months ended
In thousands	March 29, 2014			March 30, 2013
Net loss	$	(9,901	)	$	(14,935	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation		12,239			12,849
Amortization of intangible assets		4,493			13,222
Amortization of debt discount, premium and deferred financing costs		3,302			3,570
Other amortization		77			84
Deferred income taxes		(7,842	)		(12,752	)
(Gain) loss on disposal of fixed assets		(203	)		23
Stock-based compensation		—			(99	)
Excess tax benefit from share based arrangements		(36	)		—
Loss on asset impairments		41			—
Changes in assets and liabilities:
Accounts receivable		(21,591	)		(5,241	)
Inventories		(26,207	)		(23,292	)
Salespersons overdrafts		81			(188	)
Prepaid expenses and other current assets		(5,126	)		(5,280	)
Accounts payable and accrued expenses		7,336			(5,806	)
Customer deposits		54,184			48,981
Commissions payable		8,980			6,945
Income taxes payable/receivable		(49	)		(211	)
Interest payable		18,401			17,742
Other operating activities, net		(2,722	)		4,674
Net cash provided by operating activities		35,457			40,286
Purchases of property, plant and equipment		(7,550	)		(9,393	)
Proceeds from sale of property and equipment		206			7
Additions to intangibles		(41	)		(81	)
Net cash used in investing activities		(7,385	)		(9,467	)
Repayment of long-term debt and capital lease obligations		(1,302	)		(13,231	)
Proceeds from issuance of long-term debt and capital leases		—			644
Excess tax benefit from share based arrangements		36			—
Net cash used in financing activities		(1,266	)		(12,587	)
Effect of exchange rate changes on cash and cash equivalents		66			(78	)
Increase in cash and cash equivalents		26,872			18,154
Cash and cash equivalents, beginning of period		96,042			60,196
Cash and cash equivalents, end of period	$	122,914		$	78,350

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VISANT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Overview and Basis of Presentation

Overview

The Company is a leading marketing and publishing services enterprise servicing the school affinity, direct marketing, fragrance, cosmetic and personal care sampling and packaging, and educational and trade publishing segments. The Company sells products and services to end customers through several different sales channels including independent sales representatives and dedicated employed sales forces. Sales and results of operations are impacted by a number of factors, including general economic conditions, seasonality, cost of raw materials, school population trends, the availability of school funding, product and service offerings and quality and price.

On October 4, 2004, an affiliate of Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and affiliates of DLJ Merchant Banking Partners III, L.P. (“DLJMBP III”) completed a series of transactions which created a marketing and publishing services enterprise (the “Transactions”) through the combination of Jostens, Inc. (“Jostens”), Von Hoffmann Corporation (“Von Hoffmann”) and AKI, Inc. and its subsidiaries (“Arcade”).

As of March 29, 2014, affiliates of KKR and DLJMBP III (collectively, the “Sponsors”) held approximately 49.2% and 41.1%, respectively, of Visant Holding Corp.’s (“Holdco”) voting interest, while each held approximately 44.8% of Holdco’s economic interest. As of March 29, 2014, the other co-investors held approximately 8.4% of the voting interest and approximately 9.2% of the economic interest of Holdco, and members of management held approximately 1.3% of the voting interest and approximately 1.2% of the economic interest of Holdco (exclusive of exercisable options). Visant is an indirect wholly-owned subsidiary of Holdco.

Basis of Presentation

The unaudited condensed consolidated financial statements included herein are for Visant and its wholly-owned subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of Visant and its subsidiaries are presented pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) in accordance with disclosure requirements for the quarterly report on Form 10-Q. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and footnotes included in Visant’s Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

2. Significant Accounting Policies

Revenue Recognition

The Company recognizes revenue when the earnings process is complete, evidenced by an agreement with the respective customer, delivery and acceptance has occurred, collectability is probable and pricing is fixed or determinable. Revenue is recognized (1) when products are shipped (if shipped free on board “FOB” shipping point), (2) when products are delivered (if shipped FOB destination) or (3) as services are performed as determined by contractual agreement, but in all cases only when risk of loss has transferred to the customer and the Company has no further performance obligations.

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Shipping and Handling

Net sales include amounts billed to customers for shipping and handling costs. Costs incurred for shipping and handling are recorded in cost of products sold.

Cost of Products Sold

Cost of products sold primarily includes the cost of paper and other materials, direct and indirect labor and related benefit costs, depreciation of production assets and shipping and handling costs.

Warranty Costs

Provisions for warranty costs related to Jostens’ scholastic products, particularly class rings due to their lifetime warranty, are recorded based on historical information and current trends in manufacturing costs. The provision related to the lifetime warranty is based on the number of rings manufactured in the prior school year consistent with industry standards. The provision for the total net warranty costs on rings was $1.0 million for each of the quarters ended March 29, 2014 and March 30, 2013. Warranty repair costs for rings manufactured in the current school year are expensed as incurred. Accrued warranty costs included in the Condensed Consolidated Balance Sheets were approximately $0.8 million as of each of March 29, 2014 and December 28, 2013.

Selling and Administrative Expenses

Selling and administrative expenses are expensed as incurred. These costs primarily include salaries and related benefits of sales and administrative personnel, sales commissions, amortization of intangibles and professional fees such as audit and consulting fees.

Advertising

The Company expenses advertising costs as incurred. Selling and administrative expenses included advertising expense of $0.8 million and $2.3 million for the quarters ended March 29, 2014 and March 30, 2013, respectively.

Derivative Financial Instruments

The Company recognizes all derivatives on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in earnings or other comprehensive income (loss), based on whether the instrument qualifies for and is designated as part of a hedging relationship. Gains or losses on derivative instruments reported in other comprehensive income (loss) are reclassified into earnings in the period in which earnings are affected by the underlying hedged item. The ineffective portion, if any, of a derivative’s change in fair value is recognized in earnings in the current period. Refer to Note 11,Derivative Financial Instruments and Hedging Activities, for further details.

Stock-Based Compensation

The Company recognizes compensation expense related to all equity awards granted, including awards modified, repurchased or cancelled based on the fair values of the awards at the grant date. Visant recognized total stock-based compensation expense of $0.4 million and $(0.1) million for the three months ended March 29, 2014 and March 30, 2013, respectively. Stock-based compensation is included in selling and administrative expenses. Refer to Note 15,Stock-Based Compensation, for further details.

Mezzanine Equity

Certain management stockholder agreements contain a purchase feature pursuant to which, in the event the holder’s employment terminates as a result of the death or permanent disability (as defined in the agreement) of the holder, the holder (or his/her estate, in the case of death) has the option to require that the common shares or vested options be purchased from the holder (estate) and settled in cash. These equity instruments are considered temporary equity and have been classified as mezzanine equity on the Condensed Consolidated Balance Sheets as of March 29, 2014 and December 28, 2013, respectively.

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Recently Adopted Accounting Pronouncements

On January 31, 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2013-01 (“ASU 2013-01”), which clarifies the scope of the offsetting disclosure requirements. Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending arrangements that are either offset on the balance sheet or subject to an enforceable master netting arrangement or similar agreement. ASU 2013-01 became effective for interim and annual periods beginning on or after January 1, 2013. Retrospective application is required for all comparative periods presented. The Company’s adoption of this guidance did not have a material impact on its financial statements.

On February 5, 2013, the FASB issued Accounting Standards Update 2013-02 (“ASU 2013-02”), which amends existing guidance by requiring additional disclosure either on the face of the income statement or in the notes to the financial statements of significant amounts reclassified out of accumulated other comprehensive income. ASU 2013-02 became effective for interim and annual periods beginning on or after December 15, 2012, to be applied on a prospective basis. The Company’s adoption of this guidance did not have a material impact on its financial statements.

On February 28, 2013, the FASB issued Accounting Standards Update 2013-04 (“ASU 2013-04”), which requires entities to measure obligations resulting from joint and several liability arrangements, for which the total amount of the obligation is fixed at the reporting date, as the sum of (1) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (2) any additional amount the reporting entity expects to pay on behalf of its co-obligors. Required disclosures include a description of the joint and several arrangement and the total outstanding amount of the obligation for all joint parties. ASU 2013-04 is effective for interim and annual periods beginning on or after December 15, 2013 and should be applied retrospectively to obligations with joint and several liabilities existing at the beginning of an entity’s fiscal year of adoption. Early adoption is permitted. The Company’s adoption of this guidance did not have a material impact on its financial statements.

On March 4, 2013, the FASB issued Accounting Standards Update 2013-05 (“ASU 2013-05”), which indicates that the entire amount of a cumulative translation adjustment (“CTA”) related to an entity’s investment in a foreign entity should be released when there has been (1) the sale of a subsidiary or group of net assets within a foreign entity, and the sale represents the substantially complete liquidation of the investment in the foreign entity, (2) a loss of controlling financial interest in an investment in a foreign entity or (3) a step acquisition for a foreign entity. ASU 2013-05 does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company’s adoption of this guidance did not have a material impact on its financial statements.

On July 17, 2013, the FASB issued Accounting Standards Update 2013-10 (“ASU 2013-10”), which amends ASC 815 to allow entities to use the federal funds effective swap rate, in addition to U.S. Treasury rates and LIBOR, as a benchmark interest rate in accounting for fair value and cash flow hedges in the United States. ASU 2013-10 also eliminates the provision in ASC 815 which prohibited the use of different benchmark rates for similar hedges except in rare and justifiable circumstances. ASU 2013-10 is effective prospectively for qualifying new hedging relationships entered into on or after July 17, 2013 and for hedging relationships redesignated on or after that date. The Company’s adoption of this guidance did not have a material impact on its financial statements.

On July 18, 2013, the FASB issued Accounting Standards Update 2013-11 (“ASU 2013-11”), which provides guidance on the financial statement presentation of unrecognized tax benefits (“UTB”) when a net operating loss (“NOL”) carryforward, a similar tax loss or a tax credit carryforward exists. Under ASU 2013-11, an entity must present a UTB, or a portion of a UTB, in its financial statements as a reduction to a deferred tax asset (“DTA”) for a NOL carryforward, a similar tax loss or a tax credit carryforward, except when (1) a NOL carryforward, a similar tax loss or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position or (2) the entity does not intend to use the DTA for this purpose. If either of these conditions exists, an entity should present a UTB in the financial statements as a liability and should not net the UTB with a DTA. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The amendment should be applied to all UTBs that exist as of the effective date. Entities may choose to apply the amendments retrospectively to each prior reporting period presented. The Company’s adoption of this guidance did not have a material impact on its financial statements.

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3. Restructuring Activity and Other Special Charges

For the three months ended March 29, 2014, the Company recorded $0.8 million, $0.5 million and $0.2 million of restructuring costs in the Scholastic, Marketing and Publishing Services and Memory Book segments, respectively. These restructuring costs were comprised of severance and related benefits associated with reductions in force. Also included in other special charges for the three months ended March 29, 2014 were $0.3 million of non-cash asset impairment charges associated with facility consolidations in the Scholastic segment. The associated employee headcount reductions related to the above actions were 63, 22 and two in the Scholastic, Marketing and Publishing Services and Memory Book segments, respectively.

For the three months ended March 30, 2013, the Company recorded $0.4 million, $0.3 million and $0.2 million of restructuring costs in the Memory Book, Scholastic and Marketing and Publishing Services segments, respectively. These restructuring costs were comprised of severance and related benefits associated with reductions in force. The associated employee headcount reductions related to the above actions were 11, seven and three in the Marketing and Publishing Services, Scholastic and Memory Book segments, respectively.

Restructuring accruals of $6.5 million and $7.5 million as of March 29, 2014 and December 28, 2013, respectively, are included in other accrued liabilities in the Condensed Consolidated Balance Sheets. These accruals included amounts provided for the termination in July 2013 of a multi-year marketing and sponsorship arrangement entered into by Jostens in 2007 and severance and related benefits related to reductions in force in each of our reportable segments.

On a cumulative basis through March 29, 2014, the Company incurred $23.2 million of costs related to the termination of the multi-year marketing and sponsorship arrangement entered into by Jostens in 2007 and employee severance and related benefit costs related to the 2014, 2013 and 2012 initiatives, which affected an aggregate of 726 employees. The Company had paid $16.6 million in cash related to these initiatives as of March 29, 2014.

Changes in the restructuring accruals during the first three months of fiscal 2014 were as follows:

In thousands	2014 Initiatives			2013 Initiatives			2012 Initiatives			Total
Balance at December 28, 2013	$	—		$	7,367		$	129		$	7,496
Restructuring charges		998			354			52			1,404
Severance, benefits and other payments		(386	)		(1,857	)		(133	)		(2,376	)
Balance at March 29, 2014	$	612		$	5,864		$	48		$	6,524

The majority of the remaining severance and related benefits associated with all these initiatives are expected to be paid by the end of fiscal 2015 and the costs associated with the termination of the multi-year marketing and sponsorship arrangement entered into by Jostens in 2007 are expected to be paid by the end of 2016.

4. Acquisitions

On July 1, 2013, the Company announced the acquisition of SAS Carestia (“Carestia”), a leading producer of fragrance blotter cards, for a total purchase price of $16.9 million, net of cash, subject to certain subsequent post-closing adjustments. The acquisition was completed through Arcade’s subsidiary, Arcade Europe SAS. The results of the acquired Carestia operations are reported as part of the Marketing and Publishing Services segment from the date of acquisition.

The aggregate cost of the acquisition was allocated to the tangible and intangible assets acquired and liabilities assumed based upon their relative fair values as of the date of the acquisition.

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The final allocation of the purchase price for the Carestia acquisition is as follows:

In thousands
Current assets	$	10,303
Property, plant and equipment		5,025
Intangible assets		8,954
Goodwill		7,683
Long-term assets		120
Current liabilities		(4,853	)
Long-term liabilities		(4,811	)
	$	22,421

In connection with the purchase accounting related to the acquisition of Carestia, the intangible assets and goodwill approximated $16.6 million and consisted of:

In thousands
Customer relationships	$	6,058
Non-compete agreements		262
Trademarks (definite lived)		2,634
Goodwill		7,683
	$	16,637

5. Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss (“AOCL”), by component, for the three months ended March 29, 2014 were as follows:

In thousands	Fair Value of Derivatives			Foreign Currency Translation			Pension and Postretirement Plans			Total
Balance as of December 28, 2013	$	(3,371	)	$	3,929		$	(41,272	)	$	(40,714	)
Change in fair value of derivatives, net of tax of $(0.1) million		(152	)		—			—			(152	)
Change in cumulative translation adjustment		—			(92	)		—			(92	)
Change in pension and other postretirement benefit plans, net of tax of $0.2 million		—			—			358			358
Amounts reclassified from AOCL, net of tax of $0.3 million		502			—			—			502
Balance as of March 29, 2014	$	(3,021	)	$	3,837		$	(40,914	)	$	(40,098	)

6. Accounts Receivable

Net accounts receivable were comprised of the following:

In thousands	March 29, 2014			December 28, 2013
Trade receivables	$	142,078		$	119,559
Allowance for doubtful accounts		(5,224	)		(5,040	)
Allowance for sales returns		(6,653	)		(6,318	)
Accounts receivable, net	$	130,201		$	108,201

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7. Inventories

Inventories were comprised of the following:

In thousands	March 29, 2014		December 28, 2013
Raw materials and supplies	$	44,473	$	36,035
Work-in-process		52,522		40,828
Finished goods		33,521		27,486
Inventories	$	130,516	$	104,349

Precious Metals Consignment Arrangement

Jostens is a party to a precious metals consignment agreement with a major financial institution under which it currently has the ability to obtain up to the lesser of a certain specified quantity of precious metals and $57.0 million in dollar value in consigned inventory. Under these arrangements, Jostens does not take title to consigned inventory until payment. Accordingly, Jostens does not include the value of consigned inventory or the corresponding liability in its consolidated financial statements. The value of consigned inventory was $15.6 million as of each of March 29, 2014 and December 28, 2013. The agreement does not have a stated term, and it can be terminated by either party upon 60 days written notice. Additionally, Jostens incurred expenses for consignment fees related to this facility of $0.1 million for the three-month period ended March 29, 2014 and $0.3 million for the three-month period ended March 30, 2013. The obligations under the consignment agreement are guaranteed by Visant.

8. Fair Value Measurements

The Company measures fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk.

The disclosure requirements around fair value establish a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

• Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques.

The Company does not have financial assets or financial liabilities that are currently measured and reported on the balance sheet on a fair value basis except as noted in Note 11,Derivative Financial Instruments and Hedging Activities.

In addition to such financial assets and liabilities that are recorded at fair value on a recurring basis, the Company used Level 2 inputs to estimate the fair value of its financial instruments which are not recorded at fair value on the balance sheet as of each of March 29, 2014 and December 28, 2013.

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As of March 29, 2014, the fair value of Visant’s 10.00% senior notes due 2017 (the “Senior Notes”), with an aggregate principal amount outstanding of $736.7 million, approximated $731.9 million at such date. As of March 29, 2014, the fair value of the term loan B facility maturing in 2016 (the “Term Loan Credit Facility”), with an aggregate principal amount outstanding of $1,140.4 million, approximated $1,133.8 million at such date.

As of December 28, 2013, the fair value of Visant’s 10.00% Senior Notes with an aggregate principal amount outstanding of $736.7 million, approximated $713.9 million at such date. As of December 28, 2013, the fair value of the Term Loan Credit Facility with an aggregate principal amount outstanding of $1,140.4 million, approximated $1,127.6 million at such date.

Each of the Senior Notes and the Term Loan Credit Facility were classified within Level 2 of the valuation hierarchy as of each of March 29, 2014 and December 28, 2013.

9. Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill is as follows:

In thousands	Scholastic			Memory Book		Marketing and Publishing Services			Total
Balance at December 28, 2013	$	300,857		$	391,178	$	234,788		$	926,823
Goodwill additions during the period		—			—		—			—
Currency translation		(73	)		—		(22	)		(95	)
Balance at March 29, 2014	$	300,784		$	391,178	$	234,766		$	926,728

Information regarding other intangible assets is as follows:

		March 29, 2014							December 28, 2013
In thousands	Estimated useful life	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
School relationships	10 years	$	330,000	$	(330,000	)	$	—	$	330,000	$	(330,000	)	$	—
Internally developed software	2 to 5 years		8,600		(8,600	)		—		8,600		(8,600	)		—
Patented/unpatented technology	3 years		14,951		(12,891	)		2,060		15,085		(12,820	)		2,265
Customer relationships	4 to 40 years		165,960		(74,364	)		91,596		165,552		(71,636	)		93,916
Trademarks (definite lived)	10 to 20 years		3,189		(315	)		2,874		3,228		(241	)		2,987
Restrictive covenants	3 to 10 years		40,411		(26,734	)		13,677		40,411		(25,292	)		15,119
			563,111		(452,904	)		110,207		562,876		(448,589	)		114,287
Trademarks	Indefinite		253,280		—			253,280		253,280		—			253,280
		$	816,391	$	(452,904	)	$	363,487	$	816,156	$	(448,589	)	$	367,567

Amortization expense related to other intangible assets was $4.5 million and $13.3 million for the three months ended March 29, 2014 and March 30, 2013, respectively. During the three months ended March 30, 2013, approximately $11.0 million of fully amortized restrictive covenants were written off.

Based on intangible assets in service as of March 29, 2014, estimated amortization expense for the remainder of fiscal 2014 and each of the five succeeding fiscal years is $13.0 million for the remainder of fiscal 2014, $15.8 million for 2015, $13.6 million for 2016, $10.1 million for 2017, $8.8 million for 2018 and $8.4 million for 2019.

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10. Debt

Debt obligations as of March 29, 2014 and December 28, 2013 consisted of the following:

In thousands	March 29, 2014		December 28, 2013
Senior secured term loan facilities, net of original issue discount of $11.0 million and $11.9 million, respectively Term Loan B, variable rate, 5.25% at March 29, 2014 with quarterly interest payments, principal due and payable at maturity - December 2016	$	1,129,445	$	1,128,544
Senior notes, 10.00% fixed rate, with semi-annual interest payments of $36.8 million in April and October, principal due and payable at maturity - October 2017		736,670		736,670
		1,866,115		1,865,214
Equipment financing arrangements		3,343		3,806
Capital lease obligations		3,168		3,905
Total debt	$	1,872,626	$	1,872,925

Senior Secured Credit Facilities

In connection with the refinancing consummated by Visant on September 22, 2010 (the “Refinancing”), Visant entered into senior secured credit facilities among Visant, as borrower, Jostens Canada Ltd. (“Jostens Canada”), as Canadian borrower, Visant Secondary Holdings Corp. (“Visant Secondary”), as guarantor, the lenders from time to time parties thereto, Credit Suisse AG, Cayman Islands Branch, as administrative agent, and Credit Suisse AG, Toronto Branch, as Canadian administrative agent, for the Term Loan Credit Facility and a revolving credit facility expiring in 2015 consisting of a $165.0 million U.S. revolving credit facility available to Visant and its subsidiaries and a $10.0 million Canadian revolving credit facility available to Jostens Canada (the “Revolving Credit Facility” and together with the Term Loan Credit Facility, the “Credit Facilities”). The borrowing capacity under the Revolving Credit Facility can also be used for the issuance of up to $35.0 million of letters of credit (inclusive of a Canadian letter of credit facility). On March 1, 2011, Visant announced the completion of the repricing of the Term Loan Credit Facility (the “Repricing”). The amended Term Loan Credit Facility provides for an interest rate for each term loan based upon LIBOR or an alternative base rate (“ABR”) plus a spread of 4.00% or 3.00%, respectively, with a 1.25% LIBOR floor. In connection with the amendment, Visant was required to pay a prepayment premium of 1.00% of the outstanding principal amount of the Term Loan Credit Facility along with certain other fees and expenses. The Credit Facilities allow Visant, subject to certain conditions, to incur additional term loans under the Term Loan Credit Facility in either case in an aggregate principal amount of up to $300.0 million, which additional term loans will have the same security and guarantees as the Term Loan Credit Facility. Amounts borrowed under the Term Loan Credit Facility that are repaid or prepaid may not be reborrowed.

Visant’s obligations under the Credit Facilities are unconditionally and irrevocably guaranteed jointly and severally by Visant Secondary and all of Visant’s material current and future wholly-owned domestic subsidiaries (the “U.S. Subsidiary Guarantors”). The obligations of Jostens Canada under the Credit Facilities are unconditionally and irrevocably guaranteed jointly and severally by Visant Secondary, Visant, the U.S. Subsidiary Guarantors and by any future Canadian subsidiaries of Visant. Visant’s obligations under the Credit Facilities and the guarantees are secured by substantially all of Visant’s assets and substantially all of the assets of Visant Secondary and the U.S. Subsidiary Guarantors. The obligations of Jostens Canada under the Credit Facilities and the guarantees are also secured by substantially all of the tangible and intangible assets of Jostens Canada and any future Canadian subsidiaries of Visant.

The Credit Facilities require that Visant not exceed a maximum total leverage ratio, that it meet a minimum interest coverage ratio and that it abide by a maximum capital expenditure limitation. In addition, the Credit Facilities contain certain restrictive covenants which, among other things, limit Visant’s and its subsidiaries’ ability to incur additional indebtedness and liens, pay dividends, prepay subordinated and senior unsecured debt, make investments, merge or consolidate, change the business, amend the terms of its subordinated and senior unsecured debt, engage in certain dispositions of assets, enter into sale and leaseback transactions, engage in certain transactions with affiliates and engage in certain other activities customarily restricted in such agreements. It also contains certain customary events of default, subject to applicable grace periods, as appropriate.

As of March 29, 2014, the annual interest rate under the Revolving Credit Facility was LIBOR plus 5.25% or an ABR plus 4.25% (or, in the case of Canadian dollar denominated loans, the bankers’ acceptance discount rate plus 5.25% or the Canadian prime rate plus 4.25% (subject to a floor of the one-month Canadian Dealer Offered Rate plus 1.00%)), in each case, with step-downs

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based on the total leverage ratio. To the extent that the interest rates on the borrowings under the Revolving Credit Facility are determined by reference to LIBOR, the LIBOR component of such interest rates is subject to a LIBOR floor of 1.75%.

As of March 29, 2014, there was $11.5 million outstanding in the form of letters of credit, leaving $163.5 million available for borrowing under the Revolving Credit Facility. Visant is obligated to pay commitment fees of 0.75% on the unused portion of the Revolving Credit Facility, with a step-down to 0.50% if the total leverage ratio is below 5.00 to 1.00.

Senior Notes

In connection with the issuance of the Senior Notes in aggregate principal amount of $750.0 million, as part of the Refinancing, Visant and the U.S. Subsidiary Guarantors entered into an Indenture among Visant, the U.S. Subsidiary Guarantors and U.S. Bank National Association, as trustee (the “Indenture”). The Senior Notes are guaranteed on a senior unsecured basis by the U.S. Subsidiary Guarantors. Interest on the notes accrues at the rate of 10.00% per annum and is payable semi-annually in arrears on April 1 and October 1, to holders of record on the immediately preceding March 15 and September 15.

The Senior Notes are senior unsecured obligations of Visant and the U.S. Subsidiary Guarantors and rank (i) equally in right of payment with any existing and future senior unsecured indebtedness of Visant and the U.S. Subsidiary Guarantors; (ii) senior to all of Visant’s and the U.S. Subsidiary Guarantors’ existing, and any of Visant’s and the U.S. Subsidiary Guarantors’ future, subordinated indebtedness; (iii) effectively junior to all of Visant’s existing and future secured obligations and the existing and future secured obligations of the U.S. Subsidiary Guarantors, including indebtedness under the Credit Facilities, to the extent of the value of the assets securing such obligations; and (iv) structurally subordinated to all liabilities of Visant’s existing and future subsidiaries that do not guarantee the Senior Notes. The Senior Notes are redeemable, in whole or in part, under certain circumstances. Upon the occurrence of certain change of control events, the holders have the right to require Visant to offer to purchase the Senior Notes at 101% of their principal amount, plus accrued and unpaid interest and additional interest, if any.

The Indenture contains restrictive covenants that limit, among other things, the ability of Visant and its restricted subsidiaries to (i) incur additional indebtedness or issue certain preferred stock, (ii) pay dividends on or make other distributions or repurchase capital stock or make other restricted payments, (iii) make investments, (iv) limit dividends or other payments by restricted subsidiaries to Visant or other restricted subsidiaries, (v) create liens on pari passu or subordinated indebtedness without securing the notes, (vi) sell certain assets or merge with or into other companies or otherwise dispose of all or substantially all of Visant’s assets, (vii) enter into certain transactions with affiliates and (viii) designate Visant’s subsidiaries as unrestricted subsidiaries. The Indenture also contains customary events of default, including the failure to make timely payments on the Senior Notes or other material indebtedness, the failure to satisfy certain covenants and specified events of bankruptcy and insolvency.

11. Derivative Financial Instruments and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its management of interest rate risk. During the three months ended March 29, 2014, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. As of March 29, 2014, the Company had three outstanding interest rate derivatives with an outstanding aggregate notional amount of $500.0 million.

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The effective portion of changes in the fair value of derivatives which qualify as and are designated as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. As of March 29, 2014, there was no ineffectiveness on the outstanding interest rate derivatives. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The Company estimates that $3.0 million will be reclassified as an increase to interest expense through the first fiscal quarter of 2015.

The fair value of outstanding derivative instruments as of March 29, 2014 and December 28, 2013 was as follows:

Classification in the Consolidated Balance Sheets

In thousands		March 29, 2014			December 28, 2013
Liability Derivatives:
Derivatives designated as hedging instruments
Interest rate swaps	Other accrued liabilities	$	3,009		$	3,088
Interest rate swaps	Other noncurrent liabilities		1,815			2,294
				��
Total		$	4,824		$	5,382

The following table summarizes the activity of derivative instruments that qualify for hedge accounting as of December 28, 2013 and March 29, 2014, and the impact of such derivative instruments on accumulated other comprehensive loss for the three months ended March 29, 2014:

In thousands	December 28, 2013			Amount of gain recognized in Accumulated Other Comprehensive Loss on derivatives (effective portion)			Amount of loss reclassified from Accumulated Other Comprehensive Loss to interest expense (effective portion)		March 29, 2014
Interest rate swaps designated as cash flow hedges	$	(5,382	)	$	(243	)	$	801	$	(4,824	)

The following table provides the location in the Company’s financial statements of the recognized gain or loss related to such derivative instruments:

	Three months ended
In thousands	March 29, 2014		March 30, 2013
Interest rate swaps designated as cash flow hedges recognized in interest expense	$	801	$	881

Based on an evaluation of the inputs used, the Company has categorized its derivative instruments to be within Level 2 of the fair value hierarchy. Any transfer into or out of a level of the fair value hierarchy is recognized based on the value of the derivative instruments at the end of the applicable reporting period.

Non-designated Hedges

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to foreign exchange rate movements but do not meet the hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of each of March 29, 2014 and March 30, 2013, the Company did not have any derivatives outstanding that were not designated as hedges.

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Credit-risk-related Contingent Features

The Company has an agreement with each of its derivative counterparties that contains a provision whereby the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on such indebtedness.

As of March 29, 2014, the termination value of derivatives in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $5.8 million. As of March 29, 2014 the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions at March 29, 2014, it could have been required to settle its obligations under the agreements at their termination value of $5.8 million.

12. Commitments and Contingencies

Forward Purchase Contracts

The Company is subject to market risk associated with changes in the price of precious metals. To mitigate the commodity price risk, the Company may from time to time enter into forward contracts to purchase gold, platinum and silver based upon the estimated ounces needed to satisfy projected customer demand. The Company had purchase commitment contracts totaling $5.8 million outstanding as of March 29, 2014 with delivery dates occurring through 2014. The forward purchase contracts are considered normal purchases and therefore are not subject to the requirements of derivative accounting. As of March 29, 2014, the fair market value of open precious metal forward contracts was $5.7 million based on quoted future prices for each contract.

13. Income Taxes

Visant and its subsidiaries are included in the consolidated federal income tax filing of its indirect parent company, Holdco, and its consolidated subsidiaries. The Company determines and allocates its income tax provision under the separate-return method except for the effects of certain provisions of the U.S. tax code which are accounted for on a consolidated group basis. Income tax amounts payable or receivable among members of the controlled group are settled based on the filing of income tax returns and the cash requirements of the respective members of the consolidated group.

In connection with the taxable loss incurred by Holdco in 2010 as a result of the Refinancing and the related deduction of $97.2 million for previously tax-deferred original issue discount, Holdco derived certain income tax benefits that have since been fully utilized. The utilization of these tax benefits resulted in unsettled intra-group income taxes receivable and payable balances at Holdco and Visant, respectively. During 2013, these balances were settled when Holdco contributed approximately $60.5 million of income tax receivables to Visant.

The Company recorded an income tax benefit for the three months ended March 29, 2014 based on its best estimate of the consolidated effective tax rate applicable for the entire 2014 fiscal year. After adjustments for jurisdictions for which a current tax benefit is not recorded, the estimated full-year consolidated effective tax rate for fiscal 2014 is 39.2% before taking into account the impact of less than $0.1 million of accruals considered a current period tax expense. The combined effect of the annual estimated consolidated effective tax rate and the net current period tax adjustments resulted in an effective rate of tax benefit of 37.8% for the three-month period ended March 29, 2014.

For the comparable three-month period ended March 30, 2013, the effective income tax rate was 43.2%. The decrease in tax rate for the first quarter of 2014 compared to the first quarter of 2013 was due primarily to the favorable effect of the domestic manufacturing deduction, which is expected to be available in 2014 because the Company anticipates that the remaining net operating loss from 2011 will be fully utilized in 2014. The first quarter 2014 tax rate was also favorably impacted by adjustments to the estimate for foreign earnings repatriation in 2014 and the recognition in the comparable prior year period of a $0.2 million tax benefit for research and development credits as a result of legislation enacted in the quarter ended March 30, 2013. There were no such credits recognized in the Company’s 2014 estimated annual effective tax rate because the credit lapsed at the end of 2013.

For the three-month period ended March 29, 2014, the Company provided net tax and interest accruals for unrecognized tax benefits of less than $0.1 million. At March 29, 2014, the Company’s unrecognized tax benefit liability totaled $11.3 million, including interest and penalty accruals totaling $3.2 million. At December 28, 2013, the Company’s unrecognized tax benefit liability totaled $11.2 million, including interest and penalty accruals totaling $3.1 million. Substantially all of these liabilities were included in noncurrent liabilities for the respective periods.

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Holdco’s income tax filings for 2005 to 2012 are subject to examination in the U.S federal tax jurisdiction. In connection with an examination of Holdco’s income tax filings for 2005 and 2006, the Internal Revenue Service (“IRS”) proposed certain transfer price adjustments with which Holdco disagreed in order to preserve its right to seek relief from double taxation with the applicable U.S. and the French tax authorities. During 2013, the IRS and French tax authorities agreed to a settlement with respect to transfer price adjustments for the 2005 and 2006 tax periods. The settlement for the 2005 and 2006 tax periods was consistent with the terms of an advance pricing agreement entered into in 2013 between Holdco and the IRS for the tax periods 2007 through 2011. Both agreements were consistent with the Company’s expectations, resulting in only minor adjustments required to be made to the Company’s existing reserves. The U.S. statute of limitations for years 2005 through 2010 remains open because the IRS has not yet completed its final reports for the affected periods. The Company is also subject to examination in certain state jurisdictions for the 2005 to 2012 periods, none of which was individually material. During 2013, the French tax authorities concluded their examination of tax filings for 2010 and 2011 with only minor adjustments. Though subject to uncertainty, the Company believes it has made appropriate provisions for all outstanding issues for all open years and in all applicable jurisdictions. Due primarily to the potential for resolution of the Company’s current U.S. federal examination and the expiration of the related statute of limitations, it is reasonably possible that the Company’s gross unrecognized tax benefit liability could change within the next twelve months by a range of zero to $7.3 million.

In September 2013, the U.S. Treasury issued final regulations under Sections 162(a) and 263(a) of the Internal Revenue Code of 1986 (the “Code”) regarding the deduction and capitalization of expenditures related to tangible property. The final regulations replace temporary regulations that were issued in December 2011. The U.S. Treasury also released proposed regulations under Section 168 of the Code regarding dispositions of tangible property. These final and proposed regulations are effective for the Company’s 2014 fiscal year ending January 3, 2015. The Company’s adoption of these regulations did not have a material impact on its financial statements.

President Obama’s administration has proposed significant changes to U.S. tax laws for U.S. corporations doing business outside the United States, including a proposal to defer certain tax deductions allocable to non-U.S. earnings until those earnings are repatriated. As discussion continues over comprehensive U.S. tax reform, it is not presently possible to predict the effect on the Company of tax legislation not yet enacted.

14. Benefit Plans

Pension and Other Postretirement Benefit Plans

Net periodic benefit expense (income) for pension and other postretirement benefit plans is presented below:

	Pension benefits						Postretirement benefits
	Three months ended						Three months ended
In thousands	March 29, 2014			March 30, 2013			March 29, 2014			March 30, 2013
Service cost	$	332		$	280		$	—		$	1
Interest cost		4,467			4,130			11			10
Expected return on plan assets		(5,907	)		(5,489	)		—			—
Amortization of prior service cost		—			—			(69	)		(69	)
Amortization of net actuarial loss		652			1,107			11			13
Net periodic benefit (income) expense	$	(456	)	$	28		$	(47	)	$	(45	)

As of December 28, 2013, the Company estimated that it would be required to make contributions under its qualified pension plans in 2014 in an aggregate amount of $5.3 million. For the three months ended March 29, 2014, the Company did not have an obligation to make any contributions to its qualified pension plans and contributed $0.7 million and less than $0.1

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million to its non-qualified pension plans and postretirement welfare plans, respectively. The non-qualified pension payments made during the three months ended March 29, 2014 were consistent with the amount anticipated as of December 28, 2013.

15. Stock-Based Compensation

2003 Stock Incentive Plan

The 2003 Stock Incentive Plan (the “2003 Plan”) was approved by Holdco’s Board of Directors and was effective as of October 30, 2003. The 2003 Plan permitted Holdco to grant to key employees and certain other persons stock options and stock awards. As of July 29, 2013, no further grants may be made under the 2003 Plan in accordance with its terms. The 4,180 options issued under the 2003 Plan in January 2004 that remained outstanding as of December 28, 2013 were exercised in January 2014 prior to their expiration in January 2014.

2004 Stock Option Plan

In connection with the closing of the Transactions, Holdco established a new stock option plan, which permits Holdco to grant to key employees and certain other persons of Holdco and its subsidiaries various equity-based awards, including stock options and restricted stock. The plan, currently known as the Third Amended and Restated 2004 Stock Option Plan for Key Employees of Visant Holding Corp. and Subsidiaries (the “2004 Plan”), provides for the issuance of a total of 510,230 shares of Class A Common Stock. Options granted under the 2004 Plan may consist of time vesting options or performance vesting options. The option exercise period is determined at the time of grant of the option but may not extend beyond the end of the calendar year that is ten calendar years after the date the option is granted. Options granted under the 2004 Plan will begin expiring in late 2014. As of March 29, 2014, there were 150,577 shares available for grant under the 2004 Plan. Shares related to grants that are forfeited, terminated, cancelled or expire unexercised become available for new grants. As of March 29, 2014, there were 236,897 vested options outstanding under the 2004 Plan and no options unvested and subject to future vesting.

Jostens Long-Term Incentives

Certain key Jostens employees participate in Jostens long-term incentive programs. The programs provide for the grant of phantom shares to the participating employee, which are subject to vesting and other terms and conditions and restrictions of the share award, which may include meeting certain performance metrics and continued employment. The grants will be settled in cash in a lump sum amount based on the fair market value of the Class A Common Stock and the number of shares in which the employee has vested. In connection with the program put into place in 2012 (the “2012 LTIP”), the grants will be settled following the end of fiscal year 2014 (which occurs on January 3, 2015). In the case of a limited number of certain senior executives of Jostens, absent a change of control prior to January 3, 2015, payment with respect to a portion of the lump sum payment in respect of the performance award in which the executive vests as of the end of fiscal year 2014 will not be due until the earlier of a change in control or early 2016 (and not later than March 15, 2016). The awards provide for certain vesting and settlement of the vested award following the occurrence of certain termination of employment events prior to January 3, 2015, as described therein. Shares not vested as of the end of fiscal year 2014, including if the respective performance target is not achieved, are forfeited without payment. The awards are also subject to certain agreements by the employee as to confidentiality, non-competition and non-solicitation to which the employee is bound during his or her employment and for two years following a separation of service.

Certain key Jostens employees received an extraordinary long-term phantom share incentive grant in April 2013 (the “April 2013 Special LTIP”). The grants of phantom shares to the participating employees were made on terms similar to the 2012 LTIP, including that such shares are subject to vesting based on continued employment. The shares vested under the grants will be settled in cash in a lump sum amount based on the fair market value of the Class A Common Stock and the number of shares in which the employee has vested, following the end of fiscal year 2015 (which occurs on January 2, 2016). The awards provide for certain vesting and settlement of the vested award following the occurrence of certain termination of employment events prior to January 2, 2016, as described therein.

During the third quarter of 2013, Jostens implemented a long-term phantom share incentive program with certain of Jostens’ key employees (the “Jostens 2013 LTIP”). The grants of phantom shares to the participating employees were made on terms similar to the 2012 LTIP and the April 2013 Special LTIP, provided that with certain limited exceptions, the shares are subject to vesting based solely on continued employment. The shares vested under the grants will be settled in cash in a lump sum amount based on the fair market value of the Class A Common Stock and the number of shares in which the

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employee has vested, following the end of fiscal year 2015 (which occurs on January 2, 2016). The awards provide for certain vesting and settlement of the vested award following the occurrence of certain termination of employment events prior to January 2, 2016, as described therein.

The Company has issued and may from time to time issue phantom equity in the form of phantom shares or earned appreciation rights to certain employees of its other subsidiaries for the purpose of assuring retention of talent aligned with long-term performance and strategic objectives.

Common Stock

Visant is an indirect, wholly-owned subsidiary of Holdco. The Sponsors hold shares of the Class A Common Stock of Holdco, and additionally Visant’s equity-based incentive compensation plans are based on the value of the Class A Common Stock. There is no established public market for the Class A Common Stock. The fair market value of the Class A Common Stock is established pursuant to the terms of the 2004 Plan and is determined by a third party valuation, and the methodology to determine the fair market value under the equity incentive plans does not give effect to any premium for control or discount for minority interests or restrictions on transfers. Fair value includes any premium for control or discount for minority interests or restrictions on transfers. Holdco used a discounted cash flow analysis and selected public company analysis to determine the enterprise value and share price for the Class A Common Stock.

For the three months ended March 29, 2014 and March 30, 2013, Visant recognized total stock-based compensation expense of $0.4 million and $(0.1) million, respectively. Stock-based compensation is included in selling and administrative expenses.

For the three-month periods ended March 29, 2014 and March 30, 2013, there were no issuances of restricted shares or stock options.

As of March 29, 2014, there was no unrecognized stock-based compensation expense related to restricted shares expected to be recognized.

Stock Options

The following table summarizes stock option activity for the Company:

Options in thousands	Options			Weighted - average exercise price
Outstanding at December 28, 2013		241		$	41.21
Exercised		(4	)	$	—
Granted		—		$	—
Forfeited/expired		—		$	—
Cancelled		—		$	—
Outstanding at March 29, 2014		237		$	41.47
Vested or expected to vest at March 29, 2014		237		$	41.47
Exercisable at March 29, 2014		237		$	41.47

The weighted-average remaining contractual life of outstanding options at March 29, 2014 was approximately 0.8 years. As of March 29, 2014, there was no unrecognized stock-based compensation expense related to stock options expected to be recognized.

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LTIPs

The following table summarizes the 2012 LTIP, April 2013 Special LTIP and Jostens 2013 LTIP award activity for the Company:

Units in thousands	2014 Activity
Outstanding at December 28, 2013		132
Granted		14
Forfeited/Expired		—
Settled/Paid		(1	)
Cancelled		(9	)
Outstanding at March 29, 2014		136
Vested or expected to vest at March 29, 2014		113

As of March 29, 2014, there was $3.5 million of unrecognized stock-based compensation expense related to the long-term incentive plans to be recognized over a weighted-average period of 1.7 years.

16. Business Segments

The Company’s three reportable segments consist of:

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

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

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

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The following table presents information of the Company by business segment.

	Three months ended
In thousands	March 29, 2014			March 30, 2013			$ Change			% Change
Net sales
Scholastic	$	139,113		$	145,574		$	(6,461	)		(4.4	%)
Memory Book		5,383			5,634			(251	)		(4.5	%)
Marketing and Publishing Services		99,342			93,892			5,450			5.8	%
Inter-segment eliminations		(244	)		(164	)		(80	)		NM
	$	243,594		$	244,936		$	(1,342	)		(0.5	%)
Operating income (loss)
Scholastic	$	19,631		$	20,920		$	(1,289	)		(6.2	%)
Memory Book		(8,967	)		(14,662	)		5,695			38.8	%
Marketing and Publishing Services		12,223			6,809			5,414			79.5	%
	$	22,887		$	13,067		$	9,820			75.2	%
Depreciation and Amortization
Scholastic	$	6,006		$	9,554		$	(3,548	)		(37.1	%)
Memory Book		3,190			8,261			(5,071	)		(61.4	%)
Marketing and Publishing Services		7,613			8,340			(727	)		(8.7	%)
	$	16,809		$	26,155		$	(9,346	)		(35.7	%)

NM = Not meaningful

17. Related Party Transactions

Management Services Agreement

In connection with the Transactions, Holdco entered into a management services agreement with the Sponsors pursuant to which the Sponsors provide certain structuring, consulting and management advisory services. Under the management services agreement, during the term the Sponsors receive an annual advisory fee of $3.0 million that is payable quarterly and which increases by 3% per year. Holdco incurred advisory fees from the Sponsors of $1.0 million and $0.9 million for the three-month periods ended March 29, 2014 and March 30, 2013 respectively. The management services agreement also provides that Holdco will indemnify the Sponsors and their affiliates, directors, officers and representatives for losses relating to the services contemplated by the management services agreement and the engagement of the Sponsors pursuant to, and the performance by the Sponsors of the services contemplated by, the management services agreement.

Other

KKR Capstone is a team of operational professionals who work exclusively with KKR’s investment professionals and portfolio company management teams to enhance and strengthen operations in KKR’s portfolio companies. The Company has retained KKR Capstone from time to time to provide certain of its businesses with consulting services primarily to help identify and implement operational improvements and other strategic efforts within its businesses. The Company incurred less than $0.1 million of charges during the three months ended March 29, 2014 and did not incur any charges during the three months ended March 30, 2013 for services provided by KKR Capstone. An affiliate of KKR Capstone has an ownership interest in Holdco.

Certain of the lenders under the Credit Facilities and their affiliates have engaged, and may in the future engage, in investment banking, commercial banking and other financial advisory and commercial dealings with Visant and its affiliates. Such parties have received (or will receive) customary fees and commissions for these transactions.

19

Affiliates of Credit Suisse Securities (USA) LLC and KKR Capital Markets LLC act as lenders and/or as agents under the Credit Facilities and were initial purchasers of the Senior Notes, for which they received and will receive customary fees and expenses and are indemnified by the Company against certain liabilities. KKR Capital Markets LLC is an affiliate of one of the Sponsors. Until March 31, 2014, Credit Suisse Securities (USA) LLC was an affiliate of one of our Sponsors.

The Company is party to an agreement with CoreTrust Purchasing Group (“CoreTrust”), a group purchasing organization, pursuant to which the Company avails itself of the terms and conditions of the CoreTrust purchasing organization for certain purchases, including its prescription drug benefit program. An affiliate of KKR is party to an agreement with CoreTrust which permits certain KKR affiliates, including Visant, the benefit of utilizing the CoreTrust group purchasing program. CoreTrust receives payment of fees for administrative and other services provided by CoreTrust from certain vendors based on the products and services purchased by the Company and other parties, and CoreTrust shares a portion of such fees with the KKR affiliate.

The Company has participated in providing integrated marketing programs with an affiliate of First Data Corporation, a company which is owned and controlled by affiliates of KKR. This collaborative arrangement was terminated during the quarter ended September 29, 2012, subject to certain residual revenue during 2013. There was no such revenue for the three months ended March 30, 2013.

18. Condensed Consolidating Guarantor Information

As discussed in Note 10,Debt, Visant’s obligations under the Credit Facilities and the Senior Notes are guaranteed by certain of its wholly-owned subsidiaries on a full, unconditional and joint and several basis. The following tables present condensed consolidating financial information for Visant, as issuer, and its guarantor and non-guarantor subsidiaries. Included in the presentation of “Equity (earnings) in subsidiary, net of tax” is the elimination of intercompany interest expense incurred by the guarantors in the amount of $33.2 million and $33.4 million for the three-month periods ended March 29, 2014 and March 30, 2013, respectively.

20

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

Three months ended March 29, 2014

In thousands	Visant			Guarantors			Non- Guarantors		Eliminations			Total
Net sales	$	—		$	218,876		$	28,008	$	(3,290	)	$	243,594
Cost of products sold		—			104,520			21,008		(3,507	)		122,021
Gross profit		—			114,356			7,000		217			121,573
Selling and administrative expenses		(2,512	)		94,156			5,498		—			97,142
Gain on disposal of assets		—			(203	)		—		—			(203	)
Special charges		—			1,274			473		—			1,747
Operating income		2,512			19,129			1,029		217			22,887
Interest expense, net		38,428			33,364			194		(33,191	)		38,795
(Loss) income before income taxes		(35,916	)		(14,235	)		835		33,408			(15,908	)
Provision for (benefit from) income taxes		601			(7,133	)		442		83			(6,007	)
(Loss) income from operations		(36,517	)		(7,102	)		393		33,325			(9,901	)
Earnings in subsidiary, net of tax		(26,616	)		(393	)		—		27,009			—
Net (loss) income	$	(9,901	)	$	(6,709	)	$	393	$	6,316		$	(9,901	)
Comprehensive (loss) income	$	(9,285	)	$	(6,351	)	$	301	$	6,050		$	(9,285	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

Three months ended March 30, 2013

In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net sales	$	—		$	227,324		$	22,410		$	(4,798	)	$	244,936
Cost of products sold		—			112,205			13,655			(4,968	)		120,892
Gross profit		—			115,119			8,755			170			124,044
Selling and administrative expenses		(980	)		103,222			7,855			—			110,097
Loss on disposal of assets		—			23			—			—			23
Special charges		—			857			—			—			857
Operating income		980			11,017			900			170			13,067
Interest expense, net		38,845			33,924			33			(33,422	)		39,380
(Loss) income before income taxes		(37,865	)		(22,907	)		867			33,592			(26,313	)
(Benefit from) provision for income taxes		(1,296	)		(10,611	)		463			66			(11,378	)
(Loss) income from operations		(36,569	)		(12,296	)		404			33,526			(14,935	)
Earnings in subsidiary, net of tax		(21,634	)		(404	)		—			22,038			—
Net (loss) income	$	(14,935	)	$	(11,892	)	$	404		$	11,488		$	(14,935	)
Comprehensive loss	$	(14,258	)	$	(11,258	)	$	(27	)	$	11,285		$	(14,258	)

21

CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)

March 29, 2014

In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
ASSETS
Cash and cash equivalents	$	114,196		$	(1,311	)	$	10,029		$	—		$	122,914
Accounts receivable, net		1,693			102,887			25,621			—			130,201
Inventories		—			123,207			7,576			(267	)		130,516
Salespersons overdrafts, net		—			20,625			1,303			—			21,928
Prepaid expenses and other current assets		1,421			19,540			3,054			—			24,015
Income tax receivable		2,148			—			1,304			—			3,452
Intercompany receivable		26,549			5,163			124			(31,836	)		—
Deferred income taxes		6,502			14,220			306			5,215			26,243
Total current assets		152,509			284,331			49,317			(26,888	)		459,269
Property, plant and equipment, net		69			174,165			9,392			—			183,626
Goodwill		—			894,787			31,941			—			926,728
Intangibles, net		—			345,659			17,828			—			363,487
Deferred financing costs, net		30,712			—			—			—			30,712
Deferred income taxes		—			—			2,256			—			2,256
Intercompany receivable		517,625			89,177			—			(606,802	)		—
Other assets		1,239			12,155			876			—			14,270
Investment in subsidiaries		795,891			107,306			—			(903,197	)		—
	$	1,498,045		$	1,907,580		$	111,610		$	(1,536,887	)	$	1,980,348
LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Accounts payable	$	5,564		$	40,907		$	14,228		$	—		$	60,699
Accrued employee compensation and related taxes		5,372			17,687			4,822			—			27,881
Commissions payable		—			19,506			365			—			19,871
Customer deposits		—			214,335			9,548			—			223,883
Income taxes payable		1,089			(3,320	)		360			5,111			3,240
Current portion of long-term debt and capital leases		10			3,892			381			—			4,283
Interest payable		52,021			82			—			—			52,103
Intercompany payable		—			20,925			10,913			(31,838	)		—
Other accrued liabilities		2,958			24,476			1,878			—			29,312
Total current liabilities		67,014			338,490			42,495			(26,727	)		421,272
Long-term debt and capital leases - less current maturities		1,866,127			1,726			490			—			1,868,343
Intercompany payable		73,977			576,332			(43,346	)		(606,963	)		—
Deferred income taxes		1,407			139,490			3,945			—			144,842
Pension liabilities, net		17,079			33,226			—			—			50,305
Other noncurrent liabilities		14,428			22,425			720			—			37,573
Total liabilities		2,040,032			1,111,689			4,304			(633,690	)		2,522,335
Mezzanine equity		11			—			—			—			11
Stockholder’s (deficit) equity		(541,998	)		795,891			107,306			(903,197	)		(541,998	)
	$	1,498,045		$	1,907,580		$	111,610		$	(1,536,887	)	$	1,980,348

22

CONDENSED CONSOLIDATING BALANCE SHEET

December 28, 2013

In thousands	Visant			Guarantors		Non- Guarantors		Eliminations			Total
ASSETS
Cash and cash equivalents	$	83,633		$	2,695	$	9,714	$	—		$	96,042
Accounts receivable, net		1,070			88,352		18,779		—			108,201
Inventories		—			97,871		6,961		(483	)		104,349
Salespersons overdrafts, net		—			23,036		1,285		—			24,321
Prepaid expenses and other current assets		857			16,015		1,898		—			18,770
Income tax receivable		2,148			—		1,314		—			3,462
Intercompany receivable		6,487			3,665		8		(10,160	)		—
Deferred income taxes		6,526			14,220		307		—			21,053
Total current assets		100,721			245,854		40,266		(10,643	)		376,198
Property, plant and equipment, net		77			179,103		9,911		—			189,091
Goodwill		—			894,787		32,036		—			926,823
Intangibles, net		—			348,976		18,591		—			367,567
Deferred financing costs, net		33,118			—		—		—			33,118
Deferred income taxes		—			—		2,316		—			2,316
Intercompany receivable		519,772			55,526		57,972		(633,270	)		—
Other assets		1,211			9,476		475		—			11,162
Investment in subsidiaries		802,242			107,005		—		(909,247	)		—
	$	1,457,141		$	1,840,727	$	161,567	$	(1,553,160	)	$	1,906,275
LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Accounts payable	$	6,185		$	31,874	$	7,810	$	(2	)	$	45,867
Accrued employee compensation and related taxes		7,929			21,516		5,946		—			35,391
Commissions payable		—			163,205		6,714		—			169,919
Customer deposits		—			10,390		518		—			10,908
Income taxes payable		(892	)		3,183		1,207		(188	)		3,310
Current portion of long-term debt and capital leases		33,616			86		—		—			33,702
Interest payable		10			4,395		373		—			4,778
Intercompany payable		73			1,195		8,890		(10,158	)		—
Other accrued liabilities		3,003			23,741		2,450		—			29,194
Total current liabilities		49,924			259,585		33,908		(10,348	)		333,069
Long-term debt and capital leases - less current maturities		1,865,229			2,359		559		—			1,868,147
Intercompany payable		40,461			577,904		15,200		(633,565	)		—
Deferred income taxes		2,714			140,192		4,153		—			147,059
Pension liabilities, net		17,046			34,880		—		—			51,926
Other noncurrent liabilities		14,505			23,565		742		—			38,812
Total liabilities		1,989,879			1,038,485		54,562		(643,913	)		2,439,013
Mezzanine equity		11			—		—		—			11
Stockholder’s (deficit) equity		(532,749	)		802,242		107,005		(909,247	)		(532,749	)
	$	1,457,141		$	1,840,727	$	161,567	$	(1,553,160	)	$	1,906,275

23

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

Three months ended March 29, 2014

In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net (loss) income	$	(9,901	)	$	(6,709	)	$	393		$	6,316		$	(9,901	)
Other cash provided by (used in) operating activities		7,947			43,766			(39	)		(6,316	)		45,358
Net cash (used in) provided by operating activities		(1,954	)		37,057			354			—			35,457
Purchases of property, plant and equipment		—			(7,538	)		(12	)		—			(7,550	)
Additions to intangibles		—			(41	)		—			—			(41	)
Proceeds from sale of property and equipment		—			206			—			—			206
Intercompany receivable		(1,169	)		(33,651	)		—			34,820			—
Net cash used in investing activities		(1,169	)		(41,024	)		(12	)		34,820			(7,385	)
Repayments of long-term debt and capital leases		(2	)		(1,207	)		(93	)		—			(1,302	)
Intercompany payable		33,652			1,168			—			(34,820	)		—
Excess tax benefit from share based arrangements		36			—			—			—			36
Net cash provided by (used in) financing activities		33,686			(39	)		(93	)		(34,820	)		(1,266	)
Effect of exchange rate changes on cash and cash equivalents		—			—			66			—			66
Increase (decrease) in cash and cash equivalents		30,563			(4,006	)		315			—			26,872
Cash and cash equivalents, beginning of period		83,633			2,695			9,714			—			96,042
Cash and cash equivalents, end of period	$	114,196		$	(1,311	)	$	10,029		$	—		$	122,914

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

Three months ended March 30, 2013

In thousands	Visant			Guarantors			Non- Guarantors			Eliminations			Total
Net (loss) income	$	(14,935	)	$	(11,892	)	$	404		$	11,488		$	(14,935	)
Other cash provided by (used in) operating activities		5,971			62,262			(1,521	)		(11,491	)		55,221
Net cash (used in) provided by operating activities		(8,964	)		50,370			(1,117	)		(3	)		40,286
Purchases of property, plant and equipment		—			(8,054	)		(1,339	)		—			(9,393	)
Additions to intangibles		—			(81	)		—			—			(81	)
Proceeds from sale of property and equipment		—			7			—			—			7
Other investing activities, net		—			(1,005	)		1,005			—			—
Net cash used in investing activities		—			(9,133	)		(334	)		—			(9,467	)
Repayments of long-term debt and capital leases		(12,002	)		(1,227	)		(2	)		—			(13,231	)
Proceeds from issuance of long-term debt		—			644			—			—			644
Intercompany payable (receivable)		37,633			(37,636	)		—			3			—
Net cash provided by (used in) financing activities		25,631			(38,219	)		(2	)		3			(12,587	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(78	)		—			(78	)
Increase (decrease) in cash and cash equivalents		16,667			3,018			(1,531	)		—			18,154
Cash and cash equivalents, beginning of period		48,590			3,286			8,320			—			60,196
Cash and cash equivalents, end of period	$	65,257		$	6,304		$	6,789		$	—		$	78,350

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with our condensed consolidated financial statements and notes thereto.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements including, without limitation, statements concerning the conditions in our industry, expectations with respect to future cost savings, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and product development efforts. These forward-looking statements are not historical facts, but rather predictions and generally can be identified by use of statements that include such words as “may”, “might”, “will”, “should”, “estimate”, “project”, “plan”, “anticipate”, “expect”, “intend”, “outlook”, “believe” and other similar expressions that are intended to identify forward-looking statements and information. These forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. These risks and uncertainties include, without limitation, those identified under, Part I, Item 1A.Risk Factors, in our Annual Report on Form 10-K for the year ended December 28, 2013, in addition to those discussed elsewhere in this report.

The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

• our substantial indebtedness and our ability to service the indebtedness;

• our ability to implement our business strategy in a timely and effective manner;

• competitive factors and pressures;

• our ability to consummate acquisitions and dispositions on acceptable terms and to integrate acquisitions successfully and to achieve anticipated synergies;

• global market and economic conditions;

• levels of customers’ advertising and marketing spending, including as may be impacted by economic factors and general market conditions;

• fluctuations in raw material prices;

• our reliance on a limited number of suppliers;

• the seasonality of our businesses;

• developments in technology and related changes in consumer behavior;

• the loss of significant customers or customer relationships;

• Jostens’ reliance on independent sales representatives;

• our reliance on numerous complex information systems and associated security risks;

• the amount of capital expenditures required at our businesses;

• risks associated with doing business outside the United States;

• the reliance of our businesses on limited production facilities;

• actions taken by the U.S. Postal Service and changes in postal standards and their effect on our marketing services business, including as such changes may impact competition for our sampling systems;

• labor disturbances;

• environmental obligations and liabilities;

• adverse outcome of pending or threatened litigation;

• the enforcement of intellectual property rights;

• the impact of changes in applicable law and regulations, including tax legislation;

• the application of privacy laws and other related obligations and liabilities for our business;

• control by our stockholders;

• changes in market value of the securities held in our pension plans; and

• our dependence on members of senior management.

25

We caution you not to place undue reliance on these forward-looking statements, and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date they are made, are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. We undertake no obligation to update publicly or revise any forward-looking statements in light of new information, future events or otherwise, except as required by law. Comparisons of results for current and prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

GENERAL

We are a leading marketing and publishing services enterprise servicing the school affinity, direct marketing, fragrance, cosmetic and personal care sampling and packaging, and educational and trade publishing segments. Our parent company was created in October 2004 when affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and affiliates of DLJ Merchant Banking Partners III, L.P. (“DLJMBP III” and, together with KKR, the “Sponsors”) completed a series of transactions that combined Jostens, Von Hoffmann Corporation (“Von Hoffmann”) and Arcade (the “Transactions”). Visant was formed to create a platform of businesses with leading positions in attractive end market segments and to establish a highly experienced management team that could leverage a shared services infrastructure and capitalize on margin and growth opportunities. Since 2004, we have developed a unified marketing and publishing services organization with a leading and differentiated approach in each of our segments. Our management team has created and integrated central services and management functions and has reshaped the business to focus on the most attractive and highest growth market opportunities.

We sell our products and services to end customers through several different sales channels, including independent sales representatives and dedicated employed sales forces. Our sales and results of operations are impacted by a number of factors, including general economic conditions, seasonality, cost of raw materials, school population trends, the availability of school funding, product and service offerings and quality and price. Visant (formerly known as Jostens IH Corp.) was originally incorporated in Delaware in 2003.

Our business has expanded through a number of acquisitions. These acquisitions have most recently included the acquisition of the capital stock of SAS Carestia (“Carestia”) by Arcade on July 1, 2013. Headquartered in Grasse, France, Carestia is a producer of blotter cards, which are constructed for sampling fragrances, and other fragrance marketing solutions, as well as decorated packaging solutions.

We have demonstrated our ability over the last nine years since our inception to execute acquisitions and dispositions that have allowed us to complement and expand our core capabilities, accelerate into market segment adjacencies, as well as enabled us to divest non-core businesses and deleverage. We anticipate that we will continue to pursue this strategy of consummating complementary acquisitions to support expansion of our product offerings and services, including to address marketplace dynamics, developments in technology and changing consumer behaviors, broaden our geographic reach and capture opportunities for synergies, as well as availing ourselves of strategic opportunities and market conditions for transacting on businesses in the Visant portfolio.

Our Segments

Our three reportable segments as of March 29, 2014 consisted of:

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

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

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

26

We experience seasonal fluctuations in our net sales and cash flow from operations, tied primarily to the North American school year. In particular, Jostens generates a significant portion of its annual net sales in the second quarter in connection with the delivery of caps, gowns and diplomas for spring graduation ceremonies and spring deliveries of school yearbooks, and a significant portion of its annual cash flow in the fourth quarter is driven by the receipt of customer deposits in our Scholastic and Memory Book segments. The net sales of our sampling and direct mail and commercial printed products have also historically reflected seasonal variations, and we generate a majority of the annual net sales in these businesses during the third and fourth quarters, including based on the timing of customers’ advertising campaigns which have traditionally been concentrated prior to the Christmas and spring holiday seasons. Net sales of textbook components are impacted seasonally by state and local schoolbook purchasing schedules, which commence in the spring and peak in the summer months preceding the start of the school year. The seasonality of each of our businesses requires us to allocate our resources to manage our manufacturing capacity, which often operates at full or near full capacity during peak seasonal demand periods. Based on the seasonality of our cash flow, we traditionally borrow under our revolving credit facility during the third quarter to fund general working capital needs during this period of time when schools are generally not in session and orders are not being placed, and repay the amount borrowed for general working capital purposes in the fourth quarter when customer deposits in the Scholastic and Memory Book segments are received and customers’ advertising campaigns in anticipation of the holiday season generally increase.

Our net sales include sales to certain customers for whom we purchase paper. The price of paper, a primary material across most of our products and services, has been volatile over time and may cause swings in our net sales and cost of sales. We generally are able to pass on increases in the cost of paper to our customers across most of our product lines at the time we are impacted by such increases.

The price of gold and other precious metals has been highly volatile since 2009, and we anticipate continued volatility in the price of gold for the foreseeable future driven by numerous factors, such as changes in supply and demand and investor sentiment. The volatility of metal prices has impacted, and could further impact, our jewelry sales metal mix. We have seen a continuing shift in jewelry metal mix from gold to lesser priced metals over the past several years, which we believe is in part attributable to the impact of significantly higher precious metal costs on our jewelry prices. To mitigate the continued volatility of precious metal costs and the impact on our manufacturing costs, we have entered into purchase commitments for gold which we believe will cover a portion of our needs for gold for the remainder of fiscal 2014.

The continued uncertainty in market conditions and excess capacity that exists in the print and related services industry, as well as the variety of other advertising media with which we compete, have amplified competitive and pricing pressures, which we anticipate will continue for the foreseeable future. We continue to see the impact of restrictions on school budgets, which affects spending at the state and local levels, resulting in reduced spending for our Memory Book, Scholastic and elementary/high school publishing services products and services and heightened pricing pressure on our core Memory Book products and services. The continued cautious consumer spending environment also contributes to more constrained levels of spending on purchases in our Memory Book and Scholastic segments made directly by the student and parent. Funding constraints have impacted textbook adoption cycles, which are being extended in many states due to fiscal pressures, continuing to affect orders being placed by our Publishing Services customers and volume in our elementary/high school publishing services products and services. Trade book publishing has been impacted by the shift towards digital books, which has negatively impacted our publishing services business in terms of fewer printed copies of books as well as shorter print runs. To address changes in technology, consumer behavior and user preferences, we have continued to diversify, expand and improve our product and service offerings and the manner in which we sell our products and services, including through improved e-commerce tools.

We seek to distinguish ourselves based on our capabilities, innovative service offerings to our customers, quality and organizational and financial strength. In addition, to address the dynamics impacting our businesses, we have continued to implement efforts to reduce costs and drive operating efficiencies, including through the restructuring and integration of our operations and the rationalization of sales, administrative and support functions. We expect to initiate additional efforts focused on cost reduction and containment to address continued challenging marketplace conditions as well as competitive and pricing pressures demanding innovation and a lower cost structure.

For additional financial and other information about our operating segments, see Note 16,Business Segments, to our condensed consolidated financial statements included elsewhere herein.

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Company Background

On October 4, 2004, an affiliate of KKR and affiliates of DLJMBP III completed the Transactions, which created a marketing and publishing services enterprise through the consolidation of Jostens, Von Hoffmann and Arcade. The Transactions were accounted for as a combination of interests under common control.

As of May 6, 2014, affiliates of KKR and DLJMBP III held approximately 49.2% and 41.1%, respectively, of Holdco’s voting interest, while each held approximately 44.8% of Holdco’s economic interest. As of May 6, 2014, the other co-investors held approximately 8.4% of the voting interest and approximately 9.2% of the economic interest of Holdco, and members of management held approximately 1.3% of the voting interest and approximately 1.2% of the economic interest of Holdco (exclusive of exercisable options). Visant is an indirect wholly-owned subsidiary of Holdco.

CRITICAL ACCOUNTING POLICIES

The preparation of interim financial statements involves the use of certain estimates that differ from those used in the preparation of annual financial statements, the most significant of which relate to income taxes. For purposes of preparing our interim financial statements, we utilize an estimated annual effective tax rate based on estimates of the components that impact the tax rate. Those components are re-evaluated each interim period, and, if changes in our estimates are significant, we modify our estimate of the annual effective tax rate and make any required adjustments in the interim period.

There have been no material changes to our critical accounting policies and estimates as described in Part I, Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

Recently Adopted Accounting Pronouncements

On January 31, 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2013-01 (“ASU 2013-01”), which clarifies the scope of the offsetting disclosure requirements. Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending arrangements that are either offset on the balance sheet or subject to an enforceable master netting arrangement or similar agreement. ASU 2013-01 became effective for interim and annual periods beginning on or after January 1, 2013. Retrospective application is required for all comparative periods presented. Our adoption of this guidance did not have a material impact on our financial statements.

On February 5, 2013, the FASB issued Accounting Standards Update 2013-02 (“ASU 2013-02”), which amends existing guidance by requiring additional disclosure either on the face of the income statement or in the notes to the financial statements of significant amounts reclassified out of accumulated other comprehensive income. ASU 2013-02 became effective for interim and annual periods beginning on or after December 15, 2012, to be applied on a prospective basis. Our adoption of this guidance did not have a material impact on our financial statements.

On February 28, 2013, the FASB issued Accounting Standards Update 2013-04 (“ASU 2013-04”), which requires entities to measure obligations resulting from joint and several liability arrangements, for which the total amount of the obligation is fixed at the reporting date, as the sum of (1) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (2) any additional amount the reporting entity expects to pay on behalf of its co-obligors. Required disclosures include a description of the joint and several arrangement and the total outstanding amount of the obligation for all joint parties. ASU 2013-04 is effective for interim and annual periods beginning on or after December 15, 2013 and should be applied retrospectively to obligations with joint and several liabilities existing at the beginning of an entity’s fiscal year of adoption. Early adoption is permitted. Our adoption of this guidance did not have a material impact on our financial statements.

On March 4, 2013, the FASB issued Accounting Standards Update 2013-05 (“ASU 2013-05”), which indicates that the entire amount of a cumulative translation adjustment (“CTA”) related to an entity’s investment in a foreign entity should be released when there has been (1) the sale of a subsidiary or group of net assets within a foreign entity, and the sale represents the substantially complete liquidation of the investment in the foreign entity, (2) a loss of controlling financial interest in an investment in a foreign entity or (3) a step acquisition for a foreign entity. ASU 2013-05 does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. Our adoption of this guidance did not have a material impact on our financial statements.

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On July 17, 2013, the FASB issued Accounting Standards Update 2013-10 (“ASU 2013-10”), which amends ASC 815 to allow entities to use the federal funds effective swap rate, in addition to U.S. Treasury rates and LIBOR, as a benchmark interest rate in accounting for fair value and cash flow hedges in the United States. ASU 2013-10 also eliminates the provision in ASC 815 which prohibited the use of different benchmark rates for similar hedges except in rare and justifiable circumstances. ASU 2013-10 is effective prospectively for qualifying new hedging relationships entered into on or after July 17, 2013 and for hedging relationships redesignated on or after that date. Our adoption of this guidance did not have a material impact on our financial statements.

On July 18, 2013, the FASB issued Accounting Standards Update 2013-11 (“ASU 2013-11”), which provides guidance on the financial statement presentation of unrecognized tax benefits (“UTB”) when a net operating loss (“NOL”) carryforward, a similar tax loss or a tax credit carryforward exists. Under ASU 2013-11, an entity must present a UTB, or a portion of a UTB, in its financial statements as a reduction to a deferred tax asset (“DTA”) for a NOL carryforward, a similar tax loss or a tax credit carryforward, except when (1) a NOL carryforward, a similar tax loss or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position or (2) the entity does not intend to use the DTA for this purpose. If either of these conditions exists, an entity should present a UTB in the financial statements as a liability and should not net the UTB with a DTA. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The amendment should be applied to all UTBs that exist as of the effective date. Entities may choose to apply the amendments retrospectively to each prior reporting period presented. Our adoption of this guidance did not have a material impact on our financial statements.

RESULTS OF OPERATIONS

Three Months Ended March 29, 2014 Compared to the Three Months Ended March 30, 2013

The following table sets forth selected information derived from our Condensed Consolidated Statements of Operations and Comprehensive Loss for the three-month periods ended March 29, 2014 and March 30, 2013. In the text below, amounts and percentages have been rounded and are based on the amounts in our condensed consolidated financial statements.

	Three months ended
In thousands	March 29, 2014			March 30, 2013			$ Change			% Change
Net sales	$	243,594		$	244,936		$	(1,342	)		(0.5	%)
Cost of products sold		122,021			120,892			1,129			0.9	%
Gross profit		121,573			124,044			(2,471	)		(2.0	%)
% of net sales		49.9	%		50.6	%
Selling and administrative expenses		97,142			110,097			(12,955	)		(11.8	%)
% of net sales		39.9	%		44.9	%
(Gain) loss on disposal of fixed assets		(203	)		23			(226	)		NM
Special charges		1,747			857			890			NM
Operating income		22,887			13,067			9,820			75.2	%
% of net sales		9.4	%		5.3	%
Interest expense, net		38,795			39,380			(585	)		(1.5	%)
Loss before income taxes		(15,908	)		(26,313	)		10,405
Benefit from income taxes		(6,007	)		(11,378	)		5,371			47.2	%
Net loss	$	(9,901	)	$	(14,935	)	$	5,034			33.7	%

NM = Not meaningful

Our business is managed on the basis of three reportable segments: Scholastic, Memory Book and Marketing and Publishing Services. The following table sets forth selected segment information derived from our Condensed Consolidated

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Statements of Operations and Comprehensive Loss for the three-month periods ended March 29, 2014 and March 30, 2013. For additional financial information about our operating segments, see Note 16,Business Segments, to the condensed consolidated financial statements.

	Three months ended
In thousands	March 29, 2014			March 30, 2013			$ Change			% Change
Net sales
Scholastic	$	139,113		$	145,574		$	(6,461	)		(4.4	%)
Memory Book		5,383			5,634			(251	)		(4.5	%)
Marketing and Publishing Services		99,342			93,892			5,450			5.8	%
Inter-segment eliminations		(244	)		(164	)		(80	)		NM
Net sales	$	243,594		$	244,936		$	(1,342	)		(0.5	%)
Operating income (loss)
Scholastic	$	19,631		$	20,920		$	(1,289	)		(6.2	%)
Memory Book		(8,967	)		(14,662	)		5,695			38.8	%
Marketing and Publishing Services		12,223			6,809			5,414			79.5	%
Operating income	$	22,887		$	13,067		$	9,820			75.2	%
Depreciation and amortization
Scholastic	$	6,006		$	9,554		$	(3,548	)		(37.1	%)
Memory Book		3,190			8,261			(5,071	)		(61.4	%)
Marketing and Publishing Services		7,613			8,340			(727	)		(8.7	%)
Depreciation and amortization	$	16,809		$	26,155		$	(9,346	)		(35.7	%)

NM = Not meaningful

Net Sales. Consolidated net sales decreased $1.3 million, or 0.5%, to $243.6 million for the first fiscal quarter ended March 29, 2014 compared to $244.9 million for the first fiscal quarter ended March 30, 2013.

Net sales for the Scholastic segment were $139.1 million for the first fiscal quarter of 2014 compared to $145.6 million for the first fiscal quarter of 2013. This decrease was primarily attributable to lower volume in our jewelry and announcement products.

Net sales for the Memory Book segment were $5.4 million for the first fiscal quarter of 2014 compared to $5.6 million for the first fiscal quarter of 2013. This slight decrease was primarily attributable to lower volume.

Net sales for the Marketing and Publishing Services segment for the first fiscal quarter of 2014 increased $5.4 million to $99.3 million from $93.9 million for the first fiscal quarter of 2013. This increase included sales attributable to our acquisition of Carestia. Excluding the impact attributable to the acquisition of Carestia, sales decreased slightly compared to the first fiscal quarter of 2013, primarily due to lower revenue in our direct mail operations, offset by higher organic revenues from our base sampling operations and our publishing services operations.

Gross Profit. Consolidated gross profit decreased $2.4 million, or 2.0%, to $121.6 million for the three months ended March 29, 2014 from $124.0 million for the three months ended March 30, 2013. The decrease in gross profit was primarily due to lower overall volume in our Scholastic segment. As a percentage of net sales, gross profit margin for the three months ended March 29, 2014 decreased to 49.9% from 50.6% for the comparative period in 2013. Excluding the impact attributable to our acquisition of Carestia, gross profit margin increased slightly to 50.7% when compared to the prior year comparable period.

Selling and Administrative Expenses. Selling and administrative expenses decreased $13.0 million, or 11.8%, to $97.1 million for the three months ended March 29, 2014 from $110.1 million for the comparative period in 2013. This decrease was primarily due to lower depreciation and amortization expense of approximately $8.7 million in the first fiscal quarter of

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2014 compared to the prior year comparable period. Additionally, included in the first fiscal quarter of 2013 was an aggregate $5.9 million of non-recurring employment expense related to certain executive transitions. Excluding the impact of the lower depreciation and amortization and non-recurring employment expense, selling and administrative expenses for the three months ended March 29, 2014 increased approximately $1.7 million compared to the three months ended March 30, 2013, primarily due to non-recurring acquisition related costs.

Special Charges.For the three months ended March 29, 2014, we recorded $0.8 million, $0.5 million and $0.2 million of restructuring costs in the Scholastic, Marketing and Publishing Services and Memory Book segments, respectively. These restructuring costs were comprised of severance and related benefits associated with reductions in force. Also included in special charges for the three months ended March 29, 2014 were $0.3 million of non-cash asset impairment charges associated with facility consolidations in the Scholastic segment. The associated employee headcount reductions related to the above actions were 63, 22 and two in the Scholastic, Marketing and Publishing Services and Memory Book segments, respectively.

For the three months ended March 30, 2013, we recorded $0.4 million, $0.3 million and $0.2 million of restructuring costs in the Memory Book, Scholastic and Marketing and Publishing Services segments, respectively. These restructuring costs were comprised of severance and related benefits associated with reductions in force. The associated employee headcount reductions related to the above actions were 11, seven and three in the Marketing and Publishing Services, Scholastic and Memory Book segments, respectively.

Operating Income. As a result of the foregoing, consolidated operating income increased $9.8 million to $22.9 million for the three months ended March 29, 2014 compared to $13.1 million for the comparable period in 2013. As a percentage of net sales, operating income increased to 9.4% for the first fiscal quarter of 2014 from 5.3% for the same period in 2013.

Net Interest Expense.Net interest expense was comprised of the following:

	Three months ended
In thousands	March 29, 2014			March 30, 2013			$ Change			% Change
Interest expense	$	35,532		$	35,815		$	(283	)		(0.8	%)
Amortization of debt discount, premium and deferred financing costs		3,302			3,570			(268	)		(7.5	%)
Interest income		(39	)		(5	)		(34	)		NM
Interest expense, net	$	38,795		$	39,380		$	(585	)		(1.5	%)

NM = Not meaningful

Net interest expense decreased $0.6 million to $38.8 million for the three months ended March 29, 2014 compared to $39.4 million for the comparative 2013 period. This decrease in interest expense was primarily due to lower overall borrowings for the three months ended March 29, 2014 as compared to the three months ended March 30, 2013.

Income Taxes. We recorded an income tax benefit for the three months ended March 29, 2014 based on our best estimate of the consolidated effective tax rate applicable for the entire 2014 fiscal year and giving effect to tax adjustments considered a period expense or benefit. The effective tax rates for the three months ended March 29, 2014 and March 30, 2013 were 37.8% and 43.2%, respectively. The decrease in tax rate for the first quarter of 2014 compared to the first quarter of 2013 was due primarily to the favorable effect of the domestic manufacturing deduction, which is expected to be available in 2014 because the Company anticipates that the remaining net operating loss from 2011 will be fully utilized in 2014. The first quarter 2014 tax rate was also favorably impacted by adjustments to the estimate for foreign earnings repatriation in 2014 and the recognition in the comparable prior year period of a $0.2 million tax benefit for research and development credits as a result of legislation enacted in the quarter ended March 30, 2013. There were no such credits recognized in the Company’s 2014 estimated annual effective tax rate because the credit lapsed at the end of 2013.

Net Loss. As a result of the aforementioned items, we reported a net loss of $9.9 million for the three months ended March 29, 2014 compared to a net loss of $14.9 million for the three months ended March 30, 2013.

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LIQUIDITY AND CAPITAL RESOURCES

The following table presents cash flow activity for the first three months of fiscal 2014 and 2013 and should be read in conjunction with our Condensed Consolidated Statements of Cash Flows.

	Three months ended
In thousands	March 29, 2014			March 30, 2013
Net cash provided by operating activities	$	35,457		$	40,286
Net cash used in investing activities		(7,385	)		(9,467	)
Net cash used in financing activities		(1,266	)		(12,587	)
Effect of exchange rate changes on cash		66			(78	)
Increase in cash and cash equivalents	$	26,872		$	18,154

For the three months ended March 29, 2014, cash provided by operating activities decreased $4.8 million to $35.5 million compared to $40.3 million for the comparative 2013 period. The decrease in cash provided by operating activities was primarily attributable to the timing of working capital requirements and lower cash earnings.

Net cash used in investing activities for the three months ended March 29, 2014 was $7.4 million compared with $9.5 million for the comparative 2013 period. This decrease was primarily driven by lower expenditures for property, plant and equipment. Our capital expenditures relating to purchases of property, plant and equipment were $7.6 million and $9.4 million for the three months ended March 29, 2014 and March 30, 2013, respectively.

Net cash used in financing activities for the three months ended March 29, 2014 was $1.3 million, compared with $12.6 million for the comparative 2013 period. Net cash used in financing activities for the three months ended March 29, 2014 consisted of $1.3 million of repayments of long-term debt related to equipment financing arrangements and capital lease obligations. Net cash used in financing activities for the three months ended March 30, 2013 included an aggregate payment of $12.0 million on the outstanding Term Loan Credit Facility, inclusive of a voluntary pre-payment of $1.3 million and a payment of $10.7 million under the excess cash flow provisions of the Term Loan Credit Facility, and $0.6 million of repayments of long-term debt related to equipment financing arrangements and capital lease obligations

We use cash generated from operations primarily for debt service obligations and capital expenditures and to fund other working capital requirements. In assessing our liquidity, we review and analyze our current cash on-hand, the number of days our sales are outstanding and capital expenditure commitments. Our ability to make scheduled payments of principal, or to pay the interest on, or to refinance our indebtedness, or to fund planned capital expenditures will depend on our future operating performance. Future principal debt payments are expected to be paid out of cash flows from operations, cash on-hand and, if consummated, future financings. Based upon the current level of operations, management expects our cash flows from operations along with availability under the Credit Facilities will provide sufficient liquidity to fund our obligations, including our projected working capital requirements, debt service and retirement obligations and related costs, and capital spending for the foreseeable future. To the extent we make additional acquisitions, we may require additional term loan borrowings under the Credit Facilities or new sources of funding, including additional debt or equity financing or some combination thereof, subject to the limitations of our existing debt instruments.

Based on the seasonality of our cash flow, we traditionally borrow under our Revolving Credit Facility during the third quarter to fund general working capital needs during this period of time when schools are generally not in session and orders are not being placed, and repay the amount borrowed for general working capital purposes in the fourth quarter when customer deposits in the Scholastic and Memory Book segments are received and customers’ advertising campaigns in anticipation of the holiday season generally increase.

We have substantial debt service requirements and are highly leveraged. As of March 29, 2014, we had total indebtedness of $1,883.6 million, including $1,140.4 million outstanding under the Term Loan Credit Facility, $736.7 million aggregate principal amount of Senior Notes, $6.5 million of outstanding borrowings under capital lease and equipment financing arrangements and exclusive of $11.5 million of standby letters of credit outstanding and $11.0 million of original issue discount related to the Term Loan Credit Facility. Our cash and cash equivalents as of March 29, 2014 totaled $122.9 million. As of March 29, 2014, we were in compliance with the financial covenants under our outstanding material debt obligations, including our consolidated total debt to consolidated EBITDA covenant. Our principal sources of liquidity are

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cash flows from operating activities and available borrowings under the Credit Facilities, which included $163.5 million of available borrowings (net of standby letters of credit) under the $175.0 million Revolving Credit Facility as of March 29, 2014.

Our liquidity and our ability to fund our capital requirements will depend on the credit markets and our financial condition. The extent of any impact of credit market conditions on our liquidity and ability to fund our capital requirements or to undertake future financings will depend on several factors, including our operating cash flows, credit conditions, our credit ratings and credit capacity, the cost of financing and other general economic and business conditions that are beyond our control. If those factors significantly change or other unexpected factors adversely affect us, our business may not generate sufficient cash flows from operations or we may not be able to obtain future financings to meet our liquidity needs. Any refinancing of our debt could be on less favorable terms, including becoming subject to higher interest rates. In addition, the terms of our existing or future debt instruments, including the Credit Facilities and the indenture governing the Senior Notes, may restrict certain of our alternatives. We anticipate that, to the extent additional liquidity is necessary to fund our operations or make acquisitions, it would be funded through additional borrowings under the Credit Facilities, the incurrence of other indebtedness, additional equity issuances or a combination of these potential sources of liquidity. The possibility of consummating any such financing will be subject to conditions in the capital markets at such time. We may not be able to obtain this additional liquidity when needed on terms acceptable to us or at all.

As market conditions warrant, we and our Sponsors, including KKR and DLJMBP III and their affiliates, have and may from time to time in the future redeem or repurchase debt securities, in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise subject to the terms of applicable contractual restrictions. We cannot give any assurance as to whether or when such repurchases or exchanges will occur and at what price.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in our exposure to market risk during the quarter ended March 29, 2014. During the first three months of 2014, the price of gold remained highly volatile. To mitigate the continued volatility and the impact on our manufacturing costs, we have entered into purchase commitments which we believe will cover a portion of our needs for the remainder of fiscal 2014. For additional information, refer to the discussion under Part I, Item 1, Note 12,Commitments and Contingencies and Part I, Item 2,Management’s Discussion and Analysis of Financial Condition and Results ofOperations – General, elsewhere in this report and Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

ITEM 4. CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our management, under the supervision of our Chief Executive Officer and Senior Vice President, Chief Financial Officer, evaluated 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 upon that evaluation, our Chief Executive Officer and our Senior Vice President, Chief Financial Officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

During the quarter ended March 29, 2014, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

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

Neither Visant’s nor Holdco’s equity securities are registered pursuant to Section 12 of the Exchange Act. For the first fiscal quarter ended March 29, 2014, neither we nor Holdco issued or sold any equity securities, except that on January 17, 2014 (i) 1,386 shares of Holdco’s Class A Common Stock were issued to a former director of Jostens in connection with his exercise of vested options issued in 2004 prior to their expiration and (ii) 221 shares of Holdco’s Class A Common Stock were issued to Visant’s CEO in connection with his exercise of vested options issued in 2004 prior to their expiration.

ITEM 5. OTHER INFORMATION

The Company makes the following disclosure that otherwise would be made on a Form 8-K:

On May 9, 2014, the Board of Directors approved a form of indemnification agreement for persons who may serve as directors of the Company and who are not employees of or affiliated with the Sponsors. The form of indemnification agreement is filed as Exhibit 10.2 to this Form 10-Q, and the foregoing is qualified by the terms of such form.

ITEM 6. EXHIBITS

3.1(1)	Amended and Restated Certificate of Incorporation of Visant Corporation (f/k/a Ring IH Corp.).
3.2(2)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Visant Corporation.
3.3(1)	By-Laws of Visant Corporation.
3.4(3)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Visant Corporation.
10.1	Termination agreement, dated April 17, 2014, terminating the Stock Purchase Agreement by and among Jostens, Inc. American Achievement Group Holding Corp., (“American Achievement”), Visant Corporation, each holder of outstanding equity interests of American Achievement and American Achievement Holdings LLC, in its capacity as Sellers’ Representative.
10.2	Form of Director Indemnification Agreement.
31.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Visant Corporation.
31.2	Certification of Senior Vice President, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Visant Corporation.
32.1	Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Visant Corporation.
32.2	Certification of Senior Vice President, Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Visant Corporation.
101	The following materials from Visant’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2013 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statement of Operations and Comprehensive Loss (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to the Condensed Consolidated Financial Statements.

(1) Incorporated by reference to Visant Corporation’sForm S-4 (File no.333-120386), filed on November 12, 2004.

(2) Incorporated by reference to Visant Holding Corp.’sForm 10-K, filed on April 1, 2005.

(3) Incorporated by reference to Visant Corporation’s Form 10-K, filed on March 28, 2014.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VISANT CORPORATION
Date: May 13, 2014	/s/    Marc L. Reisch
	Marc L. Reisch
	President and
	Chief Executive Officer
	(principal executive officer)
Date: May 13, 2014	/s/    Paul B. Carousso
	Paul B. Carousso
	Senior Vice President, Chief Financial Officer
	(principal financial and accounting officer)