Jostens Has Grabbed the Brass Ring : Growth: Subsidiary’s computerized education system has made tough times more palatable for the parent company, which has seen the recession cut into the sale of school rings, pictures and other mementos.
To say that Jostens Inc. Chairman William Lurton is happy with his company’s acquisition of Educational Systems Corp. is the understatement of the year.
Since the Minneapolis-based manufacturer of class rings and school yearbooks paid $65 million in stock for the San Diego-based education software company in 1989 and made it the nucleus of San Diego-based Jostens Learning Corp., sales at the subsidiary have taken off, much to Lurton’s delight.
Visiting San Diego last week in his capacity as chairman of the U.S. Chamber of Commerce, Lurton said the subsidiary’s sales have grown from $85 million in 1989 to $172 million for the year ended last June, a compounded growth rate of 25%.
Local payroll at the San Diego-based Jostens operation has grown from 205 to 420 in three years. Since 1989, Jostens Learning has tripled its floor space to about 130,000 square feet of plant and offices in the Mira Mesa area.
Meanwhile, the company’s market penetration--the number of schools now using Jostens Learning computerized education systems--has grown to 8,000 schools, from 1,500.
“It’s been a very, very successful investment, a very successful acquisition,” Lurton said.
Jostens Learning’s performance has made tough times more palatable for parent Jostens Inc. The recession has cut into the company’s sales of rings, school pictures and other mementos. Revenues for the fiscal year ended in June increased only slightly, to $876 million from $860 million for the previous year.
Meanwhile, profits for fiscal 1992 dropped slightly, to $61.4 million from $64.2 million in 1991.
Jostens Learning is very much the bright light in the parent company’s constellation of operations. In fact, it now controls about 55% of the educational software market, said Robb Prince, vice president and treasurer of Jostens Inc. in Minneapolis.
The main competitor in the so-called “integrated learning systems” market is Computer Curriculum Corp. of Palo Alto, a subsidiary of Simon & Schuster, which is owned by Paramount.
The success of the division is founded on the value of the educational software developed in San Diego in the early 1980s by a staff dominated by John Kernan, who was chief executive of ESC at the time of the Jostens buyout and remains chief executive and chairman of the Jostens Learning subsidiary.
“Why has the company grown so quickly?” Prince said. “The product really meets the needs for elementary and high schools to increase the productivity of the learning process, and it allows each student to work at his or her own pace.”
The company’s market position was strengthened, Prince said, with the acquisition in August of Wicat of Orem, Utah, which had sales of about $48 million last year.
