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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 3, 1998.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------- -----------------
Commission File No. 1-5064
JOSTENS, INC.
--------------------------------------------------------
(Exact name of Registrant as specified in its charter)
MINNESOTA 41-0343440
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5501 NORMAN CENTER DRIVE, MINNEAPOLIS, MINNESOTA 55437
- ------------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)
(612) 830-3300
----------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Shares, $.33 1/3 par value New York Stock Exchange, Inc.
Common Share Purchase Rights New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
The aggregate market value of voting stock held by nonaffiliates of the
Registrant on March 3, 1998, was $890,609,303. The number of shares outstanding
of Registrant's only class of common stock on March 3, 1998, was 38,203,080.
1
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT FORM
- ------------------------------------- ---------------
10-K Parts II and IV
Annual Report to Shareholders for
The Year Ended January 3, 1998
Proxy Statement for Annual Meeting of Parts I and III
Shareholders to be held April 23, 1998
2
PART I
Item 1. BUSINESS
(a) The Company is a Minnesota corporation, incorporated in 1906. The
Company provides products and services that help people celebrate
achievement, reward performance, recognize service and commemorate
experiences throughout their lives. Products and services include:
yearbooks, class rings, graduation products, student photography
packages, customized business performance and service awards, sports
awards and customized affinity products.
In July 1997, the Board of Directors authorized the repurchase of up to
$100 million in shares of the Company's common stock. Under the
authorization, shares may be repurchased periodically in the open
market and through privately negotiated transactions. The repurchase is
to be funded from the Company's cash and short-term investment balance,
as well as short-term borrowings. As of January 3, 1998, the Company
had repurchased $20 million in common shares.
In July 1997, the Company purchased the Gold Lance class ring brand
from Town & Country Corporation for $9.5 million in cash. Under the
terms of the agreement, the Company purchased the Gold Lance name,
accounts and notes receivable, and tooling.
In March 1997, the Company closed its Porterville, California,
graduation announcement facility and transferred operations to the
Company's announcement plant in Shelbyville, Tennessee.
In February 1997 and October 1996, the Company entered into joint
venture agreements with partners in Columbia and Chile, respectively.
The Company began selling its products in these countries during
calendar 1997. The Company's commitment to provide financing to these
joint ventures is insignificant.
Since November 1996, Jostens has overseen a Mexican facility in Nuevo
Laredo, Mexico, which is being operated under a contract manufacturing
agreement. Based on the successful results of a test project completed
in February 1997, the Company transferred virtually all non-precious
metal ring finishing volume to the facility in Mexico. Furthermore, in
February 1988, the Company announced plans to shift some high school
gold ring finishing volume from the Attleboro, Massachusetts, and
Denton, Texas facilities, to the Nuevo Laredo, Mexico, facility.
In July 1996, the Company closed its Winnipeg, Manitoba, jewelry
manufacturing facility and transferred production to the Denton, Texas
plant. Additionally, a photography plant in Lachine, Quebec was closed
in January 1997 with processing volume transferred to the Winnipeg
facility.
In September 1995, the Company repurchased 7,011,108 shares of its
common stock, the maximum number of shares allowable for purchase, for
$169.3 million through a Modified Dutch Auction tender offer. The
repurchase was funded from the Company's cash and short-term investment
balance, as well as short-term borrowings.
In June 1995, the Company sold its JLC curriculum software subsidiary
to a group led by Bain Capital, Inc. Information related to the sale of
JLC is in the financial statement footnote "Discontinued Operations" on
pages 44 through 45 of the 1997 Annual Report to Shareholders.
3
In October 1995, the Company sold its Wicat Systems business to Wicat
Acquisition Corp., a private investment group. Wicat Systems was the
small, computer-based aviation training subsidiary of JLC that was
retained in the sale of JLC, but held for sale. The Company treated
Wicat Systems as a discontinued operation in June 1995, pending the
sale of the business. Information related to the sale of Wicat Systems
is in the financial statement footnote "Discontinued Operations" on
pages 44 through 45 of the 1997 Annual Report to Shareholders.
In October 1996, the Company elected to change its fiscal year end from
June 30 to the Saturday closest to December 31, effective December 29,
1996. The change was made to enable better business planning and
internal management.
(b) The Company's operations are classified into two business segments:
school-based recognition products and services (School Products) and
longevity and performance recognition products and services for
businesses (Recognition). Business segment financial information is in
the financial statement footnote "Business Segment Information"
on pages 43 and 44 of the 1997 Annual Report to Shareholders.
4
(c) The Company's two business segments sell their products in elementary
schools, high schools, colleges and businesses in the 50 United States
and some foreign countries through a sales force of approximately 950
representatives. In the year ended June 30, 1995, the Company had a
discontinued operation (JLC) that produced educational software for
students in kindergarten through grade 12. The JLC discontinued
operation included JLC's Wicat subsidiary which was subsequently sold
in October 1995.
SCHOOL PRODUCTS SEGMENT
School Products recognizes individual and group achievement and
affiliation primarily in the academic market. School Products comprises
five businesses: Printing & Publishing, Jewelry, Graduation Products,
U.S. Photography and Jostens Canada. The School Products segment's
sales of $631.9 million in calendar 1997 included these five lines of
business and $6.9 million in other sales.
Printing & Publishing: The Company manufactures and sells student-
created yearbooks in elementary schools, junior high schools, high
schools and colleges. Independent sales representatives and their
associates work closely with each school's yearbook staff (both
students and a faculty adviser), assisting with the planning, editing,
layout and printing scheduling until the book is completed. The
Company's sales representatives work with the faculty advisers to renew
yearbook contracts each year. This business also prints commercial
brochures, and promotional books and materials. Printing & Publishing
contributed approximately 37% of School Products segment sales volume
for the year ended January 3, 1998 (calendar 1997), and 32%, 30%, 37%
and 36% for the year ended December 28, 1996 (calendar 1996), the six
months ended December 28, 1996 (the 1996 Transition Period), fiscal
1996 and fiscal 1995, respectively.
Jewelry: The Company manufactures and sells rings representing a
graduating class primarily to high school and college students. This
product line contributed approximately 28% of the School Products
segment sales volume in calendar 1997 and 25%, 38%, 28% and 27% in
calendar 1996, the 1996 Transition Period, fiscal 1996 and fiscal 1995,
respectively. Many schools have only one school-designated supplier to
its students each year. Rings may be sold through bookstores, other
campus stores, retail jewelry stores and within the school through
temporary order-taking booths. The Company, through its independent and
employee sales representatives, manages the process of interacting with
the student through ring design, promotion, ordering and presentation
to relieve school officials of any administrative burden connected with
students purchasing this symbol of achievement.
Graduation Products: The Company manufactures and sells graduation
announcements and accessories, diplomas and caps and gowns to students
and administrators in high schools and colleges. This product group
contributed approximately 24% of School Products segment sales volume
in calendar 1997, and 21%, 12% , 23% and 24% of sales to this segment
in calendar 1996, the 1996 Transition Period, fiscal 1996 and fiscal
1995, respectively. Jostens independent and employee sales
representatives make calls on schools and sales are taken through
temporary order-taking booths, telemarketing programs and college
bookstores.
Photography: U.S. Photography provides class and individual school
pictures to students in elementary, junior high and high school; high
school senior portrait photography; photography for proms and other
special events; and other photo-based products such as student ID
cards. These services are provided through a sales force and
independent dealers, who arrange the sittings/shootings at individual
schools or in their own studios. This business contributed
approximately 4% of School Products segment sales volume in calendar
1997, and 4%, 8%, 4% and 4% in calendar 1996, the 1996 Transition
Period, fiscal 1996 and fiscal 1995, respectively. The Company
processes the photos at its plants in the U.S. and Canada.
5
Jostens Canada: The Company is the leader in school photography,
yearbooks and class rings in Canada. Approximately 59% of the calendar
1997 sales in Canada were from school photography. Jostens Canada
contributed approximately 6% of School Products segment sales in
calendar 1997, and 7%, 10%, 7% and 7%, in calendar 1996, the 1996
Transition Period, and fiscal 1996 and fiscal 1995, respectively.
MARKETS: School Products serves elementary schools, middle schools,
high schools, colleges, alumni associations and other organizations in
the United States and Canada through approximately 865 independent and
employee sales representatives. Jostens also maintains an international
sales force servicing primarily American schools and military
installations in about 50 countries.
PRODUCTS: School products include elementary through college yearbooks,
commercial printing, desktop publishing curriculum kits, class rings,
graduation caps and gowns, graduation announcements and accessories,
diplomas, alumni products, individual and group school pictures, and
senior graduation portraits .
SALES FORCE: The School Products segment markets its products primarily
through independent and employee sales representatives. Approximately
418 persons are dedicated to selling class rings and graduation
products, 326 to yearbooks and 121 to photography.
Information related to changes in sales representatives' contracts is
under the caption "Commitment and Contingencies" on pages 22 through
23, and pages 38 through 39 in the Company's Annual Report to
Shareholders for the year ended January 3, 1998.
6
SEASONALITY: This segment experiences strong seasonal business swings
concurrent with the school year, with 40-45 percent of full-year sales
and 65-70 percent of full-year profits occurring in the period from
April to June. The business generally requires short-term financing
during the course of the year.
COMPETITION: The business of the School Products segment is highly
competitive, primarily in the pricing, product development and
marketing areas.
Printing & Publishing competition is primarily made up of two national
firms (Herff Jones and Taylor Publishing) and one smaller regional firm
(Walsworth Publishing). All compete on price, print quality, product
offerings and service. Technological offerings in the way of computer
based curricula are becoming a more significant market differentiator.
In the class ring business, the Company has two primary national
competitors: Herff Jones and Commemorative Brands (CBI), which markets
through the Balfour and ArtCarved brands. Herff Jones distributes its
product in schools, in a manner similar to the Company's, while CBI
distributes its product through multiple distribution channels
including schools, independent and chain jewelers and mass
merchandisers.
In the Graduation Products business, several national and numerous
local and regional competitors offer products similar to those of the
Company.
In Photography, the Company competes with Lifetouch, Olan Mills, Herff
Jones and a variety of regional and locally owned and operated
photographers. In Canada, the Company competes with Lifetouch and a
variety of regional and locally owned and operated photographers.
The Company's strategy for competing with these companies is based on
its service and quality.
RECOGNITION SEGMENT
The Recognition segment helps companies and other organizations promote
and recognize achievement in people's careers. It designs, communicates
and administers programs to help customers improve performance and
recognize employee service. It also produces awards for championship
team accomplishments and affinity products for associations.
This business manufactures and markets a wide variety of products sold
primarily to corporations and businesses in the United States and
Canada. The products manufactured by Recognition include customized and
personalized jewelry, rings, watches and engraved certificates. In
addition, this business also remarkets items manufactured by others for
incorporation into programs sold to Recognition customers. These
products include items supplied by Lenox, Hartmann, Waterman, Kirk
Stieff and Oneida.
MARKETS: Recognition serves customers from small and mid-size companies
to global corporations, professional and amateur sports teams and
special interest associations.
PRODUCTS: Recognition offers an assortment of products and services
tailored to the needs of the organization it is serving under a
Strategic Recognition(TM) approach. For global companies, the Company
customizes programs to meet specific customer needs.
7
Standardized programs, such as Symphony(TM) and Crescendo(TM), provide
small and mid-size companies the same product and service features
without complex customization. Recognition enjoys exclusive product and
personalization distributor arrangements including
Hartmann luggage and Lenox china for the service award marketplace.
SALES FORCE: Recognition sells its products through approximately 85
independent sales representatives who develop programs incorporating
Recognition products.
COMPETITION: The Recognition business competes primarily with O.C.
Tanner and the Robbins Company on a national basis, as well as several
regional companies. Recognition focuses on service and product
offerings in competing with these companies.
JOSTENS, INC. -- INFORMATION REGARDING ALL BUSINESSES
BACK ORDERS: Because of the nature of the Company's business, generally
all orders are filled within a few months from the time of placement.
However, the School Products segment obtains student yearbook contracts
in one year for a significant portion of the yearbooks to be delivered
in the next year. Often the prices of the yearbooks are not established
at the time of the order because the content of the books may not have
been finalized. Subject to the foregoing qualifications, the Company
estimates that as of January 3, 1998, the backlog of orders related to
continuing operations was approximately $276.2 million, compared with
$260.8 million at December 28, 1996, primarily related to student
yearbooks, jewelry and graduation products. The Company expects most of
the backlog orders to be confirmed and filled in 1998.
ENVIRONMENTAL: Information related to the Company's environmental
management progam is under the caption "Commitment and Contingencies"
on pages 22 through 23, and pages 38 through 39 in the Company's Annual
Report to Shareholders for the year ended January 3, 1998.
RAW MATERIALS: All of the raw materials used by the Company are
available from several sources. Gold is an important raw material and
accounted for approximately 10% of the Company's cost of products sold
for the year ended January 3, 1998. For the 1996 Transition Period and
the fiscal
8
years ended June 30, 1996 and 1995, gold usage accounted for
approximately 11%, 10% and 10%, respectively, of the Company's cost of
products sold.
INTELLECTUAL PROPERTY: The Company has no patents, licenses, franchises
or concessions that are material to it as a whole, but does have a
number of proprietary trade secrets, trademarks and copyrights that it
considers important. In addition, licenses are an important part of
certain aspects of the Company's businesses; however, the loss of any
license would not have a material affect on the Company's operations.
SIGNIFICANT CUSTOMERS: No material part of any business of the Company
depends upon a single customer or very few customers.
FEDERAL GOVERNMENT CONTRACTS: No material portion of the Company's
business is subject to renegotiation of profits or the termination of
contracts or subcontracts at the election of the United States
Government.
EMPLOYEES: At January 3, 1998, the total number of employees of the
Company was approximately 6,500 (not including independent sales
representatives). Because of seasonal fluctuations and the nature of
the business, the number of employees tends to vary.
As of January 3, 1998, the Company had 277 employees who were members
of two separate unions. The Company has not had a work stoppage or
strike that had a material impact on the Company's operations.
(d) The Company's foreign sales are derived primarily from operations in
Canada and the United Kingdom. The accounts and operations of the
Company's foreign businesses are not material. Local taxation, import
duties, fluctuation in currency exchange rates and restrictions on
exportation of currencies are among risks attendant to foreign
operations, but these risks are not considered material with respect to
the Company's business. The profit margin on foreign sales is
approximately the same as the profit margin on domestic sales.
9
Item 2. PROPERTIES
The principal plants, which are owned by the Company unless
otherwise noted, are as follows:
APPROXIMATE
AREA IN
LOCATION PRINCIPAL PRODUCTS SQUARE FEET
Attleboro, Massachusetts Class Rings 52,000
Denton, Texas Class Rings 57,000
Nuevo Laredo, Mexico* Class Rings 43,000
Laurens, South Carolina Caps and Gowns 98,000
Laurens, South Carolina* Caps and Gowns 105,000
Red Wing, Minnesota Graduation Products 132,000
Shelbyville, Tennessee Graduation Products 87,000
Burnsville, Minnesota * Scholastic Support 47,000
Edina, Minnesota * IS Support 21,000
Owatonna, Minnesota ** Scholastic 118,000
Owatonna, Minnesota * Scholastic Support 24,000
Memphis, Tennessee Recognition Awards 67,000
Princeton, Illinois Recognition Awards 65,000
Sherbrooke, Quebec* Recognition Awards 15,000
Clarksville, Tennessee Yearbooks 105,000
State College, Pennsylvania Yearbooks 66,000
Topeka, Kansas Yearbooks 236,000
Visalia, California Yearbooks 96,000
Winston-Salem, North Carolina Yearbooks/Commercial Printing 132,000
Anaheim, California* Photography Retail 12,000
Webster, New York Photography Products 60,000
Winnipeg, Manitoba Photography and Yearbooks 69,000
Winnipeg, Manitoba * Class Rings 22,000
Executive offices are located in a company-owned general office building,
which has approximately 116,000 square feet and is located in a Minneapolis,
Minnesota suburb. A portion of this facility has been financed through
revenue bonds.
10
Item 2. PROPERTIES (continued)
* Represents leased properties with the following expiration dates.
Nuevo Laredo 1998
Laurens 1998
Burnsville 2000
Edina 1999
Owatonna 2000
Sherbrooke 2002
Anaheim 1998
Winnipeg 2000
** Several locations.
Item 3. LEGAL PROCEEDINGS
There are no material pending or threatened legal,
governmental, administrative or other proceedings to which the
Company or any subsidiary as a defendant or plaintiff is
subject.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
11
Item 4A. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference is information under the caption "Election
of Directors" contained on pages 3 through 6 of the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held on April 23,
1998. Executive officers of the Registrant are as follows:
YEARS OF
SERVICE WITH
NAME THE COMPANY AGE TITLE AND BUSINESS EXPERIENCE
- ----- ----------- --- -----------------------------
Robert C. Buhrmaster 5 50 CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Mr. Buhrmaster joined the Company in December 1992
as Executive Vice President and Chief Staff
Officer. He was named President and Chief
Operating Officer in June 1993; was named Chief
Executive Officer in March 1994; and was named
Chairman in February 1998. Prior to joining the
Company, Mr. Buhrmaster was with Corning, Inc. for
18 years, most recently as Senior Vice President of
Strategy and Business Development.
Carl H. Blowers 1 58 SENIOR VICE PRESIDENT - MANUFACTURING,
TECHNOLOGY, AND OPERATIONS
Mr. Blowers joined the Company in June 1996 as
Division Vice President, Manufacturing &
Engineering and was appointed to his current
position in February 1998. Prior to joining the
Company, Mr. Blowers was with Corning, Inc. for 27
years, most recently as Vice President and General
Manager of Corning's Advanced Materials and Process
Technologies Division.
Thomas W. Jans 2 49 VICE PRESIDENT AND PRESIDENT OF THE RECOGNITION
DIVISION
Mr. Jans joined the Company in August 1995 as
President of Business Recognition. He was appointed to
his current position in May 1997. From 1992 to 1995, he
worked for Carlson Travel, most recently as Executive
Vice President of Global Sales and Marketing.
David J. Larkin 0 58 EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING
OFFICER
Mr. Larkin joined the Company in February 1998 in
his current position. From 1995 to 1998, Mr.
Larkin was an independent management consultant.
Prior to 1995, he worked for Honeywell Inc. for 30
years, most recently as Chairman, President and CEO
of Honeywell Limited in Canada.
12
YEARS OF
SERVICE WITH
NAME THE COMPANY AGE TITLE AND BUSINESS EXPERIENCE
- ----- ----------- --- -----------------------------
Gregory S. Lea 4 45 VICE PRESIDENT - COLLEGE AND UNIVERSITY
Mr. Lea joined the Company in November 1993 as Vice
President - Total Quality Management. He was named
to his current position in June 1995. Prior to
joining the Company, Mr. Lea spent 19 years with
International Business Machines Corp. in various
financial, operations and quality positions.
John J. Mann 2 53 VICE PRESIDENT - SCHOLASTIC DIVISION
Mr. Mann joined the Company in April 1996 as
General Manager - Scholastic and was appointed to
his current position in May 1997. Prior to joining
the Company, Mr. Mann was a director at Coopers &
Lybrand Consulting. From 1991 to 1995, he worked
for Grand Metropolitan PLC, most recently as Senior
Vice President of strategic customer service
development at Pillsbury.
Lee U. McGrath 3 41 VICE PRESIDENT AND TREASURER
Mr. McGrath joined the Company in May 1995 in his
current position. For the six years prior to
joining the Company, he was the assistant treasurer
for H.B. Fuller Company, a manufacturer of chemical
products.
William N. Priesmeyer 1 53 SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Mr. Priesmeyer joined the Company in August 1997 in
his current position. From April to August 1997,
Mr. Priesmeyer was Senior Vice President and CFO of
MVE Holdings. From 1994 to 1997, he was Senior
Vice President and CFO with Waldorf Corp.; and from
1993 to 1994 was Vice President and CFO for
DataCard Corp.
Kevin M. Whalen 5 38 VICE PRESIDENT - CORPORATE COMMUNICATIONS &
INVESTOR RELATIONS
Mr. Whalen joined the Company in 1993 as Director -
Corporate Communications and was appointed to his
current position in May 1997. Prior to joining the
Company, he worked for Honeywell Inc. for two years
as the Director of Corporate Public Relations.
13
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
Incorporated by reference is information under the captions "Dividends"
on page 22; "Unaudited Quarterly Financial Data" on page 46 and
"Shareholder Information" on page 48 in the Company's Annual Report to
Shareholders for the year ended January 3, 1998.
Item 6. SELECTED FINANCIAL DATA
Incorporated by reference is information under the caption "Six-Year
Financial Summary" on page 47 in the Company's Annual Report to
Shareholders for the year ended January 3, 1998.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference is information under the caption "Management
Discussion and Analysis" on pages 16 through 24 of the Company's Annual
Report to Shareholders for the year ended January 3, 1998.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference are consolidated balance sheets of Jostens,
Inc. as of January 3, 1998, and December 28, 1996, and the related
consolidated statements of operations, changes in shareholders'
investment and cash flows for the years ended January 3, 1998, and
December 28, 1996 (unaudited); the six-month transition period ended
December 28, 1996; and the years ended June 30, 1996 and 1995, together
with the related notes and the report of Ernst & Young, LLP, independent
auditors, all contained on pages 25 through 46 of the Company's Annual
Report to Shareholders for the year ended January 3, 1998.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTING AND FINANCIAL DISCLOSURE
None.
14
PART III
Item 10. DIRECTORS AND OFFICERS OF THE REGISTRANT
In addition to certain information as to executive officers of the
Company included in Part I of this Form 10-K, the information on pages
3 through 6 of the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held April 23, 1998, with respect to directors and
executive officers of the Company, is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
Incorporated by reference is information under the caption "Executive
Compensation" on pages 8 through 15 of the Company's Proxy Statement
for the Annual Meeting of Shareholders to be held April 23, 1998.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference is information under the caption "Shares held
by Directors and Officers" on page 7 of the Company's Proxy Statement
for the Annual Meeting of Shareholders to be held April 23, 1998.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
15
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) 1. Financial Statements: The following financial statements of the
Company appearing on the indicated pages of the Annual Report to
Shareholders for the year ended January 3, 1998, are
incorporated herein by reference.
PAGES IN
ANNUAL REPORT
-------------
Consolidated Balance Sheets -
January 3, 1998 and December 28, 1996 28 and 29
Statement of Consolidated Operations
for the years ended January 3, 1998, and
December 28, 1996 (unaudited); the six-month
period ended December 28, 1996; and the
years ended June 30, 1996 and 1995 26
Statement of Consolidated Cash Flows for the years 27
ended January 3, 1998, and December 28, 1996
(unaudited); the six-month period ended
December 28, 1996; and the years ended June 30,
1996 and 1995.
Statements of Consolidated Changes in
Shareholders' Investment for the years ended
January 3, 1998 and December 28, 1996 (unaudited);
the six-month period ended December 28, 1996;
and the years ended June 30, 1996 and 1995. 30
Notes to Consolidated Financial Statements 31 through 46
2. Financial Statement Schedule
PAGE IN
10-K
-------
Schedule II - Valuation and Qualifying Accounts S-1
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have
been omitted as not required or not applicable or the information
required to be shown thereon is included in the financial statements
and related notes.
16
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(continued)
3. Executive Agreements
The following agreement is an exhibit to this Annual Report on
Form 10-K:
Deferred Compensation Plan
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
year ended January 3, 1998.
(c) Exhibits
2.a. Stock Purchase Agreement by and between JLC Holdings, Inc.
Software Systems Corp. and JLC Acquisition, Inc. and
Jostens, Inc. (incorporated by reference to Exhibit 2.1
contained in the Current Report on Form 8-K filed on
July 14, 1995).
3.a. Articles of Incorporation and Bylaws (Incorporated by
reference to Exhibit 3(a) contained in the Annual Report on
Form 10-K for the year ended June 30, 1993).
4.a. Rights Agreement dated August 9, 1998, between the Company
and Norwest Bank Minnesota, N.A. (incorporated by reference
to the Company's Form 8-A dated August 17, 1998, File No. 1-
5064).
b. Form of Indenture, dated as of May 1, 1991, between Jostens,
Inc. and Norwest Bank Minnesota, N.A., as Trustee
(incorporated by reference to Exhibit 4.1 contained in the
Company's Form S-3, File No. 33-40233).
10.a. Company's 1984 Stock Option Plan (incorporated by reference
to the Company's Registration Statement of Form S-8,
File No. 2-95076).
b. Company's 1987 Stock Option Plan (incorporated by reference
to the Company's Registration Statement of Form S-8, File
No. 33-19308).
c. Company's 1992 Stock Incentive Plan (incorporated by
reference to Exhibit 10(d) contained in the Annual Report on
Form 10-K for the year ended June 30, 1992).
d. Form of Contract entered into with respect to Executive
Supplemental Retirement Plan (incorporated by reference to
the Company's Form 8 dated May 2, 1991).
e. Written description of the Company's Retired Director
Consulting Plan (incorporated by reference to the Company's
Form 8 dated May 2, 1991).
f. 1992 Stock Incentive Plan Performance Share Agreement (filed
with this report).
17
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(continued)
g. Employment and Separation Agreement dated February 3, 1997,
with Charles W. Schmid (incorporated by reference to Exhibit
10(j) contained in the Transition Report on Form 10-K for
the six-month period ended December 28, 1996).
h. Employment and Separation Agreement dated April 1, 1997, with
Jack Thornton.
i. Employment and Consulting Transition Agreement dated
December 19, 1997, with Orville E. Fisher, Jr.
j. Deferred Compensation Plan (filed with this report).
13. Annual Report to Shareholders for the year ended January 3,
1998.
21. List of Company subsidiaries.
23. Consent of Independent Auditors.
27. Financial Data Schedule.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
JOSTENS, INC.
Date: March 31, 1998
By /S/ ROBERT C. BUHRMASTER
-------------------------------
Robert C. Buhrmaster
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrants in
the capacities and on the dates indicated.
/S/ ROBERT C. BUHRMASTER
- --------------------------------- March 31, 1998
Robert C. Buhrmaster (Principal Executive Officer)
Chairman of the Board, President and
Chief Executive Officer and Director
/S/ WILLIAM N. PRIESMEYER
- ---------------------------------- March 31, 1998
William N. Priesmeyer (Principal Financial
and Accounting Officer)
Senior Vice President and Chief Financial Officer
/S/ LILYAN H. AFFINITO
- ---------------------------------- March 31, 1998
Lilyan H. Affinito
Director
/S/ MANNIE L. JACKSON
- ---------------------------------- March 31, 1998
Mannie L. Jackson
Director
/S/ JACK W. EUGSTER
- ---------------------------------- March 31, 1998
Jack W. Eugster
Director
/S/ RICHARD A. ZONA
- ---------------------------------- March 31, 1998
Richard A. Zona
Director
/S/KENDRICK B. MELROSE
- ---------------------------------- March 31, 1998
Kendrick B. Melrose
Director
/S/WALKER LEWIS
- ---------------------------------- March 31, 1998
Walker Lewis
Director
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JOSTENS, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)
- ---------------------------------------------------------------------------------------------------------------
COL A. COL. B COL. C COL. D COL. E
- ---------------------------------------------------------------------------------------------------------------
Additions
-----------------------
Charged to
Balance at Charged to Other Balance at
Beginning Costs and Accounts - Deductions - End of
Description of Period Expenses Describe Describe Period
- --------------------------------------------------------------------------------------------------------------
Reserves and allowances deducted
from asset accounts:
- --------------------------------------------------------------------------------------------------------------
Allowances for uncollectible accounts:
Year ended January 3, 1998 $ 6,884 $ 2,245 $ - $ 1,683 (1) $ 7,446
Six months ended December 28, 1996 $ 5,966 $ 1,202 $ - $ 284 (1) $ 6,884
Year ended June 30, 1996 $ 9,049 $ 2,195 $ - $ 5,278 (1) $ 5,966
Year ended June 30, 1995 $13,749 $ 3,552 $ - $ 8,252 (2) $ 9,049
- --------------------------------------------------------------------------------------------------------------
Allowances for sales returns:
Year ended January 3, 1998 $ 4,787 $18,352 $ - $17,570 (3) $ 5,569
Six months ended December 28, 1996 $ 6,518 $ 6,308 $ - $ 8,039 (3) $ 4,787
Year ended June 30, 1996 $ 7,509 $12,951 $ - $13,942 (3) $ 6,518
Year ended June 30, 1995 $ 6,719 $12,763 $ - $11,973 (3) $ 7,509
- --------------------------------------------------------------------------------------------------------------
SFAS No. 109 valuation allowance:
Year ended January 3, 1998 $ 4,494 $ 451 (4) $ - $ 2,030 (10) $ 2,915
Six months ended December 28, 1996 $ 5,920 $ - $ - $ 1,426 (11) $ 4,494
Year ended June 30, 1996 $ 2,117 $ 3,803 (4) $ - $ - $ 5,920
Year ended June 30, 1995 $ 3,642 $ - $ - $ 1,525 (5) $ 2,117
- --------------------------------------------------------------------------------------------------------------
Overdraft reserves:
Year ended January 3, 1998 $ 7,344 $ 2,946 $ - $ 1,968 (1) $ 8,322
Six months ended December 28, 1996 $ 6,545 $ 1,740 $ - $ 941 (1) $ 7,344
Year ended June 30, 1996 $ 6,157 $ 2,838 $ - $ 2,450 (1) $ 6,545
Year ended June 30, 1995 $ 7,796 $ 1,943 $ - $ 3,582 (1) $ 6,157
- -------------------------------------------------------------------------------------------------------------
Reserves and allowances added
to liability accounts:
- -------------------------------------------------------------------------------------------------------------
Restructuring charges:
Year ended January 3, 1998 $ 1,300 $ - $ - $ 800 (9) $ 500
Six months ended December 28, 1996 $ 2,700 $ - $ - $ 1,400 (8) $ 1,300
Year ended June 30, 1996 $ 8,636 $ - $ - $ 5,936 (6) $ 2,700
Year ended June 30, 1995 $39,821 $ - $ - $31,185 (7) $ 8,636
- -----------------------------------------------------------------------------------------------------------
Note (1) -- Uncollectible accounts written off - net of recoveries.
Note (2) -- Uncollectible amounts written off - net of recoveries ($5,796)
plus disposition of Jostens Learning ($2,456).
Note (3) -- Returns processed against reserve.
Note (4) -- Increased due to the increase in foreign tax credits not likely
to be utilized.
Note (5) -- Reduced for utilization of Jostens Learning NOL.
Note (6) -- Payments ($2,400), Noncash items ($400), and disposition of
Wicat ($3,136).
Note (7) -- Payments ($21,090), Noncash items ($3,523) and disposition of
Jostens Learning ($6,572).
Note (8) -- Payments ($1,000), Noncash items ($400)
Note (9) -- Payments ($700), Noncash items ($100)
Note (10) -- Reduced for anticipated NOL utilization related to the
Photography business.
Note (11) -- To adjust reserve for foreign tax credits and NOL per the returns
as filed.
S-1
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