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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

|                                                 |  |                                                                                        
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------
|/X/                                              |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
|                                                 |  |                                                                                        
|FOR THE QUARTERLY PERIOD ENDED NOVEMBER 29, 2003

OR

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

COMMISSION FILE NUMBER 333-84294

AMERICAN ACHIEVEMENT CORPORATION

(Exact name of registrant as specified in its charter)

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

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 [X] No
[  ].

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [  ] No [X].

809,775 SHARES OF COMMON STOCK
(Number of shares outstanding as of November 29, 2003)





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TABLE OF CONTENTS



|                                                  |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                    
|                                                  | ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES                                
|                                                  |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                                                  |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                  |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                  |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                                                  | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                  | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                                                  | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION                       
|                                                  | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                                                  | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                                       
|EX-31.1 CEO Certification Pursuant to Section 302
|EX-31.2 CFO Certification Pursuant to Section 302
|EX-32.1 CEO Certification Pursuant to Section 906
|EX-32.2 CFO Certification Pursuant to Section 906



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##### Table of Contents



AMERICAN ACHIEVEMENT CORPORATION
FOR THE QUARTERLY PERIOD ENDED NOVEMBER 29, 2003
INDEX

|           |  |                                                                                                                                             |    |  |       |      |  | 
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------------------- | -- |  | ----- | ---- |  | 
|           |  |                                                                                                                                             |    |  |       | PAGE
|           |  |                                                                                                                                             |    |  |       |     
|PART I.    |  | FINANCIAL INFORMATION                                                                                                                       |    |  |       |     
|Item 1.    |  | Condensed Consolidated Financial Statements and Notes                                                                                       |    |  |       |     
|           |  | Condensed
Consolidated Balance Sheets As of November 29, 2003 (unaudited) and August 30, 2003                                              |    |  | 3     |     
|           |  | Condensed
Consolidated Statements of Operations For the Three Months Ended November 29, 2003 (unaudited) and November 30, 2002 (unaudited) |    |  | 4     |     
|           |  | Condensed
Consolidated Statements of Cash Flows For the Three Months Ended November 29, 2003 (unaudited) and November 30, 2002 (unaudited) |    |  | 5     |     
|           |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                            |    |  | 6-15  |     
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                       |    |  | 16-21 |     
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                  |    |  | 22    |     
|Item 4.    |  | Controls and Procedures                                                                                                                     |    |  | 23    |     
|PART II.   |  | OTHER INFORMATION                                                                                                                           |    |  |       |     
|Item 1.    |  | Legal Proceedings                                                                                                                           |    |  | 24    |     
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                                                            |    |  | 24    |     
|SIGNATURES |  |                                                                                                                                             | 25 | 

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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES




AMERICAN ACHIEVEMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |         |         |  | 
|------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ------- | ------------ |  | ---------- | ------- | ------- |  | 
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         | NOVEMBER 29, |  | AUGUST 30,
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         | 2003         |  | 2003      
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |           
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         | (UNAUDITED)  |  |            |         |        
|ASSETS                                                                                |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|Current assets:                                                                       |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      | Cash and cash equivalents                                                                                                                                        |                                            | $                                    | 3,234   |              |  | $          | 1,735   |        
|                                                                                      | Accounts receivable, net of allowance for doubtful
accounts of $3,616 and $3,242                                                                                 |                                            |                                      | 44,306  |              |  |            | 44,193  |        
|                                                                                      | Inventories, net                                                                                                                                                 |                                            |                                      | 23,619  |              |  |            | 23,310  |        
|                                                                                      | Prepaid expenses and other current assets, net                                                                                                                   |                                            |                                      | 28,499  |              |  |            | 30,317  |        
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  | Total current assets                       |                                      |         | 99,658       |  |            |         | 99,555  | 
|Property, plant and equipment, net of accumulated
depreciation of $49,535 and $46,315 |                                                                                                                                                                  |                                            | 68,676                               |         |              |  | 65,307     |        
|Trademarks                                                                            |                                                                                                                                                                  |                                            | 41,855                               |         |              |  | 41,855     |        
|Goodwill                                                                              |                                                                                                                                                                  |                                            | 162,059                              |         |              |  | 162,059    |        
|Other assets, net of accumulated amortization of $9,077 and
$8,057                    |                                                                                                                                                                  |                                            | 26,670                               |         |              |  | 26,725     |        
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  | Total assets                               |                                      | $       | 398,918      |  |            | $       | 395,501 | 
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  |                                            | LIABILITIES AND STOCKHOLDERS EQUITY |         |              |  |            |         |         |  | 
|Current liabilities:                                                                  |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      | Bank overdraft                                                                                                                                                   |                                            | $                                    | 2,956   |              |  | $          | 4,877   |        
|                                                                                      | Accounts payable                                                                                                                                                 |                                            |                                      | 5,470   |              |  |            | 6,564   |        
|                                                                                      | Customer deposits                                                                                                                                                |                                            |                                      | 27,985  |              |  |            | 21,393  |        
|                                                                                      | Accrued expenses                                                                                                                                                 |                                            |                                      | 27,086  |              |  |            | 26,856  |        
|                                                                                      | Deferred revenue                                                                                                                                                 |                                            |                                      | 7,714   |              |  |            | 5,123   |        
|                                                                                      | Accrued interest                                                                                                                                                 |                                            |                                      | 10,283  |              |  |            | 4,231   |        
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  | Total current liabilities                  |                                      |         | 81,494       |  |            |         | 69,044  | 
|Long-term debt, net of current portion                                                |                                                                                                                                                                  |                                            | 217,279                              |         |              |  | 226,710    |        
|Other long-term liabilities                                                           |                                                                                                                                                                  |                                            | 11,792                               |         |              |  | 9,854      |        
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  | Total liabilities                          |                                      |         | 310,565      |  |            |         | 305,608 | 
|Redeemable Minority Interest in Subsidiary                                            |                                                                                                                                                                  |                                            | 18,350                               |         |              |  | 18,050     |        
|Commitments and contingencies                                                         |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|Stockholders equity:                                                                 |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      | Preferred stock, $.01 par value, 1,200,000 shares authorized
Series A, 1,007,366 shares issued and outstanding;
liquidation preference of approximately $100,737 |                                            |                                      | 10      |              |  |            | 10      |        
|                                                                                      | Common stock, $.01 par value, 1,250,000 shares authorized,
809,775 shares issued and outstanding                                                                 |                                            |                                      | 8       |              |  |            | 8       |        
|                                                                                      | Additional paid-in capital                                                                                                                                       |                                            |                                      | 95,350  |              |  |            | 95,350  |        
|                                                                                      | Accumulated deficit                                                                                                                                              |                                            |                                      | (20,232 | )            |  |            | (18,375 | )      
|                                                                                      | Accumulated other comprehensive loss                                                                                                                             |                                            |                                      | (5,133  | )            |  |            | (5,150  | )      
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  | Total stockholders equity                 |                                      |         | 69,907       |  |            |         | 71,843  | 
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        
|                                                                                      |                                                                                                                                                                  | Total liabilities and stockholders equity |                                      | $       | 398,918      |  |            | $       | 395,501 | 
|                                                                                      |                                                                                                                                                                  |                                            |                                      |         |              |  |            |        

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

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AMERICAN ACHIEVEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)

|                                             |                                            |   |                            |        |              |   |        |        |  
|-------------------------------------------- | ------------------------------------------ | - | -------------------------- | ------ | ------------ | - | ------ | ------ | -
|                                             |                                            |   | FOR THE THREE MONTHS ENDED
|                                             |                                            |   |                           
|                                             |                                            |   | NOVEMBER 29,               |        | NOVEMBER 30,
|                                             |                                            |   | 2003                       |        | 2002        
|                                             |                                            |   |                            |        |             
|Net sales                                    |                                            | $ | 67,928                     |        |              | $ | 75,035 |       
|Cost of sales                                |                                            |   | 30,044                     |        |              |   | 33,817 |       
|                                             |                                            |   |                            |        |              |   |        |       
|                                             | Gross profit                               |   |                            | 37,884 |              |   |        | 41,218 |  
|Selling, general and administrative expenses |                                            |   | 32,460                     |        |              |   | 33,610 |       
|                                             |                                            |   |                            |        |              |   |        |       
|                                             | Operating income                           |   |                            | 5,424  |              |   |        | 7,608  |  
|Interest expense, net                        |                                            |   | 6,981                      |        |              |   | 7,372  |       
|                                             |                                            |   |                            |        |              |   |        |       
|                                             | Income (loss) before income taxes          |   |                            | (1,557 | )            |   |        | 236    |  
|Provision for income taxes                   |                                            |   |                           |        |              |   | 18     |       
|                                             |                                            |   |                            |        |              |   |        |       
|                                             | Net income (loss)                          |   |                            | (1,557 | )            |   |        | 218    |  
|Preferred dividends                          |                                            |   | (300                       | )      |              |   | (300   | )     
|                                             |                                            |   |                            |        |              |   |        |       
|                                             | Net loss applicable to common stockholders |   | $                          | (1,857 | )            |   | $      | (82    | )
|                                             |                                            |   |                            |        |              |   |        |       

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

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AMERICAN ACHIEVEMENT CORPORATION




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)
(UNAUDITED)

|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |        |        |        |  
|------------------------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------------------------- | ------------------------------------------------------------------------------- | ------ | -------------------------- | ------- | ------------ | ------ | ------ | ------ | -
|                                                        |                                                                                         |                                                           |                                                                                 |        | FOR THE THREE MONTHS ENDED
|                                                        |                                                                                         |                                                           |                                                                                 |        |                           
|                                                        |                                                                                         |                                                           |                                                                                 |        | NOVEMBER 29,               |         | NOVEMBER 30,
|                                                        |                                                                                         |                                                           |                                                                                 |        | 2003                       |         | 2002        
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |             
|CASH FLOWS FROM OPERATING ACTIVITIES:                   |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|Net income (loss)                                       |                                                                                         | $                                                         | (1,557                                                                          | )      |                            | $       | 218          |       
|                                                        | Adjustments to reconcile net income (loss) to net cash
provided by operating activities |                                                           |                                                                                 |        |                            |         |              |        |       
|                                                        |                                                                                         | Depreciation and amortization                             |                                                                                 |        | 3,798                      |         |              |        | 3,470  |       
|                                                        |                                                                                         | Amortization of debt discount and deferred financing
fees |                                                                                 |        | 515                        |         |              |        | 438    |       
|                                                        |                                                                                         | Provision for doubtful accounts                           |                                                                                 |        | 374                        |         |              |        | 89     |       
|                                                        |                                                                                         | Other                                                     |                                                                                 |        |                           |         |              |        | (209   | )     
|                                                        |                                                                                         | Changes in assets and liabilities-                        |                                                                                 |        |                            |         |              |        |        |       
|                                                        |                                                                                         |                                                           | Increase in accounts receivable                                                 |        |                            | (487    | )            |        |        | (3,857 | )
|                                                        |                                                                                         |                                                           | Increase in inventories, net                                                    |        |                            | (309    | )            |        |        | (693   | )
|                                                        |                                                                                         |                                                           | Decrease in prepaid expenses and other current
assets, net                      |        |                            | 1,818   |              |        |        | 4,079  |  
|                                                        |                                                                                         |                                                           | Increase in other assets                                                        |        |                            | (965    | )            |        |        | (578   | )
|                                                        |                                                                                         |                                                           | Increase in customer deposits                                                   |        |                            | 6,592   |              |        |        | 1,663  |  
|                                                        |                                                                                         |                                                           | Increase in deferred revenue                                                    |        |                            | 2,591   |              |        |        | 3,460  |  
|                                                        |                                                                                         |                                                           | Increase in accounts payable, accrued expenses, and
other long-term liabilities |        |                            | 7,143   |              |        |        | 7,702  |  
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        |                                                                                         | Net cash provided by operating activities                 |                                                                                 |        | 19,513                     |         |              |        | 15,782 |       
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                   |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        | Purchases of property, plant and equipment                                              |                                                           |                                                                                 | (6,593 | )                          |         |              | (4,816 | )     
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        |                                                                                         | Net cash used in investing activities                     |                                                                                 |        | (6,593                     | )       |              |        | (4,816 | )     
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                   |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        | Payments from Revolver, net                                                             |                                                           |                                                                                 | (9,500 | )                          |         |              | (9,000 | )     
|                                                        | Decrease of bank overdraft                                                              |                                                           |                                                                                 | (1,921 | )                          |         |              | (3     | )     
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        |                                                                                         |                                                           | Net cash used in financing activities                                           |        |                            | (11,421 | )            |        |        | (9,003 | )
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|NET INCREASE IN CASH AND CASH EQUIVALENTS               |                                                                                         |                                                           | 1,499                                                                           |        |                            |         | 1,963        |       
|CASH AND CASH EQUIVALENTS, beginning of period          |                                                                                         |                                                           | 1,735                                                                           |        |                            |         | 1,562        |       
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|CASH AND CASH EQUIVALENTS, end of period                |                                                                                         | $                                                         | 3,234                                                                           |        |                            | $       | 3,525        |       
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|SUPPLEMENTAL DISCLOSURE                                 |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        | Cash paid during the period for                                                        |                                                           |                                                                                 |        |                            |         |              |        |       
|                                                        |                                                                                         | Interest                                                  |                                                                                 | $      | 357                        |         |              | $      | 472    |       
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        |                                                                                         | Income taxes                                              |                                                                                 | $      | 124                        |         |              | $      | 85     |       
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       
|                                                        | Accrued preferred stock dividends                                                       |                                                           | $                                                                               | 300    |                            |         | $            | 300    |       
|                                                        |                                                                                         |                                                           |                                                                                 |        |                            |         |              |       

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

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

1. Summary of Significant Accounting Policies

Consolidation

The condensed consolidated financial statements include the accounts of
American Achievement Corporation (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, with the exception
of Commemorative Brands, Inc., which is majority owned. American Achievement
Corporation is a holding company with no independent assets or operations other
than its investment in its subsidiaries.

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 three months
ended November 29, 2003 are not necessarily indicative of the results that may
be expected for the fiscal year ending August 28, 2004.

Stock-Based Compensation

The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of SFAS No. 123 (SFAS 123), Accounting for
Stock-Based Compensation, as amended by SFAS No. 148 (SFAS 148),Accounting
for Stock-Based Compensation - Transition and Disclosure an amendment of FASB
Statement No. 123. The Company accounts for stock-based employee compensation
arrangements in accordance with the provisions of Accounting Principles Board
Opinion No. 25 (APB No. 25), Accounting for Stock Issued to Employees and
complies with the disclosure provisions of SFAS 123, as amended by SFAS 148.
Accordingly, no compensation expense has been recognized for the Companys
stock plans.

Had compensation expense for the stock plans been determined based on the fair
value at the grant date for options granted consistent with the provisions of
SFAS 123, as amended by SFAS 148, the pro forma net income (loss) would have
been reported as follows:

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

1. Summary of Significant Accounting Policies (Continued)

|                                                             |  |                            |        |              |  |   |     | 
|------------------------------------------------------------ |  | -------------------------- | ------ | ------------ |  | - | --- | 
|                                                             |  | FOR THE THREE MONTHS ENDED
|                                                             |  |                           
|                                                             |  | NOVEMBER 29,               |        | NOVEMBER 30,
|                                                             |  | 2003                       |        | 2002        
|                                                             |  |                            |        |             
|Net income (loss)                                            |  | $                          | (1,557 | )            |  | $ | 218 | 
|Less: stock-based compensation expense,
net of related taxes |  |                            | 4      |              |  |   | 8   | 
|                                                             |  |                            |        |              |  |   |     | 
|Net income (loss) - pro forma                                |  | $                          | (1,561 | )            |  | $ | 210 | 
|                                                             |  |                            |        |              |  |   |     | 

The fair value of each option grant is estimated at the date of grant using the Black-Scholes pricing model with the following weighted average
assumptions for grants in the fiscal year ended 2003:

|                        |  |          |      |  
|----------------------- |  | -------- | ---- | -
|                        |  | 2003    
|                        |  |         
|Risk-free interest rate |  |          | 3.93 | %
|Expected life           |  | 10 years
|Volatility              |  |          | 25   | %
|Dividend yield          |  |          |     |  

No options were granted during the first quarter of 2004.

2. Amortization of Trademarks, Goodwill and Other Intangible Assets

The Company adopted Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets (SFAS 142), which revised the
accounting for purchased goodwill and intangible assets, effective September 1,
2002; and thus, goodwill and trademarks are no longer amortized.

The Company includes other intangible assets subject to amortization in other
assets on the balance sheet. The other intangible assets subject to
amortization are as follows:

|                     |                                           |                                                 |   |             |        |              |   |             |        |   |   |        |        | 
|-------------------- | ----------------------------------------- | ----------------------------------------------- | - | ----------- | ------ | ------------ | - | ----------- | ------ | - | - | ------ | ------ | 
|                     |                                           |                                                 |   |             |        |              |   | ACCUMULATED |        |   |   |       
|                     |                                           |                                                 |   | GROSS ASSET |        | AMORTIZATION |   | NET ASSET  
|                     |                                           |                                                 |   |             |        |              |   |            
|At November 29, 2003 |                                           |                                                 |   |             |        |              |   |             |        |   |   |       
|                     | Deferred financing costs                  |                                                 | $ | 10,522      |        |              | $ | (3,732      | )      |   | $ | 6,790  |       
|                     | Customer lists and distribution contracts |                                                 |   | 16,072      |        |              |   | (5,345      | )      |   |   | 10,727 |       
|                     |                                           |                                                 |   |             |        |              |   |             |        |   |   |       
|                     |                                           | Total intangible assets subject to amortization |   | $           | 26,594 |              |   | $           | (9,077 | ) |   | $      | 17,517 | 
|                     |                                           |                                                 |   |             |        |              |   |             |        |   |   |       
|At August 30, 2003   |                                           |                                                 |   |             |        |              |   |             |        |   |   |       
|                     | Deferred financing costs                  |                                                 | $ | 10,344      |        |              | $ | (3,286      | )      |   | $ | 7,058  |       
|                     | Customer lists and distribution contracts |                                                 |   | 16,072      |        |              |   | (4,771      | )      |   |   | 11,301 |       
|                     |                                           |                                                 |   |             |        |              |   |             |        |   |   |       
|                     |                                           | Total intangible assets subject to amortization |   | $           | 26,416 |              |   | $           | (8,057 | ) |   | $      | 18,359 | 
|                     |                                           |                                                 |   |             |        |              |   |             |        |   |   |       

Total amortization on intangible assets above was $1,020 and $395 for the three
months ended November 29, 2003 and November 30, 2002, respectively, of which
amortization on deferred financing costs is recorded as interest expense and
amortization on customer lists and distribution contracts is recorded as
amortization expense. Deferred financing costs have a useful life of 1-7 years
and customer lists and distribution contracts have a useful life of 10-12
years. Estimated annual amortization expense for fiscal years ended 2004
through 2008 is approximately $4.0 million each year.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

3. Comprehensive Income (Loss)

The effective portion of the loss on derivatives and unrecognized losses on
accrued minimum pension liabilities were included in other comprehensive income
(loss). The following amounts were included in determining the Companys
comprehensive income (loss) for the three month periods ended November 29, 2003
and November 30, 2002.

|                                        |  |                            |        |              |  |   |     | 
|--------------------------------------- |  | -------------------------- | ------ | ------------ |  | - | --- | 
|                                        |  | FOR THE THREE MONTHS ENDED
|                                        |  |                           
|                                        |  | NOVEMBER 29,               |        | NOVEMBER 30,
|                                        |  | 2003                       |        | 2002        
|                                        |  |                            |        |             
|Net income (loss)                       |  | $                          | (1,557 | )            |  | $ | 218 | 
|Adjustment in minimum pension liability |  |                            | 17     |              |  |   |    | 
|                                        |  |                            |        |              |  |   |     | 
|Total comprehensive income (loss)       |  | $                          | (1,540 | )            |  | $ | 218 | 
|                                        |  |                            |        |              |  |   |     | 

4. Inventories, Net

A summary of inventories, net is as follows:

|                |  |              |        |            |  |   |        |  
|--------------- |  | ------------ | ------ | ---------- |  | - | ------ | -
|                |  | NOVEMBER 29, |        | AUGUST 30,
|                |  | 2003         |        | 2003      
|                |  |              |        |           
|Raw materials   |  | $            | 8,282  |            |  | $ | 7,876  |  
|Work in process |  |              | 7,502  |            |  |   | 8,043  |  
|Finished goods  |  |              | 9,000  |            |  |   | 7,632  |  
|LessReserves   |  |              | (1,165 | )          |  |   | (241   | )
|                |  |              |        |            |  |   |        |  
|                |  | $            | 23,619 |            |  | $ | 23,310 |  
|                |  |              |        |            |  |   |        |  

Cost of sales includes depreciation and amortization of $2,163 and $2,254 for
the three months ended November 29, 2003 and November 30, 2002, respectively.

5. Prepaid Expenses and Other Current Assets, Net

Prepaid expenses and other current assets, net on the balance sheet include
reserves on sales representative advances of $2,781 and $2,516 at November 29,
2003 and August 30, 2003, respectively.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

6. Long-Term Debt

Long-term debt consists of the following:

|                                                                                           |                      |   |              |         |            |   |         |         | 
|------------------------------------------------------------------------------------------ | -------------------- | - | ------------ | ------- | ---------- | - | ------- | ------- | 
|                                                                                           |                      |   | NOVEMBER 29, |         | AUGUST 30,
|                                                                                           |                      |   | 2003         |         | 2003      
|                                                                                           |                      |   |              |         |           
|11 5/8% Senior unsecured notes due 2007 (net of unamortized
discount of $1,076 and $1,145) |                      | $ | 175,924      |         |            | $ | 175,855 |        
|11% Senior subordinated notes due 2007                                                     |                      |   | 41,355       |         |            |   | 41,355  |        
|Senior secured credit facility                                                             |                      |   |             |         |            |   | 9,500   |        
|                                                                                           |                      |   |              |         |            |   |         |        
|                                                                                           | Total long-term debt |   | $            | 217,279 |            |   | $       | 226,710 | 
|                                                                                           |                      |   |              |         |            |   |         |        

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 13.0%. 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 domestic subsidiaries, and the guarantees
rank pari passu with the existing Senior Subordinated Notes 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.

The Company may not redeem the Unsecured Notes until 2005, except that the
Company, in connection with a public equity offering, 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 November 29, 2003.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

6. Long-Term Debt (Continued)

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 November 29, 2003.

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 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. The Company was in compliance with the
Subordinated Notes covenants as of November 29, 2003.

Senior Secured Credit Facility

In conjunction with the issuance of the Unsecured Notes, on February 20, 2002,
the Company entered into a $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
November 29, 2003 was approximately $38.1 million with $0 borrowings
outstanding. The Senior Secured Credit Facility matures on February 20, 2006.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

6. Long-Term Debt (Continued)

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 effective rate on borrowings for
the three months ended November 29, 2003 was 10.5%.

The Credit Agreement contains customary negative covenants and restrictions on
actions by the Company and its subsidiaries including, without limitation,
restrictions on indebtedness, declaration or payment of dividends, liens, and
changing the provisions of 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 covenants as of November 29, 2003.The Companys long-term
debt outstanding as of November 29, 2003 matures as follows:

|                   |  |                 |         | 
|------------------ |  | --------------- | ------- | 
|FISCAL YEAR ENDING |  | AMOUNT MATURING
|                   |  |                
|2004               |  | $               |        | 
|2005               |  |                 |        | 
|2006               |  |                 |        | 
|2007               |  |                 | 217,279 | 
|Thereafter         |  |                 |        | 
|                   |  |                 |         | 
|                   |  | $               | 217,279 | 
|                   |  |                 |         | 

The weighted average interest rate on debt outstanding as of November 29, 2003
and August 30, 2003 was 11.8% and 12.3%, respectively.

The Companys management believes the carrying amount of long-term debt
approximates fair value as of November 29, 2003 and August 30, 2003, based upon
current rates offered for debt with the same or similar debt terms.

7. Commitments and Contingencies

Leases

Certain Company facilities and equipment are leased under agreements expiring
at various dates through 2018.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

7. Commitments and Contingencies (Continued)

Employment Contracts

The Company has employment agreements with its executive officers, the terms of
which expire at various times through August 2005. Unless terminated, one
executive officers employment agreement adds one day to the term for each day
that passes, and accordingly, there are always two years remaining on the term.
The remaining executive officers terms can be automatically extended for an
additional one year term. Such agreements, which have been revised from
time-to-time, provide for minimum salary levels, adjusted annually for
cost-of-living changes, as well as for incentive bonuses for a certain
executive that are payable if specific management goals are attained. The
aggregate commitment for future salaries as of November 29, 2003, excluding
bonuses, was approximately $2.7 million.

Pending Litigation

The Company is not a party to any pending legal proceedings other than ordinary
routine litigation incidental to its 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.

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 November
29, 2003 and November 30, 2002, the Company expensed consignment fees of
approximately $67 and $68, 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 November 29, 2003 and August
30, 2003, the Company held approximately 17,520 ounces and 17,780 ounces,
respectively, of gold valued at $7.0 million and $6.7 million, respectively, on
consignment.

8. Income Taxes

For the three months ended November 29, 2003 and November 30, 2002, the Company
recorded an income tax provision of $0 and $18, respectively, which represents
an effective tax rate of 0% and 7.6%, respectively. For the quarters ending
November 29, 2003 and November 30, 2002, no net federal income tax benefit is
reflected in the statement of operations for net operating losses to be carried
forward since realization of the potential benefit of net operating loss
carry-forwards is not considered to be more likely than not. Although state
taxes are expected for the year ended 2004, no benefit has been recorded for
the quarter ended November 29, 2003 due to the valuation allowance. For the quarter ended
November 30, 2002, the effective tax rate reflects the state tax expense expected for the
year.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

9. Stockholders Equity

In the event of any liquidation, dissolution or winding up of the Company, the
holders of the Series A Preferred Stock 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 Common Stock of the
Company. The liquidation preference of the Series A Preferred Stock totaled
approximately $100,737 at November 29, 2003 and August 30, 2003, respectively.

Stock-Based Compensation

Incentive stock options for 94,115 shares and nonqualified stock options for
3,289 shares of the Companys Common Stock were outstanding as of November 29,
2003.

During the three-month period ended November 30, 2002, the Company granted
28,500 options to employees. These options have an exercise price of $6.02 per
share and, accordingly, the Company did not record any related compensation
expense based upon the market price of the stock on the date of grant. A
portion of the options, 10,000, vested on the grant date, with the remaining
options vesting ratably over a four year period.

Pursuant to an employment agreement entered into between the Company and its
chief executive officer in July 1999, as amended on February 1, 2002, if the
Company achieves certain EBITDA targets as defined by the agreement at any
point from 2002 through 2004, the chief executive is entitled to receive up to
a total of $1 million in face value of the Companys Series A Preferred Stock.
In addition, the plan provided for the immediate issuance of an option to
purchase 12,500 shares of the Companys common stock with a discretionary
option to purchase shares. An option to purchase 12,500 shares was granted in
fiscal 2002 pursuant to this plan. The executive is also entitled to receive
discretionary bonuses as directed by the Board of Directors up to $300
annually, of which $75 is accrued as of November 29, 2003.

10. Related-Party Transactions

The Company entered into a management agreement on March 30, 2001 with Castle
Harlan, Inc., its majority shareholder, (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. The Company is required to pay a management fee equal to $3.0
million, unless otherwise prohibited by the Companys Credit Agreement. Amounts
paid under the management agreement totaled approximately $750 for the three
months ended November 29, 2003 and November 30, 2002, respectively. As of
November 29, 2003 and August 30, 2003, the Company had accrued management fees
of approximately $750, respectively.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

11. Business Segments

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.

|                                     |                                 |  |            |         |              |  |             |        |  |  |   |         | 
|------------------------------------ | ------------------------------- |  | ---------- | ------- | ------------ |  | ----------- | ------ |  |  | - | ------- | 
|                                     |                                 |  |            |         |              |  | RECOGNITION |        |  |  |  
|                                     |                                 |  | SCHOLASTIC |         | AND AFFINITY |  | TOTAL      
|                                     |                                 |  |            |         |              |  |            
|Three Months Ended November 29, 2003 |                                 |  |            |         |              |  |             |        |  |  |   |        
|                                     | Net sales                       |  | $          | 53,580  |              |  | $           | 14,348 |  |  | $ | 67,928  | 
|                                     | Interest expense, net           |  |            | 6,283   |              |  |             | 698    |  |  |   | 6,981   | 
|                                     | Depreciation and amortization   |  |            | 3,272   |              |  |             | 526    |  |  |   | 3,798   | 
|                                     | Segment operating income        |  |            | 808     |              |  |             | 4,616  |  |  |   | 5,424   | 
|                                     | Capital expenditures            |  |            | 5,927   |              |  |             | 666    |  |  |   | 6,593   | 
|                                     | Goodwill                        |  |            | 115,074 |              |  |             | 46,985 |  |  |   | 162,059 | 
|                                     | Segment assets                  |  |            | 311,050 |              |  |             | 87,868 |  |  |   | 398,918 | 
|Three Months Ended November 30, 2002 |                                 |  |            |         |              |  |             |        |  |  |   |        
|                                     | Net sales                       |  | $          | 54,237  |              |  | $           | 20,798 |  |  | $ | 75,035  | 
|                                     | Interest expense, net           |  |            | 6,647   |              |  |             | 725    |  |  |   | 7,372   | 
|                                     | Depreciation and amortization   |  |            | 3,123   |              |  |             | 347    |  |  |   | 3,470   | 
|                                     | Segment operating income (loss) |  |            | (447    | )            |  |             | 8,055  |  |  |   | 7,608   | 
|                                     | Capital expenditures            |  |            | 4,325   |              |  |             | 491    |  |  |   | 4,816   | 
|                                     | Goodwill                        |  |            | 115,004 |              |  |             | 46,977 |  |  |   | 161,981 | 
|                                     | Segment assets                  |  |            | 318,082 |              |  |             | 87,630 |  |  |   | 405,712 | 

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.

12. Recent Accounting Pronouncements

In May 2003, SFAS No. 150 (SFAS 150), Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity, was issued,
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. The
Company adopted SFAS 150 beginning in September 2003. The adoption of this
standard did not have a significant impact on its financial statements.

In May 2003, FIN 46, Consolidation of Variable Interest Entities, was issued,
which clarifies the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity
investors do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. The Company will adopt FIN 46 beginning its third quarter of fiscal
year 2004 and is currently reviewing the impact this statement will have on its
financial statements.

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AMERICAN ACHIEVEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

12. Recent Accounting Pronouncements (Continued)

In December 2003, the FASB amended SFAS No. 132, Employers Disclosures about
Pensions and Other Postretirement Benefits. The amendment revised employers
disclosures about pension plans and other post retirement benefit plans to
require additional disclosures to those in the original SFAS No. 132 about the
assets, obligations, cash flows, and net periodic benefit cost of defined
pension plans and other defined benefit postretirement plans. The Company
will adopt the additional disclosure requirements the second quarter of 2004.

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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
consolidated financial statements and the notes thereto. The following
discussion includes forward-looking statements that involve certain risks and
uncertainties. See Special Note Regarding Forward-Looking Statements.

Overview

OVERVIEW

We are one of the leading manufacturers and suppliers of class rings,
yearbooks, graduation products, 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 79% of our net sales for the three months ended November 29,
2003. 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 21%
of our net sales for the three months ended November 29, 2003. 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
for a purchase price of approximately $30.0 million, 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.

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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.

Milestone Acquisition. Effective July 15, 2002, we acquired all the outstanding
stock and warrants of Milestone for a total purchase price of $16.3 million
(the Milestone Acquisition). The Milestone Acquisition was accounted for
using the purchase method of accounting. Milestone is a specialty marketer of
class rings and other graduation products to the college market.

Effective December 31, 2002, Milestone merged into CBI, with CBI as the
surviving entity. In conjunction with the merger, for each share of Milestone
common stock held by us, we received one share of CBI common stock. The
existing common stock and warrants of Milestone were cancelled in connection
with this transaction.

Critical Accounting Policies

We prepare our consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America. As such, we are
required to make certain estimates, judgments and assumptions that we believe
are reasonable based upon the information available. These estimates and
assumptions affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the periods presented. The significant accounting policies which we
believe are the most critical to aid in fully understanding and evaluating our
reported financial results include the following:

Revenue Recognition. We recognize revenue when the earnings process is
complete, evidenced by an agreement between the customer and us, delivery and
acceptance has occurred, collectibility is reasonably assured and pricing is
fixed and determinable. In accordance with the Securities and Exchange
Commissions Staff Accounting Bulletin No. 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, are deferred until the independent sales representative delivers
the product and title passes to our end customer. Provisions for sales returns
and warranty costs are recorded at the time of sale based on historical
information and current trends.

Sales Returns and Allowances. We make estimates of potential future product
returns related to current period product revenue. We analyze historical
returns, current economic trends and changes in customer demand and acceptance
of our products when evaluating the adequacy of the sales returns and
allowances. Significant management judgments and estimates must be made and
used in connection with establishing the sales returns and allowances in any
accounting period. Material differences could result in the amount and timing
of our revenue for any period if we made different judgments or utilized
different estimates.

Allowance for Doubtful Accounts and Reserve on Sales Representative Advances.
We make estimates of potentially uncollectible customer accounts receivable and
receivables arising from sales representative draws paid in excess of earned
commissions. Our reserves are based on an analysis of customer and salesperson
accounts and historical write-off experience. Our analysis includes the age of
the receivable, customer or salesperson creditworthiness and general economic
conditions. We believe the results could be materially different if historical
trends do not reflect actual results or if economic conditions worsened.

Goodwill and Other Intangible Assets. On September 1, 2002, we adopted SFAS
No. 142, Goodwill and Other Intangible Assets, which addresses the initial
recognition and measurement of intangible assets acquired outside of a business
combination and the accounting for goodwill and other intangible assets
subsequent to their acquisition. SFAS No. 142 also provides that intangible
assets with finite useful lives be amortized and that goodwill and intangible
assets with indefinite lives will not be amortized, but will rather be tested
for impairment upon adoption and on an annual basis thereafter. We completed
the initial

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impairment test and concluded that goodwill was not impaired as of August 30,
2003. The adoption of SFAS No. 142 during the fiscal year ended 2003 did not
have a material impact on our consolidated balance sheets or our statements of
operations, shareholders equity or cash flows.

Results of Operations

The following table sets forth selected information from our condensed
consolidated statements of operations expressed on an actual basis and as a
percentage of net sales.

|                                             |                                   |        |                    |        |                   |        |          |       |    |   |        |        |          |  |       |      |  
|-------------------------------------------- | --------------------------------- | ------ | ------------------ | ------ | ----------------- | ------ | -------- | ----- | -- | - | ------ | ------ | -------- |  | ----- | ---- | -
|                                             |                                   |        | THREE MONTHS ENDED
|                                             |                                   |        |                   
|                                             |                                   |        | NOVEMBER 29, 2003  |        | NOVEMBER 30, 2002
|                                             |                                   |        |                    |        |                  
|                                             |                                   |        |                    |        |                   |        | % OF NET |       |    |   |        |        | % OF NET
|(IN THOUSANDS)                               |                                   | ACTUAL |                    | SALES  |                   | ACTUAL |          | SALES
|                                             |                                   |        |                    |        |                   |        |          |      
|Net sales                                    |                                   | $      | 67,928             |        |                   |        | 100.0    | %     |    | $ | 75,035 |        |          |  | 100.0 | %   
|Cost of sales                                |                                   |        | 30,044             |        |                   |        | 44.2     | %     |    |   | 33,817 |        |          |  | 45.1  | %   
|                                             |                                   |        |                    |        |                   |        |          |       |    |   |        |        |          |  |       |     
|                                             | Gross profit                      |        |                    | 37,884 |                   |        |          | 55.8  | %  |   |        | 41,218 |          |  |       | 54.9 | %
|Selling, general and
administrative expenses |                                   |        | 32,460             |        |                   |        | 47.8     | %     |    |   | 33,610 |        |          |  | 44.8  | %   
|                                             |                                   |        |                    |        |                   |        |          |       |    |   |        |        |          |  |       |     
|Operating income                             |                                   |        | 5,424              |        |                   |        | 8.0      | %     |    |   | 7,608  |        |          |  | 10.1  | %   
|Interest expense, net                        |                                   |        | 6,981              |        |                   |        | 10.3     | %     |    |   | 7,372  |        |          |  | 9.8   | %   
|                                             |                                   |        |                    |        |                   |        |          |       |    |   |        |        |          |  |       |     
|                                             | Income (loss) before income taxes |        |                    | (1,557 | )                 |        |          | (2.3  | )% |   |        | 236    |          |  |       | 0.3  | %
|Provision for income taxes                   |                                   |        |                   |        |                   |        | 0.0      | %     |    |   | 18     |        |          |  | 0.0   | %   
|                                             |                                   |        |                    |        |                   |        |          |       |    |   |        |        |          |  |       |     
|Net income (loss)                            |                                   | $      | (1,557             | )      |                   |        | (2.3     | )%    |    | $ | 218    |        |          |  | 0.3   | %   
|                                             |                                   |        |                    |        |                   |        |          |       |    |   |        |        |          |  |       |     

Three Months Ended November 29, 2003 Compared to Three Months Ended November
30, 2002

Net Sales.Net sales consist of product sales and are net of product returns
and promotional discounts. Net sales decreased $7.1 million, or 9.5%, to $67.9
million for the three months ended November 29, 2003 from $75.0 million for the
three months ended November 30, 2002. This decrease in net sales was due
primarily to lower sales volumes in recognition and infinity products.

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



| |  | Scholastic Products.Net sales decreased $0.6 million to $53.6 million for
the three months ended November 29, 2003 from $54.2 million for the three
months ended November 30, 2002. The decrease in net sales was the result of
timing differences from college ring shipments and a decline in retail high
school ring units, partially offset by increased in-school high school ring
shipments, price increases and an increase in yearbook shipments.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | Recognition and Affinity Products.Net sales decreased $6.5 million to
$14.3 million for the three months ended November 29, 2003 from $20.8
million for the three months ended November 30, 2002. The decrease was
primarily the result of a $3.9 million decrease in sales related to the
omission of the ECI teachers publication (published bi-annually versus its
other publications) in the three months ended November 29, 2003 and lower
overall sales volumes in ECIs high school publications due to order loss
coinciding with the beginning of the United States and Iraqi conflict.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit.Gross margin represents gross profit as a percentage of net
sales. Gross margin was 55.8% for the three months ended November 29, 2003, a
0.9 percentage point increase from 54.9% for the three months ended November
30, 2002. The increase was a result of continued gross margin improvement in
all areas of the business.

Selling, General and Administrative Expenses.Selling, general and
administrative expenses decreased $1.1 million, or 3.4%, to $32.5 million for
the three months ended November 29, 2003 from $33.6 million for the three
months ended November 30, 2002. Included in selling, general and administrative
expenses are two sub-categories: selling and marketing expenses and general and
administrative expenses. Selling and marketing expenses decreased $1.3 million
to $23.6 million or 34.8% of net sales, for the three months ended November 29,
2003 from $24.9 million or 33.2% of net sales, for the three months ended
November 30, 2002. The decrease in selling and marketing expenses as a
percentage of sales is primarily the result of lower marketing expenses at ECI
due to one less publication being sold in the three months ended November 29,
2003 and synergy savings related to the integration of the Milestone
Acquisition.

General and administrative expenses for the three months ended November 29,
2003 were $8.9 million, or 13.0% of net sales, as compared to $8.7 million, or
11.6% of net sales, for the three months ended November 30, 2002. The increase
in general and administrative expenses is primarily the result of an increase
in professional services.

Operating Income.As a result of the foregoing, operating income was $5.4
million, or 8.0% of net sales, for the three months ended November 29, 2003 as
compared with operating income $7.6 million, or 10.1% of net sales, for the
three months ended November 30, 2002. The scholastic products segment reported
an operating income of $0.8 million for the three months ended November 29,
2003 as compared with operating loss of $0.5 million for the three months ended
November 30, 2002. The recognition and affinity products segment reported
operating income of $4.6 million for the three months ended November 29, 2003
as compared with operating income of $8.1 million for the three months ended
November 30, 2002.

Interest Expense, Net.Net interest expense was $7.0 million for the three
months ended November 29, 2003 and $7.4 million for the three months ended
November 30, 2002. The average debt outstanding for the three months ended
November 29, 2003 and the three months ended November 30, 2002 was $234 million
and $254 million, respectively. The weighted average interest rate of debt
outstanding for the three months ended November 29, 2003 and the three months
ended November 30, 2002 was 11.8% and 11.0%, respectively.

Provision (Benefit) for Income Taxes.For the three months ended November 29,
2003 and November 30, 2002, the Company recorded an income tax provision of $0
and $18,000, respectively, which represents an effective tax rate of 0% and 7.6%,
respectively. For the quarters ending November 29, 2003 and November 30, 2002, no net federal income tax benefit is reflected in the statement of operations
for net operating losses to be carried forward since realization of the
potential benefit of net operating loss carry-forwards is not considered to be
more likely than not. Although state taxes are expected for the year ended
2004, no benefit has been recorded for the quarter ended November 29, 2003 due to the
valuation allowance. For the quarter ended November 30, 2002, the effective tax rate
reflects the state tax expense expected for the year.

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Net Income (Loss).As a result of the foregoing, we reported a net loss of
$1.6 million for the three months ended November 29, 2003 as compared to net
income of $218,000 for the three months ended November 30, 2002.

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 April 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 $19.5 million for
the three months ended November 29, 2003 as compared with $15.8 million for the
three months ended November 30, 2002. The $3.7 million increase in cash
provided by operating activities was primarily attributable to an increase in
customer deposits of $4.9 million, accounts receivable of $3.4 million, and
inventories of $0.4 million. These items were partially offset by a decrease
in prepaid expenses and other assets of $2.6 million, a decrease in net (loss)
income (net of adjustments) of $0.9 million, a decrease in deferred revenue of
$0.9 million, and a decrease in accounts payable, accrued expenses, and other
long-term liabilities of $0.6 million.

Investing Activities.Capital expenditures for the three months ended
November 29, 2003 and November 30, 2002 were $6.6 million and $4.8 million,
respectively. Our projected capital expenditures for 2004 are expected to be
approximately $17.0 million.

Financing Activities.Net cash used in financing activities was $11.4 million
for the three months ended November 29, 2003 and net cash used in financing
activities was $9.0 million for the three months ended November 30, 2002. For
the three months ended November 29, 2003, cash was generated from operating
activities and used to pay down $9.5 million of the revolver facility.

Capital Resources.In February 2002, the Company issued $177 million of
Unsecured Notes due in 2007 and entered into a new $40 million Senior Secured
Credit Facility. As of November 29, 2003, $0 under the Senior Secured Credit
Facility was outstanding.

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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 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 of November 29, 2003 and August
30, 2003, the Company held approximately 17,520 ounces and 17,780 ounces,
respectively, of gold valued at $7.0 million and $6.7 million, respectively, on
consignment.

Cash generated from operating activities and availability under our Senior
Secured Credit Facility and our prior facilities, which were paid off in
February 2002, 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 November 29, 2003 we had
approximately $38.1 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 senior secured credit facility will be
sufficient to support our operations and liquidity requirements for the
foreseeable future.

Recent Accounting Pronouncements

In May 2003, SFAS No. 150 (SFAS 150), Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity, was issued,
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. We
adopted SFAS 150 beginning in September 2003. The adoption of this standard did
not have a significant impact on our financial statements.

In May 2003, FIN 46, Consolidation of Variable Interest Entities, was issued,
which clarifies the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity
investors do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. We will adopt FIN 46 beginning its third quarter of fiscal year 2004
and we are currently reviewing the impact this statement will have on our
financial statements.

In December 2003, the FASB amended SFAS No. 132, Employers Disclosures about
Pensions and Other Postretirement Benefits. The amendment revised employers
disclosures about pension plans and other post retirement benefit plans to
require additional disclosures to those in the original SFAS No. 132 about the
assets, obligations, cash flows, and net periodic benefit cost of defined
pension plans and other defined benefit postretirement plans. We will adopt
the additional disclosure requirements the second quarter of 2004.

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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 Senior Secured Facility and our
gold consignment facility 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.
Our derivatives and other financial instruments subject to interest rate risk
consist of long-term debt and notional amount under the gold consignment
agreement. The net market value of these financial instruments at November 29,
2003 represented a net liability of $7.0 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 the three months
ended November 29, 2003, we did not purchase any forward contracts.

Gold.We purchase all of our gold requirements from The Bank of Nova Scotia
through our revolving credit and gold consignment agreement. We consign the
majority of our gold from The Bank of Nova Scotia and pay for gold as the
product is shipped to customers and as required by the terms of the gold
consignment agreement. As of November 29, 2003, we had hedged most of our gold
requirements for the fiscal year ending August 28, 2004 through the purchase of
gold options.

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ITEM 4. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation
of our management, including our President and Chief Executive Officer and our
Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure control and procedures pursuant to Rule 13a-15 under the
Securities Exchange Act of 1934, as amended (the Exchange Act), as of the end
of the period covered by this quarterly report. Based upon this evaluation,
our President and Chief Executive Officer and our Chief Financial Officer
concluded that, as of November 29, 2003, our disclosure controls and procedures
were adequate to ensure that information required to be disclosed by us in the
reports filed or submitted by us under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SECs rules
and forms.

Additionally, our President and Chief Executive Officer and Chief Financial
Officer determined that there were no significant changes in our internal
controls or in other factors that could significantly affect our internal
controls during the period covered by this quarterly report.

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 material 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 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

|     |  |                                                                                                       
|---- |  | ------------------------------------------------------------------------------------------------------
|31.1 |  | CEO Certification Accompanying Period Report Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|31.2 |  | CFO Certification Accompanying Period Report Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|32.1 |  | CEO Certification Accompanying Period Report Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|32.2 |  | CFO Certification Accompanying Period Report Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

None

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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.

Date: January 9, 2004

| |  |                                  |  |                        
| |  | -------------------------------- |  | -----------------------
| |  | 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

25