<Page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM 10-Q/A

---------------

<Table>

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 23, 2002

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

COMMISSION FILE NUMBER 333-84294
</Table>

AMERICAN ACHIEVEMENT CORPORATION
(Exact name of registrant as specified in its charter)

<Table>

DELAWARE 13-4126506
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation
or organization)
</Table>

7211 CIRCLE S ROAD
AUSTIN, TEXAS 78745
(Address of principal executive offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (512) 444-0571

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes / / No /X/. (Prior to April 8,
2002, registrant was not subject to such filing requirements.)

809,351 SHARES OF COMMON STOCK
(Number of shares outstanding as of April 19 and September 10, 2002)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>
AMERICAN ACHIEVEMENT CORPORATION
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 23, 2002
INDEX

<Table>
<Caption>
PAGE
--------

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements and Notes (as
restated)

Financial Information....................................... 1

Condensed Consolidated Balance Sheets--
As of February 23, 2002 (unaudited) and August 25, 2001
(unaudited)............................................... 2

Condensed Consolidated Statements of Operations--
For the Three Months Ended February 23, 2002 (unaudited)
and February 24, 2001 (unaudited)......................... 3

Condensed Consolidated Statements of Operations--
For the Six Months Ended February 23, 2002 (unaudited) and
February 24, 2001 (unaudited)............................. 4

Condensed Consolidated Statements of Stockholders' Equity--
For the Year Ended August 25, 2001 (unaudited) and for the
Six Months Ended February 23, 2002 (unaudited)............ 5

Condensed Consolidated Statements of Cash Flows--
For the Six Months Ended February 23, 2002 (unaudited) and
February 24, 2001 (unaudited)............................. 6

Notes to Condensed Consolidated Financial Statements
(unaudited)............................................... 7 - 23

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 24

Item 3. Quantitative and Qualitative Disclosures About Market
Risk...................................................... 31

PART II. OTHER INFORMATION

Item 1. Legal Proceedings........................................... 32

Item 2. Changes in Securities and Use of Proceeds................... 32

Item 3. Defaults Upon Senior Securities............................. 32

Item 4. Submission of Matters to a Vote of Security Holders......... 32

Item 6. Exhibits and Reports on Form 8-K............................ 32

SIGNATURES........................................................... 33
</Table>
<Page>
PART I. FINANCIAL INFORMATION

This amendment to the Quarterly Report on Form 10-Q for the period ended
February 23, 2002 includes restated unaudited condensed consolidated financial
statements reflecting (1) the Company changing its revenue recognition on
certain sales to independent sales representatives in order to comply with the
provisions of Securities and Exchange Commission Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial Statements ("SAB101") which should
have been adopted on the first day of the Company's fiscal year ended
August 25, 2001, and (2) an income tax benefit related to a net operating loss
carryback attributable to one of the Company's subsidiaries, which should have
been recognized during the year ended August 25, 2001, as discussed in Note 13
to the accompanying unaudited condensed consolidated financial statements.

The Company expects to issue restated consolidated financial statements for
the year ended August 25, 2001 upon filing of its Annual Report on Form 10-K for
the year ended August 31, 2002.

1
<Page>
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

AMERICAN ACHIEVEMENT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
FEBRUARY 23, 2002 AUGUST 25, 2001
----------------- ---------------
(UNAUDITED)
(AS RESTATED--SEE NOTE 13)

ASSETS
Current assets:
Cash and cash equivalents................................. $ 5,247 $ 2,636
Accounts receivable, net of allowance of $4,032 and
$3,379.................................................. 41,904 49,931
Income tax receivable..................................... 1,781 776
Inventories, net.......................................... 38,816 26,672
Prepaid expenses and other current assets................. 18,693 20,158
-------- --------
Total current assets.................................... 106,441 100,173

Property, plant and equipment, net of accumulated
depreciation of $32,303 and $26,669....................... 62,944 64,842
Trademarks, net of accumulated amortization of $4,713 and
$3,942.................................................... 41,527 42,299
Goodwill, net of accumulated amortization of $13,674 and
$11,655................................................... 145,746 147,497
Other assets, net of accumulated amortization of $3,798 and
$4,487.................................................... 31,529 30,160
-------- --------
Total assets............................................ $388,187 $384,971
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft............................................ $ 4,173 $ 4,243
Accounts payable and accrued expenses..................... 32,222 35,135
Customer deposits......................................... 47,192 24,180
Deferred revenue.......................................... 7,838 6,799
Current portion of long-term debt......................... -- 12,900
-------- --------
Total current liabilities............................... 91,425 83,257

Long-term debt, net of current portion...................... 216,812 183,714
Bridge Notes due to Affiliates.............................. -- 26,995
Other long-term liabilities................................. 3,705 4,527
-------- --------
Total liabilities....................................... 311,942 298,493
Redeemable Minority Interest in Subsidiary.................. 16,250 15,650
Commitments and contingencies.............................
Stockholders' equity:
Preferred stock, $.01 par value, 1,200,000 shares
authorized (in total)--
Series A, 1,006,847 shares and 1,001,347 shares issued
and outstanding, respectively; liquidation preference of
approximately $100,685 and $100,135, respectively....... 10 10
Common stock, $.01 par value, 1,250,000 shares authorized,
809,351 shares issued and outstanding................... 8 8
Additional paid-in capital................................ 95,310 94,760
Accumulated other comprehensive loss...................... (2,173) (2,751)
Accumulated deficit....................................... (33,160) (21,199)
-------- --------
Total stockholders' equity.............................. 59,995 70,828
-------- --------
Total liabilities and stockholders' equity.............. $388,187 $384,971
======== ========
</Table>

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

2
<Page>
AMERICAN ACHIEVEMENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

(UNAUDITED)

<Table>
<Caption>
FOR THE THREE MONTHS ENDED
---------------------------------
FEBRUARY 23, FEBRUARY 24,
2002 2001
------------ ------------
(AS RESTATED--SEE NOTE 13)

Net sales................................................. $ 54,981 $54,122
Cost of sales............................................. 22,541 22,071
-------- -------
Gross profit............................................ 32,440 32,051
Selling, general and administrative expenses.............. 31,972 29,809
-------- -------
Operating income........................................ 468 2,242
Interest expense, net..................................... 5,282 5,286
Other expense............................................. 2,609 --
-------- -------
Loss before provision for income taxes.................. (7,423) (3,044)
Income tax benefit........................................ (1,507) --
-------- -------
Loss before extraordinary item.......................... (5,916) (3,044)

Extraordinary item: Loss on early extinguishment of
debt.................................................... 5,650 --
-------- -------
Net loss................................................ (11,566) (3,044)
Preferred dividends....................................... (300) (300)
-------- -------
Net loss to common stockholders......................... $(11,866) $(3,344)
======== =======
</Table>

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

3
<Page>
AMERICAN ACHIEVEMENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

(UNAUDITED)

<Table>
<Caption>
FOR THE SIX MONTHS ENDED
---------------------------------
FEBRUARY 23, FEBRUARY 24,
2002 2001
------------ ------------
(AS RESTATED--SEE NOTE 13)

Net sales................................................... $126,582 $115,160

Cost of sales............................................... 57,280 57,208
-------- --------

Gross profit.............................................. 69,302 57,952

Selling, general and administrative expenses................ 62,460 58,491
-------- --------

Operating income (loss)................................... 6,842 (539)

Interest expense, net....................................... 11,212 11,154

Other expense............................................... 2,609 --
-------- --------

Loss before provision for income taxes.................... (6,979) (11,693)

Income tax benefit.......................................... (1,268) (2,861)
-------- --------

Loss before extraordinary item and cumulative effect of
change in accounting principle.......................... (5,711) $ (8,832)

Extraordinary item: Loss on early extinguishment of debt.... 5,650 --

Cumulative effect of change in accounting principle......... -- 1,835
-------- --------

Net loss.................................................. (11,361) (10,667)

Preferred dividends......................................... (600) (600)
-------- --------

Net loss to common stockholders........................... $(11,961) $(11,267)
======== ========
</Table>

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

4
<Page>
AMERICAN ACHIEVEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED AUGUST 25, 2001 AND SIX MONTHS ENDED FEBRUARY 23, 2002
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<Table>
<Caption>
PREFERRED STOCK
------------------------------------------
SERIES "A" SERIES "B" COMMON STOCK
-------------------- ------------------- ------------------- ADDITIONAL
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT PAID-IN CAPITAL
--------- -------- -------- -------- -------- -------- ---------------

Balance, August 26, 2000 (as restated)...... 854,467 $ 9 -- $ -- 696,914 $ 7 $78,760
Comprehensive loss-
Net loss (as restated)...................... -- -- -- -- -- -- --
Adjustment in minimum pension liability..... -- -- -- -- -- -- --
Change in effective portion of derivative
loss...................................... -- -- -- -- -- -- --
Total comprehensive loss....................
Issuance of American Achievement Series B
Preferred Stock........................... -- -- 16,000 160 -- -- 15,840
Exchange of Series B Preferred Stock for
Series A and common stock................. 146,880 1 (16,000) (160) 112,137 1 158
Accrued dividends on CBI Inc. "Old" Series A
Preferred Stock........................... -- -- -- -- -- -- --
Exercise of Stock Options................... -- -- -- -- 300 -- 2
--------- ------- ------- ----- ------- ------- -------
Balance, August 25, 2001 (as restated)...... 1,001,347 $ 10 -- $ -- 809,351 $ 8 $94,760
--------- ------- ------- ----- ------- ------- -------
Comprehensive loss-
Net loss (unaudited-as restated)............ -- -- -- -- -- -- --
Adjustment in minimum pension liability..... -- -- -- -- -- -- --
Reclassification into earnings for
derivative termination.................... -- -- -- -- -- -- --
Total comprehensive loss....................
Accrued dividends on CBI Inc. "Old" Series A
Preferred Stock........................... -- -- -- -- -- -- --
Issuance of American Achievement Series A...
Preferred Stock........................... 5,500 -- -- -- -- -- 550
--------- ------- ------- ----- ------- ------- -------
Balance, February 23, 2002 (as restated).... 1,006,847 $ 10 -- $ -- 809,351 $ 8 $95,310
--------- ------- ------- ----- ------- ------- -------

ACCUMULATED OTHER
COMPREHENSIVE ACCUMULATED
LOSS DEFICIT TOTAL
----------------- ----------- --------

Balance, August 26, 2000 (as restated)...... $ -- $(15,678) $ 63,098
Comprehensive loss-
Net loss (as restated)...................... -- (4,321) (4,321)
Adjustment in minimum pension liability..... (519) -- (519)
Change in effective portion of derivative
loss...................................... (2,232) -- (2,232)
------- -------- --------
Total comprehensive loss.................... (2,751) (19,999) (7,072)
Issuance of American Achievement Series B
Preferred Stock........................... -- -- 16,000
Exchange of Series B Preferred Stock for
Series A and common stock................. -- -- --
Accrued dividends on CBI Inc. "Old" Series A
Preferred Stock........................... -- (1,200) (1,200)
Exercise of Stock Options................... -- -- 2
------- -------- --------
Balance, August 25, 2001 (as restated)...... $(2,751) $(21,199) $ 70,828
------- -------- --------
Comprehensive loss-
Net loss (unaudited-as restated)............ -- (11,361) (11,361)
Adjustment in minimum pension liability..... (1,654) -- (1,654)
Reclassification into earnings for
derivative termination.................... 2,232 -- 2,232
------- -------- --------
Total comprehensive loss.................... 578 (11,361) (10,783)
Accrued dividends on CBI Inc. "Old" Series A
Preferred Stock........................... -- (600) (600)
Issuance of American Achievement Series A...
Preferred Stock........................... -- -- 550
------- -------- --------
Balance, February 23, 2002 (as restated).... $(2,173) $(33,160) $ 59,995
------- -------- --------
</Table>

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

5
<Page>
AMERICAN ACHIEVEMENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

<Table>
<Caption>
FOR THE SIX MONTHS ENDED
---------------------------------
FEBRUARY 23, FEBRUARY 24,
2002 2001
------------ ------------
(AS RESTATED--SEE NOTE 13)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss.................................................... $ (11,361) (10,667)
Adjustments to reconcile net loss to net cash provided by
operating activities
Loss on early extinguishment of debt.................... 5,650 --
Cumulative effect of change in accounting principle..... -- 1,835
Depreciation and amortization........................... 9,575 7,982
Amortization of debt discount and deferred financing
fees................................................... 549 618
Provision for doubtful accounts......................... 653 922
Changes in assets and liabilities-
(Increase) decrease in accounts receivables........... 7,374 (1,159)
Increase in inventories............................... (12,144) (10,143)
Decrease (increase) in prepaid expenses and other
current assets....................................... 460 (3,993)
Decrease (increase) in other assets................... (848) 1,420
Increase in customer deposits......................... 23,012 36,960
Increase in deferred revenue.......................... 1,039 8,128
Decrease in accounts payable, accrued expenses and
other long-term liabilities.......................... (1,288) (7,102)
--------- --------
Net cash provided by operating activities............... 22,671 24,801
--------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment.............. (3,736) (3,752)
--------- --------
Net cash used in investing activities................. (3,736) (3,752)
--------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Senior Unsecured Notes, net of debt issue
cost.................................................... 167,318 --
Payments on term loan facility, net....................... (121,400) (3,276)
Revolver payments, net.................................... (33,859) (18,357)
Payment of bridge notes to affiliate...................... (28,383) --
--------- --------
Net cash used in financing activities................. (16,324) (21,633)
--------- --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ 2,611 (584)

CASH AND CASH EQUIVALENTS, beginning of period.............. 2,636 1,887
--------- --------

CASH AND CASH EQUIVALENTS, end of period.................... $ 5,247 $ 1,303
========= ========

SUPPLEMENTAL DISCLOSURE
Cash paid during the period for--
Interest................................................ $ 13,282 $ 10,132
========= ========
Income taxes............................................ $ 566 $ 38
========= ========

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
Accrued preferred stock dividends......................... $ 600 $ 600
========= ========
Issuance of stock in settlement of obligation............. $ 550 $ --
========= ========
</Table>

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

6
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) BACKGROUND AND ORGANIZATION:

American Achievement Corporation, a Delaware corporation (together with its
subsidiaries, "AAC" or the "Company") is a manufacturer and supplier of class
rings, yearbooks and other graduation-related scholastic products for the high
school and college markets and manufactures and markets recognition and affinity
jewelry designed to commemorate significant events, achievements and
affiliations. The Company also operates a division, which sells achievement
publications in the specialty directory publishing industry nationwide. The
Company markets its products and services primarily in the United States and
operates in two reporting segments, scholastic products and affinity products.
The Company's corporate offices and primary manufacturing facilities are located
in Austin and Dallas, Texas.

The Company changed its name from Commemorative Brands Holding Corporation
to American Achievement Corporation on January 23, 2002. The Company was formed
on June 27, 2000 to serve as a holding company for the Commemorative
Brands, Inc. ("CBI") operations and future acquisitions.

On July 27, 2000, the Company acquired Taylor Senior Holding Corp ("TSHC"),
the parent company of Taylor Publishing Company ("Taylor") which produces the
Company's yearbooks (the "Taylor Acquisition"). On March 30, 2001, the Company
acquired Educational Communications, Inc. ("ECI") (the "ECI Acquisition") (See
Note 3). ECI has been in the academic achievement publication business since
1967.

The accompanying condensed consolidated financial statements have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes the disclosures are adequate to make
the information presented not misleading. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the financial position and results of operations for the
periods presented have been included. Operating results for the six months ended
February 23, 2002 are not necessarily indicative of the results that may be
expected for the fiscal year ending August 31, 2002.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

FISCAL YEAR END

CBI uses a 52/53-week fiscal year ending on the last Saturday of August.

CONSOLIDATION

The condensed consolidated financial statements include the accounts of the
Company and its direct and indirect subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.

The 11 5/8% Senior Unsecured Notes Due 2007 (the "Unsecured Notes") are
guaranteed by every direct and indirect domestic subsidiary of the Company. The
guarantees by the guarantor subsidiaries are full, unconditional, and joint and
several. All of the guarantor subsidiaries are wholly owned. American
Achievement Corporation is a holding company with no independent assets or
operations other than its investment in its subsidiaries.

7
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
Effective August 27, 2000, the Company changed its accounting method for
recognizing revenue on certain sales to independent sales representatives, in
order to comply with the provisions of Securities and Exchange Commission Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB
101"). Under SAB 101, the recognition of revenue and related gross profit on
sales to independent sales representatives, along with commissions to
independent sales representatives that are directly related to the revenue
should be deferred until the independent sales representative delivers the
product and title passes to the Company's end customer. Previously, the Company
recognized revenue from these transactions upon shipment of product to the
independent sales representative, net of estimates for possible returns and
allowances. The cumulative effect of the change in accounting principle resulted
in an increase of $1.8 million to the net loss for the six months ended
February 24, 2001. This change had no impact on the Company's cash flows from
operations.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include highly liquid investments with original
maturities of three months or less.

INVENTORIES

Inventories, which include raw materials, labor and manufacturing overhead,
are stated at the lower of cost or market using the first-in, first-out (FIFO)
method.

SALES REPRESENTATIVE ADVANCES AND RELATED RESERVE

The Company advances funds to sales representatives as prepaid commissions
against anticipated earnings. Such amounts are repaid by the sales
representatives through earned commissions on product sales. The Company
provides reserves to cover those amounts which it estimates to be uncollectible.
These amounts are included in prepaid expenses and other current assets in the
accompanying consolidated balance sheets.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost, net of accumulated
depreciation. Depreciation is provided principally using the straight-line
method.

Maintenance, repairs and minor replacements are charged against income as
incurred; major replacements and betterments are capitalized. The cost of assets
sold or retired and the related accumulated depreciation are removed from the
accounts at the time of disposition, and any resulting gain or loss is reflected
as other income or expense for the period.

TRADEMARKS

The value of trademarks was determined based on a third-party appraisal and
is being amortized on a straight-line basis over 40 years and 20 years for CBI
and ECI, respectively.

GOODWILL

Costs in excess of fair value of net tangible and identifiable intangible
assets acquired are included in goodwill in the accompanying consolidated
balance sheets. Goodwill is being amortized on a

8
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
straight-line basis over 40 years. The Company continually evaluates whether
events and circumstances have occurred that indicate that the remaining
estimated useful life of goodwill may warrant revision or that the remaining
balance of goodwill may not be recoverable. When factors indicate that goodwill
should be evaluated for possible impairment, the Company would use an estimate
of the related product lines undiscounted cash flows over the remaining life of
the goodwill in measuring whether the goodwill is recoverable.

OTHER ASSETS

Other assets include deferred financing costs, customer lists, work force in
place and ring samples supplied to national chain stores and sales
representatives of the Company. All values are amortized on a straight-line
basis as follows:

<Table>
<Caption>
DESCRIPTION USEFUL LIFE
- ----------- -----------

Deferred financing costs.................................... 1-7 years
Customer lists.............................................. 12 years
Work force in place......................................... 7 years
Ring samples................................................ 6 years
</Table>

IMPAIRMENT OF LONG-LIVED ASSETS

Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of," deals with accounting for the impairment of long-lived assets, certain
identifiable intangibles and goodwill related to assets to be held and used and
for long-lived assets and certain identifiable intangibles to be disposed of.
This statement requires that long-lived assets (e.g., property, plant and
equipment and intangibles) be reviewed for impairment whenever events or changes
in circumstances, such as changes in market value, indicate that the assets'
carrying amounts may not be recoverable. In performing the review for
recoverability, if future undiscounted cash flows (excluding interest charges)
from the use and ultimate disposition of the assets are less than their carrying
values, an impairment loss is recognized. Impairment losses are to be measured
based on the fair value of the asset. When factors indicate that long-lived
assets should be evaluated for possible impairment, the Company uses an estimate
of the related product lines undiscounted cash flows over the remaining lives of
the assets in measuring whether the assets are recoverable.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Deferred tax assets are
recognized net of any valuation allowance. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.

9
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist primarily of cash and cash
equivalents, accounts receivable, bank overdraft, accounts payable and long-term
debt. The carrying amounts of the Company's cash and cash equivalents, accounts
receivable, bank overdraft and accounts payable approximate fair value due to
their short-term nature. The fair value of the Company's long-term debt
approximates the recorded amount based on current rates available to the Company
for debt with the same or similar terms.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company adopted SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," beginning on August 27, 2000. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. SFAS No. 133 requires that an entity recognize derivatives as either
assets or liabilities on the balance sheet and measure those instruments at fair
value. The accounting for changes in the fair value of a derivative depends on
the intended use of the derivative and the resulting designation. The adoption
of SFAS No. 133 did not have a material effect on the Company's financial
statements.

The Company designates its derivatives based upon criteria established by
SFAS No. 133. For a derivative designated as a fair value hedge, the gain or
loss is recognized in earnings in the period of change together with the
offsetting loss or gain on the hedged item attributed to the risk being hedged.
For a derivative designated as a cash flow hedge, the effective portion of the
derivative's gain or loss is initially reported as a component of accumulated
other comprehensive income (loss) and subsequently reclassified into earnings
when the hedged exposure affects earnings. The ineffective portion of the gain
or loss is reported in earnings immediately.

Trading derivatives are reflected in other current liabilities at their fair
value with any changes in fair value being reported to other income or loss.

REVENUE RECOGNITION

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial
Statements," which among other guidance, clarified the Staff's view on various
revenue recognition and reporting matters. As a result, the Company changed its
method of accounting for certain sales transactions. Under its previous policy,
the Company recognized revenue upon shipment of the product from its production
facility. Under the new accounting method, adopted retroactive to August 27,
2000, the first day of the Company's fiscal year 2001, the Company now defers
revenue and direct costs until the product is delivered to the end consumer and
acceptance has occurred. Provisions for sales returns and warranty costs are
recorded at the time of sale based on historical information and current trends.

SEASONALITY

10
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
predominantly made during February through April (which overlaps the Company's
second and third fiscal quarters) for graduation in May and June. The Company
has historically experienced operating losses during the period of the Company's
fourth fiscal quarter, which includes the summer months when school is not in
session, thus reducing related shipment of products. Yearbook sales are highest
during the months of May through June, as yearbooks are typically shipped to
schools prior to the school's summer break. The Company's recognition and
affinity product line sales are also seasonal. The majority of the sales of
achievement publications are shipped in November of each year. The remaining
recognition and affinity product line sales are highest during the winter
holiday season and in the period prior to Mother's Day. As a result, the effects
of the seasonality of the class ring business on the Company are somewhat
tempered by the Company's relatively broad product mix. As a result of the
foregoing, the Company's working capital requirements tend to exceed its
operating cash flows from July through December.

CONCENTRATION OF CREDIT RISK

Credit is extended to certain industries, such as educational and retail,
which may be affected by changes in economic or other external conditions. The
Company's policy is to manage its exposure to credit risk through credit
approvals and limits.

SHIPPING AND HANDLING FEES

In accordance with Emerging Issues Task Force (EITF) No. 00-10, "Accounting
for Shipping and Handling Fees and Costs," the Company recognizes as revenue
amounts billed to customers related to shipping and handling, with the related
expense recorded as a component of cost of sales.

SUPPLIER CONCENTRATION

The Company purchases substantially all synthetic and semi-precious stones
from a single supplier located in Germany who is also the supplier to
substantially all of the class ring manufacturers in the United States.

ADVERTISING

The Company expenses advertising costs as incurred, however in accordance
with Statement of Position 93-7 "Reporting on Advertising Costs" the Company
defers certain advertising costs until the first time the advertising takes
place. These deferred advertising costs are included in prepaid expenses and
other current assets.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.

11
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
COMPREHENSIVE LOSS

Beginning in fiscal year 2001, the effective portion of the loss on
derivatives and unrecognized losses on accrued minimum pension liabilities were
included in other comprehensive loss. The following amounts were included in
accumulated other comprehensive loss as of the six months ended February 23,
2002 (in thousands):

<Table>

Effective portion of derivative loss........................ $ --
Unrecognized loss on minimum pension liability.............. 2,173
------
Accumulated other comprehensive loss........................ $2,173
======
</Table>

For measurement purposes for the Taylor Publishing Company Plan, the
weighted average discount rate used in determining the accumulated benefit
obligation was revised to 7.0 from 7.5 percent between the periods of
February 23, 2002 and August 25, 2001. Approximately $1,654,000 of the
unrecognized loss on minimum pension liability is a result of the change in the
estimated weighted average discount rate effective January 2002. As of
February 23, 2002 the Company no longer held any derivatives considered to be
cash flow hedges.

NEW ACCOUNTING PRONOUNCEMENTS

In June, 2001, the Financial Accounting Standards Board issued SFAS
No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 requires that all business combinations
initiated subsequent to June 30, 2001, be accounted for under the purchase
method of accounting. The pooling-of-interests method is no longer allowed.
Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no
longer amortized but are reviewed annually (or more frequently if impairment
indicators arise) for impairment. Separable intangible assets that are not
deemed to have indefinite lives will continue to be amortized over their useful
lives (but with no maximum life). SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001.

The Company anticipates adopting SFAS No. 142 beginning on September 1,
2002, the first day of fiscal year 2003. The Company is evaluating the impact of
the adoption of these standards and has not yet determined the effect of
adoption on its financial position and results of operations. The impact of
adoption may be material. Upon adoption of these standards, goodwill
amortization will cease and certain intangibles such as workforce in place will
be reclassified into goodwill.

In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS
No. 144 establishes a single accounting model, based upon the framework
established in SFAS No. 121, for long-lived assets to be disposed of by sale.
SFAS No. 144 broadens the presentation of discontinued operations to include
more disposal transactions, and also provides additional implementation guidance
for SFAS No. 121. SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001. The Company anticipates adopting SFAS No. 144 effective
September 1, 2002, and management does not expect the adoption to have a
material impact on the Company's financial position and results of operations.

12
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(3) SIGNIFICANT ACQUISITIONS:

Effective March 30, 2001, Honors Acquisition Corporation, a wholly owned
subsidiary of American Achievement, purchased all the outstanding stock of ECI,
for a total purchase price of $58.7 million. The acquisition of ECI was
accounted for using the purchase method of accounting and, accordingly, the
purchase price has been allocated to assets acquired and liabilities assumed
based upon estimated fair values. Subsequent to the transaction, Honors
Acquisition Corporation was merged into the Company, and ECI remained the
surviving wholly owned subsidiary of the Company. ECI's primary business is the
sales and marketing of achievement publications of the specialty directory
publishing industry.

The estimated fair value of assets acquired and liabilities assumed relating
to the ECI acquisition, which is preliminary and subject to further refinements
in accordance with accounting principles generally accepted in the United
States, is summarized below (in thousands):

<Table>

Working capital............................................. $ 5,534
Property, plant and equipment............................... 400
Other intangibles........................................... 17,240
Goodwill.................................................... 35,492
Other long-term assets...................................... 44
-------
$58,710
=======
</Table>

Goodwill and other intangibles related to ECI are amortized on a
straight-line basis over their useful lives which range from three to 40 years.

The Company incurred approximately $2.4 million in financing costs
associated with the purchase agreement. These costs were capitalized and are
included in the accompanying consolidated balance sheet as of August 25, 2001.
These costs were subsequently written off in connection with the early
extinguishment of debt (see Note 5).

As a result of this transaction, the condensed consolidated financial
statements of the Company for the six months ended February 23, 2002, include
the results of operations of ECI for the six months ended February 23, 2002,
while the consolidated financial statements of the Company for the six months
ended February 24, 2001 include no results of operations of ECI.

The following unaudited pro forma data summarizes the results of operations
for the periods indicated as if the ECI acquisition had been completed as of the
beginning of the periods presented (in thousands):

<Table>
<Caption>
FOR THE SIX MONTHS ENDED
---------------------------
FEBRUARY 23, FEBRUARY 24,
2002 2001
------------ ------------
(UNAUDITED) (UNAUDITED)
(AS RESTATED--SEE NOTE 13)

Net sales........................................... $126,582 $128,778
Loss before extraordinary item...................... (5,711) (5,412)
Net loss to common stockholders..................... (11,961) (7,847)
</Table>

13
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(4) INVENTORIES, NET

A summary of inventories, net is as follows (in thousands):

<Table>
<Caption>
FEBRUARY 23, AUGUST 25,
2002 2001
------------ ----------

Raw materials.......................................... $ 8,168 $ 8,545
Work in process........................................ 22,394 10,293
Finished goods......................................... 9,079 8,092
Less--Reserves......................................... (825) (258)
------- -------
$38,816 $26,672
======= =======
</Table>

Cost of sales includes depreciation and amortization of $3,902,000 and
$3,563,000, for the six months ended February 23, 2002 and February 24, 2001,
respectively.

(5) LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<Table>
<Caption>
FEBRUARY 23, AUGUST 25,
2002 2001
------------ ----------

11 5/8% Senior unsecured notes due 2007..................... $175,457 $ --
11% Senior subordinated notes due 2007 Senior secured credit
facility.................................................. 41,355 41,355
Former senior credit facility:
Revolving credit facility................................. -- 33,859
Term Loan A............................................... -- 57,000
Term Loan B............................................... -- 64,400
Bridge notes to affiliates.................................. -- 26,995
-------- --------
Total debt.............................................. $216,812 $223,609
Less: current portion....................................... -- 12,900
-------- --------
Total long-term debt.................................... $216,812 $210,709
======== ========
</Table>

11 5/8% SENIOR UNSECURED NOTES

On February 20, 2002, the Company issued $177 million of senior unsecured
notes (the "Unsecured Notes") due in 2007. The Unsecured Notes bear interest at
a stated rate of 11 5/8%. The Unsecured Notes were issued at a discount of
0.872% resulting in net proceeds of approximately $175.5 million before
considering financing costs. The effective rate of the Unsecured Notes after
discount is approximately 11.87%. The Unsecured Notes rank PARI PASSU with the
Company's existing and future senior indebtedness, including obligations under
the Company's Senior Secured Credit Facility (as defined below). The Unsecured
Notes are guaranteed by the Company's subsidiaries, and the guarantees rank PARI
PASSU with existing and future senior debt of the Company and its subsidiaries.
The Unsecured Notes and the guarantees on the Unsecured Notes are effectively
subordinated to any of the Company's secured debt.

14
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(5) LONG-TERM DEBT (CONTINUED)

The Company may not redeem the Unsecured Notes until 2005, except that the
Company may redeem up to 35 percent of the Unsecured Notes before the third
anniversary of the issue date of the Unsecured Notes as long as (a) the Company
pays a certain percentage of the principal amount of the Unsecured Notes, plus
interest, (b) the Company redeems the Unsecured Notes within 90 days of
completing a public equity offering and (c) at least 65 percent of the aggregate
principal amount of the Unsecured Notes issued remains outstanding afterward.

If a change in control, as defined in the indenture relating to the
Unsecured Notes (the "AAC Indenture"), occurs, the Company must give the holders
of the Unsecured Notes the opportunity to sell their Unsecured Notes to the
Company at 101 percent of the principal amount of the Unsecured Notes, plus
accrued interest.

The Unsecured Notes contain customary negative covenants and restrictions on
actions by the Company and its subsidiaries including, without limitation,
restrictions on additional indebtedness, investments, asset dispositions outside
the ordinary course of business, liens, and transactions with affiliates, among
other restrictions (as defined in the AAC Indenture). In addition, the Unsecured
Notes contain covenants which restrict the declaration or payment of dividends
by the Company and/or its subsidiaries (as defined in the AAC Indenture). The
Unsecured Notes also require that the Company meet certain financial covenants
including a minimum fixed charge coverage ratio (as defined in the AAC
Indenture). The Company was in compliance with the Unsecured Notes covenants as
of February 23, 2002.

11% SENIOR SUBORDINATED NOTES

CBI's 11% senior subordinated notes (the "Subordinated Notes") mature on
January 15, 2007. The Subordinated Notes are redeemable at the option of CBI in
whole or in part, at any time on or after January 15, 2002, at specified
redemption prices ranging from 105.5 percent of the principal amount thereof if
redeemed during 2002 and declining to 100 percent of the principal amount
thereof if redeemed during the year 2005 or thereafter, plus accrued and unpaid
interest and Liquidated Damages as defined in the indenture relating to the
Subordinated Notes, as amended (the "CBI Indenture"), if any, thereon to the
date of redemption. The Company has not redeemed any of the Subordinated Notes
as of February 23, 2002.

In the event of a Change of Control (as defined in the CBI Indenture), each
holder of the Subordinated Notes will have the right to require CBI to purchase
all or any part of such holder's Subordinated Notes at a purchase price in cash
equal to 101 percent of the aggregate principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of purchase.

In the event of an Asset Sale (as defined in the CBI Indenture), CBI is
required to apply any Net Proceeds (as defined in the CBI Indenture) to
permanently reduce senior indebtedness, to acquire another business or long-term
assets or to make capital expenditures. To the extent such amounts are not so
applied within 365 days and the amount not applied exceeds $5.0 million, CBI is
required to make an offer to all holders of the Subordinated Notes to purchase
an aggregate principal amount of Subordinated Notes equal to such excess amount
at a purchase price in cash equal to 100 percent of

15
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(5) LONG-TERM DEBT (CONTINUED)
the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase.

The Subordinated Notes contain certain covenants that, among other things,
limit the ability of CBI to engage in certain business transactions such as
mergers, consolidations or sales of assets that would decrease the value of CBI
or cause an event of default.

SENIOR SECURED CREDIT FACILITY

In conjunction with the issuance of the Unsecured Notes, on February 20,
2002, the Company entered into a new $40 million senior revolving credit
facility (the "Senior Secured Credit Facility") with various financial
institutions, with all of the Company's current domestic subsidiaries as
guarantors. Loans made pursuant to the Senior Secured Credit Facility are
secured by a first priority security interest in substantially all of the
Company's and the Company's domestic subsidiaries' assets and in all of the
Company's domestic subsidiaries' capital stock.

Availability under the Senior Secured Credit Facility is restricted to the
lesser of (1) $40 million or (2) the Borrowing Base Amount as defined in the
credit agreement under the Senior Secured Credit Facility (the "Credit
Agreement"). Availability under the Senior Secured Credit Facility as of
February 23, 2002 was approximately $37.5 million with no borrowings
outstanding. The Senior Secured Credit Facility matures on February 20, 2006.

Advances under the Senior Secured Credit Facility may be made as base rate
loans or LIBOR loans at the Company's election (except for the initial loans
which were base rate loans). Interest rates payable upon advances are based upon
the base rate or LIBOR depending on the type of loan the Company chooses, plus
an applicable margin based upon a consolidated leverage ratio of certain
outstanding indebtedness to EBITDA (to be calculated in accordance with the
terms specified in the Credit Agreement).

The Credit Agreement contains customary negative covenants and restrictions
on actions by the Company and its subsidiaries including, without limitation,
restrictions on indebtedness, liens, and the gold consignment agreement, among
other restrictions. In addition, the Credit Agreement requires that the Company
meet certain financial covenants, ratios and tests, including capital
expenditure limits, a maximum secured leverage ratio, a minimum interest
coverage ratio, and a minimum fixed charge coverage ratio. The Company was in
compliance with the Credit Agreement convenants as of February 23, 2002.

EARLY EXTINGUISHMENT OF DEBT

In conjunction with the issuance of the Unsecured Notes and entrance into
the Senior Secured Credit Facility, the Company paid off the then outstanding
term loans and revolver under the former credit facility, the bridge notes to
affiliates and settled all but $25 million in notional amount of the interest
rate swap agreements. The Company recognized an extraordinary charge in
February 2002 of approximately $5.7 million, relating to the write-off of
unamortized deferred financing costs and, due to the termination and
reclassification of interest rate swaps, the Company recorded a charge to other
expense for approximately $2.6 million.

16
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(5) LONG-TERM DEBT (CONTINUED)
As a result of the early prepayment of certain debt obligations, the
remaining interest rate swap agreement representing a notional amount of
$25 million has been reclassified as a trading derivative to other current
liabilities. As such, any changes in the fair value of this derivative will
result in a mark-to-market adjustment of the carrying value with any changes
being reported to other income or loss. As of February 23, 2002, the fair value
of this derivative represented a liability of approximately $1.3 million.

GOLD CONSIGNMENT AGREEMENT

Under the Company's gold consignment financing arrangement, the Company has
the ability to have on consignment the lowest of the dollar value of 27,000 troy
ounces of gold, $10.1 million or a borrowing base, determined based upon a
percentage of gold located at the Company's facilities and other approved
locations, as specified by the agreement. For the three months ended
February 23, 2002 and February 24, 2001, the Company expensed consignment fees
of approximately $57,000 and $47,300, respectively and for the six months ended
February 23, 2002 and February 24, 2001, the Company expensed consignment fees
of approximately $117,100 and $95,000, respectively. Under the terms of the
consignment arrangement, the Company does not own the consigned gold nor does it
have risk of loss related to such inventory until the money is received by the
bank from the Company in payment for the gold purchased. Accordingly, the
Company does not include the value of consigned gold in its inventory or the
corresponding liability for financial statement purposes. As of February 23,
2002 and August 25, 2001, the Company held approximately 20,140 ounces and
14,620 ounces, respectively, of gold valued at $5.9 million and $4.0 million,
respectively, on consignment from the bank.

The Company's long-term debt outstanding as of February 23, 2002, matures as
follows (in thousands):

<Table>
<Caption>
AMOUNT
MATURING
FISCAL YEAR ENDING ---------

2003........................................................ $ --
2004........................................................ --
2005........................................................ --
2006........................................................ --
2007........................................................ 216,812
Thereafter.................................................. --
--------
$216,812
========
</Table>

The weighted average interest rate of debt outstanding as of February 23,
2002 and August 25, 2001 was 10.4% and 11.9%, respectively.

The Company's management believes the carrying amount of long-term debt,
including the current maturities, approximates fair value as of February 23,
2002 and August 25, 2001, based upon current rates offered for debt with the
same or similar debt terms.

17
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(6) COMMITMENTS AND CONTINGENCIES

LEASES

Certain Company facilities and equipment are leased under agreements
expiring at various dates through 2008.

CONTRACTS WITH SALES REPRESENTATIVES

The Company is a party to certain contracts with some of its independent
sales representatives whereby the independent sales representatives have
purchased from their predecessors the right to sell the Company's products in a
territory. The contracts generally provide that the value of those rights is
primarily determined by the amount of business achieved by a successor
independent sales representative and is therefore not determinable in advance of
performance by the successor independent sales representative.

PENDING LITIGATION

The Company is not a party to any pending legal proceedings other than
ordinary routine litigation incidental to the business. In management's opinion,
adverse decisions on legal proceedings, in the aggregate, would not have a
materially adverse impact on the Company's results of operations or financial
position.

(7) INCOME TAXES

For the six months ended February 23, 2002 and February 24, 2001, the
Company recorded an income tax benefit of $1,268,000 and $2,861,000,
respectively, which represents an effective tax rate of 18% and 24%,
respectively, on loss before extraordinary items and cumulative effect of change
in accounting principle. The Company's effective tax rate relates to the
expected annual benefits from the net operating loss carryback generated in the
year ending August 31, 2002 and the year ended August 25, 2001 attributable to
Taylor Senior Holding Corp (THSC) as a percentage of the Company's expected
annual pretax loss from continuing operations. For the year ending August 31,
2002 and August 31, 2001, the annual effective tax rates are expected to be 54%
and 37%, respectively on loss before extraordinary items and cumulative effect
of change in accounting principle. The effective tax rate shown for each quarter
of these years may fluctuate due to limitations on the maximum year-to-date tax
benefits allowed to be recorded. No net federal income tax benefit is reflected
in the income statement for net operating losses to be carried forward since
realization of the potential benefit of net operating loss carryforwards is not
considered to be more likely than not.

(8) STOCKHOLDERS' EQUITY

During the six months ended February 23, 2002, 5,500 shares of the American
Achievement "New" Series A Preferred were issued to an executive pursuant to a
bonus provided for in fiscal 2001. In the event of any liquidation, dissolution
or winding up of the Company, the holders of the American Achievement "New"
Series A Preferred are entitled to receive payment of the liquidation value of
$100 per share plus any accrued and unpaid dividends prior to the payment of any
distributions to the holders of the American Achievement "New" Common of the
Company. The liquidation preference of the American Achievement "New" Series A
Preferred totaled approximately $100,685,000 and $100,135,000 at February 23,
2002, and August 25, 2001, respectively.

18
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(8) STOCKHOLDERS' EQUITY (CONTINUED)
STOCK-BASED COMPENSATION

During the six months ended February 23, 2002, the Company issued an option
to purchase 12,500 shares of American Achievement common stock at fair market
value to an executive whereby the terms of the option are the same as provided
for in the 2000 Stock Option Plan with the exception that the option vested on
date of grant.

Incentive stock options for 69,853 shares and 28,984 shares and nonqualified
stock options for 2,230 and 1,874 shares of the Company's common stock were
outstanding as of February 23, 2002, and August 25, 2001, respectively.

Pursuant to an employment agreement entered into between the Company and its
chief executive officer in July 1999, and as amended as of February 1, 2002, if
the Company achieves a certain consolidated EBITDA target, as defined by the
agreement, for the fiscal years commencing with fiscal 2002 and ending in fiscal
2004, the chief executive officer is entitled to receive up to a total of
$1 million in face value of American Achievement "New" Series A Preferred Stock
during the period.

(9) RELATED-PARTY TRANSACTIONS

The Company entered into a management agreement on March 30, 2001, with
Castle Harlan, Inc. (the "Manager"), pursuant to which the Manager agreed to
provide business and organization strategy, financial and investment management
and merchant and investment banking services to the Company and its
subsidiaries. The Company has agreed to indemnify the Manager against
liabilities, costs, charges and expenses relating to the Manager's performance
of its duties, other than such of the foregoing resulting from the Manager's
gross negligence or willful misconduct. The agreement is for a term of
10 years, renewable automatically from year to year unless Castle Harlan
Partners III, L.P. or Castle Harlan Partners II, L.P., affiliates of the
Manager, shall own less than 5 percent of the then-outstanding capital stock of
the Company. Beginning fiscal year 2002, the Company is to pay a management fee
equal to $3,000,000, unless otherwise prohibited by the Company's Credit
Agreement. The Company was subject to a similar management agreement with the
Manager which was signed on July 27, 2000, and an agreement signed on
December 16, 1996. Amounts paid under all management agreements totaled
approximately $750,000 and $325,000 for the three months ended February 23, 2002
and February 24, 2001 and $1,075,000 and $325,000 for the six months ended
February 23, 2002 and February 24, 2001, respectively. As of February 23, 2002,
and August 25, 2001, the Company had accrued management fees of approximately
$750,000 and $688,000, respectively. Included in deferred financing costs for
the ECI Acquisition is approximately $557,000 of management fees.

In connection with the ECI Acquisition, the Company has a receivable from
the Castle Harlan Group relating to the acquisition expenses, along with other
reimbursable expenses, which were to be reimbursed to the Company. The amount of
such receivables were approximately $179,000 as of February 23, 2002 and
August 25, 2001.

In conjunction with the issuance of the Unsecured Notes and entrance into
the Senior Secured Credit Facility (See Note 5), the Company paid off the bridge
notes to affiliates.

19
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(10) BUSINESS SEGMENTS (IN THOUSANDS):

The Company operates in two reportable business segments: scholastic
products, and recognition and affinity products. The principal products sold in
the scholastic segment are class rings, yearbooks and graduation products, which
include fine paper products and graduation accessories. The scholastic segment
primarily serves the high school and college markets. The recognition and
affinity segment includes publications that recognize the academic achievement
of top students at the high school and college levels, jewelry commemorating
family events, fan affinity jewelry and related products, and professional
sports championship rings. The accounting policies of the segments are the same
as those described in the summary of significant accounting policies in Note 2.

<Table>
<Caption>
RECOGNITION
AND
SCHOLASTIC AFFINITY TOTAL
---------- ----------- --------

Three months ended February 24, 2001
Net sales................................................. $ 47,108 $ 7,014 $ 54,122
Interest expense.......................................... 4,758 528 5,286
Depreciation and amortization............................. 3,670 442 4,112
Segment operating income (loss)........................... 2,357 (115) 2,242
Capital expenditures...................................... 1,623 197 1,820
Segment assets............................................ 300,667 33,407 334,074
Three months ended February 23, 2002
Net sales................................................. $ 49,658 $ 5,323 $ 54,981
Interest expense.......................................... 3,394 1,888 5,282
Depreciation and amortization............................. 3,712 1,102 4,814
Segment operating income (loss)........................... 3,138 (2,670) 468
Capital expenditures...................................... 1,460 188 1,648
Segment assets............................................ 300,583 87,604 388,187
Six months ended February 24, 2001
Net sales................................................. $102,197 $12,963 $115,160
Interest expense.......................................... 10,039 1,115 11,154
Depreciation and amortization............................. 7,184 798 7,982
Segment operating income (loss)........................... 729 (1,268) (539)
Capital expenditures...................................... 3,377 375 3,752
Segment assets............................................ 300,667 33,407 334,074
Six months ended February 23, 2002
Net sales................................................. $102,073 $24,509 $126,582
Interest expense.......................................... 8,731 2,481 11,212
Depreciation and amortization............................. 7,478 2,097 9,575
Segment operating income (loss)........................... 1,369 5,473 6,842
Capital expenditures...................................... 3,362 374 3,736
Segment assets............................................ 300,583 87,604 388,187
</Table>

The Company's reportable segments are strategic business units that offer
products to different consumer segments. Each segment is managed separately
because each business requires different marketing strategies. The Company
evaluates the performance of each segment based on the profit or loss from
operations before income taxes, excluding nonrecurring gains or losses.

20
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(11) REGISTRATION WITH SECURITIES AND EXCHANGE COMMISSION

On March 14, 2002, the Company filed a registration statement on Form S-4
(Commission File No. 333-84294) with the Securities and Exchange Commission (the
"Registration Statement"), relating to the offer to exchange $177 million of the
Company's 11 5/8% Senior Notes due 2007, Series B (the "New Notes") for any and
all outstanding Unsecured Notes. The terms of the New Notes and the Unsecured
Notes are identical, except that the New Notes have been registered under the
Securities Act of 1933, as amended. References elsewhere herein to the Unsecured
Notes include the New Notes. The Registration Statement was declared effective
on April 8, 2002 and the exchange offer was completed on May 16, 2002.

(12) NEW ACCOUNTING PRONOUNCEMENTS

The Company will adopt SFAS No. 142 beginning on September 1, 2002, the
first day of fiscal year 2003. The Company is evaluating the impact of the
adoption of these standards and have not yet determined the effect of adoptions
on its financial position and results of operations. The impact of adoption may
be material. Upon adoption of these standards, goodwill amortization will cease
and certain intangibles such as workforce in place will be reclassified into
goodwill.

In August 2001, the Financial Accounting Standards Board released SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS
No. 144 establishes a single accounting model, based upon the framework
established in SFAS No. 121, for long-lived assets to be disposed of by sale.
SFAS No. 144 broadens the presentation of discontinued operations to include
more disposal transactions, and also provides additional implementation guidance
with SFAS No. 121. SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001. The Company anticipates adopting SFAS No. 144 effective
September 1, 2002, and does not expect the adoption to have a material impact on
its financial position and results of operations.

In April 2002, the FASB issued SFAS No. 145, RECISSION OF FASB STATEMENTS
NO. 4, 44 AND 64, AMENDMENT OF FASB STATEMENT NO. 13, AND TECHNICAL CORRECTIONS,
which rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishments o f
Debt, and an amendment of that Statement SFAS No. 64, Extinguishments of Debt
Made to Satisfy Sinking-Fund Requirements. The Statement also rescinds SFAS
No. 44, Accounting for Intangible Assets of Motor Carriers. The Statement amends
SFAS No. 13, Accounting for Leases, to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. The Company will adopt SFAS No. 145 in
September 2002 and does not expect this adoption to have a material effect on
the financial statements, except for the reclassification of the extraordinary
item, loss on early extinguishments of debt.

21
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(13) RESTATEMENT OF FINANCIAL STATEMENTS

Subsequent to the issuance of its condensed consolidated financial
statements as of and for the three and six month periods ended February 23,
2002, management of the Company determined that a change in its revenue
recognition policy for recognizing revenue on certain sales to representatives
should have been made as of August 27, 2000, in order to comply with the
provisions of SAB 101, and that a 2001 income tax benefit related to the net
operating loss carryback attributable to one of the Company's subsidiaries,
Taylor Senior Holding Corp, should have been recognized during the year ended
August 25, 2001. Such adjustment resulted in a reduction of $1.6 million to the
net loss. As a result, the accompanying condensed consolidated financial
statements have been restated from the amounts previously reported.

A summary of the significant effects of the restatement is as follows (in
thousands):

<Table>
<Caption>
AS OF AS OF
AUGUST 25, 2001 FEBRUARY 23, 2002
------------------------ ------------------------
AS AS
PREVIOUSLY PREVIOUSLY
REPORTED AS RESTATED REPORTED AS RESTATED
---------- ----------- ---------- -----------

Prepaids and other assets................... $ 15,916 $ 20,158 $ 13,810 $ 18,693
Income tax receivable....................... -- 776 -- 1,781
Total assets................................ 379,953 384,971 381,523 388,187
Deferred revenue............................ -- 6,799 -- 7,838
Accumulated deficit......................... (20,218) (21,199) (33,312) (33,160)
Stockholders equity......................... $ 71,809 $ 70,828 $ 59,843 $ 59,995
</Table>

<Table>
<Caption>
AUGUST 25, 2001
------------------------
AS
PREVIOUSLY
REPORTED AS RESTATED
---------- -----------

Net sales................................... $281,515 $281,053
Cost of sales............................... 141,946 142,164
Gross profit................................ 139,569 138,889
Selling, general and administrative
expenses.................................. 119,930 119,972
(Provision) benefit for income taxes........ (133) 1,443
Cumulative effect of change in accounting
principle................................. -- 1,835
Net loss.................................... $ (3,340) $ (4,321)
</Table>

22
<Page>
AMERICAN ACHIEVEMENT CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(13) RESTATEMENT OF FINANCIAL STATEMENTS (CONTINUED)

<Table>
<Caption>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED ENDED
FEBRUARY 23, 2002 FEBRUARY 23, 2002
------------------------ ------------------------
AS AS
PREVIOUSLY PREVIOUSLY
REPORTED AS RESTATED REPORTED AS RESTATED
---------- ----------- ---------- -----------

Net sales................................... $ 50,049 $ 54,981 $127,621 $126,582
Cost of sales............................... 21,563 22,541 57,510 57,280
Gross profit................................ 28,486 32,440 70,111 69,302
Selling, general and administrative
expenses.................................. 30,469 31,972 62,871 62,460
(Provision) benefit for income taxes........ (143) 1,507 (263) 1,268
Net loss.................................... $(15,667) $(11,566) $(12,494) $(11,361)
</Table>

<Table>
<Caption>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED ENDED
FEBRUARY 24, 2001 FEBRUARY 24, 2001
------------------------ ------------------------
AS AS
PREVIOUSLY PREVIOUSLY
REPORTED AS RESTATED REPORTED AS RESTATED
---------- ----------- ---------- -----------

Net sales................................... $ 52,613 $ 54,122 $116,951 $115,160
Cost of sales............................... 21,650 22,071 57,189 57,208
Gross profit................................ 30,963 32,051 59,762 57,952
Selling, general and administrative
expenses.................................. 29,448 29,809 58,991 58,491
(Provision) benefit for income taxes........ (102) -- (471) 2,861
Cumulative effect of change in accounting
principle................................. -- -- -- 1,835
Net loss.................................... $ (3,873) $ (3,044) $(10,854) $(10,667)
</Table>

23
<Page>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion of our consolidated financial condition and results
of operations should be read in conjunction with the information contained in
our condensed consolidated financial statements and the notes thereto. The
following discussion includes forward-looking statements that involve certain
risks and uncertainties. See "Disclosure Regarding Forward-Looking Statements."

RESTATEMENT

As discussed in Note 13, the unaudited condensed consolidated financial
statements in this amendment to the Quarterly Report on Form 10-Q for the period
ended February 23, 2002 have been restated.

The Company's Management Discussion and Analysis has been revised to reflect
the effects of this restatement.

OVERVIEW

We are one of the leading manufacturers and suppliers of class rings,
yearbooks, academic achievement publications and recognition and affinity
jewelry in the United States. Our two principal business segments are:
scholastic products and recognition and affinity products. The scholastic
products segment serves the high school, college and, to a lesser extent, the
elementary and junior high school markets and accounted for approximately 81% of
our net sales for the six months ended February 23, 2002. Our scholastic
products segment consists of three principal categories: class rings, yearbooks
and graduation products, the last of which includes fine paper products and
graduation accessories.

The recognition and affinity products segment accounted for approximately
19% of our net sales for the six months ended February 23, 2002. This segment
provides, among other things, publications that recognize the academic
achievement of top students at the high school and college levels, as well as
the nation's most inspiring teachers, jewelry commemorating family events such
as the birth of a child, fan affinity jewelry and related products and
professional sports championship rings such as World Series rings.

COMPANY BACKGROUND

Commemorative Brands, Inc. ("CBI") was initially formed by Castle Harlan
Partners II, L.P. ("CHPII"), a private equity investment fund, in March 1996 for
the purpose of acquiring substantially all of the ArtCarved operations of CJC
Holdings, Inc. and the Balfour operations of L. G. Balfour Company, Inc.. These
acquisitions were consummated on December 16, 1996. Until such date, CBI engaged
in no business activities other than in connection with the completion of the
acquisitions and the financing thereof.

Our Company was formed on June 27, 2000 to serve as a holding company for
the CBI operations and future acquisitions. Upon formation, each share of CBI's
issued and outstanding common stock was converted into one share of our common
stock, and each share of CBI's issued and outstanding series B preferred stock
was converted into one share of our series A preferred stock. The original
holders of CBI's Series A Preferred Stock continued to hold such shares. We
changed our name from Commemorative Brands Holding Corporation to American
Achievement Corporation on January 23, 2002.

TAYLOR ACQUISITION. On February 11, 2000, Castle Harlan Partners III, L.P.
("CHPIII"), one of our stockholders and an affiliate of CHPII, acquired Taylor,
whose primary business is the designing and printing of student yearbooks. On
July 27, 2000, we acquired all issued and outstanding shares of Taylor Senior
Holding Corp ("TSHC"), Taylor's parent, through the issuance of 320,929 shares
of our common stock and 393,482 shares of our series A preferred stock (the
"Taylor Acquisition"). The Taylor Acquisition was accounted for under the
purchase method of accounting.

24
<Page>
ECI ACQUISITION. On March 30, 2001, we acquired all of the capital stock of
ECI for a purchase price of approximately $58.7 million (the "ECI Acquisition").
ECI has been in the academic achievement publication business since 1967 and
publishes such well-known titles as, Who's Who Among American High School
Students, The National Dean's List and Who's Who Among America's Teachers. The
ECI Acquisition was accounted for under the purchase method of accounting. As a
result of this transaction, our consolidated financial statements for the six
months ended February 23, 2002 include the results of operations for ECI for the
six months ended February 23, 2002, while our consolidated financial statements
for the six months ended February 24, 2001 include no results of operations of
ECI.

RESULTS OF OPERATIONS

The following table sets forth selected information from our Consolidated
Statements of Operations expressed on an actual basis and as a percentage of net
sales.

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------------------- -----------------------------------------
FEBRUARY 23, 2002 FEBRUARY 24, 2001 FEBRUARY 23, 2002 FEBRUARY 24, 2001
------------------- ------------------- ------------------- -------------------
% OF NET % OF NET % OF NET % OF NET
ACTUAL SALES ACTUAL SALES ACTUAL SALES ACTUAL SALES
-------- -------- -------- -------- -------- -------- -------- --------

Net sales................ $ 54,981 100.0% $54,122 100.0% $126,582 100.0% $115,160 100.0%
Cost of sales............ 22,541 41.0% 22,071 40.8% 57,280 45.3% 57,208 49.7%
-------- ----- ------- ----- -------- ----- -------- -----
Gross profit......... 32,440 59.0% 32,051 59.2% 69,302 54.7% 57,952 50.3%
Selling, general and
administrative
expenses............... 31,972 58.2% 29,809 55.1% 62,460 49.3% 58,491 50.8%
-------- ----- ------- ----- -------- ----- -------- -----
Operating income
(loss)................. 468 0.9% 2,242 4.1% 6,842 5.4% (539) (0.5)%
Interest expense, net.... 5,282 9.6% 5,286 9.8% 11,212 8.9% 11,154 9.7%
Other expense............ 2,609 4.7% -- 0.0% 2,609 2.1% -- 0.0%
-------- ----- ------- ----- -------- ----- -------- -----
Income (loss) before
taxes.............. (7,423) (13.5)% (3,044) (5.6)% (6,979) (5.5)% (11,693) (10.2)%
Provision/(benefit) for
income taxes........... (1,507) (2.7)% -- 0.0% (1,268) (1.0)% (2,861) (2.5)%
Loss on extinguishments
of debt................ 5,650 10.3% -- 0.0% 5,650 4.5% -- 0.0%
Cumulative effect of
change in accounting
principle.............. -- 0.0% -- 0.0% -- 0.0% 1,835 1.6%
-------- ----- ------- ----- -------- ----- -------- -----
Net (loss)............... $(11,566) (21.0)% $(3,044) (5.6)% $(11,361) (9.0)% $(10,667) (9.3)%
======== ===== ======= ===== ======== ===== ======== =====
</Table>

THREE MONTHS ENDED FEBRUARY 23, 2002 COMPARED WITH THREE MONTHS ENDED
FEBRUARY 24, 2001.

NET SALES. Net sales consist of product sales and are net of product
returns and promotional discounts. Net sales increased $0.9 million, or 1.6%, to
$55.0 million for the three months ended February 23, 2002 from $54.1 million
for the three months ended February 24, 2001. This increase in net sales was due
primarily to timing of shipments offset by the decline in personalized family
jewelry and lower sales of affinity and sports jewelry.

The following details the changes in net sales during such periods by
business segment.

SCHOLASTIC PRODUCTS. Net sales increased $2.6 million to $49.7 million for
the three months ended February 23, 2002 from $47.1 million for the three months
ended February 24, 2001. The increase in net sales was due to increased unit
volume of in-store ring sales, timing of college ring shipments, and early
shipment of graduation products as a result of manufacturing efficiencies. These
increases in net sales were offset by timing of yearbook shipments of
$0.8 million.

25
<Page>
RECOGNITION AND AFFINITY PRODUCTS. Net sales decreased $1.7 million to
$5.3 million for the three months ended February 23, 2002 from $7.0 million for
the three months ended February 24, 2001. The decrease was primarily the result
of a decline in personalized family jewelry and lower sales of affinity and
sports jewelry offset by $0.6 million of net sales attributable to ECI.

GROSS PROFIT. Gross margin represents gross profit as a percentage of net
sales. Gross margin was 59.0% for the three months ended February 23, 2002, a
0.2 percentage point decrease from 59.2% for the three months ended
February 24, 2001. Excluding ECI, gross margin for the three months ended
February 23, 2002 would have been 59.4%, a 0.2 percentage point increase from
the three months ended February 24, 2001.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $2.2 million, or 7.3%, to $32.0 million for
the three months ended February 23, 2002 from $29.8 million for the three months
ended February 24, 2001. Included in selling, general and administrative
expenses are two sub-categories: selling and marketing expenses and general and
administrative expenses. Selling and marketing expenses increased $1.1 million
to $21.8 million, for the three months ended February 23, 2002 from
$20.7 million, for the three months ended February 24, 2001. This increase is
due to timing of high school ring deliveries made by our independent sales
representatives. General and administrative expenses for the three months ended
February 23, 2002 were $10.2 million, or 18.5% of net sales, as compared to
$9.1 million, or 16.8% of net sales, for the three months ended February 24,
2001. Excluding ECI, general and administrative expenses for the three months
ended February 23, 2002 would have been $9.1 million or 16.7% of net sales, a
0.1 percentage point decrease from the three months ended February 24, 2001.

OPERATING INCOME (LOSS). As a result of the foregoing, operating income was
$0.5 million, or 0.9% of net sales, for the three months ended February 23, 2002
as compared with operating income of $2.2 million, or 4.1% of net sales, for the
three months ended February 24, 2001. The scholastic products segment reported
operating income of $3.1 million for the three months ended February 23, 2002 as
compared with $2.4 million for the three months ended February 24, 2001. The
recognition and affinity products segment reported an operating loss of
$2.7 million for the three months ended February 23, 2002 as compared with an
operating loss of $0.1 million for the three months ended February 24, 2001.

INTEREST EXPENSE, NET. Net interest expense was $5.3 million for the three
months ended February 23, 2002 and the three months ended February 24, 2001. The
average debt outstanding for the three months ended February 23, 2002 and the
three months ended February 24, 2001 was $209 million and $181 million,
respectively. The weighted average interest rate of debt outstanding for the
three months ended February 23, 2002 and the three months ended February 24,
2001 was 10.0% and 12.0%, respectively.

OTHER EXPENSE. Other expense was $2.6 million for the six months ended
February 23, 2002. The $2.6 million was a result of the termination and
reclassification of the interest rate swaps that occurred in conjunction with
the issuance of the Unsecured Notes and the Senior Secured Credit Facility on
February 20, 2002. The remaining interest rate swap agreement representing a
notional amount of $25 million has been reclassified as a trading derivative to
other current liabilities. As such, any changes in the fair value of this
derivative will result in a mark-to-market adjustment of the carrying value with
any changes being reported to other income or loss. As of February 23, 2002, the
fair value of this derivative represented a liability of approximately
$1.3 million.

PROVISION FOR INCOME TAXES. For the three months ended February 23, 2002
and February 24, 2001, the Company recorded an income tax benefit of $1,507,000
and $0, respectively, which represents an effective tax rate of 20% and none,
respectively, on loss before extraordinary items and cumulative effect of change
in accounting principle. The Company's effective tax rate relates to the
expected annual benefits from the net operating loss carryback generated in the
year ending August 31, 2002 and the year ended August 25, 2001 attributable to
Taylor Senior Holding Corp. (THSC) as a percentage of

26
<Page>
the Company's expected annual pretax loss from continuing operations. For the
year ending August 31, 2002 and August 31, 2001, the annual effective tax rates
are expected to be 54% and 37%, respectively on loss before extraordinary items
and cumulative effect of change in accounting principle. The effective tax rate
shown for each quarter of these years may fluctuate due to limitations on the
maximum year-to-date tax benefits allowed to be recorded. No net federal income
tax benefit is reflected in the income statement for net operating losses to be
carried forward since realization of the potential benefit of net operating loss
carryforwards is not considered to be more likely than not.

LOSS ON EXTINGUISHMENT OF DEBT. In conjunction with the issuance of the
Unsecured Notes and the Senior Secured Credit Facility on February 20, 2002, the
Company paid off the then outstanding term loans and revolver under the former
credit facility and bridge notes to affiliates. As a result, a loss of
$5.7 million was recognized relating to the write-off of unamortized deferred
financing costs.

NET INCOME (LOSS). As a result of the foregoing, we reported a net loss of
$11.6 million for the three months ended February 23, 2002 as compared to a net
loss of $3.0 million for the three months ended February 24, 2001.

SIX MONTHS ENDED FEBRUARY 23, 2002 COMPARED WITH SIX MONTHS ENDED FEBRUARY 24,
2001.

NET SALES. Net sales increased $11.4 million, or 9.9%, to $126.6 million
for the six months ended February 23, 2002 from $115.2 million for the six
months ended February 24, 2001. The increase was due primarily to the inclusion
of $14.1 million of net sales from ECI, which we acquired on March 30, 2001,
offset by a decline in sales of other product lines.

The following details the changes in net sales during such periods by
business segment.

SCHOLASTIC PRODUCTS. Net sales for the six months ended February 23, 2002
and February 24, 2001 were $102.1 million and $102.2 million, respectively. The
in-school high school segment of graduation products revenues increased
$2.7 million for the six months ended February 23, 2002 as compared with the six
months ended February 24, 2001 due to earlier shipments as a result of
manufacturing efficiencies. Net sales increased an additional $0.8 million due
to timing of high school ring deliveries made by our independent sales
representatives. The increase was offset by a decline in net sales of college
rings of $0.7 million and in net sales of yearbooks of $2.9 million as a result
of timing of shipments.

RECOGNITION AND AFFINITY PRODUCTS. Net sales increased $11.5 million to
$24.5 million for the six months ended February 23, 2002 from $13.0 million for
the six months ended February 24, 2001. The increase was primarily the result of
$14.1 million of net sales attributable to ECI. The increase was partially
offset by a decline in personalized family jewelry and lower sales of affinity
and sports jewelry.

GROSS PROFIT. Gross margin was 54.7% for the six months ended February 23,
2002, a 4.4 percentage point increase from 50.3% for the six months ended
February 24, 2001. The gross margin increase for the six months ended
February 23, 2002 was primarily the result of the inclusion of the ECI
operations for this period. Excluding ECI, gross margin for the six months ended
February 23, 2002 would have been 51.1%, a 0.8 percentage point increase from
the six months ended February 24, 2001.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $4.0 million, or 6.8%, to $62.5 million for
the six months ended February 23, 2002 from $58.5 million for the six months
ended February 24, 2001. As a percentage of net sales, however, selling, general
and administrative expenses decreased 1.5 percentage points for the six months
ended February 23, 2002 compared with the six months ended February 24, 2001.
Included in selling, general and administrative expenses are two sub-categories:
selling and marketing expenses and general and administrative expenses. Selling
and marketing expenses increased $2.7 million to $42.5 million, or 33.5% of net
sales, for the six months ended February 23, 2002 from $39.8 million, or 34.6%
of net sales, for the six months ended February 24, 2001. Excluding ECI, selling
and marketing expenses would have increased to 35.7% of net sales from 34.6% of
net sales for the six months ended

27
<Page>
February 24, 2001. This increase was a result of increased marketing costs in
the in-school segment of both rings and yearbooks and increased promotion costs
in the in-store ring market. General and administrative expenses for the six
months ended February 23, 2002 were $20.0 million, or 15.8% of net sales, as
compared to $18.6 million, or 16.2% of net sales, for the six months ended
February 24, 2001. Excluding ECI, general and administrative expenses for the
six months ended February 23, 2002 would have been $17.8 million or 15.8% of net
sales, a 0.4 percentage point decrease from the six months ended February 24,
2001. This decrease in general and administrative expenses was a result of
synergy savings realized from the Taylor Acquisition partially offset by
increased medical expenses.

OPERATING INCOME (LOSS). As a result of the foregoing, operating income was
$6.8 million, or 5.4% of net sales, for the six months ended February 23, 2002
as compared with an operating loss of $0.5 million, or 0.5% of net sales, for
the six months ended February 24, 2001. The scholastic products segment reported
operating income of $1.4 million for the six months ended February 23, 2002 as
compared with $0.7 million for the six months ended February 24, 2001. The
recognition and affinity products segment reported operating income of
$5.5 million for the six months ended February 23, 2002 as compared with an
operating loss of $1.3 million for the six months ended February 24, 2001.

OTHER EXPENSE. Other expense was $2.6 million for the six months ended
February 23, 2002. The $2.6 million was a result of the termination and
reclassification of the interest rate swaps that occurred in conjunction with
the issuance of the Unsecured Notes and the Senior Secured Credit Facility on
February 20, 2002. The remaining interest rate swap agreement representing a
notional amount of $25 million has been classified as a trading derivative to
other current liabilities. As such, any changes in the fair value of this
derivative will result in a mark-to-market adjustment of the carrying value with
any changes being reported to other income or loss. As of February 23, 2002, the
fair value of this derivative represented a liability of approximately
$1.3 million.

INTEREST EXPENSE, NET. Net interest expense was $11.2 million for the six
months ended February 23, 2002 and the six months ended February 24, 2001. The
average debt outstanding for the six months ended February 23, 2002 and the six
months ended February 24, 2001 was $216 million and $189 million, respectively.
The weighted average interest rate of debt outstanding for the six months ended
February 23, 2002 and the six months ended February 24, 2001 was 10.4% and 11.9%
respectively.

PROVISION FOR INCOME TAXES. For the six months ended February 23, 2002 and
February 24, 2001, the Company recorded an income tax benefit of $1,268,000 and
$2,861,000, respectively, which represents an effective tax rate of 54% and 37%,
respectively, on loss before extraordinary items and cumulative effect of change
in accounting principle. The Company's effective tax rate relates to the
expected annual benefits from the net operating loss carryback generated in the
year ending August 31, 2002 and the year ended August 25, 2001 attributable to
Taylor Senior Holding Corp (THSC) as a percentage of the Company's expected
annual pretax loss from continuing operations. No net federal income tax benefit
is reflected in the income statement for net operating losses to be carried
forward since realization of the potential benefit of net operating loss
carryforwards is not considered to be more likely than not.

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE. The cumulative effect
of change in accounting principle, representing a loss of $1.8 million, was
recorded due to the adoption of SAB 101 as of August 27, 2000. See Note 13 to
condensed consolidated financial statements in Item 1.

NET INCOME (LOSS). As a result of the foregoing, we reported a net loss of
$11.4 million for the six months ended February 23, 2002 as compared to a net
loss of $10.7 million for the six months ended February 24, 2001.

28
<Page>
SEASONALITY

The Company's scholastic product sales tend to be seasonal. Class ring sales
are highest during October through December (which overlaps the Company's first
and second fiscal quarters), when students have returned to school after the
summer recess and orders are taken for class rings for delivery to students
before the winter holiday season. Sales of the Company's fine paper products are
predominantly made during February through April (which overlaps the Company's
second and third fiscal quarters) for graduation in May and June. The Company
has historically experienced operating losses during the period of the Company's
fourth fiscal quarter, which includes the summer months when school is not in
session, thus reducing related shipment of products. Yearbook sales are highest
during the months of May through June, as yearbooks are typically shipped to
schools prior to the school's summer break. The Company's recognition and
affinity product line sales are also seasonal. The majority of the sales of
achievement publications are shipped in November of each year. The remaining
recognition and affinity product line sales are highest during the winter
holiday season and in the period prior to Mother's Day. As a result, the effects
of the seasonality of the class ring business on the Company are somewhat
tempered by the Company's relatively broad product mix. As a result of the
foregoing, the Company's working capital requirements tend to exceed its
operating cash flows from July through December.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES. Operating activities provided cash of $22.7 million
for the six months ended February 23, 2002 as compared with $24.8 million for
the six months ended February 24, 2001. The $2.1 million decrease in cash
provided by operating activities was primarily attributable to an increase in
inventory of $2.0 million and a decrease in customer deposits of $14.0 million.
The decreases were partially offset by an increase in operating cash from net
income before depreciation and amortization and other noncash charges of
$4.4 million, a decrease in prepaid expenses and other assets of $4.5 million
and a decrease of $8.5 million in accounts receivables.

INVESTING ACTIVITIES. Capital expenditures for the six months ended
February 23, 2002 and February 24, 2001 were $3.7 million and $3.8 million,
respectively. Our projected capital expenditures for 2002 are expected to be
$15.0 million.

FINANCING ACTIVITIES. Net cash used in financing activities was
$16.3 million for the six months ended February 23, 2002 and $21.6 million for
the six months ended February 24, 2001. For the six months ended February 23,
2002, the cash provided by operating activities and the proceeds received on
February 20, 2002 from the issuance of the $177 million of Unsecured Notes,
$167.3 million net of financing fees, were used to pay off the old term loans,
revolver and bridge notes. For the six months ended February 24, 2001 payments
were made on the revolver and the term loan facility from cash provided by
operating activities.

CAPITAL RESOURCES. In connection with the Taylor Acquisition, we amended
and restated our original credit agreement as of July 27, 2000 and increased the
amounts available under the term loan A, term loan B and the revolving credit
facility. On March 31, 2001, in connection with the ECI Acquisition, we entered
into a second amendment to the credit agreement to increase the amounts
available under the term loan A and term loan B. As of February 20, 2002, the
Company issued $177 million of Unsecured Notes due in 2007 in conjunction with
the issuance of the Unsecured Notes, the Company entered into a new $40 million
Senior Secured Credit Facility. With these proceeds, the Company paid off the
then outstanding term loans and revolver under the former credit facility.

In connection with the Taylor Acquisition, CBI signed a gold consignment
financing agreement with a bank. Under its gold consignment financing agreement,
CBI has the ability to have on consignment the lowest of (i) the dollar value of
27,000 troy ounces of gold, (ii) $10.1 million and (iii) a borrowing base,
determined based upon a percentage of gold located at CBI's facilities and other
approved locations, as specified by the agreement. Under the terms of the
consignment arrangement, CBI does not own the consigned gold nor have risk of
loss related to such inventory until the money is

29
<Page>
received by the bank from CBI in payment for the gold purchased. Accordingly,
CBI does not include the values of consigned gold in its inventory or the
corresponding liability for financial statement purposes. As a result, as of
February 23, 2002 and February 24, 2001, CBI held approximately 20,140 ounces
and 14,627 ounces, respectively, of gold valued at $5.9 million and
$4.0 million, respectively, on consignment from the bank.

As of February 23, 2002, the Company issued $177 million of Unsecured Notes
due in 2007 and a new $40 million Senior Secured facility. With the proceeds
thereof, the Company paid off the TP Holding Corp. convertible subordinated
bridge promissory notes owing to CHPIII, one of our stockholders, of
approximately $19.0 million in the aggregate, including accrued interest, which
were due on February 28, 2003 and the convertible subordinated bridge promissory
note due to CHPIII of approximately $9.4 million, including accrued interest,
which was due on February 28, 2003.

Cash generated from operating activities and availability under our existing
credit facilities have been our principal sources of liquidity. Our liquidity
needs arise primarily from debt service, working capital, capital expenditure
and general corporate requirements. As of February 23, 2002 we had approximately
$37.5 million available under our Senior Secured Credit Facility. We believe
that cash flow from our operating activities combined with the availability of
funds under our new senior secured credit facility will be sufficient to support
our operations and liquidity requirements for the foreseeable future.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 141 requires that all business combinations initiated
subsequent to June 30, 2001, be accounted for under the purchase method of
accounting. The pooling-of-interests method is no longer allowed. Under SFAS
No. 142, goodwill and intangible assets with indefinite lives are no longer
amortized but are reviewed annually (or more frequently if impairment indicators
arise) for impairment. Separable intangible assets that are not deemed to have
indefinite lives will continue to be amortized over their useful lives (but with
no maximum life).

In April 2002, the FASB issued SFAS No. 145, RECISSION OF FASB STATEMENTS
NO. 4, 44 AND 64, AMENDMENT OF FASB STATEMENT NO. 13, AND TECHNICAL CORRECTIONS,
which rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishments of
Debt, and an amendment of that Statement SFAS No. 64, Extinguishments of Debt
Made to Satisfy Sinking-Fund Requirements. The Statement also rescinds SFAS
No. 44, Accounting for Intangible Assets of Motor Carriers. The Statement amends
SFAS No. 13, Accounting for Leases, to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. The Company will adopt SFAS No. 145 in
September 2002 and does not expect this adoption to have a material effect on
the financial

30
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statements, except for the reclassification of the extraordinary item, loss on
early extinguishments of debt.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK. We have market risk exposure from changes in interest
rates on our variable rate debt. Our policy is to manage interest rate exposure
through the use of a combination of fixed and floating rate debt instruments and
through the use of interest rate swaps. Our Credit Agreement and our gold
consignment agreement are variable rate facilities. The interest rates under
these facilities are based on a floating benchmark rate (such as LIBOR or the
Federal Funds rate) plus a fixed spread. We do not use derivatives or other
financial instruments for trading purposes. Upon the issuance of the Unsecured
Notes and the new Senior Secured Credit Facility on February 20, 2002, we
settled a portion of our existing swap agreements representing a notional amount
of $37.5 million and the remaining interest rate swap agreement representing a
notional amount of $25 million has been reclassified as a trading derivative. As
such, any changes in the fair value of this derivative will result in a
mark-to-market adjustment of the carrying value with any changes being reported
to other income or loss. As of February 23, 2002, the fair value of this
derivative represented a liability of approximately $1.3 million.

Our derivatives and other financial instruments subject to interest rate
risk consist of (a) long-term debt (b) a trading derivative and (c) notional
amount under the gold consignment agreement. The net market value of these
financial instruments at February 23, 2002 represented a net liability of
$7.2 million.

SEMI-PRECIOUS STONES. We purchase the majority of our semi-precious stones
from a single source supplier in Germany. We believe that all of our major
competitors purchase their semi-precious stones from this same supplier. The
purchases are payable in Euros. In order to hedge our market risk, we have from
time to time purchased forward currency contracts. During 2002, we did not
purchase any forward Deutsche Mark contracts. During 2001, we purchased a total
of $2.0 million in forward currency contracts with various maturity dates
resulting in a net gain of $0.1 million.

GOLD. We purchase all of our gold requirements from a bank through our
revolving credit and gold consignment agreement. We consign the majority of our
gold from a bank and pay for gold as the product is shipped to customers and as
required by the terms of the gold consignment agreement. As of February 23,
2002, we had hedged our gold requirements for the fiscal year ending August 31,
2002 by covering the majority of our estimated gold requirements through the
purchase of gold options. At February 23, 2002, we held options to purchase
27,500 ounces of gold at an average price of $303 per ounce which expire on a
monthly basis through July 2002.

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Although
management believes that the expectations reflected in such forward looking
statements are based upon reasonable assumptions, the Company can give no
assurance that these expectations will be achieved. Any change in or adverse
development, including the following factors may impact the achievement of
results in or accuracy of forward-looking statements: the price of gold and
precious, semiprecious and synthetic stones; the Company's access to students
and consumers in schools; the seasonality of the Company's business; regulatory
and accounting rules; the Company's relationship with its independent sales
representatives; fashion and demographic trends; general economic, business, and
market trends and events, especially during peak buying seasons for the
Company's products; the Company's ability to respond to customer change orders
and delivery schedules; development and operating costs; competitive pricing
changes; successful completion of management initiatives designed to achieve
operating efficiencies; the Company's cash flows; and the Company's ability to
draw down funds under its current bank financings and to enter into new bank
financings. The foregoing factors are not exhaustive. New factors may emerge or
changes may occur that impact the Company's operations and businesses.
Forward-looking statements herein are expressly qualified on the foregoing or
such other factors as may be applicable.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no materials pending legal proceedings to which the Company is a
party or to which any of its property is subject. The Company monitors all
claims, and the Company accrues for those, if any, which management believes may
be adversely decided against the Company and result in money damages to a third
party.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<Table>

99.1 CEO Certification Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of
2002

99.2 CEO Certification Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of
2002

99.3 CFO Certification Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of
2002

99.4 CFO Certification Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of
2002
</Table>

(b) Reports on Form 8-K

A Form 8-K dated May 24, 2002 and filed May 29, 2002 announcing the
dismissal of Arthur Andersen LLP as our independent public accountants
and the engagement of Deloitte & Touche LLP as our new independent public
accountants.

A Form 8-K dated July 15, 2002 and filed July 30, 2002 announcing the
acquisition of all the issued and outstanding stock and warrants of
Milestone Marketing Incorporated.

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AMERICAN ACHIEVEMENT CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on September 10, 2002.

<Table>

AMERICAN ACHIEVEMENT CORPORATION

By: /s/ DAVID G. FIORE
-----------------------------------------
David G. Fiore
CHIEF EXECUTIVE OFFICER

By: /s/ SHERICE P. BENCH
-----------------------------------------
Sherice P. Bench
CHIEF FINANCIAL OFFICER
</Table>