Champ Acquisition Corp: Results call for grad gown, but bonds may be cap’d; maintain Marketweight

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Champ Acquisition Corp: Results call for grad gown, but bonds may be cap’d; maintain Marketweight

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Champ Acquisition Corp

Results call for grad gown, but bonds may

be cap’d; maintain Marketweight

Earnings Review

Limited upside potential supportive of Marketweight 26 May 2026

We maintain our Marketweight on the Jostens 8.375% Sr Sec’d Notes as bonds have High Yield Credit

limited upside potential given that they trade 60 bps inside of the Single B Index. United States

However, we expect solid financial results in FY26 and declining leverage. The Consumer Products

company’s products are relatively recession resistant as the cost of them is small in William M. Reuter

relation to their value as they surround infrequent life events, such as graduations. As a Research Analyst

result, we believe demand for yearbooks and graduation products will be relatively BofAS+1 646 855 6363

unchanged even if consumer spending were to weaken. william.m.reuter@bofa.com

Michael DeRienzo

1Q26 was above our estimates ResearchBofAS Analyst

1Q26 Adj EBITDA increased 10% to $48 million due to (1) sales growth across all michael.derienzo@bofa.com

segments and (2) gross margin expansion. Results were above our Adj EBITDA estimate

of $46 million. Revenue increased 5% to $238 million with growth in all segments: Champ Acquisition Corp

Scholastic +2% to $160 million; Yearbook +12% to $14 million; and College, Pro and (VISANT)

Key Data 1Q2025A 1Q2026A LTMOther +13% to $64 million. Gross margin increased 180 bps to 61.1% due to (1) price

increases; (2) cost savings; and (3) lower tariffs. Based on debt of $930 million and cash Operating (US$ mm)

of $156 million, net leverage was 2.9x at the end of the quarter. Revenues 226 238 978

Adj EBITDA 44 48 267