10-Q

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 26, 2011

OR

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

For the transition period from to

Commission File No. 1-11257

CHECKPOINT SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

Pennsylvania		22-1895850
(State of Incorporation)		(IRS Employer Identification No.)
One Commerce Square, 2005 Market Street, Suite 2410, Philadelphia, Pennsylvania		19103
(Address of principal executive offices)		(Zip Code)
	856-848-1800
	(Registrant’s telephone number, including area code)

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 R No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes R No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes £ No R

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of July 27, 2011, there were 40,098,852 shares of the Company’s Common Stock outstanding.

CHECKPOINT SYSTEMS, INC.

FORM 10-Q

Table of Contents

	Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Equity	5
Consolidated Statements of Comprehensive Income (Loss)	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8-22
Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations	23-35
Item 3. Quantitative and Qualitative Disclosure About Market Risk	36
Item 4. Controls and Procedures	36
PART II. OTHER INFORMATION	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 5. Other Information	37
Item 6. Exhibits	38
SIGNATURES	39
INDEX TO EXHIBITS	40
Master Purchase Agreement dated January 28, 2011
Amended & Restated Master Purchase Agreement dated May 16, 2011
Rule 13a-14(a)/15d-14(a) Certification of Robert P. van der Merwe, President and Chief Executive Officer
Rule 13a-14(a)/15d-14(a) Certification of Raymond D. Andrews, Senior Vice President and Chief Financial Officer
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document
XBRL Taxonomy Extension Definition Document

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(amounts in thousands)

	June 26, 2011	December 26, 2010*
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$    183,831	$    173,802
Restricted cash	652	140
Accounts receivable, net of allowance of $11,161 and $10,472	197,310	178,636
Inventories	134,115	106,974
Other current assets	44,599	32,655
Deferred income taxes	20,189	20,622
Total Current Assets	580,696	512,829
REVENUE EQUIPMENT ON OPERATING LEASE, net	2,202	2,340
PROPERTY, PLANT, AND EQUIPMENT, net	146,089	121,258
GOODWILL	282,662	231,325
OTHER INTANGIBLES, net	103,145	90,823
DEFERRED INCOME TAXES	53,158	52,506
OTHER ASSETS	24,008	24,192
TOTAL ASSETS	$ 1,191,960	$ 1,035,273
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term debt	$      26,367	$      22,225
Accounts payable	75,852	63,366
Accrued compensation and related taxes	32,413	29,308
Other accrued expenses	70,056	47,646
Income taxes	46	4,395
Unearned revenues	29,225	12,196
Restructuring reserve	7,629	7,522
Accrued pensions — current	4,672	4,358
Other current liabilities	61,081	23,019
Total Current Liabilities	307,341	214,035
LONG-TERM DEBT, LESS CURRENT MATURITIES	146,704	119,724
ACCRUED PENSIONS	82,036	75,396
OTHER LONG-TERM LIABILITIES	31,454	30,502
DEFERRED INCOME TAXES	11,784	11,325
COMMITMENTS AND CONTINGENCIES
CHECKPOINT SYSTEMS, INC. STOCKHOLDERS’ EQUITY:
Preferred stock, no par value, 500,000 shares authorized, none issued	—	—
Common stock, par value $.10 per share, 100,000,000 shares authorized, issued          44,131,952 and 43,843,095	4,413	4,384
Additional capital	414,143	407,383
Retained earnings	233,531	233,322
Common stock in treasury, at cost, 4,035,912 and 4,035,912 shares	(71,520)	(71,520)
Accumulated other comprehensive income, net of tax	30,801	10,722
TOTAL CHECKPOINT SYSTEMS, INC. STOCKHOLDERS’ EQUITY	611,368	584,291
NON-CONTROLLING INTERESTS	1,273	—
TOTAL EQUITY	612,641	584,291
TOTAL LIABILITIES AND EQUITY	$ 1,191,960	$ 1,035,273

   * Derived from the Company’s audited Consolidated Financial Statements at December 26, 2010.

      See Notes to Consolidated Financial Statements.

3

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(amounts in thousands, except per share data)

	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Net revenues	$ 219,931	$ 208,176	$ 404,604	$ 395,632
Cost of revenues	134,439	117,412	248,738	224,317
Gross profit	85,492	90,764	155,866	171,315
Selling, general, and administrative expenses	80,695	70,233	155,078	140,035
Research and development	5,347	5,216	10,136	9,908
Restructuring expense	1,495	1,199	3,092	1,635
Acquisition costs	2,017	—	2,203	—
Other operating income	16,672	—	16,672	—
Operating income	12,610	14,116	2,029	19,737
Interest income	727	698	1,693	1,366
Interest expense	1,918	1,421	3,560	3,021
Other gain (loss), net	(376)	(1,462)	(266)	(1,196)
Earnings (loss) before income taxes	11,043	11,931	(104)	16,886
Income taxes	1,521	2,898	(315)	4,416
Net earnings	9,522	9,033	211	12,470
Less: income (loss) attributable to non-controlling interests	2	(7)	2	(76)
Net earnings attributable to Checkpoint Systems, Inc.	$    9,520	$     9,040	$       209	$   12,546
Net earnings attributable to Checkpoint Systems, Inc. per Common Shares:
Basic earnings per share	$         .23	$         .23	$         .01	$         .32
Diluted earnings per share	$         .23	$         .22	$         .01	$         .31

See Notes to Consolidated Financial Statements.

4

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(amounts in thousands)

	Checkpoint Systems, Inc. Stockholders
	Common Stock		Additional	Retained	Treasury Stock		Accumulated Other Comprehensive	Non-controlling	Total
	Shares	Amount	Capital	Earnings	Shares	Amount	Income	Interests	Equity
Balance, December 27, 2009	43,078	$ 4,307	$ 390,379	$ 205,951	4,036	$ (71,520)	$   28,603	$   834	$ 558,554
Net earnings				27,371				(116)	27,255
Exercise of stock-based compensation and awards released	765	77	5,945						6,022
Tax benefit on stock-based compensation			133						133
Stock-based compensation expense			8,751						8,751
Deferred compensation plan			2,112						2,112
Repurchase of non-controlling interests			63					(755)	(692)
Amortization of pension plan actuarial losses, net of tax							103		103
Change in realized and unrealized gains on derivative hedges, net of tax							679		679
Recognized loss on pension, net of tax							(3,405)		(3,405)
Foreign currency translation adjustment							(15,258)	37	(15,221)
Balance, December 26, 2010	43,843	$ 4,384	$ 407,383	$ 233,322	4,036	$ (71,520)	$   10,722	$     —	$ 584,291
Net earnings				209				2	211
Exercise of stock-based compensation and awards released	289	29	1,540						1,569
Tax benefit on stock-based compensation			90						90
Stock-based compensation expense			4,779						4,779
Deferred compensation plan			351						351
Non-controlling interests of acquired entities								1,271	1,271
Amortization of pension plan actuarial losses, net of tax							(244)		(244)
Change in realized and unrealized gains on derivative hedges, net of tax							(1,762)		(1,762)
Foreign currency translation adjustment							22,085		22,085
Balance, June 26, 2011	44,132	$ 4,413	$ 414,143	$ 233,531	4,036	$ (71,520)	$   30,801	$ 1,273	$ 612,641

See Notes to Consolidated Financial Statements.

5

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(amounts in thousands)

	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Net earnings	$  9,522	$    9,033	$      211	$    12,470
Amortization of pension plan actuarial losses (gains), net of tax	12	(33)	(244)	51
Change in realized and unrealized gains (losses) on derivative hedges, net of tax	57	584	(1,762)	2,136
Foreign currency translation adjustment	3,490	(16,067)	22,085	(31,302)
Comprehensive income (loss)	13,081	(6,483)	20,290	(16,645)
Less: comprehensive income (loss) attributable to non-controlling interests	2	25	2	(57)
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.	$ 13,079	$  (6,508)	$ 20,288	$ (16,588)

See Notes to Consolidated Financial Statements.

6

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(amounts in thousands)

Six months (26 weeks) ended	June 26, 2011	June 27, 2010
Cash flows from operating activities:
Net earnings	$       211	$    12,470
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	17,861	17,200
Deferred taxes	1,812	596
Stock-based compensation	4,779	4,496
Provision for losses on accounts receivable	889	443
Excess tax benefit on stock compensation	(594)	(1,259)
Loss on disposal of fixed assets	5	62
(Increase) decrease in current assets, net of the effects of acquired companies:
Accounts receivable	(3,043)	14,064
Inventories	(21,245)	(23,224)
Other current assets	(10,894)	(3,206)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable	4,526	10,805
Income taxes	(5,331)	(4,882)
Unearned revenues	16,163	(3,788)
Restructuring reserve	(62)	(1,712)
Other current and accrued liabilities	28,152	(12,900)
Net cash provided by operating activities	33,229	9,165
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(9,416)	(8,857)
Acquisitions of businesses, net of cash acquired	(48,937)	—
Change in restricted cash	(355)	(336)
Other investing activities	192	78
Net cash (used in) investing activities	(58,516)	(9,115)
Cash flows from financing activities:
Proceeds from stock issuances	1,569	3,980
Excess tax benefit on stock compensation	594	1,259
Proceeds from short-term debt	196	5,411
Payment of short-term debt	(877)	(3,979)
Net change in factoring and bank overdrafts	47	1,833
Proceeds from long-term debt	31,117	6,105
Payment of long-term debt	(5,310)	(1,890)
Debt issuance costs	—	(280)
Net cash provided by financing activities	27,336	12,439
Effect of foreign currency rate fluctuations on cash and cash equivalents	7,980	(11,855)
Net increase in cash and cash equivalents	10,029	634
Cash and cash equivalents:
Beginning of period	173,802	162,097
End of period	$  183,831	$  162,731

See Notes to Consolidated Financial Statements.

7

CHECKPOINT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

The Consolidated Financial Statements include the accounts of Checkpoint Systems, Inc. and its majority-owned subsidiaries (collectively, the Company). All inter-company transactions are eliminated in consolidation. The Consolidated Financial Statements and related notes are unaudited and do not contain all disclosures required by generally accepted accounting principles in annual financial statements. Refer to our Annual Report on Form 10-K for the fiscal year ended December 26, 2010 for the most recent disclosure of the Company’s accounting policies, except for the revisions to the Revenue Recognition Policy in Item 2 Critical Accounting Policies and Estimates.

The Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position at June 26, 2011 and December 26, 2010 and our results of operations for the thirteen and twenty-six weeks ended June 26, 2011 and June 27, 2010 and changes in cash flows for the twenty-six weeks ended June 26, 2011 and June 27, 2010. The results of operations for the interim period should not be considered indicative of results to be expected for the full year.

Restricted Cash

We classify restricted cash as cash that cannot be made readily available for use. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits. As of June 26, 2011, the unused portion of a grant from the Chinese government of $0.5 million (RMB 3.3 million) and $0.2 million in compensating balances were recorded within restricted cash in the accompanying Consolidated Balance Sheets.

Accounts Receivable

At June 26, 2011, proceeds from the sale of accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaled $30.9 million. Proceeds from the initial sale of the accounts receivable are used to fund operations. We have presented the earnings recognized on the sale of the receivables separately under the line item captioned other operating income on our Consolidated Statements of Operations for the three and six months ended June 26, 2011 and June 27, 2010. This transaction meets the criteria for sale treatment in accordance with ASC 860 "Accounting for Transfers and Servicing of Financial Assets".

Internal-Use Software

Included in fixed assets is the capitalized cost of internal-use software. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over their estimated useful lives, which generally range from three to five years. Costs incurred related to design or maintenance of internal-use software is expensed as incurred.

During 2009, we announced that we were in the initial stages of implementing a company-wide ERP system to handle the business and finance processes within our operations and corporate functions. The total amount of internal-use software costs capitalized since the beginning of the ERP implementation as of June 26, 2011 and December 26, 2010 were $16.8 million and $13.1 million, respectively. As of June 26, 2011, $15.4 million was recorded in machinery and equipment related to supporting software packages that were placed in service. The remaining costs of $1.4 million and $12.7 million as of June 26, 2011 and December 26, 2010, respectively, are capitalized as construction-in-progress until such time as the ERP system has been placed in service.

Warranty Reserves

We provide product warranties for our various products. These warranties vary in length depending on product and geographical region. We establish our warranty reserves based on historical data of warranty transactions.

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)

Six months ended	June 26, 2011
Balance at beginning of year	$   6,170
Accruals for warranties issued	3,132
Settlements made	(3,343)
Foreign currency translation adjustment	213
Balance at end of period	$   6,172

8

Recently Adopted Accounting Standards

In October 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue Arrangements, (amendments to ASC Topic 605, Revenue Recognition)” (ASU 2009-13) and ASU 2009-14, “Certain Arrangements That Include Software Elements, (amendments to ASC Topic 985, Software)” (ASU 2009-14). ASU 2009-13 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. The amendments eliminate the residual method of revenue allocation and require revenue to be allocated using the relative selling price method. ASU 2009-14 removes tangible products from the scope of software revenue guidance and provides guidance on determining whether software deliverables in an arrangement that includes a tangible product are covered by the scope of the software revenue guidance. ASU 2009-13 and ASU 2009-14 are effective on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of these standards did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2010, FASB issued ASU 2010-13 "Compensation-Stock Compensation (Topic 718) Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades" (ASU 2010-13). Topic 718 is amended to clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades shall not be considered to contain a market, performance, or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies as equity classification. The amendments in this standard are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The guidance should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings for all outstanding awards as of the beginning of the fiscal year in which the amendments are initially applied. The adoption of the standard did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In December 2010, FASB issued ASU 2010-28 “Intangibles - Goodwill and Other (Topic 350)” (ASU 2010-28). Topic 350 is amended to clarify the requirement to test for impairment of goodwill. Topic 350 has required that goodwill be tested for impairment if the carrying amount of a reporting unit exceeds its fair value. Under ASU 2010-28, when the carrying amount of a reporting unit is zero or negative an entity must assume that it is more likely than not that a goodwill impairment exists, perform an additional test to determine whether goodwill has been impaired and calculate the amount of that impairment. The modifications to ASC Topic 350 resulting from the issuance of ASU 2010-28 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of the standard did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In December 2010, the FASB issued ASU 2010-29 “Business Combinations (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations” (ASU 2010-29). This standard update clarifies that, when presenting comparative financial statements, SEC registrants should disclose revenue and earnings of the combined entity as though the current period business combinations had occurred as of the beginning of the comparable prior annual reporting period only. The update also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective prospectively for material (either on an individual or aggregate basis) business combinations entered into in fiscal years beginning on or after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of the standard did not have a material impact on our Consolidated Financial Statements.

New Accounting Pronouncements and Other Standards

In January 2011, the FASB issued ASU 2011-01 “Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20” (ASU 2011-01). This standard update defers the effective date of new disclosure requirements for troubled debt restructurings prescribed by ASU 2010-20, "Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses." ASU 2011-01 is effective upon issuance. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2011, the FASB issued ASU 2011-02 “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” (ASU 2011-02). The amendments to Topic 310 (Receivables) clarify the guidance on a creditor’s evaluation of whether a debtor is experiencing financial difficulties and when a loan modification or restructuring is considered a troubled debt restructuring. In determining whether a loan modification represents a troubled debt restructuring, an entity should consider whether the debtor is experiencing financial difficulty and the lender has granted a concession to the borrower. ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2011, the FASB issued ASU 2011-03 “Reconsideration of Effective Control for Repurchase Agreements” (ASU 2011-03). The amendments to Topic 860 (Transfers and Servicing) affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments do not affect other transfers of financial assets. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. ASU 2011-03 is effective for the first interim or annual periods beginning on or after December 15, 2011, and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). The amendments to Topic 820 (Fair Value Measurement) establish common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United Sates and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for the first interim and annual periods beginning after December 15, 2011, and should be applied prospectively. We do not expect the adoption of the standard to have a material effect on our Consolidated Results of Operations and Financial Condition.

9

In June 2011, the FASB issued ASU 2011-05 “Presentation of Comprehensive Income” (ASU 2011-05). The amendments to Topic 220 (Comprehensive Income) eliminate the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders' equity, require consecutive presentation of the statement of net income and other comprehensive income and require reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. ASU 2011-05 is effective for the first interim and annual periods beginning after December 15, 2011. We do not expect the adoption of the standard to have a material effect on our Consolidated Results of Operations and Financial Condition.

Note 2. INVENTORIES

Inventories consist of the following:

(amounts in thousands)

	June 26, 2011	December 26, 2010
Raw materials	$   27,587	$   21,976
Work-in-process	7,205	5,416
Finished goods	99,323	79,582
Total	$ 134,115	$ 106,974

Note 3. GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $103.1 million and $90.8 million as of June 26, 2011 and December 26, 2010, respectively.

The following table reflects the components of intangible assets as of June 26, 2011 and December 26, 2010:

(dollar amounts in thousands)

		June 26, 2011		December 26, 2010
	Amortizable Life (years)	Gross Amount	Gross Accumulated Amortization	Gross Amount	Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6 to 20	$   97,812	$   47,035	$   79,696	$   41,226
Trade name	1 to 30	31,745	18,355	29,148	16,634
Patents, license agreements	3 to 14	62,960	49,038	60,410	45,048
Other	2 to 6	7,259	4,343	10,701	8,320
Total amortized finite-lived intangible assets		199,776	118,771	179,955	111,228
Indefinite-lived intangible assets:
Trade name		22,140	—	22,096	—
Total identifiable intangible assets		$ 221,916	$ 118,771	$ 202,051	$ 111,228

Amortization expense for the three and six months ended June 26, 2011 was $3.0 million and $5.6 million, respectively.

Amortization expense for the three and six months ended June 27, 2010 was $3.0 million and $6.1 million, respectively.

Estimated amortization expense for each of the five succeeding years is anticipated to be:

(amounts in thousands)

2011	$ 12,163
2012	$ 11,465
2013	$ 10,303
2014	$   9,788
2015	$   9,614

The changes in the carrying amount of goodwill are as follows:

(amounts in thousands)

	Shrink Management Solutions	Apparel Labeling Solutions	Retail Merchandising Solutions	Total
Balance as of December 27, 2009	$ 171,878	$   4,300	$ 67,884	$ 244,062
Acquired during the year	—	467	—	467
Purchase accounting adjustment	—	(1,077)	—	(1,077)
Translation adjustments	(6,554)	225	(5,798)	(12,127)
Balance as of December 26, 2010	$ 165,324	$   3,915	$ 62,086	$ 231,325
Acquired during the year	—	39,850	—	39,850
Translation adjustments	6,470	56	4,961	11,487
Balance as of June 26, 2011	$ 171,794	$ 43,821	$ 67,047	$ 282,662

10

The following table reflects the components of goodwill as of June 26, 2011 and December 26, 2010:

(amounts in thousands)

	June 26, 2011			December 26, 2010
	Gross Amount	Accumulated Impairment Losses	Goodwill, Net	Gross Amount	Accumulated Impairment Losses	Goodwill, Net
Shrink Management Solutions	$ 226,562	$   54,768	$ 171,794	$ 219,771	$   54,447	$ 165,324
Apparel Labeling Solutions	63,585	19,764	43,821	23,102	19,187	3,915
Retail Merchandising Solutions	141,011	73,964	67,047	130,486	68,400	62,086
Total goodwill	$ 431,158	$ 148,496	$ 282,662	$ 373,359	$ 142,034	$ 231,325

On January 28, 2011, Checkpoint Systems, Inc. and certain of its direct subsidiaries (collectively, the “Company”) entered into a Master Purchase Agreement. The Master Purchase Agreement outlines the general terms and conditions pursuant to which the Company agreed to acquire, through the acquisition of equity and/or assets, a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $39.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and a payable to be settled in the third quarter of 2011 of $27.8 million for a 2010 performance based purchase accounting adjustment and other post-closing items, which includes the acquisition of the following:

·   100% of the voting equity interests of J&F International, Inc. (U.S.), Shore to Shore Far East (Hong Kong), Shore to Shore MIS (India), Shore to Shore Lacar SA (Guatemala), Adapt Identification (HK) Ltd., and W Print Europe Ltd. (UK);

·   Assets of Shore to Shore, Inc. (U.S.), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., and Wing Hung Printing Co., Ltd. (U.S.);

·   51% of the voting equity interests of Shore to Shore PVT Ltd. (Sri Lanka);

·   50% of the voting equity interests of the Cybsa Adapt SA de CV (El Salvador) joint venture. In accordance with ASC 323 “Investments—Equity Method and Joint Ventures”, we have applied the Equity Method in recording this joint venture.

Included in the $27.8 million payable, which is recorded in other current liabilities on our Consolidated Balance Sheets, is $17.5 million of purchase price related to the 2010 performance of the acquired business. This amount is subject to adjustment pending final determination of the 2010 performance and could result in an additional purchase price payment of up to $6.3 million. We expect to conclude on the 2010 performance of the acquired businesses during the third quarter of 2011.  After final determination of the 2010 performance including final payment amount due, an adjustment will be recorded to the purchase price and goodwill. Acquisition costs incurred in connection with the transaction are recognized within acquisition costs in the Consolidated Statement of Operations and approximate $2.0 million and $2.2 million for the three and six months ended June 26, 2011.

As the Company acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash, we have classified the non-controlling interests as equity on our Consolidated Balance Sheets as of June 26, 2011 and December 26, 2010, and presented net income attributable to non-controlling interests separately on our Consolidated Statements of Operations for the three and six months ended June 26, 2011 and June 27, 2010. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

At June 26, 2011, the financial statements reflected the preliminary allocation of the purchase price based on estimated fair values at the date of acquisition, including $22.8 million in Property, Plant, and Equipment, $7.2 million in Accounts Receivable, and $2.2 million in Inventories. This preliminary allocation resulted in acquired goodwill of $39.9 million and intangible assets of $16.2 million. The intangible assets were composed of a non-compete agreement ($0.3 million), customer lists ($15.4 million), and trade names ($0.5 million). The useful lives were 5 years for the non-compete agreement, 10 years for the customer lists, and 7.5 months for the trade names. The Company continues to evaluate certain assets and liabilities related to this business combination. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill. Also, the allocation of the purchase price remains open for final valuation results, quantification of acquired income and non-income based tax exposures, and certain information related to deferred income taxes. The measurement period is expected to be completed by May of 2012. The tax deductible portion of the acquired goodwill will also be determined during the measurement period. The results from the acquisition date through June 26, 2011 are included in the Apparel Labeling Solutions segment and were not material to the Consolidated Financial Statements (revenues of $6.0 million and net earnings of $0.5 million).

In July 2009, the Company entered into an agreement to purchase the business of Brilliant, a China-based manufacturer of woven and printed labels, and settled the acquisition on August 14, 2009 for approximately $38.3 million, including cash acquired of $0.6 million and the assumption of debt of $19.6 million. The transaction was paid in cash and the purchase price includes the acquisition of 100% of Brilliant’s voting equity interests. Acquisition costs incurred in connection with the transaction are recognized within selling, general and administrative expenses in the Consolidated Statement of Operations and approximate $0.3 million during the first six months of 2010 without a comparable charge in 2011.

During the second quarter of 2010 we finalized our purchase accounting related to income taxes for the Brilliant acquisition and as a result we recorded a decrease to goodwill of $1.1 million. As of June 27, 2010, the financial statements reflect the final allocations of the purchase price based on the estimated fair values at the date of acquisition.

11

We perform an assessment of goodwill by comparing each individual reporting unit’s carrying amount of net assets, including goodwill, to their fair value at least annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Future assessments could result in impairment charges, which would be accounted for as an operating expense.

Note 4. DEBT

Short-term Borrowings and Current Portion of Long-term Debt

Short-term borrowings and current portion of long-term debt as of June 26, 2011 and December 26, 2010 consisted of the following:

(amounts in thousands)	June 26, 2011	December 26, 2010
Line of credit	$   1,866	$   1,808
Overdraft	613	—
Full-recourse factoring liabilities	15,983	13,065
Term loans	5,307	4,950
Revolving loan facility	385	386
Other short-term borrowings	562	—
Current portion of long-term debt	1,651	2,016
Total short-term borrowings and current portion of long-term debt	$ 26,367	$ 22,225

In connection with the acquisition of the Shore to Shore businesses, the Company assumed debt of $4.2 million. As of June 26, 2011, $4.4 million related to the assumed debt remained outstanding. The debt assumed includes capital leases, accounts receivable factoring arrangements, term loans, an overdraft facility, and other short-term loans. With the exception of the capital leases, the banking facilities are subject to the banks’ rights to call the liabilities at any time, and are therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

On December 30, 2009, we entered into a new Hong Kong banking facility. The banking facility includes a trade finance facility, a revolving loan facility, and a term loan. The maximum availability under the facility is $7.6 million (HKD 59.5 million). The banking facility is secured by all plant, machinery, fittings and equipment. The book value of the collateral as of June 26, 2011 is $9.2 million (HKD 71.6 million). The banking facility is subject to the bank’s right to call the liabilities at any time, and is therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

Trade Finance Facility - The trade finance facility is a full-recourse factoring arrangement that has a maximum borrowing limit of $3.2 million (HKD 25.0 million) and totaled $2.7 million (HKD 21.1 million) at June 26, 2011. The interest rate on this arrangement is HIBOR + 2.5%. The trade finance facility is secured by the related receivables.

Revolving Loan Facility – The revolving loan facility has a maximum borrowing limit of $0.4 million (HKD 3.0 million). The interest rate on this arrangement is Hong Kong Best Lending Rate + 1.0%. As of June 26, 2011, the revolving loan facility is $0.4 million (HKD 3.0 million) and is fully drawn.

Term Loan – On March 18, 2010, the Company borrowed $5.4 million (HKD 42.0 million). The interest rate on this arrangement is HIBOR + 2.5% and matures in March 2015. As of June 26, 2011, $4.0 million (HKD 31.5 million) was outstanding.

Included in Term loans is a $0.2 million (RMB 1.5 million) term loan maturing in May 2012. The term loan is subject to the bank’s right to call the liabilities at any time, and is therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In October 2009, the Company entered into a $12.0 million (€8.0 million) full-recourse factoring arrangement. The arrangement is secured by trade receivables. Borrowings bear interest at rates of EURIBOR plus a margin of 3.00%. At June 26, 2011, the interest rate was 4.43%. At June 26, 2011, our short-term full-recourse factoring arrangement equaled $11.4 million (€8.0 million) and is included in short-term borrowings in the accompanying Consolidated Balance Sheets since the agreement expires in December 2011.

As of June 26, 2011, the Japanese local line of credit is $1.9 million (¥150 million) and is fully drawn. The line of credit matures in November 2011.

Long-Term Debt

Long-term debt as of June 26, 2011 and December 26, 2010 consisted of the following:

(amounts in thousands)

	June 26, 2011	December 26, 2010
Senior Secured Credit Facility:
$125 million variable interest rate revolving credit facility maturing in 2014	$   69,904	$   42,687
Senior Secured Notes:
$25 million 4.00% fixed interest rate Series A senior secured notes maturing in 2015	25,000	25,000
$25 million 4.38% fixed interest rate Series B senior secured notes maturing in 2016	25,000	25,000
$25 million 4.75% fixed interest rate Series C senior secured notes maturing in 2017	25,000	25,000
Full-recourse factoring liabilities	1,636	1,740
Other capital leases with maturities through 2016	1,815	2,313
Total	148,355	121,740
Less current portion	1,651	2,016
Total long-term portion	$ 146,704	$ 119,724

12

Revolving Credit Facility

The Senior Secured Credit Facility includes an expansion option that will allow us to request an increase in the Senior Secured Credit Facility of up to an aggregate of $50.0 million, for a potential total commitment of $175.0 million. As of June 26, 2011, we did not elect to request the $50.0 million expansion option.

The Senior Secured Credit Facility contains a $25.0 million sublimit for the issuance of letters of credit of which $1.4 million, issued under the Secured Credit Facility, are outstanding as of June 26, 2011. The Senior Secured Credit Facility also contains a $15.0 million sublimit for swingline loans.

All obligations of domestic borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. The obligations of foreign borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by certain of our foreign subsidiaries as well as the domestic guarantors. Collateral under the Senior Secured Credit Facility includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary.

Pursuant to the terms of the Senior Secured Credit Facility, we are subject to various requirements, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Credit Facility also contains customary representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults. Upon a default under the Senior Secured Credit Facility, including the non-payment of principal or interest, our obligations under the Senior Secured Credit Facility may be accelerated and the assets securing such obligations may be sold. Certain wholly-owned subsidiaries with respect to the Company are guarantors of our obligations under the Senior Secured Credit Facility. As of June 26, 2011, we were in compliance with all covenants.

Senior Secured Notes

The Senior Secured Notes Agreement provides that for a three-year period ending on July 22, 2013, we may issue, and our lender may, in its sole discretion, purchase, additional fixed-rate senior secured notes (the “Shelf Notes”); together with the 2010 Notes, (the “Notes”), up to an aggregate amount of $50.0 million. As of June 26, 2011, we did not issue additional fixed-rate senior secured notes.

All obligations under the Senior Secured Notes are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. Collateral under the Senior Secured Notes includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary.

The Senior Secured Notes Agreement is subject to covenants that are substantially similar to the covenants in the Senior Secured Credit Facility Agreement, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Notes Agreement also contains representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults that are substantially similar to those contained in the Senior Secured Credit Facility, and those that are customary for similar private placement transactions. Upon a default under the Senior Secured Notes Agreement, including the non-payment of principal or interest, our obligations under the Senior Secured Notes Agreement may be accelerated and the assets securing such obligations may be sold. Certain of our wholly-owned subsidiaries are also guarantors of our obligations under the Senior Secured Notes. As of June 26, 2011, we were in compliance with all covenants.

Full-recourse Factoring Arrangements

In December 2009, we entered into new full-recourse factoring arrangements. The arrangements are secured by trade receivables. The Company received a weighted average of 92.4% of the face amount of receivables that it desired to sell and the bank agreed, at its discretion, to buy. At June 26, 2011 the factoring arrangements had a balance of $1.6 million (€1.2 million), of which $0.4 million (€0.3 million) was included in the current portion of long-term debt and $1.2 million (€0.9 million) was included in long-term borrowings in the accompanying Consolidated Balance Sheets since the receivables are collectable through 2016.

Note 5. STOCK-BASED COMPENSATION

Stock-based compensation cost recognized in operating results (included in selling, general, and administrative expenses) for the three and six months ended June 26, 2011 was $2.0 million and $4.8 million ($1.5 million and $3.5 million, net of tax), respectively. For the three and six months ended June 27, 2010, the total compensation expense was $2.2 million and $4.5 million ($1.5 million and $3.1 million, net of tax), respectively. The associated actual tax benefit realized for the tax deduction from option exercises of share-based payment units and awards released equaled $1.1 million and $1.8 million for the six months ended June 26, 2011 and June 27, 2010, respectively.

13

Stock Options

Option activity under the principal option plans as of June 26, 2011 and changes during the six months ended June 26, 2011 were as follows:

	Number of Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 26, 2010	2,745,796	$ 19.11	5.32	$ 8,731
Granted	93,144	21.91
Exercised	(124,098)	12.50
Forfeited or expired	(18,965)	17.44
Outstanding at June 26, 2011	2,695,877	$ 19.52	5.03	$ 3,571
Vested and expected to vest at June 26, 2011	2,653,406	$ 19.52	4.97	$ 3,533
Exercisable at June 26, 2011	2,187,179	$ 19.66	4.39	$ 2,722

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of fiscal 2011 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 26, 2011. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the six months ended June 26, 2011 and June 27, 2010 was $1.0 million and $3.0 million, respectively.

As of June 26, 2011, $1.7 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.8 years.

The fair value of share-based payment units was estimated using the Black Scholes option pricing model. The table below presents the weighted-average expected life in years. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

The assumptions and weighted-average fair values were as follows:

Six months ended	June 26, 2011		June 27, 2010
Weighted-average fair value of grants	$   9.88		$   7.39
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	49.85	%	48.11	%
Expected life (in years)	4.96		4.93
Risk-free interest rate	2.178	%	1.893	%

14

Restricted Stock Units

Nonvested service based restricted stock units as of June 26, 2011 and changes during the six months ended June 26, 2011 were as follows:

	Number of Shares	Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 26, 2010	630,244	0.81	$ 20.48
Granted	246,142		$ 20.91
Vested	(150,949)		$ 21.52
Forfeited	(13,297)		$ 15.09
Nonvested at June 26, 2011	712,140	1.16	$ 20.51
Vested and expected to vest at June 26, 2011	590,013	1.14
Vested at June 26, 2011	62,590	—

The total fair value of restricted stock awards vested during the first six months of 2011 was $3.2 million as compared to $2.1 million in the first six months of 2010. As of June 26, 2011, there was $5.0 million of unrecognized stock-based compensation expense related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.0 years.

Other Compensation Arrangements

On March 15, 2010, we initiated a plan in which time-vested cash unit awards were granted to eligible employees. The time-vested cash unit awards under this plan vest one-third each year over three years from the date of grant. The total amount accrued related to the plan equaled $0.2 million at June 26, 2011, of which $0.2 million and $0.3 million was expensed for the three and six months ended June 26, 2011. The total amount accrued related to the plan equaled $0.1 million at June 27, 2010, of which $8 thousand and $0.1 million was expensed for the three and six months ended June 27, 2010. The associated liability is included in Accrued Compensation and Related Taxes in the accompanying Consolidated Balance Sheets.

Note 6. SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest and income taxes for the six months ended June 26, 2011 and June 27, 2010 were as follows:

(amounts in thousands)

Six months ended	June 26, 2011	June 27, 2010
Interest	$ 2,895	$   2,266
Income tax payments	$ 4,819	$ 10,715

In January 2011, the Company entered into an agreement to acquire the business of Shore to Shore, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $39.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and a payable to be settled in the third quarter of 2011 of $27.8 million for a 2010 performance based purchase accounting adjustment and other post-closing items.  The acquisition payment, net of cash acquired, is reflected in the acquisition of businesses line within investing activities on the Consolidated Statement of Cash Flows.

15

Note 7. EARNINGS PER SHARE

The following data shows the amounts used in computing earnings per share and the effect on net earnings from continuing operations and the weighted-average number of shares of dilutive potential common stock:

(amounts in thousands, except per share data)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Basic earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$   9,520	$   9,040	$      209	$  12,546
Diluted earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$   9,520	$   9,040	$      209	$  12,546
Shares:
Weighted-average number of common shares outstanding	40,084	39,476	39,990	39,330
Shares issuable under deferred compensation agreements	458	469	447	436
Basic weighted-average number of common shares outstanding	40,542	39,945	40,437	39,766
Common shares assumed upon exercise of stock options and awards	360	552	461	526
Shares issuable under deferred compensation arrangements	12	13	5	9
Dilutive weighted-average number of common shares outstanding	40,914	40,510	40,903	40,301
Basic earnings attributable to Checkpoint Systems, Inc. per share	$       .23	$       .23	$       .01	$        .32
Diluted earnings attributable to Checkpoint Systems, Inc. per share	$       .23	$       .22	$       .01	$        .31

Anti-dilutive potential common shares are not included in our earnings per share calculation. The Long-term Incentive Plan restricted stock units were excluded from our calculation due to the performance of vesting criteria not being met.

The number of anti-dilutive common share equivalents for the three and six month periods ended June 26, 2011 and June 27, 2010 were as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS	1,847	1,380	1,608	1,509

Note 8. INCOME TAXES

The effective tax rate for the twenty-six weeks ended June 26, 2011 was 302.9% as compared to 26.2% for the twenty-six weeks ended June 27, 2010. The increase in the 2011 tax rate was due to the decrease in year-to-date pretax income.

In accordance with ASC 740, “Accounting for Income Taxes”, we evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. ASC 740 requires that companies assess whether valuation allowances should be established against their deferred tax assets based on all available evidence, both positive and negative, using a “more likely than not” standard. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company's experience with loss carryforwards not expiring and tax planning alternatives. The Company operates and derives income across multiple jurisdictions. As the geographic footprint of the business changes, we may encounter losses in jurisdictions that have been historically profitable, and as a result might require additional valuation allowances to be recorded against certain deferred tax asset balances. At June 26, 2011 and December 26, 2010, the Company had net deferred tax assets of $60.9 million and $61.5 million, respectively.

During 2010 negative evidence arose in the form of cumulative losses in two material jurisdictions with net deferred tax assets of $41.8 million and $10.1 million, respectively. The Company considered all available evidence and was able to conclude on a more likely than not basis that the effects of our commitment to specific tax planning actions provided a sufficient amount of positive evidence to support the continued benefit of the jurisdictions’ deferred tax assets. The Company is committed to implementing tax planning actions, when deemed appropriate, in jurisdictions that experience losses in order to realize deferred tax assets prior to their expiration.

16

The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate was $12.2 million and $12.8 million at June 26, 2011 and December 26, 2010, respectively. Penalties and tax-related interest expense are reported as a component of income tax expense. During the six months ended June 26, 2011, we did not recognize any interest and penalties expense compared to an interest and penalties expense of $0.4 million during the six months ended June 27, 2010, in the Statement of Operations. At June 26, 2011 and December 26, 2010, the Company had accrued interest and penalties related to unrecognized tax benefits of $3.6 million and $3.6 million, respectively.

We file income tax returns in the U.S. and in various states, local and foreign jurisdictions. We are routinely examined by tax authorities in these jurisdictions. It is possible that these examinations may be resolved within twelve months. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the gross unrecognized tax benefits balance may decrease within the next twelve months by a range of $3.4 million to $5.3 million.

We are currently under audit in the following major jurisdictions: United States 2007 – 2008, Germany 2002 – 2005, Finland 2005 – 2009, and Sweden 2007 – 2009.

Note 9. PENSION BENEFITS

The components of net periodic benefit cost for the three and six months ended June 26, 2011 and June 27, 2010 were as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Service cost	$    252	$    206	$    489	$    429
Interest cost	1,140	1,043	2,221	2,175
Expected return on plan assets	40	(14)	78	(30)
Amortization of actuarial (gain)	13	(6)	25	(12)
Amortization of transition obligation	33	30	65	62
Amortization of prior service costs	—	—	1	1
Net periodic pension cost	$ 1,478	$ 1,259	$ 2,879	$ 2,625

We expect the cash requirements for funding the pension benefits to be approximately $5.1 million during fiscal 2011, including $2.8 million which was funded during the six months ended June 26, 2011.

Note 10. FAIR VALUE MEASUREMENT, FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair Value Measurement

We utilize the market approach to measure fair value for our financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The fair value hierarchy is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

Level 1	Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2	Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.
Level 3	Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Because the Company’s derivatives are not listed on an exchange, the Company values these instruments using a valuation model with pricing inputs that are observable in the market or that can be derived principally from or corroborated by observable market data. The Company’s methodology also incorporates the impact of both the Company’s and the counterparty’s credit standing.

17

The following tables represent our assets and liabilities measured at fair value on a recurring basis as of June 26, 2011 and December 26, 2010 and the basis for that measurement:

(amounts in thousands)	Total Fair Value Measurement June 26, 2011	Quoted Prices In Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Foreign currency revenue forecast contracts	$   45	$ —	$   45	$ —
Foreign currency forward exchange contracts	7	—	7	—
Total assets	$   52	$ —	$   52	$ —
Foreign currency revenue forecast contracts	$ 724	$ —	$ 724	$ —
Foreign currency forward exchange contracts	—	—	—	—
Total liabilities	$ 724	$ —	$ 724	$ —

(amounts in thousands)	Total Fair Value Measurement December 26, 2010	Quoted Prices In Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Foreign currency revenue forecast contracts	$ 938	$ —	$ 938	$ —
Foreign currency forward exchange contracts	27	—	27	—
Total assets	$ 965	$ —	$ 965	$ —
Foreign currency revenue forecast contracts	$ 278	$ —	$ 278	$ —
Foreign currency forward exchange contracts	20	—	20	—
Total liabilities	$ 298	$ —	$ 298	$ —

The following table provides a summary of the activity associated with all of our designated cash flow hedges (foreign currency) reflected in accumulated other comprehensive income for the six months ended June 26, 2011:

(amounts in thousands)

	June 26, 2011
Beginning balance, net of tax	$       377
Changes in fair value gain, net of tax	(2,350)
Reclassification to earnings, net of tax	588
Ending balance, net of tax	$ (1,385)

We believe that the fair values of our current assets and current liabilities (cash, restricted cash, accounts receivable, accounts payable, and other current liabilities) approximate their reported carrying amounts. The carrying values and the estimated fair values of non-current financial assets and liabilities that qualify as financial instruments and are not measured at fair value on a recurring basis at June 26, 2011 and December 26, 2010 are summarized in the following table:

(amounts in thousands)	June 26, 2011		December 26, 2010
	Carrying Amount	Estimated Fair Value	Carrying Amount	Estimated Fair Value
Long-term debt (including current maturities and excluding capital leases and factoring) (1)
Senior secured credit facility	$ 69,904	$ 69,904	$ 42,687	$ 42,687
Senior secured notes	$ 75,000	$ 76,096	$ 75,000	$ 75,787

(1)   The carrying amounts are reported on the balance sheet under the indicated captions.

18

Long-term debt is carried at the original offering price, less any payments of principal. Rates currently available to us for long-term borrowings with similar terms and remaining maturities are used to estimate the fair value of existing borrowings as the present value of expected cash flows.

Financial Instruments and Risk Management

We manufacture products in the U.S., the Caribbean, Europe, and the Asia Pacific region for both the local marketplace and for export to our foreign subsidiaries. The foreign subsidiaries, in turn, sell these products to customers in their respective geographic areas of operation, generally in local currencies. This method of sale and resale gives rise to the risk of gains or losses as a result of currency exchange rate fluctuations on inter-company receivables and payables. Additionally, the sourcing of product in one currency and the sales of product in a different currency can cause gross margin fluctuations due to changes in currency exchange rates.

Our major market risk exposures are movements in foreign currency and interest rates. We have historically not used financial instruments to minimize our exposure to currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries. We have used third-party borrowings in foreign currencies to hedge a portion of our net investments in and cash flows derived from our foreign subsidiaries. A reduction in our third party foreign currency borrowings will result in an increase of foreign currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries.

We enter into forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts are entered into with major financial institutions, thereby minimizing the risk of credit loss. We will consider using interest rate derivatives to manage interest rate risks when there is a disproportionate ratio of floating and fixed-rate debt. We do not hold or issue derivative financial instruments for speculative or trading purposes. We are subject to other foreign exchange market risk exposure resulting from anticipated non-financial instrument foreign currency cash flows which are difficult to reasonably predict, and have therefore not been included in the table of fair values. All listed items described are non-trading.

The following table presents the fair values of derivative instruments included within the Consolidated Balance Sheets as of June 26, 2011 and December 26, 2010:

(amounts in thousands)	June 26, 2011				December 26, 2010
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign currency revenue forecast contracts	Other current assets	$   45	Other current liabilities	$  724	Other current assets	$  938	Other current liabilities	$  278
Total derivatives designated as hedging instruments		45		724		938		278
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts	Other current assets	7	Other current liabilities	—	Other current assets	27	Other current liabilities	20
Total derivatives not designated as hedging instruments		7		—		27		20
Total derivatives		$ 52		$ 724		$ 965		$ 298

The following tables present the amounts affecting the Consolidated Statement of Operations for the three months ended June 26, 2011 and June 27, 2010:

(amounts in thousands)	June 26, 2011				June 27, 2010
	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$  (354)	Cost of sales	$  (276)	$  (124)	$  978	Cost of sales	$  382	$  (11)
Interest rate swap contracts	—	Interest expense	—	—	—	Interest expense	—	—
Total designated cash flow hedges	$ (354)		$ (276)	$ (124)	$ 978		$ 382	$ (11)

19

The following tables present the amounts affecting the Consolidated Statement of Operations for the six months ended June 26, 2011 and June 27, 2010:

(amounts in thousands)	June 26, 2011				June 27, 2010
	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$  (2,725)	Cost of sales	$  (494)	$  (105)	$  2,082	Cost of sales	$       10	$  (26)
Interest rate swap contracts	—	Interest expense	—	—	171	Interest expense	(159)	—
Total designated cash flow hedges	$ (2,725)		$ (494)	$ (105)	$ 2,253		$ (149)	$ (26)

(amounts in thousands)	Quarter (13 weeks) Ended				Six Months (26 weeks) Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments
Foreign exchange forwards and options	$ (158)	Other gain (loss), net	$ 237	Other gain (loss), net	$ (495)	Other gain (loss), net	$ 410	Other gain (loss), net

We selectively purchase currency forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts guarantee a predetermined exchange rate at the time the contract is purchased. This allows us to shift the effect of positive or negative currency fluctuations to a third party. Transaction gains or losses resulting from these contracts are recognized at the end of each reporting period. We use the fair value method of accounting, recording realized and unrealized gains and losses on these contracts. These gains and losses are included in other gain (loss), net on our Consolidated Statements of Operations. As of June 26, 2011, we had currency forward exchange contracts with notional amounts totaling approximately $3.3 million. The fair values of the forward exchange contracts were reflected as a $7 thousand asset and are included in other current assets and in the accompanying Balance Sheets. The contracts are in the various local currencies covering primarily our operations in the U.S., the Caribbean, and Western Europe. Historically, we have not purchased currency forward exchange contracts where it is not economically efficient, specifically for our operations in South America and Asia, with the exception of Japan.

Beginning in the second quarter of 2008, we entered into various foreign currency contracts to reduce our exposure to forecasted Euro-denominated inter-company revenues. These contracts were designated as cash flow hedges. The foreign currency contracts mature at various dates from July 2011 to June 2012. The purpose of these cash flow hedges is to eliminate the currency risk associated with Euro-denominated forecasted inter-company revenues due to changes in exchange rates. These cash flow hedging instruments are marked to market and the changes are recorded in other comprehensive income. Amounts recorded in other comprehensive income are recognized in cost of goods sold as the inventory is sold to external parties. Any hedge ineffectiveness is charged to other gain (loss), net on our Consolidated Statements of Operations. As of June 26, 2011, the fair value of these cash flow hedges were reflected as a $45 thousand asset and a $0.7 million liability and are included in other current assets and other current liabilities in the accompanying Consolidated Balance Sheets. The total notional amount of these hedges is $28.1 million (€20.2 million) and the unrealized loss recorded in other comprehensive income was $1.4 million (net of taxes of $0.2 million), of which $1.4 million (net of taxes of $0.2 million) is expected to be reclassified to earnings over the next twelve months. During the three and six months ended June 26, 2011, a $0.3 million and $0.5 million expense related to these foreign currency hedges was recorded to cost of goods sold as the inventory was sold to external parties, respectively. The Company recognized $0.1 million of hedge ineffectiveness during the six months ended June 26, 2011.

20

Note 11. PROVISION FOR RESTRUCTURING

Restructuring expense for the three and six months ended June 26, 2011 and June 27, 2010 was as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
SG&A Restructuring Plan
Severance and other employee-related charges	$   874	$   741	$ 2,459	$   837
Other exit costs	578	—	610	—
Manufacturing Restructuring Plan
Severance and other employee-related charges	(32)	274	(41)	569
Other exit costs	75	184	64	229
Total	$ 1,495	$ 1,199	$ 3,092	$ 1,635

Restructuring accrual activity for the six months ended June 26, 2011 was as follows:

(amounts in thousands)

	Accrual at Beginning of Year	Charged to Earnings	Charge Reversed to Earnings	Cash Payments	Exchange Rate Changes	Accrual at 6/26/2011
SG&A Restructuring Plan
Severance and other employee-related charges	$ 6,660	$ 2,577	$ (118)	$ (2,545)	$ 314	$ 6,888
Other exit costs(1)	—	610	—	(128)	—	482
Manufacturing Restructuring Plan
Severance and other employee-related charges	719	69	(110)	(494)	—	184
Other exit costs(2)	143	75	(11)	(132)	—	75
Total	$ 7,522	$ 3,331	$ (239)	$ (3,299)	$ 314	$ 7,629

(1)   During the first six months of 2011, there was a net charge to earnings of $0.6 million due to the closing of an operating facility and one-time payment related to a lease modification for an operating facility.

(2)   During 2010, costs were recorded due to the closing of a manufacturing facility. For the first six months of 2011, there was a net charge to earnings of $0.1 million due to other exit costs associated with the manufacturing closings.

SG&A Restructuring Plan

During 2009, we initiated a plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan expected to be substantially complete by the end of 2011.

As of June 26, 2011, the net charge to earnings of $3.1 million represents the current year activity related to the SG&A Restructuring Plan. The anticipated total costs related to the plan are expected to approximate $20 million to $25 million, of which $12.9 million have been incurred. The total number of employees currently affected by the SG&A Restructuring Plan were 204, of which 141 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

Manufacturing Restructuring Plan

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our Apparel Labeling Solutions (ALS) business, formerly Check-Net®, and to support incremental improvements in our EAS systems and labels businesses. For the six months ended June 26, 2011, there was a net charge to earnings of $23 thousand recorded in connection with the Manufacturing Restructuring Plan. This net charge was primarily due to other exit costs associated with the closing of manufacturing facilities partially offset by lower than estimated severance accruals.

The total number of employees currently affected by the Manufacturing Restructuring Plan was 420, of which 417 have been terminated. As of June 26, 2011 the implementation of the Manufacturing Restructuring Plan is substantially complete, with total costs incurred of $4.2 million. Termination benefits are planned to be paid one month to 24 months after termination.

21

Note 12. CONTINGENT LIABILITIES AND SETTLEMENTS

We are involved in certain legal actions, all of which have arisen in the ordinary course of business. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on our Consolidated Results of Operations and/or Financial Condition, except as disclosed in our Annual Report on Form 10-K for the year ended December 26, 2010 for which there have been no material changes.

Note 13. BUSINESS SEGMENTS

During the three and six months ended June 26, 2011, the Company’s acquisition of the Shore to Shore businesses resulted in an increase in Apparel Labeling Solutions segment assets. Specific segment data are as follows:

(amounts in thousands)	Quarter (13 weeks) Ended				Six Months (26 weeks) Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
Business segment net revenue:
Shrink Management Solutions	$ 148,298		$ 143,837		$ 273,809		$ 273,267
Apparel Labeling Solutions	53,857		48,185		95,217		88,408
Retail Merchandising Solutions	17,776		16,154		35,578		33,957
Total revenues	$ 219,931		$ 208,176		$ 404,604		$ 395,632
Business segment gross profit:
Shrink Management Solutions	$   61,435		$   64,738		$ 109,253		$ 120,943
Apparel Labeling Solutions	15,574		18,313		29,480		33,709
Retail Merchandising Solutions	8,483		7,713		17,133		16,663
Total gross profit	85,492		90,764		155,866		171,315
Operating expenses, net	72,882	(1)	76,648	(2)	153,837	(3)	151,578	(4)
Interest (expense) income, net	(1,191)		(723)		(1,867)		(1,655)
Other gain (loss), net	(376)		(1,462)		(266)		(1,196)
Earnings before income taxes	$  11,043		$   11,931		$     (104)		$   16,886

(1)   Includes a $1.5 million restructuring charge and $2.0 million in acquisition costs.

(2)   Includes a $1.2 million restructuring charge.

(3)   Includes a $3.1 million restructuring charge and $2.2 million in acquisition costs.

(4)   Includes a $1.6 million restructuring charge.

22

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Information Relating to Forward-Looking Statements

This report includes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this quarterly report on Form 10-Q which express that we "believe," "anticipate," "expect" or "plan to" as well as other statements which are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect to future events and financial performance, and are subject to certain risks and uncertainties which could cause actual results to differ materially from historical results or those anticipated. Such risks, uncertainties and assumptions include, but are not limited, to the following: our ability to integrate the Shore to Shore acquisition and other acquisitions and to achieve our financial and operational goals for our acquisitions; changes in international business conditions; foreign currency exchange rate and interest rate fluctuations; lower than anticipated demand by retailers and other customers for our products; slower commitments of retail customers to chain-wide installations and/or source tagging adoption or expansion; possible increases in per unit product manufacturing costs due to less than full utilization of manufacturing capacity as a result of slowing economic conditions or other factors; our ability to provide and market innovative and cost-effective products; the development of new competitive technologies; our ability to maintain our intellectual property; competitive pricing pressures causing profit erosion; the availability and pricing of component parts and raw materials; possible increases in the payment time for receivables as a result of economic conditions or other market factors; changes in regulations or standards applicable to our products; the ability to implement cost reduction in field service, sales, and general and administrative expense, and our manufacturing and supply chain operations without significantly impacting revenue and profits; our ability to maintain effective internal control over financial reporting; and risks generally associated with our company-wide implementation of an enterprise resource planning (ERP) system. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about potential factors that could affect our business and financial results is included in our Annual Report on Form 10-K for the year ended December 26, 2010, and our other Securities and Exchange Commission filings.

Overview

We are a multinational manufacturer and marketer of identification, tracking, security and merchandising solutions primarily for the retail industry. We provide technology-driven integrated supply chain solutions to brand, track, and secure goods for retailers and consumer product manufacturers worldwide. We are a leading provider of, and earn revenues primarily from the sale of Shrink Management, Apparel Labeling and Retail Merchandising Solutions. Shrink Management Solutions consists of electronic article surveillance (EAS) systems and EAS consumables including Alpha® solutions, store monitoring solutions (CheckView®), and radio frequency identification (RFID) systems, software, tags and labels. Apparel Labeling Solutions includes our web-enabled apparel labeling solutions platform and network of service bureaus to manage the printing of variable information on price and promotional tickets, adhesive labels, fabric and woven tags and labels, and apparel branding tags. Retail Merchandising Solutions consists of hand-held labeling systems (HLS) and retail display systems (RDS). Applications of these products include primarily retail security, asset and merchandise visibility, automatic identification, and pricing and promotional labels and signage. Operating directly in 35 countries, we have a global network of subsidiaries and distributors, and provide customer service and technical support around the world.

Our results are heavily dependent upon sales to the retail market. Our customers are dependent upon retail sales, which are susceptible to economic cycles and seasonal fluctuations. Furthermore, as approximately two-thirds of our revenues and operations are located outside the U.S., fluctuations in foreign currency exchange rates have a significant impact on reported results.

Our operations and results depend significantly on global market worldwide economic conditions, which have experienced deterioration in recent years. In response to these market conditions, we continue to focus on providing customers with innovative products that will be valuable in addressing shrink, which is particularly important during a difficult economic environment. We have also implemented initiatives to reduce costs and improve working capital to mitigate the effects of the economy on our business. We believe that the strength of our core business and our ability to generate positive cash flow will sustain us through this challenging period.

In January 2011, the Company entered into an agreement to acquire the business of Shore to Shore, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition settled in May 2011 for a purchase price of approximately $78.7 million. The financial statements reflect the preliminary allocations of the purchase price based on estimated fair values at the date of acquisition. The results from the acquisition and related goodwill are included in the Apparel Labeling Solutions segment. This acquisition will allow us to strengthen and expand our core apparel labeling offering and provides us with additional capacity in key geographical locations.

In July 2009, we entered into an agreement to purchase the business of Brilliant, a China-based manufacturer of woven and printed labels, and settled the acquisition in August 2009. As of June 27, 2010, our financial statements reflect the final allocations of the Brilliant purchase price based on estimated fair values at the date of acquisition. The results from the acquisition and related goodwill are included in the Apparel Labeling Solutions segment.  Brilliant’s woven and printed label manufacturing capabilities has contributed to establishing us as a full range global supplier for the apparel labeling solutions business.

23

During 2009, we initiated a plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with subsequent phases initiated during fiscal 2010. In September 2010, we announced the remaining phases of the plan in which we anticipate the total plan to result in restructuring charges of approximately $20 million to $25 million, or $0.49 to $0.61 per diluted share. We expect implementation of this program to be substantially complete by the end of 2011 and to result in total cost savings of approximately $20 million to $25 million. We expect to realize approximately $15 million to $17 million of the total cost savings in 2011 and the remainder of the savings in 2012.

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our ALS business and to support incremental improvements in our EAS systems and labels businesses. The implementation of this program was substantially completed in 2010 and is expected to result in annualized cost savings of approximately $6 million in 2011.

Future financial results will be dependent upon our ability to expand the functionality of our existing product lines, develop or acquire new products for sale through our global distribution channels, convert new large chain retailers to our solutions for shrink management, merchandise visibility™ and apparel labeling, and reduce the cost of our products and infrastructure to respond to competitive pricing pressures.

Our base of recurring revenue (revenues from the sale of consumables into the installed base of security systems, apparel tags and labels, and hand-held labeling tools and services from monitoring and maintenance), repeat customer business, and our borrowing capacity should provide us with adequate cash flow and liquidity to execute our business plan.

Critical Accounting Policies and Estimates

We have updated the Revenue Recognition section of our Critical Accounting Policies and Estimates since those presented in Part II - Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 26, 2010. Except for revisions to the Revenue Recognition section, there have been no material changes to our Critical Accounting Policies and Estimates set forth in our Annual Report on Form 10-K for the fiscal year ended December 26, 2010. The revised Revenue Recognition policy is included below.

Revenue Recognition. We recognize revenue when revenue is realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectability is reasonably assured.

We enter into contracts to sell our products and services, and, while the majority of our sales agreements contain standard terms and conditions, there are agreements that contain multiple elements or non-standard terms and conditions. As a result, significant contract interpretation is sometimes required to determine the appropriate accounting, including whether the deliverables specified in a multiple element arrangement should be treated as separate units of accounting for revenue recognition purposes, and, if so, how the selling price should be allocated among the elements and when to recognize revenue for each element.

For arrangements with multiple elements, we allocate total arrangement consideration to all deliverables based on their relative selling price using a specific hierarchy and recognize revenue when each element’s revenue recognition criteria are met. The hierarchy is as follows: vendor-specific objective evidence (“VSOE”), third-party evidence of selling price (“TPE”) or best estimate of selling price (“BESP”). VSOE of fair value for each element is established based on the price charged when the same element is sold separately. We recognize revenue when installation is complete or other post-shipment obligations have been satisfied. Unearned revenue is recorded when payments are received in advance of performing our service obligations and is recognized over the service period.

Products leased to customers under sales-type leases are accounted for as the equivalent of a sale. The present value of such lease revenues is recorded as net revenues, and the related cost of the products is charged to cost of revenues. The deferred finance charges applicable to these leases are recognized over the terms of the leases. Rental revenue from products under operating leases is recognized over the term of the lease. Installation revenue from SMS EAS products is recognized when the systems are installed. Service revenue is recognized, for service contracts, on a straight-line basis over the contractual period, and, for non-contract work, as services are performed.

Revenues from software license agreements are recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, no significant vendor obligations are remaining to be fulfilled, the fee is fixed or determinable, and collection is probable. Revenue from software contracts for both licenses and professional services that require significant production, modification, customization, or implementation are recognized together using the percentage of completion method based upon the ratio of labor incurred to total estimated labor to complete each contract. In instances where there is a term license combined with services, revenue is recognized ratably over the term.

We record estimated reductions to revenue for customer incentive offerings, including volume-based incentives and rebates. We record revenues net of an allowance for estimated return activities. Return activity was immaterial to revenue and results of operations for all periods presented.

Results of Operations

All comparisons are with the prior year period, unless otherwise stated.

Net Revenues

Our unit volume is driven by product offerings, number of direct sales personnel, recurring sales and, to some extent, pricing. Our base of installed systems provides a source of recurring revenues from the sale of disposable tags, labels, and service revenues.

Our customers are substantially dependent on retail sales, which are seasonal, subject to significant fluctuations, and difficult to predict. In addition, current economic trends have particularly affected our customers, and consequently our net revenues have been, and may continue to be impacted in the future. Historically, we have experienced lower sales in the first half of each year.

24

Analysis of Statement of Operations

Thirteen Weeks Ended June 26, 2011 Compared to Thirteen Weeks Ended June 27, 2010

The following table presents for the periods indicated certain items in the Consolidated Statement of Operations as a percentage of total revenues and the percentage change in dollar amounts of such items compared to the indicated prior period:

	Percentage of Total Revenue				Percentage Change In Dollar Amount
Quarter ended	June 26, 2011 (Fiscal 2011)		June 27, 2010 (Fiscal 2010)		Fiscal 2011 vs. Fiscal 2010
Net revenues
Shrink Management Solutions	67.4	%	69.1	%	3.1	%%
Apparel Labeling Solutions	24.5		23.1		11.8
Retail Merchandising Solutions	8.1		7.8		10.0
Net revenues	100.0		100.0		5.6
Cost of revenues	61.1		56.4		14.5
Total gross profit	38.9		43.6		(5.8)
Selling, general, and administrative expenses	36.7		33.7		14.9
Research and development	2.5		2.5		2.5
Restructuring expense	0.7		0.6		24.7
Acquisition costs	0.9		—		N/A
Other operating income	7.6		—		N/A
Operating income	5.7		6.8		(10.7)
Interest income	0.3		0.3		4.2
Interest expense	0.9		0.7		35.0
Other (loss) gain, net	(0.1)		(0.7)		(74.3)
Earnings before income taxes	5.0		5.7		(7.4)
Income taxes	0.7		1.4		(47.5)
Net earnings	4.3		4.3		5.4
Less: income (loss) attributable to non-controlling interests	—		—		(128.6)
Net earnings attributable to Checkpoint Systems, Inc.	4.3	%	4.3	%	5.3	%%

N/A – Comparative percentages are not meaningful.

Net Revenues

Revenues for the second quarter of 2011 compared to the second quarter of 2010 increased $11.7 million, or 5.6%, from $208.2 million to $219.9 million. Foreign currency translation had a positive impact on revenues of approximately $12.3 million, or 5.9%, in the second quarter of 2011 as compared to the second quarter of 2010.

(amounts in millions)

Quarter ended	June 26, 2011 (Fiscal 2011)	June 27, 2010 (Fiscal 2010)	Dollar Amount Change Fiscal 2011 vs. Fiscal 2010	Percentage Change Fiscal 2011 vs. Fiscal 2010
Net Revenues:
Shrink Management Solutions	$ 148.3	$ 143.8	$   4.5	3.1	%
Apparel Labeling Solutions	53.8	48.2	5.6	11.8
Retail Merchandising Solutions	17.8	16.2	1.6	10.0
Net Revenues	$ 219.9	$ 208.2	$ 11.7	5.6	%

25

Shrink Management Solutions

Shrink Management Solutions (SMS) revenues increased $4.5 million, or 3.1%, during the second quarter of 2011 compared to the second quarter of 2010. Foreign currency translation had a positive impact of approximately $8.5 million. The decrease in Shrink Management Solutions, after considering the foreign currency translation positive impact, was due to declines of $8.1 million in EAS consumablesand $2.1 million in CheckView®. These decreases were offset by increases in the other SMS businesses including EAS systems and Alpha of $4.9 million and $0.4 million, respectively.

EAS consumables revenues decreased $8.1 million in the second quarter of 2011 as compared to the second quarter of 2010. Similar to the impact on first quarter 2011 results, the decrease was primarily due to Hard Tag @ Source™ revenues, which were below levels of one year ago when we experienced high volumes associated with the initial program roll-out to a major European retailer. A decline in Europe EAS label revenues due to reduced volumes with certain customers was also a factor.

CheckView® revenues decreased $2.1 million in the second quarter of 2011 as compared to the second quarter of 2010. The decrease was due to declines in installations and on-going services with existing customers, primarily in the U.S., International Americas, and Asia. CheckView® has been dependent on new store openings and capital spending that has been scaled back by retail customers. We continue to work to mitigate this trend by leveraging our relationships with EAS and Alpha® customers to generate new revenue opportunities for CheckView®.

EAS systems revenues increased $4.9 million in the second quarter of 2011 as compared to the second quarter of 2010. The increase was primarily driven by growth in Europe and Asia resulting from the addition of new customers and also due to extensions of arrangements and new product installations with existing customers. New store openings are a significant contributor to EAS systems revenues. These have been scaled back by many of our Europe and North America based customers, who have increased their focus on margin improvement at existing stores. We have been addressing this by selling new, faster payback EAS consumables and Alpha® solutions to existing customers while increasing our market share in underpenetrated retail verticals through innovative products such as Evolve® and our Hard Tag @ Source™ program.

Alpha® revenues increased $0.4 million in the second quarter of 2011 as compared to the second quarter of 2010. The increase was due to stronger international demand for Alpha® products as market conditions for high theft prevention products improved during the second quarter of 2011.

Apparel Labeling Solutions

Apparel Labeling Solutions revenues increased $5.6 million, or 11.8%, in the second quarter of 2011 as compared to the second quarter of 2010. After considering the foreign currency translation positive impact of approximately $1.8 million, the remaining increase of $3.8 million was due to non-comparable revenues of approximately $6.0 million, resulting from our acquisition of Shore to Shore on May 16, 2011. Offsetting this increase was a decrease in our organic business due primarily to declines in sales volumes in Europe.

Retail Merchandising Solutions

Retail Merchandising Solutions revenues increased $1.6 million, or 10.0%, in the second quarter of 2011 as compared to the second quarter of 2010. After considering the foreign currency translation positive impact of approximately $2.1 million, the decreases in revenues are related to a Retail Display Solutions (RDS) decrease of $0.3 million and a $0.2 million decrease in Hand-held Labeling Solutions (HLS). We anticipate RDS and HLS will face difficult revenue trends in 2011 due to the impact of pricing pressures on the RDS business and continued shifts in market demand for HLS products.

Gross Profit

During the second quarter of 2011, gross profit decreased $5.3 million, or 5.8%, from $90.8 million to $85.5 million. The positive impact of foreign currency translation on gross profit was approximately $4.1 million. Gross profit, as a percentage of net revenues, decreased from 43.6% to 38.9%.

Shrink Management Solutions

Shrink Management Solutions gross profit as a percentage of Shrink Management Solutions revenues decreased to 41.4% in the second quarter of 2011, from 45.0% in the second quarter of 2010. The decrease in the gross profit percentage of Shrink Management Solutions was due primarily to lower margins in Alpha, EAS consumables and CheckView® that were partially offset with improvements in EAS Systems margins.  The decline in Alpha margins was due to customer and product mix coupled with rising raw material prices.  The CheckView® business also contributed to the decline, where gross margins were impacted by customer product and service mix as well as project timing. The decline in EAS consumables margin was less than experienced in the first quarter of 2011 as we made progress in addressing the delays in capturing expected cost efficiencies as we expanded new product and specialty label capacity coupled with pricing that does not yet reflect the enhanced capabilities of these products that we experienced earlier this year. EAS consumables margins were also impacted by the year over year reduction in higher margin Hard Tag @ Source™. The declines were partially offset by improvements in EAS Systems margins that were driven by increased volumes.

26

Apparel Labeling Solutions

Apparel Labeling Solutions gross profit as a percentage of Apparel Labeling Solutions revenues decreased to 28.9% in the second quarter of 2011, from 38.0% in the second quarter of 2010. The decline was largely attributable to weaker operational performance at certain Asia facilities, inventory adjustments, and the impact of the Shore to Shore acquisition, which includes a purchase accounting based mark-up of acquired inventory as well as the deferred transfer to the Company of certain Asia based printing operations.

Retail Merchandising Solutions

The Retail Merchandising Solutions gross profit as a percentage of Retail Merchandising Solutions revenues remained consistent at 47.7% in the second quarter of 2011 and the second quarter of 2010.

Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses increased $10.5 million, or 14.9%, during the second quarter of 2011 compared to the second quarter of 2010. Foreign currency translation increased SG&A expenses by approximately $4.4 million. The remaining increase in SG&A expense of $6.1 million was due primarily to temporary increases in consulting, operations and shared services expenses resulting from the second quarter 2011 North American and Caribbean implementation of our company wide ERP system, additions to staff to add capabilities required for future process and cost improvement initiatives, and increased commissions expenses associated with the renewal/extension of sales-type leases in the second quarter of 2011.  We expect the impact of SG&A restructuring programs to contribute to meaningful reductions in SG&A expense beginning in the second half of this year.

Research and Development Expenses

Research and development (R&D) expenses were $5.3 million, or 2.5% of revenues, in the second quarter of 2011 and $5.2 million, or 2.5% of revenues in the second quarter of 2010.

Restructuring Expenses

Restructuring expenses were $1.5 million, or 0.7% of revenues in the second quarter of 2011 compared to $1.2 million or 0.6% of revenues in the second quarter of 2010.

Acquisition Costs

Acquisition costs were $2.0 million, or 0.9% of revenues in the second quarter of 2011 without a comparable expense in 2010.

Other Operating Income

Other operating income was $16.7 million, or 7.6% of revenues in the second quarter of 2011 without comparable income in 2010. The increase was due to the sale of customer related receivables associated with the renewal and extension of sales-type lease arrangements.

Interest Income and Interest Expense

Interest income for the second quarter of 2011 was consistent with the second quarter of 2010.

Interest expense for the second quarter of 2011 increased $0.5 million or 35% from the comparable quarter in 2010 due to an increase in debt related to the Shore to Shore acquisition as well as the funding of the temporary cash flow impact of the second quarter 2011 ERP implementation in North America and Caribbean operations. Interest expense was also impacted by an increase in interest charged on our revolving credit facility due to an increase in our total leverage ratio.

Other Gain (Loss), net

Other gain (loss), net was a net loss of $0.4 million in the second quarter of 2011 compared to a net loss of $1.5 million in the second quarter of 2010. The decrease in the net loss was primarily due to a $0.4 million foreign exchange loss during the second quarter of 2011 compared to a $1.5 million foreign exchange loss during the second quarter of 2010.

Income Taxes

The effective tax rate for the second quarter of 2011 was 13.8% as compared to 24.3% for the second quarter of 2010. The decrease in the second quarter of 2011 tax rate was due to the mix of income between subsidiaries.

Net Earnings Attributable to Checkpoint Systems, Inc.

Net earnings attributable to Checkpoint Systems, Inc. were $9.5 million, or $0.23 per diluted share, during the second quarter of 2011 compared to $9.0 million, or $0.22 per diluted share, during the second quarter of 2010. The weighted-average number of shares used in the diluted earnings per share computation was 40.9 million and 40.5 million for the second quarters of 2011 and 2010, respectively.

27

Twenty-Six Weeks Ended June 26, 2011 Compared to Twenty-Six Weeks Ended June 27, 2010

The following table presents for the periods indicated certain items in the Consolidated Statement of Operations as a percentage of total revenues and the percentage change in dollar amounts of such items compared to the indicated prior period:

	Percentage of Total Revenue				Percentage Change In Dollar Amount
Twenty-six weeks ended	June 26, 2011 (Fiscal 2011)		June 27, 2010 (Fiscal 2010)		Fiscal 2011 vs. Fiscal 2010
Net revenues
Shrink Management Solutions	67.7	%	69.1	%	0.2	%%
Apparel Labeling Solutions	23.5		22.3		7.7
Retail Merchandising Solutions	8.8		8.6		4.8
Net revenues	100.0		100.0		2.3
Cost of revenues	61.5		56.7		10.9
Total gross profit	38.5		43.3		(9.0)
Selling, general, and administrative expenses	38.3		35.4		10.7
Research and development	2.5		2.5		2.3
Restructuring expense	0.8		0.4		89.1
Acquisition costs	0.5		—		N/A
Other operating income	4.1		—		N/A
Operating income	0.5		5.0		(89.7)
Interest income	0.4		0.3		23.9
Interest expense	0.8		0.8		17.8
Other gain (loss), net	(0.1)		(0.2)		(77.8)
(Loss) earnings before income taxes	—		4.3		(100.6)
Income taxes	(0.1)		1.1		(107.1)
Net earnings	0.1		3.2		(98.3)
Less: income (loss) attributable to non-controlling interests	—		—		(102.6)
Net earnings attributable to Checkpoint Systems, Inc.	0.1	%	3.2	%	(98.3)	%%

N/A – Comparative percentages are not meaningful.

Net Revenues

Revenues for the first six months of 2011 compared to the first six months of 2010 increased $9.0 million, or 2.3%, from $395.6 million to $404.6 million. Foreign currency translation had a positive impact on revenues of approximately $13.1 million, or 3.3%, in the first six months of 2011 as compared to the first six months of 2010.

(amounts in millions)

Twenty-six weeks ended	June 26, 2011 (Fiscal 2011)	June 27, 2010 (Fiscal 2010)	Dollar Amount Change Fiscal 2011 vs. Fiscal 2010	Percentage Change Fiscal 2011 vs. Fiscal 2010
Net Revenues:
Shrink Management Solutions	$ 273.8	$ 273.3	$ 0.5	0.2	%
Apparel Labeling Solutions	95.2	88.4	6.8	7.7
Retail Merchandising Solutions	35.6	33.9	1.7	4.8
Net Revenues	$ 404.6	$ 395.6	$ 9.0	2.3	%

28

Shrink Management Solutions

Shrink Management Solutions (SMS) revenues increased $0.5 million, or 0.2%, during the first six months of 2011 compared to the first six months of 2010. Foreign currency translation had a positive impact of approximately $9.5 million. After considering the impact of the foreign currency translation, the increases in EAS systems, and Alpha® of $3.6 million, and $1.5 million, respectively, were offset by decreases in other SMS businesses including $13.9 million in EAS consumables and $0.7 million in CheckView®.

EAS systems revenues increased $3.6 million in the first six months of 2011 as compared to the first six months of 2010. The increase was driven by growth in Europe and Asia resulting from the addition of new customers and also due to the extensions of arrangements and new product installations with existing customers. New store openings are a significant contributor to EAS systems revenues. These have been scaled back by many of our Europe and North America based customers, who have increased their focus on margin improvement at existing stores. We have been addressing this by selling new, faster payback EAS consumables and Alpha® solutions to existing customers while increasing our market share in underpenetrated retail verticals through innovative products such as Evolve® and our Hard Tag @ Source™ program.

Alpha® revenues increased $1.5 million in the first six months of 2011 as compared to the first six months of 2010. The increase was due to stronger international demand for Alpha® products as market conditions for high theft prevention products improved during the first six months of 2011.

EAS consumables revenues decreased $13.9 million in the first six months of 2011 as compared to the first six months of 2010. The decrease was primarily due to Hard Tag @ Source™ revenues, which were below levels of one year ago when we experienced high volumes associated with the initial program roll-out to a major European retailer. A decline in Europe EAS label revenues due to reduced volumes with certain customers was also a factor.

CheckView® revenues decreased $0.7 million in the first six months of 2011 as compared to the first six months of 2010. The decrease was due to declines in installations and on-going services with existing customers, primarily in the U.S., International Americas and Asia. CheckView® has been dependent on new store openings and capital spending that has been scaled back by retail customers. We continue to mitigate this trend by leveraging our relationships with EAS and Alpha® customers to generate new revenue opportunities for CheckView®.

Apparel Labeling Solutions

Apparel Labeling Solutions revenues increased $6.8 million, or 7.7%, in the first six months of 2011 as compared to the first six months of 2010. After considering the foreign currency translation positive impact of approximately $1.5 million, the remaining increase of $5.3 million was due to $6.0 million in revenues from the acquisition of Shore to Shore on May 16, 2011 which were offset by a $0.7 million decline in organic revenues, primarily due a decline in sales volumes in Europe.

Retail Merchandising Solutions

Retail Merchandising Solutions revenues increased $1.7 million, or 4.8%, in the first six months of 2011 as compared to the first six months of 2010. Foreign currency translation had a positive impact of $2.1 million on revenues for the comparable periods. Retail Display Solutions (RDS) and Hand-held Labeling Solutions (HLS) decreased $0.1 million and $0.3 million, respectively. We anticipate RDS and HLS will face difficult revenue trends in 2011 due to the impact of pricing pressures on the RDS business and continued shifts in market demand for HLS products.

Gross Profit

During the first six months of 2011, gross profit decreased $15.4 million, or 9.0%, from $171.3 million to $155.9 million. The positive impact of foreign currency translation on gross profit was approximately $4.3 million. Gross profit, as a percentage of net revenues, decreased from 43.3% to 38.5%.

Shrink Management Solutions

Shrink Management Solutions gross profit as a percentage of Shrink Management Solutions revenues decreased to 39.9% in the first six months of 2011, from 44.3% in the first six months of 2010. The decrease in the gross profit percentage of Shrink Management Solutions was due primarily to lower margins in CheckView®, Alpha, and EAS consumables that were partially offset by an improvement in EAS Systems margins. The decline in CheckView® margins was due to product and service mix as well as project timing and costs associated with obsolete inventory. The decline in Alpha margins was due to customer and product mix coupled with rising raw material prices.  The decline in EAS consumables margins, which has shown improvements since the first quarter of 2011, was due to delays in capturing expected cost efficiencies as we expanded new product and specialty label capacity coupled with pricing that does not yet reflect the enhanced capabilities of these products that we experienced earlier this year.  EAS consumables margins were also impacted by the year over year reduction in higher margin Hard Tag @ Source™. The declines were partially offset by improvements in EAS Systems margins that were driven by increased volumes.

29

Apparel Labeling Solutions

Apparel Labeling Solutions gross profit as a percentage of Apparel Labeling Solutions revenues decreased to 31.0% in the first six months of 2011, from 38.1% in the first six months of 2010. The decline was largely attributable to weaker operational performance at certain Asia facilities, inventory adjustments, and the impact of the Shore to Shore acquisition, which includes a purchase accounting based mark-up of acquired inventory as well as the deferred transfer to the Company of certain Asia based printing operations.  The efficiency issues that impacted EAS consumables margins in the Shrink Management Solutions segment also contributed to the Apparel Labeling Solutions margin decline.

Retail Merchandising Solutions

The Retail Merchandising Solutions gross profit as a percentage of Retail Merchandising Solutions revenues decreased to 48.2% in the first six months of 2011, from 49.1% in the first six months of 2010. The decrease in Retail Merchandising Solutions gross profit percentage was due primarily to lower margins in HLS resulting from unfavorable manufacturing variances related to lower volumes in the first quarter of 2011.

Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses increased $15.0 million, or 10.7%, during the first six months of 2011 compared to the first six months of 2010. Foreign currency translation increased SG&A expenses by approximately $4.6 million. The remaining increase in SG&A expense of $10.4 million was due primarily to temporary increases in consulting, operations and shared services expenses resulting from the second quarter 2011 North American and Caribbean implementation of our company wide ERP system, additions to staff to add capabilities required for future process and cost improvement initiatives, and increased commissions expenses associated with the renewal/extension of sales-type leases in the second quarter of 2011.  We expect the impact of SG&A restructuring programs to contribute to meaningful reductions in SG&A expense beginning in the second half of this year.

Research and Development Expenses

Research and development (R&D) expenses were $10.1 million, or 2.5% of revenues, in the first six months of 2011 and $9.9 million, or 2.5% of revenues in the first six months of 2010.

Restructuring Expenses

Restructuring expenses were $3.1 million, or 0.8% of revenues in the first six months of 2011 compared to $1.6 million or 0.4% of revenues in the first six months of 2010.

Acquisition Costs

Acquisition costs were $2.2 million, or 0.5% of revenues in the first six months of 2011 without comparable expense in 2010.

Other Operating Income

Other operating income was $16.7 million, or 4.1% of revenues in the first six months of 2011 without comparable income in 2010. The increase was due to the sale of customer related receivables associated with the renewal and extension of sales-type lease arrangements.

Interest Income and Interest Expense

Interest income for the first six months of 2011 increased $0.3 million from the comparable six months in 2010. The increase in interest income was primarily due to higher cash balances and increased interest income recognized for sales-type leases during the first six months of 2011 compared to the first six months of 2010.

Interest expense for the first six months of 2011 increased $0.5 million from the comparable six months in 2010 due to an increase in debt related to the Shore to Shore acquisition as well as the funding of the temporary cash flow impact of the second quarter 2011 ERP implementation in North America and Caribbean operations.  Interest expense was also impacted by an increase in interest charged on our revolving credit facility due to an increase in our total leverage ratio.

Other Gain (Loss), net

Other gain (loss), net was a net loss of $0.3 million in the first six months of 2011 compared to a net loss of $1.2 million in the first six months of 2010. The decrease was primarily due to a $0.7 million foreign exchange loss during the first six months of 2011 compared to a $1.5 million foreign exchange loss during the first six months of 2010.

Income Taxes

The effective tax rate for the first six months of 2011 was 302.9% as compared to 26.2% for the first six months of 2010. The increase in the 2011 tax rate was due the decrease in year-to-date pretax income.

Net Earnings Attributable to Checkpoint Systems, Inc.

Net earnings attributable to Checkpoint Systems, Inc. were $0.2 million, or $0.01 per diluted share, during the first six months 2011 compared to $12.5 million, or $0.31 per diluted share, during the first six months of 2010. The weighted-average number of shares used in the diluted earnings per share computation was 40.9 million and 40.3 million for the first six months of 2011 and 2010, respectively.

30

Liquidity and Capital Resources

Our liquidity needs have been, and are expected to continue to be driven by acquisitions, capital investments, product development costs, potential future restructuring related to the rationalization of the business, and working capital requirements. We have met our liquidity needs primarily through cash generated from operations. Based on an analysis of liquidity utilizing conservative assumptions for the next twelve months, we believe that cash on hand from operating activities and funding available under our credit agreements should be adequate to service our debt and working capital needs, meet our capital investment requirements, other potential restructuring requirements, and product development requirements.

The ongoing financial and credit crisis has reduced credit availability and liquidity for many companies. We believe, however, that the strength of our core business, cash position, access to credit markets, and our ability to generate positive cash flow will sustain us through this challenging period. We are working to reduce our liquidity risk by accelerating efforts to improve working capital while reducing expenses in areas that will not adversely impact the future potential of our business. Additionally, we have increased our monitoring of counterparty risk. We evaluate the creditworthiness of all existing and potential counterparties for all debt, investment, and derivative transactions and instruments. Our policy allows us to enter into transactions with nationally recognized financial institutions with a credit rating of “A” or higher as reported by one of the credit rating agencies that is a nationally recognized statistical rating organization by the U.S. Securities and Exchange Commission. The maximum exposure permitted to any single counterparty is $50.0 million. Counterparty credit ratings and credit exposure are monitored monthly and reviewed quarterly by our Treasury Risk Committee.

As of June 26, 2011, our cash and cash equivalents were $183.8 million compared to $173.8 million as of December 26, 2010. Cash and cash equivalents increased in 2011 primarily due to $33.2 million of cash provided by operating activities, $27.3 million of cash provided by financing activities and $8.0 million effect of foreign currency, partially offset by $58.5 million of cash used in investing activities.

Cash provided by operating activities was $24.1 million greater during the first six months of 2011 compared to the first six months of 2010. In 2011 compared to 2010, our cash from operating activities was impacted positively by changes in inventories, unearned revenues and other current liabilities, which was partially offset by changes in accounts receivable, other current assets, and accounts payable. The changes in other current liabilites, accounts payable, accounts receivable, and other current assets can be attributed to the implementation of our ERP system in North America and the Caribbean in the second quarter of 2011 coupled with the following additional explanations.  Inventories fluctuated due to expected customer demand during the remainder of 2011. Unearned revenues increased due to the increase of future contracted customer orders during the first half of 2011. Accounts receivable increased primarily due to increased sales during the first six months of 2011 compared to the first six months of 2010.  Accounts payable and other current and accrued liabilities favorably impacted cash flows from operating activities primarily due to the timing of payments during the first six months of 2011 compared to the first six months of 2010. Further, in June 2011, we sold accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaling $30.9 million. Cash proceeds from the initial sale of the accounts receivable are used to fund operations.

Cash used in investing activities was $49.4 million greater during the first six months of 2011 compared to the first six months of 2010. This was primarily due to the Shore to Shore acquisition as well as the increase in property, plant and equipment, related to the company-wide ERP system implementation.

Cash provided by financing activities was $14.9 million greater in the first six months of 2011 compared to the first six months of 2010. The increase in cash provided by financing activities was primarily due to increases in proceeds from the existing borrowing facilities. The increase in cash provided by financing activities was offset by lower payments against existing borrowing facilities and lower proceeds from stock issuances during the first six months of 2011.

Our percentage of total debt to total equity as of June 26, 2011, was 28.2% compared to 24.3% as of December 26, 2010. As of June 26, 2011, our working capital was $273.4 million compared to $298.8 million as of December 26, 2010.

We continue to reinvest in the Company through our investment in technology and process improvement. Our investment in research and development amounted to $10.1 million and $9.9 million during the first six months of 2011 and 2010, respectively. These amounts are reflected in cash used in operations, as we expense our research and development as it is incurred. We anticipate spending approximately $9 million on research and development to support achievement of our strategic plan during the remainder of 2011.

We have various unfunded pension plans outside the U.S. These plans have significant pension costs and liabilities that are developed from actuarial valuations. For the first six months of 2011, our contribution to these plans was $2.8 million. Our total funding expectation for 2011 is $5.1 million. We believe our current cash position, cash generated from operations, and the availability of cash under our revolving line of credit will be adequate to fund these requirements.

Acquisition of property, plant, and equipment during the first six months of 2011 totaled $9.4 million compared to $8.9 million during 2010. During the first six months of 2011, our acquisition of property, plant, and equipment included $3.7 million of capitalized internal-use software costs related to an ERP system implementation, without a comparable amount during the first six months of 2010. We anticipate our remaining capital expenditures, used primarily to upgrade information technology and improve our production capabilities, to approximate $23 million in 2011.

In January 2011, the Company entered into an agreement to acquire, through the acquisition of equity and/or assets, a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition settled in May 2011 for a purchase price of approximately $78.7 million, including cash acquired of $1.9 million and the assumption of debt of $4.2 million. As of June 26, 2011, $4.4 million of this amount remained outstanding. The debt assumed includes capital leases, accounts receivable factoring arrangements, term loans, an overdraft facility, and other short-term loans. With the exception of the capital leases, the banking facilities are subject to the banks right to call the liabilities at any time, and are therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets. The payment for the acquisition is reflected in the acquisition of businesses line within investing activities on the consolidated statement of cash flows.

As of June 26, 2011, the Japanese local line of credit is $1.9 million (¥150 million) and is fully drawn. The line of credit matures in November 2011.

During the first six months of 2010, our outstanding Asialco loans of $3.7 million (RMB 25 million) were paid down.

31

On December 30, 2009, we entered into a new Hong Kong banking facility. The banking facility includes a trade finance facility, a revolving loan facility, and a term loan. The maximum availability under the facility is $7.6 million (HKD 59.5 million). The banking facility is secured by all plant, machinery, fittings and equipment. The book value of the collateral as of June 26, 2011 is $9.2 million (HKD 71.6 million). As of June 26, 2011, the Company has outstanding $4.0 million (HKD 31.5 million) against the term loan, $2.7 million (HKD 21.1 million) against the trade finance facility, and $0.4 million (HKD 3.0 million) against the revolving loan facility. The banking facility is subject to the bank’s right to call the liabilities at any time, and is therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In December 2009, we entered into new full-recourse factoring arrangements. The arrangements are secured by trade receivables. The Company received a weighted average of 92.4% of the face amount of receivables that it desired to sell and the bank agreed, at its discretion, to buy. At June 26, 2011 the factoring arrangements had a balance of $1.6 million (€1.2 million), of which $0.4 million (€0.3 million) was included in the current portion of long-term debt and $1.2 million (€0.9 million) was included in long-term borrowings in the accompanying Consolidated Balance Sheets since the receivables are collectable through 2016.

In October 2009, the Company entered into a $12.0 million (€8.0 million) full-recourse factoring arrangement. The arrangement is secured by trade receivables. Borrowings bear interest at rates of EURIBOR plus a margin of 3.00%. At June 26, 2011, the interest rate was 4.43%. At June 26, 2011, our short-term full-recourse factoring arrangement equaled $11.4 million (€8.0 million) and is included in short-term borrowings in the accompanying Consolidated Balance Sheets since the agreement expires in December 2011.

On July 1, 1997, Checkpoint Systems Japan Co. Ltd. (Checkpoint Japan), a wholly-owned subsidiary of the Company, issued newly authorized shares to Mitsubishi Materials Corporation (Mitsubishi) in exchange for cash. In February 2006, Checkpoint Japan repurchased 26% of these shares from Mitsubishi in exchange for $0.2 million in cash. In August 2010, Checkpoint Manufacturing Japan Co., LTD. repurchased the remaining 74% of these shares from Mitsubishi in exchange for $0.8 million in cash.

Revolving Credit Facility

The Senior Secured Credit Facility includes an expansion option that will allow us to request an increase in the Senior Secured Credit Facility of up to an aggregate of $50.0 million, for a potential total commitment of $175.0 million. As of June 26, 2011, we did not elect to request the $50.0 million expansion option.

The Senior Secured Credit Facility contains a $25.0 million sublimit for the issuance of letters of credit of which $1.4 million, issued under the Secured Credit Facility, are outstanding as of June 26, 2011. The Senior Secured Credit Facility also contains a $15.0 million sublimit for swingline loans.

All obligations of domestic borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. The obligations of foreign borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by certain of our foreign subsidiaries as well as the domestic guarantors. Collateral under the Senior Secured Credit Facility includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary.

Pursuant to the terms of the Senior Secured Credit Facility, we are subject to various requirements, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Credit Facility also contains customary representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults. Upon a default under the Senior Secured Credit Facility, including the non-payment of principal or interest, our obligations under the Senior Secured Credit Facility may be accelerated and the assets securing such obligations may be sold. Certain wholly-owned subsidiaries with respect to the Company are guarantors of our obligations under the Senior Secured Credit Facility. As of June 26, 2011, we were in compliance with all covenants.

Senior Secured Notes

The Senior Secured Notes Agreement provides that for a three-year period ending on July 22, 2013, we may issue, and our lender may, in its sole discretion, purchase, additional fixed-rate senior secured notes (the “Shelf Notes”); together with the 2010 Notes, (the “Notes”), up to an aggregate amount of $50.0 million. As of June 26, 2011, we did not issue additional fixed-rate senior secured notes.

All obligations under the Senior Secured Notes are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. Collateral under the Senior Secured Notes includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary.

32

The Senior Secured Notes Agreement is subject to covenants that are substantially similar to the covenants in the Senior Secured Credit Facility Agreement, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Notes Agreement also contains representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults that are substantially similar to those contained in the Senior Secured Credit Facility, and those that are customary for similar private placement transactions. Upon a default under the Senior Secured Notes Agreement, including the non-payment of principal or interest, our obligations under the Senior Secured Notes Agreement may be accelerated and the assets securing such obligations may be sold. Certain of our wholly-owned subsidiaries are also guarantors of our obligations under the Senior Secured Notes. As of June 26, 2011, we were in compliance with all covenants.

We have never paid a cash dividend (except for a nominal cash distribution in April 1997 to redeem the rights outstanding under our 1988 Shareholders’ Rights Plan). We do not anticipate paying any cash dividends in the near future.

As we continue to implement our strategic plan in a volatile global economic environment, our focus will remain on operating our business in a manner that addresses the reality of the current economic marketplace without sacrificing the capability to effectively execute our strategy when economic conditions and the retail environment stabilize. Based upon an analysis of liquidity using our current forecast, management believes that our anticipated cash needs can be funded from cash and cash equivalents on hand, the availability of cash under the Senior Secured Credit Facility, Senior Secured Notes, and cash generated from future operations over the next twelve months.

Provisions for Restructuring

Restructuring expense for the three and six months ended June 26, 2011 and June 27, 2010 was as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
SG&A Restructuring Plan
Severance and other employee-related charges	$   874	$   741	$ 2,459	$   837
Other exit costs	578	—	610	—
Manufacturing Restructuring Plan
Severance and other employee-related charges	(32)	274	(41)	569
Other exit costs	75	184	64	229
Total	$ 1,495	$ 1,199	$ 3,092	$ 1,635

Restructuring accrual activity for the six months ended June 26, 2011 was as follows:

(amounts in thousands)

	Accrual at Beginning of Year	Charged to Earnings	Charge Reversed to Earnings	Cash Payments	Exchange Rate Changes	Accrual at 6/26/2011
SG&A Restructuring Plan
Severance and other employee-related charges	$ 6,660	$ 2,577	$ (118)	$ (2,545)	$ 314	$ 6,888
Other exit costs(1)	—	610	—	(128)	—	482
Manufacturing Restructuring Plan
Severance and other employee-related charges	719	69	(110)	(494)	—	184
Other exit costs(2)	143	75	(11)	(132)	—	75
Total	$ 7,522	$ 3,331	$ (239)	$ (3,299)	$ 314	$ 7,629

(1)   During the first six months of 2011, there was a net charge to earnings of $0.6 million due to the closing of an operating facility and one-time payment related to a lease modification for an operating facility.

(2)   During 2010, costs were recorded due to the closing of a manufacturing facility. For the first six months of 2011, there was a net charge to earnings of $0.1 million due to other exit costs associated with the manufacturing closings.

33

SG&A Restructuring Plan

During 2009, we initiated a plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan expected to be substantially complete by the end of 2011.

As of June 26, 2011, the net charge to earnings of $3.1 million represents the current year activity related to the SG&A Restructuring Plan. The anticipated total costs related to the plan are expected to approximate $20 million to $25 million, of which $12.9 million have been incurred. The total number of employees currently affected by the SG&A Restructuring Plan were 204, of which 141 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination. Upon completion, the annual savings related to the phases of the SG&A Restructuring Plan that have been implemented are anticipated to be approximately $20 million to $25 million.

Manufacturing Restructuring Plan

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our Apparel Labeling Solutions (ALS) business, formerly Check-Net®, and to support incremental improvements in our EAS systems and labels businesses. For the six months ended June 26, 2011, there was a net charge to earnings of $23 thousand recorded in connection with the Manufacturing Restructuring Plan. This net charge was primarily due to other exit costs associated with the closing of manufacturing facilities partially offset by lower than estimated severance accruals.

The total number of employees currently affected by the Manufacturing Restructuring Plan was 420, of which 417 have been terminated. As of June 26, 2011 the implementation of the Manufacturing Restructuring Plan is substantially complete, with total costs incurred of $4.2 million. Termination benefits are planned to be paid one month to 24 months after termination. Annual savings in connection with the Manufacturing Restructuring Plan are anticipated to be approximately $6 million.

Off-Balance Sheet Arrangements

We do not utilize material off-balance sheet arrangements apart from operating leases that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. We use operating leases as an alternative to purchasing certain property, plant, and equipment. There have been no material changes to the discussion of these rental commitments under non-cancelable operation leases presented in our Annual Report on Form 10-K for the year ended December 26, 2010.

Contractual Obligations

There have been no material changes to the table entitled “Contractual Obligations” presented in our Annual Report on Form 10-K for the year ended December 26, 2010. The table of contractual obligations excludes our gross liability for uncertain tax positions, including accrued interest and penalties, which totaled $15.8 million as of June 26, 2011, and $16.4 million as of December 26, 2010, because we cannot predict with reasonable reliability the timing of cash settlements to the respective taxing authorities.

Recently Adopted Accounting Standards

In October 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue Arrangements, (amendments to ASC Topic 605, Revenue Recognition)” (ASU 2009-13) and ASU 2009-14, “Certain Arrangements That Include Software Elements, (amendments to ASC Topic 985, Software)” (ASU 2009-14). ASU 2009-13 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. The amendments eliminate the residual method of revenue allocation and require revenue to be allocated using the relative selling price method. ASU 2009-14 removes tangible products from the scope of software revenue guidance and provides guidance on determining whether software deliverables in an arrangement that includes a tangible product are covered by the scope of the software revenue guidance. ASU 2009-13 and ASU 2009-14 are effective on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of these standards did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2010, FASB issued ASU 2010-13 "Compensation-Stock Compensation (Topic 718) Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades" (ASU 2010-13). Topic 718 is amended to clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades shall not be considered to contain a market, performance, or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies as equity classification. The amendments in this standard are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The guidance should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings for all outstanding awards as of the beginning of the fiscal year in which the amendments are initially applied. The adoption of the standard did not have a material impact on our Consolidated Results of Operations and Financial Condition.

34

In December 2010, FASB issued ASU 2010-28 “Intangibles - Goodwill and Other (Topic 350)” (ASU 2010-28). Topic 350 is amended to clarify the requirement to test for impairment of goodwill. Topic 350 has required that goodwill be tested for impairment if the carrying amount of a reporting unit exceeds its fair value. Under ASU 2010-28, when the carrying amount of a reporting unit is zero or negative an entity must assume that it is more likely than not that a goodwill impairment exists, perform an additional test to determine whether goodwill has been impaired and calculate the amount of that impairment. The modifications to ASC Topic 350 resulting from the issuance of ASU 2010-28 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of the standard did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In December 2010, the FASB issued ASU 2010-29 “Business Combinations (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations” (ASU 2010-29). This standard update clarifies that, when presenting comparative financial statements, SEC registrants should disclose revenue and earnings of the combined entity as though the current period business combinations had occurred as of the beginning of the comparable prior annual reporting period only. The update also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective prospectively for material (either on an individual or aggregate basis) business combinations entered into in fiscal years beginning on or after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of the standard did not have a material impact on our Consolidated Financial Statements.

New Accounting Pronouncements and Other Standards

In January 2011, the FASB issued ASU 2011-01 “Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20” (ASU 2011-01). This standard update defers the effective date of new disclosure requirements for troubled debt restructurings prescribed by ASU 2010-20, "Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses." ASU 2011-01 is effective upon issuance. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2011, the FASB issued ASU 2011-02 “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” (ASU 2011-02). The amendments to Topic 310 (Receivables) clarify the guidance on a creditor’s evaluation of whether a debtor is experiencing financial difficulties and when a loan modification or restructuring is considered a troubled debt restructuring. In determining whether a loan modification represents a troubled debt restructuring, an entity should consider whether the debtor is experiencing financial difficulty and the lender has granted a concession to the borrower. ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2011, the FASB issued ASU 2011-03 “Reconsideration of Effective Control for Repurchase Agreements” (ASU 2011-03). The amendments to Topic 860 (Transfers and Servicing) affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments do not affect other transfers of financial assets. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. ASU 2011-03 is effective for the first interim or annual periods beginning on or after December 15, 2011, and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). The amendments to Topic 820 (Fair Value Measurement) establish common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United Sates and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for the first interim and annual periods beginning after December 15, 2011, and should be applied prospectively. We do not expect the adoption of the standard to have a material effect on our Consolidated Results of Operations and Financial Condition.

In June 2011, the FASB issued ASU 2011-05 “Presentation of Comprehensive Income” (ASU 2011-05). The amendments to Topic 220 (Comprehensive Income) eliminate the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders' equity, require consecutive presentation of the statement of net income and other comprehensive income and require reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. ASU 2011-05 is effective for the first interim and annual periods beginning after December 15, 2011. We do not expect the adoption of the standard to have a material effect on our Consolidated Results of Operations and Financial Condition.

35

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except as noted below, there have been no significant changes to the market risks as disclosed in Part II - Item 7A. - “Quantitative And Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 26, 2010.

Exposure to Foreign Currency

We manufacture products in the U.S., the Caribbean, Europe, and the Asia Pacific region for both the local marketplace and for export to our foreign subsidiaries. The foreign subsidiaries, in turn, sell these products to customers in their respective geographic areas of operation, generally in local currencies. This method of sale and resale gives rise to the risk of gains or losses as a result of currency exchange rate fluctuations on inter-company receivables and payables. Additionally, the sourcing of product in one currency and the sales of product in a different currency can cause gross margin fluctuations due to changes in currency exchange rates.

We selectively purchase currency forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts guarantee a predetermined exchange rate at the time the contract is purchased. This allows us to shift the effect of positive or negative currency fluctuations to a third party. Transaction gains or losses resulting from these contracts are recognized at the end of each reporting period. We use the fair value method of accounting, recording realized and unrealized gains and losses on these contracts. These gains and losses are included in other gain (loss), net on our Consolidated Statements of Operations. As of June 26, 2011, we had currency forward exchange contracts with notional amounts totaling approximately $3.3 million. The fair values of the forward exchange contracts were reflected as a $7 thousand asset and are included in other current assets and in the accompanying Balance Sheets. The contracts are in the various local currencies covering primarily our operations in the U.S., the Caribbean, and Western Europe. Historically, we have not purchased currency forward exchange contracts where it is not economically efficient, specifically for our operations in South America and Asia, with the exception of Japan.

Hedging Activity

Beginning in the second quarter of 2008, we entered into various foreign currency contracts to reduce our exposure to forecasted Euro-denominated inter-company revenues. These contracts were designated as cash flow hedges. The foreign currency contracts mature at various dates from July 2011 to June 2012. The purpose of these cash flow hedges is to eliminate the currency risk associated with Euro-denominated forecasted inter-company revenues due to changes in exchange rates. These cash flow hedging instruments are marked to market and the changes are recorded in other comprehensive income. Amounts recorded in other comprehensive income are recognized in cost of goods sold as the inventory is sold to external parties. Any hedge ineffectiveness is charged to other gain (loss), net on our Consolidated Statements of Operations. As of June 26, 2011, the fair value of these cash flow hedges were reflected as a $45 thousand asset and a $0.7 million liability and are included in other current assets and other current liabilities in the accompanying Consolidated Balance Sheets. The total notional amount of these hedges is $28.1 million (€20.2 million) and the unrealized loss recorded in other comprehensive income was $1.4 million (net of taxes of $0.2 million), of which $1.4 million (net of taxes of $0.2 million) is expected to be reclassified to earnings over the next twelve months. During the three and six months ended June 26, 2011, a $0.3 million and $0.5 million expense related to these foreign currency hedges was recorded to cost of goods sold as the inventory was sold to external parties, respectively. The Company recognized $0.1 million of hedge ineffectiveness during the six months ended June 26, 2011.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(d) of the Exchange Act, the Company carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Controls

As required by Rule 13a-15(d) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. There have been no changes in our internal controls over financial reporting that occurred during the Company's second fiscal quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are involved in certain legal and regulatory actions, all of which have arisen in the ordinary course of business. There have been no material changes to the actions described in Part I - Item 3 - “Legal Proceedings” contained in our Annual Report on Form 10-K for the year ended December 26, 2010, and there are no material pending legal proceedings other than as described therein.

Item 1A. RISK FACTORS

There have been no material changes from December 26, 2010 to the significant risk factors and uncertainties known to us that, if they were to occur, could materially adversely affect our business, financial condition, operating results and/or cash flow. For a discussion of our risk factors, refer to Part I - Item 1A - “Risk Factors”, contained in our Annual Report on Form 10-K for the year ended December 26, 2010.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES.

None.

Item 5. OTHER INFORMATION

None.

37

Item 6. EXHIBITS

Exhibit 10.1	Master Purchase Agreement dated January 28, 2011 by and among Checkpoint Systems, Inc. and Shore to Shore, Inc., Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., Wing Hung Printing Co., Ltd., Adapt Identification (China) Garment Accessories Trading Co., Ltd., Lau Shun Keung aka John Lau, Yeung Mei Kuen, Lau Shun Man, Lau Shun Wah, Howard J. Kurdin and Lau Wing Ting aka Shirley Lau is incorporated by reference to the Registrant’s Form 10-Q filed on May 4, 2011.
Exhibit 10.2	Amended and Restated Master Purchase Agreement dated May 16, 2011 by and among Checkpoint Systems, Inc. and Shore to Shore, Inc., J&F International Ltd. (HK), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., Wing Hung Printing Co., Ltd., Alpha Print (China) Trading Co., Ltd., Lau Shun Keung aka John Lau, Howard J. Kurdin and Lau Wing Ting aka Shirley Lau.
Exhibit 31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS	XBRL Instance Document.*
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document.*
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Document.*

* Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filings.

38

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.

	CHECKPOINT SYSTEMS, INC.
August 2, 2011	/s/ Raymond D. Andrews
	Raymond D. Andrews
	Senior Vice President and Chief Financial Officer

39

INDEX TO EXHIBITS

Exhibit 10.1	Master Purchase Agreement dated January 28, 2011 by and among Checkpoint Systems, Inc. and Shore to Shore, Inc., Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., Wing Hung Printing Co., Ltd., Adapt Identification (China) Garment Accessories Trading Co., Ltd., Lau Shun Keung aka John Lau, Yeung Mei Kuen, Lau Shun Man, Lau Shun Wah, Howard J. Kurdin and Lau Wing Ting aka Shirley Lau is incorporated by reference to the Registrant’s Form 10-Q filed on May 4, 2011.
Exhibit 10.2	Amended and Restated Master Purchase Agreement dated May 16, 2011 by and among Checkpoint Systems, Inc. and Shore to Shore, Inc., J&F International Ltd. (HK), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., Wing Hung Printing Co., Ltd., Alpha Print (China) Trading Co., Ltd., Lau Shun Keung aka John Lau, Howard J. Kurdin and Lau Wing Ting aka Shirley Lau.
Exhibit 31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS	XBRL Instance Document.*
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document.*
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Document.*

* Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filings.

40

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED MASTER PURCHASE AGREEMENT

This Amended and Restated Master Purchase Agreement (“Agreement”) is made and entered into this 16th day of May, 2011 by and among Checkpoint Systems, Inc., a Pennsylvania corporation (“Checkpoint” and along with each Buyer Local Entity, collectively, the “Purchasers”), and Shore to Shore, Inc. (“STS Inc.”), J&F International Ltd. (HK) (“J&F”), (Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., Wing Hung Printing Co., Ltd., Alpha Print (China) Trading Co., Ltd., Lau Shun Keung aka John Lau, Howard J. Kurdin and Lau Wing Ting aka Shirley Lau (collectively, the “Owners”). Certain defined terms used herein are set forth in Appendix I attached hereto and made a part hereof.

WITNESSETH

WHEREAS, Owners own a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, hang tags, price tickets, printed paper tags, pressure sensitive products, woven labels, leather and leather-like labels, heat transfer labels and brand protection and EAS solutions/labels which may or may not contain RFID tags, chips or inlays (the “Global Business”); and

WHEREAS, Checkpoint and Owners are parties to that certain Master Purchase Agreement dated as of January 28, 2011 (“MPA”), pursuant to which the parties thereto outlined certain general terms and conditions pursuant to which Owners will sell to Purchasers and Purchasers will purchase from the Owners, substantially all of their right, title and interest in and to the Global Business (subject to certain exclusions and limitations set forth herein and in the Local Purchase Agreements, as defined below (the “Global Business Exclusions”) pursuant to the MPA and the related local purchase agreements (“Local Purchase Agreements”) (including the Local Purchase Agreements, collectively, the “Purchase Agreements”), all as more particularly described herein; and

WHEREAS, the parties desire to amend and restate the MPA as provided herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein and intending to be legally bound the parties agree as follows:

ARTICLE 1

ACQUISITION OF GLOBAL BUSINESS

1.01.Purchase Agreements.

(a)Local Purchase Agreements. Owners and Purchasers shall enter into Purchase Agreements necessary for Purchasers collectively to acquire the Global Business, subject to the Global Business Exclusions. After the date of this Agreement, to the extent that it becomes apparent to the parties hereto that an entity that is not a signatory to this Agreement owns an asset that is part of the Global Business being acquired by Purchasers and therefore needs to be transferred to a Purchaser, the Owners will cause such entity to join this Agreement and be bound by its terms, conditions and obligations and become part of the defined term “Owner.” Specifically, with respect to each Owner transferring assets (“Seller Local Entity”), each such Owner will agree pursuant to a Local Purchase Agreement and under the laws of the jurisdiction under which each such Owner is formed or in which the assets to be transferred reside, to transfer those assets and/or equity interests which are not part of the Global Business Exclusions owned by such Owner to the respective Purchaser (“Buyer Local Entity”).

(b)Purchase of Assets, Equity and Rights/Assumption of Liabilities.

(i)Purchase and Sale of Global Business. The Owners hereby agree that upon the closing of the transactions contemplated by this Agreement and each Local Purchase Agreement, all occurring contemporaneously unless otherwise agreed by the parties in writing (all closings occurring together shall be deemed the “Closing”), the Owners shall sell, assign, transfer and deliver to Purchasers, and Purchasers, as applicable, shall purchase, accept and acquire from the Owners, substantially all of the assets and properties of the Owners used in the Global Business, including a level of cash consistent with historic operating levels and including the Equity Interest in certain Acquired Entities (as defined in Section 1.01(b)(iii)) (collectively, the “Purchased Assets”). Acquired Entities will include 51% of STS Sri Lanka.

(ii)Covenants and Further Assurances. With respect to each transactions contemplated by the Local Purchase Agreements and this Agreement, the closing shall occur on the Closing Date with an effective time of 6:00 p.m. local Ohio, USA time for the Local Purchase Agreement involving Shore to Shore, Inc. and, for all other Local Purchase Agreement, the corresponding local time for such Seller Local Entity (i.e. for a Hong Kong Seller Local Entity, the effective time would be 6:00 am on the day after the Closing Date) (“Effective Time”), regardless of the actual time of Closing. Following the Closing Date, Purchasers and Owners will fully cooperate with each other and their respective counsel and accountants in connection with all steps reasonably necessary to be taken as part of their respective obligations under this Agreement and each applicable Local Purchase Agreement. Owners shall provide, or shall cause its Affiliates who have provided the Services (defined below) to the Global Business within the most recent twelve months (“Service Providers”) to provide to one or more Purchasers, as applicable, for a period up to twenty-four months following the Closing Date the Services, as requested by the Companies from time to time on comparable terms and conditions. Owners and Service Providers agree to assist in customer relationship management, information systems support and administration (including website, email and other communication technology), intellectual property support, human resource management support, transfer of financial documentation, banking accounts and services and other books and records; payroll processing for up to two payroll periods; and other similar transition services (collectively, the “Services”). Each Service shall be provided in exchange for the consideration paid herein for the Global Business. The Service Providers and the Purchasers shall cooperate with each other in all reasonable respects in matters relating to the provision and receipt of the Services. The Service Providers shall be required to provide the Services of substantially the same nature and quality and with the same standard of care with which such Services were provided to the Global Business, consistent with past practice. The Purchasers will cease using all Services under this Agreement as soon as reasonably practicable following the Closing Date.

(iii)Purchase of Equity Interests. To the extent that a Buyer Local Entity is to acquire the equity interests held by a Seller Local Entity in another entity (the entity whose equity interests are being acquired may be referred to herein as the “Acquired Equity”), by transfer thereof, merger or otherwise:

(A)Except for the Sri Lanka Bank Debt (as defined below) and the indebtedness in an approximate amount of $1.2 million of STS MIS (India) (“STS India”), contemporaneously with Closing, at the instruction of and on behalf of the Owners, the Purchaser shall transfer funds in an amount equal to the sum of the Local Entity Debt and any Prepayment Penalties incurred as a result of the payment of the Local Entity Debt at Closing, and cause the Acquired Entity to pay in full all Local Entity Debt and all Prepayment Penaltiespursuant to payoff letters therefor, all in form and content satisfactory to Purchasers.

(B)The Purchase Price shall be reduced by the aggregate amount of all Local Entity Debt; provided, however, that with respect to Shore to Shore Private Ltd, a Sri Lanka private company (“Sri Lanka”), the Purchase Price will be reduced by only one-half (1/2) the Sri Lanka Bank Debt (as defined in Section 1.02(b)(i) below).

(C) Owners agree to transfer, or, as applicable, cause an Affiliate of an Owner, to transfer Inter-company Receivables from such Owner or Affiliate in a face amount equal to the aggregate Inter-company Payables of the Acquired Entities, either on the Closing Date or subsequent thereto but not later than thirty (30) days following the date on which the Closing Date Balance Sheet is provided to Owners’ Representative.  The parties agree that the amount and the identity of the specific Inter-company Receivables is not determinable until the Closing Date Balance Sheet is completed by Purchaser; therefore, the parties will identify the accounts to be assigned and transfer such accounts within the timeframe described in this Section 1.01(b)(iii)(C).

(iv)Excluded Assets. To the extent that a Seller Local Entity sells assets pursuant to a Local Purchase Agreement, such assets shall not include the following:

(A)the property set forth on a Schedule 1.01(b)(iv) attached thereto;

(B)all Inter-company Receivables (other than Wing Hung Printing Co., Ltd. which will transfer specific Inter-company Receivables);

(C)the corporate seal, minute books, stock books, tax returns and other records having to do with the formation of such Seller Local Entity;

(D)all personnel files, workers’ compensation files, employee medical files and other employee books and records pertaining to employees of such Seller Local Entity who will not become employees of a Purchaser; and

(E)the rights of such Seller Local Entity or any Owner under such Local Purchase Agreement (collectively, the “Excluded Assets”); and together with equity interests in any entity not being acquired and/or any Seller Local Entity not selling assets, and any other rights or assets pertaining to the Global Business not being transferred hereunder or pursuant to a Local Purchase Agreement, the “Global Business Exclusions”).

(v)Assumption of Liabilities/Excluded Liabilities.

(A)Assumption of Assumed Obligations. To the extent that a Seller Local Entity sells assets, the Buyer Local Entity shall assume and agree to accept only the following (collectively, the “Assumed Obligations”):

(i)all trade payables, accounts payable, accrued payroll, accrued expenses, accrued wages, accrued payroll taxes, accrued vacation pay and other current liabilities of the Seller Local Entity relating to the Global Business and other liabilities reflected on the Financial Statements which Purchaser agrees to assume. (the “Assumed Liabilities”); and

(ii)the obligations of the Seller Local Entity arising and to be performed under the Seller Local Entity’s contracts, each of which shall be listed on a Schedule to the Local Purchase Agreement (the “Assumed Contracts”).

(B)Excluded Liabilities. Purchasers shall assume and be responsible for no debts, obligations, or liabilities (whether liquidated, un-liquidated, accrued, absolute, fixed, contingent, ascertained, unascertained, known, unknown or otherwise) of the Owners, past, present, or future, of any sort whatsoever, other than the Assumed Obligations, or as otherwise specifically set forth in this Agreement or in a Local Purchase Agreement. All debts, obligations and liabilities of the Owners, past, present or future, not expressly assumed by Purchasers pursuant to a this Agreement or a Local Purchase Agreement (including all Local Entity Debt, except to the extent the Purchase Price was reduced with respect to such Local Entity Debt) (collectively, the “Excluded Liabilities”) shall continue to be the sole responsibility of the applicable Owner and each Owner covenants to perform all of its obligations in connection with the Excluded Liabilities. To the extent that a Seller Local Entity sells assets, all Inter-company payables shall be Excluded Liabilities;

(c)Enforcement of Rights. The parties agree that Checkpoint shall be entitled to assert and enforce all rights that any Buyer Local Entity may have under any applicable Local Purchase Agreement and the actions of Checkpoint shall bind such Buyer Local Entity.

(d)Owners’ Representative. Each Owner hereby agrees that John Lau shall be entitled to act, and shall act, on behalf of each other Owner individually and all of the other Owners collectively and such actions shall be binding upon such other Owners.

(e)Representations/Warranties included in Local Purchase Agreements. The parties agree that the Local Purchase Agreements will contain the following representations and warranties, as may be modified by agreement of the parties in each Local Purchase Agreement:

(i)All Local Purchase Agreements shall contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(i).

(ii)In the event that the Seller Local Entity is transferring tangible assets other than real estate to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(ii).

(iii)In the event that the Seller Local Entity is transferring contracts to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(iii).

(iv)In the event that the Seller Local Entity is transferring accounts receivable and inventory to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(iv).

(v)In the event that the Seller Local Entity is transferring intellectual property to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(v).

(vi)In the event that the Seller Local Entity is transferring employees to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(vi).

(vii)In the event that the Seller Local Entity has one or more subsidiaries, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(vii).

(viii)In the event that the Seller Local Entity is transferring real property and/or a real property lease to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(viii).

(ix)In the event that a Seller Local Entity transfers equity interests in an Acquired Entity to a Buyer Local Entity, then the Local Purchase Agreement shall also contain or incorporate by reference the representations and warranties set forth on Exhibit 1.01(e)(ix).

(x)Breaches of Representations and Warranties. Any claims by a Seller Local Entity or Buyer Local Entity for breaches of representations and warranties arising from a particular Local Purchase Agreement shall be governed by and addressed in accordance with the provisions set forth in Section 1.06 and Article IV below.

1.02.Aggregate Purchase Price for Global Business.

(a)Initial Purchase Price. The aggregate purchase price to be paid by Purchasers to the respective Owners for the Purchased Assets shall be Sixty-Two Million Nine Hundred Fifty Thousand US Dollars (US$62,950,000), payable in U.S. Dollars or an equivalent amount in Euros or Hong Kong Dollars, or a combination thereof payable in cash at closing pursuant to Section 1.02(c) below (“Closing Date Purchase Payment”); plus the amounts payable pursuant to Section 1.05 below (“Contingent Additional Purchase Price Payments”)as adjusted herein, collectively, the “Purchase Price”).

(b)Reductions/Adjustments in Purchase Price.

(i)Payment of Local Entity Debt. Additionally, except for interest bearing debt, including inter alia bank debt, bank loans and lines of credit of Sri Lanka and STS India to be described on a schedule to the applicable Local Purchase Agreement (“Sri Lanka Bank Debt”), the applicable Buyer Local Entity shall, on behalf of the respective Seller Local Entity, pay/escrow out of the Closing Date Purchase Payment all Local Entity Debt listed on a schedule to each Local Purchase Agreement to be paid by a Buyer Local Entity and any Local Entity Debt (or portion thereof) as agreed upon on the Purchase Price Closing Statement (defined in Section 1.02(c) below), as executed by Checkpoint and Owners Representative, with any secured debt to be extinguished pursuant to pay-off letters issued by the lender therefor in a form acceptable to such lender, the Seller Local Entity, and the Buyer Local Entity. The Purchase Price will be reduced by an amount equal to one-half (1/2) of the Sri Lanka Bank Debt.

(c)Payment of Purchase Price/Deposit.

(i)Purchasers shall pay the Closing Date Purchase Payment (as adjusted as specifically stated herein) to Owners at Closing, and Purchasers shall pay the Contingent Additional Purchase Price Payments to Owners as specified herein, by wire transfer of immediately available funds to the accounts designated by the Owners’ Representative. All Closing Date Purchase Price Payments, any Closing Date adjustments to the Purchase Price and any adjustments and payments of Local Entity Debt will be reflected on a closing statement executed by Checkpoint and Owners’ Representative as of the Closing Date (“Purchase Price Closing Statement”). All references to dollars herein shall mean United States Dollars or, at the option of Purchasers in each case upon agreement of the Owners’ Representative, an equivalent amount in Euros or Hong Kong Dollars, or a combination thereof.

(ii)Production Centre Deposit. Brilliant shall deposit US$2.4 million with a Hong Kong entity designated by Owners’ Representative. Upon completion of payment by an Affiliate of Brilliant for assets comprising the Wing Hung Production Centre in an amount equivalent to US$2.4 million (“WHPC Payment”), Owners’ Representative will concurrent with the WHPC Payment return such Deposit to Brilliant.

(d)Purchase Price Allocation. The Purchase Price shall be allocated among the Local Purchase Agreements in the manner set forth on Schedule 1.02(d) hereto, provided that the parties acknowledge that such allocation is an estimate based upon information known to date and shall be adjusted as agreed to by Purchasers and Owners’ Representative. For clarity, Purchase Price will be first allocated to Inter-company Receivables and then to other asset acquired pursuant to Local Purchase Agreements. Additionally, any increase in the Purchase Price due to a payment to Owners under Section 1.05 shall be allocated to the purchase of intangibles by Brilliant Label Manufacturing Ltd. From Wing Hung Printing Co., Ltd., unless otherwise agree in writing by the parties.

(e)Purchase Price under Local Purchase Agreements. For the sake of clarity and greater certainty, the purchase price payable to the applicable Owners and/or Seller Local Entity, as the case may be, under a Local Purchase Agreement, including, without limitation, the purchase price payable under the Asset Transfer Agreements related to the acquisition of certain assets of Wing Hung (Dongguan) Printing and Shanghai WH Printing (“Chinese Asset Transfer Agreements”) shall be deemed included within the Purchase Price described in this Section 1.02 (whether or not the applicable Local Purchase Agreement (x) refers to this Agreement or (y) provides that the purchase price payable under such Local Purchase Agreement constitutes a portion of the Purchase Price described in this Agreement), and in no event shall the Purchasers be required to pay an aggregate amount to the Owners in excess of the Purchase Price described in this Section 1.02 (as such Purchase Price may be adjusted pursuant to terms of this Agreement) in connection with Purchasers’ acquisition of the Global Business, including the assets and equity interests constituting the Global Business, pursuant to this Agreement and the Local Purchase Agreements executed and delivered in connection herewith.

1.03.Preparation of Closing Date Balance Sheet. Within one hundred twenty (120) days following the Closing Date, Checkpoint will prepare, at the expense of Checkpoint, an actual Closing Date balance sheet (“Closing Date Balance Sheet”). Upon completion of the Closing Date Balance Sheet, Checkpoint will provide Owners’ Representative a copy of such Closing Date Balance Sheet.

1.04.Escrow Agreement.

(a)Escrow. Owners and Purchasers shall enter into an Escrow Agreement at the Closing in the form attached as Exhibit 1.04(a) (“Escrow Agreement”). The parties shall split equally the Escrow Agent’s fees for the escrow account and pay such fees promptly when due.

(i)Escrowed Funds. Out of the Closing Date Purchase Payment and as soon as such escrow account is opened, Purchasers shall deposit in escrow with HSBC (“Escrow Agent”):

(A)Nine Million Five Hundred Thousand Dollars (US$9,500,000.00) (the “General Escrowed Funds”), in immediately available funds for the general obligations of the Owners set forth hereunder, for the obligations of the Seller Local Entities under the Local Purchase Agreements, and for any other purposes set forth in the Escrow Agreement; to be released upon each of: (I) the making of the Final Working Capital Purchase Price Adjustment in accordance with Section 1.03(e); and (II) the expiration of the Escrow Term as defined in the Escrow Agreement (18 months following Closing); provided, however, that subject to the provisions of Section 1.06(b) hereof, the Escrowed Funds shall not be the limit of Owners’obligations hereunder or under the Local Purchase Agreements, and

(B)Two Million Five Hundred Thousand Dollars (US$2,500,000) of the General Escrowed Funds shall be paid (i) to Owners’ Representative for distribution upon the completion of the Wing Hung Production Centre/Office transfer of assets, the receipt of all required local permits and licenses, and as such assets become fully operational at the production capacity to support the acquired Global Business or (ii) to Brilliant Label Manufacturing Ltd., a Hong Kong Private limited company (“Brilliant”), an Affiliate of Purchasers, in the event that Owners’ Representative has been paid an amount equal thereto from another Affiliate of Purchasers, all as provided in the Escrow Agreement.

(C)With respect to those Purchased Assets that are intended to be transferred at Closing but cannot be accomplished in that timeframe or the accomplishment of certain actions or results as contemplated herein that must be obtained post-Closing (“Post-Closing Transfers/Actions”), the parties will work together to create a plan and timeline for completing/obtaining such Post-Closing Transfers/Actions and, if material to the Global Business, will agree on a commercially reasonable escrow amount to secure the performance of Owners required in connection therewith.

(ii)Interest on the Escrowed Funds. The Escrowed Funds shall earn interest in accordance with the Escrow Agreement. Any interest earned on the Escrowed Funds not otherwise distributed in accordance with this Agreement and the Escrow Agreement shall be paid to Owners upon the expiration of the Escrow Term, except with respect to any portion of the Escrowed Funds that are payable to Purchasers pursuant to the terms of this Agreement and the Escrow Agreement, in which case interest on such portion of the Escrowed Funds shall be payable to the Purchasers.

(iii)Contingent Payment Escrowed Funds. Purchasers shall deposit with Escrow Agent Seventeen Million Five Hundred Thousand U.S. Dollars (US$17,500,000.00) (together with interest earned thereon, the “Contingent Payment Escrowed Funds” and together with the General Escrowed Funds, collectively, the “Escrowed Funds”), in immediately available funds for purposes of funding payment by Purchasers of the EBITDA Payment (if any) pursuant to Section 1.05 hereof. If the EBITDA Payment (when finally determined) is greater than or equal to the Contingent Payment Escrowed Funds, then as partial payment therefor (or if the Contingent Payment Escrowed Funds equals the amount of the EBITDA Payment, as payment in full) all of the Contingent Payment Escrowed Funds will be released to Owners and if the EBITDA Payment payable to Owners (when finally determined) is less than the Contingent Payment Escrowed Funds, then a portion of the Contingent Payment Escrowed Funds equal to the EBITDA Payment payable to Owners will be released to Owners and the difference between the Contingent Payment Escrowed Funds and the EBITDA Payment payable to Owners will be released to Purchasers.

(b)Outstanding Amounts upon Expiration of the Escrow Term. Upon the expiration of the Escrow Term, any remaining amounts of the Escrowed Funds (plus the interest thereon) less any pending or outstanding claims against the Escrowed Funds timely made by Purchasers in accordance with the terms of this Agreement and the Escrow Agreement shall be distributed to Owners. Any amounts representing outstanding claims of Purchasers against the Escrowed Funds, shall remain in escrow until such time as such claims are finally determined and/or settled upon the mutual written agreement of Purchasers and Owners.

1.05.Contingent Additional Purchase Price Payments.

(a)EBITDA Based Contingent Payment.

(i)Defined Terms:

(A)EBITDA – The term EBITDA shall mean the following (all determined in accordance with GAAP) with respect to the Global Business for the calendar year ended December 31, 2010:  (a) net income plus (b) interest expense; plus (c) federal, state, local and foreign income taxes and other taxes on income; plus (d) depreciation and amortization expense ; minus (e) interest income; minus (f) non-operating income of the Global Business; plus or minus (g) any loss or gain on the sale or disposal of assets of the Global Business.   For the avoidance of doubt EBITDA will include (i) the effect of eliminating all intercompany activity within the Global Business, including activity between WHPC/O and the remainder of the Global Business and (ii) 51% of Sri Lanka EBITDA and (iii) 50% of Cybsa Adapt SA de CV (El Salvador) EBITDA.

(B)“EBITDA Target” – US$9,650,000

(ii)[Intentionally Omitted]

(iii)EBITDA Payment. Subsequent to Closing, subject to the provisions set forth herein, if EBITDA for the calendar year ending December 31, 2010 as set forth in the financial statements for the Global Business (including the Wing Hung Production Centre and the Shaghai Trading Office collectively referred to as “WHPC/O”) related to the Global Business (“2010 EBITDA”) is greater than US$8,000,000.00, then Purchasers shall make an additional payment to Owners calculated in the manner set forth in the table below based upon 2010 EBITDA (“EBITDA Payment”), provided that the maximum EBITDA Payment to which Owners shall be entitled to receive shall be $23,750,000 if 2010 EBITDA equals or exceeds $10,615,000:

	2010 EBITDA	EBITDA PAYMENT
110%	10,615,000	23,750,000
108%	10,422,000	22,188,000
106%	10,229,000	20,625,000
104%	10,036,000	19,063,000
102%	9,843,000	18,282,000
100%	9,650,000	17,500,000
98%	9,457,000	15,453,000
96%	9,264,000	13,406,000
94%	9,071,000	11,359,000
92%	8,878,000	9,312,000
90%	8,685,000	7,265,000
88%	8,492,000	5,218,000
86%	8,299,000	3,171,000
84%	8,106,000	1,124,000
82.9%	8,000,000	No payment

In the event that 2010 EBITDA falls in between any two thresholds described in the chart above, the EBITDA Payment payable to Owners shall be proportionally adjusted.

(iv)To determine the EBITDA of the Wing Hung Production Centre and the Shanghai Trading Office, within ten (10) Business days subsequent to Closing, Owners will retain an independent big four accounting firm or, if such a firm is unavailable or resigns, then an international firm of suitable sophistication and expertise, acceptable to Brilliant, to prepare an EBITDA Calculation for WHPC/O as of and for the period ending December 31, 2010, using GAAP and the methodologies described on Schedule 1.05(a)(iv) hereto (the “WHPC/O 2010 EBITDA”). As part of the engagement of such independent accounting firm, Brilliant will approve the statement of work for the determination of the WHPC/O 2010 EBITDA and such firm will agree to provide a duty of care letter to Brilliant for the EBITDA calculation. Owners shall provide such independent accounting firm full access to all such information, documents and personnel requested by such independent accounting firm and fully cooperate in connection with its preparation of the WHPC/O 2010 EBITDA Report as contemplated by this Agreement. The WHPC/O 2010 EBITDA Calculation shall be completed by such independent accounting firm and delivered, together with a report signed by such independent accounting firm (the “WHPC/O 2010 EBITDA Report”), to Brilliant within the later of (x) one hundred twenty (120) days of the Closing Date and (y) thirty (30) days following the Completion of the Wing Hung Transfer.

(v)In the event that Brilliant has any objections to the WHPC/O 2010 EBITDA Report, Brilliant shall present such objections to Owners’ Representative together with the impact of incorporating such objections on the WHPC/O 2010 EBITDA Report (as defined in Section 1.05(a)(vi) below). Any disputes between Owners’ Representative and Brilliant regarding the WHPC/O 2010 EBITDA Report shall be resolved in accordance with Section 1.05(a)(vi) (including, without limitation, submitting any such dispute to the Independent Accountant if Brilliant and Owners’ Representative cannot resolve the dispute amongst themselves). The WHPC/O 2010 EBIDTA Report as finally determined (including, if applicable, pursuant to the dispute resolution provisions described in this Agreement) shall be used in determining the 2010 EBITDA of the Global Business for purposes of calculating the EBITDA Payment as set forth in this Section 1.05(a).

(vi)Within the later of (x) sixty (60) days following delivery to Purchaser of the WHPC/O 2010 EBITDA Report as contemplated by Section 1.05(a)(iv) above or (y) thirty (30) days following the completion of the Wing Hung Production Centre transfer of assets, the receipt of all required local permits and licenses, and such assets becoming fully operational at the production capacity to support the acquired Global Business (the “Completion of the Wing Hung Production Centre Transfer”), Brilliant will prepare, at the expense of Brilliant, and deliver to the Owners’ Representative an EBITDA adjustment statement based upon its review of the financial statements of the Global Business (exclusive of the Wing Hung Production Centre for calendar year ending December 31, 2010) and its review of the WHPC/O 2010 EBITDA Report (“EBITDA Adjustment Statement”) which will set forth the 2010 EBITDA and a calculation of the EBITDA Payment. The EBITDA Adjustment Statement shall be subject to review and verification by the Owners’ Representative. The Owners shall be deemed to have accepted as final the EBITDA Adjustment Statement unless, within thirty (30) days after the date of delivery of the EBITDA Adjustment Statement to the Owners’ Representative, the Owners’ Representative gives written notice of objection to Brilliant to any item thereon, which objection shall specify in reasonable detail the basis for such objection, in which case Brilliant and the Owners’ Representative shall attempt in good faith to resolve such dispute as promptly as possible. If a final resolution thereof is not obtained within thirty (30) days after the date of delivery of the Owners’ Representative’s objections to Brilliant, the parties will engage the Independent Accountant to resolve any remaining differences concerning such calculations. The Independent Accountant’s resolution shall be final and binding on the parties. The fees and expenses of the Independent Accountant shall be borne one-half by the Purchasers jointly and severally, and one-half by the Owners jointly and severally.

(vii)In the event that the final determination of 2010 EBITDA pursuant to Section 1.05(a)(vi) above results in an EBITDA Payment payable to Owners, then Brilliant shall instruct Escrow Agent to release a portion of the Contingent Payment Escrowed Funds to Owners equal to the EBITDA Payment, provided that if the EBITDA Payment is greater than the Contingent Payment Escrowed Funds, then Brilliant shall instruct Escrow Agent to release all Contingent Payment Escrowed Funds to Owners and shall pay Owners the an amount equal to the difference between the EBITDA Payment and the Contingent Payment Escrowed Funds release to Owners not later than ten (10) business days after the determination of 2010 EBITDA becomes final. In the event that the EBITDA Payment is less than the Contingent Payment Escrowed Funds then Brilliant and Owners shall instruct Escrow Agent to release to Brilliant an amount equal to the difference between the EBITDA Payment and the Contingent Payment Escrowed Funds.

(viii)Owners’ right to receive the EBITDA Payment in accordance with this Section 1.05(a), shall survive the Closing and the Closing Date and shall be enforceable from and after the Closing Date against Purchasers.

(ix)The Owners represent and warrant that the Global Business has been operated in the calendar year 2010 in the ordinary course. From the date hereof to the Closing Date, the Owners covenant that they will operate the Global Business in the ordinary course without any extraordinary measures (including, without limitation, with respect to liabilities and debt, working capital, and reserve accounts) in anticipation of Closing, except as agreed upon by the parties in advance.

(b)[Intentionally Omitted]

1.06.Indemnification.

(a)Owners’ Indemnification. Owners jointly and severally agree to indemnify, defend and hold harmless Purchasers that are signatories to a Local Purchase Agreement (“Purchaser’s Indemnitees”) from and against any and all Losses (as defined in Section 1.06(e) below) imposed on, asserted against or incurred by Purchaser’s Indemnitees which arise out of, in connection with, result from or are incident to any of the following:

(i)any breach of any representation or warranty of an Owner made in this Agreement or in any Local Purchase Agreement or in any Schedule hereto or thereto or in any of the other ancillary documents to be executed and delivered to Purchasers by an Owner in connection with the acquisition of the Purchased Assets;

(ii)Owners indemnification obligations pursuant to Section 2.07 hereof;

(iii)any breach or failure to perform any obligation, covenant or agreement of any Owner in this Agreement or in any Local Purchase Agreement or in any other ancillary documents to be executed and delivered to Purchasers by an Owner in connection with the acquisition of the Purchased Assets;

(iv)the items and matters described on Schedule 1.06(a)(iv) hereto; and

(v)any and all severance required to be paid as a result of any employees of Wing Hung Dongguan Printing and/or Shanghai Printing not accepting being employed in seniority-carry-over manner to the applicable Purchaser or voluntarily terminating their employment within thirty (30) days after the transfer of such employee and any liability arising out of any non-performance by an Owner of any agreement with any such employees.

(b)Limitations on Owners’ Indemnification.

(i)Basket; Cap. Except as otherwise provided in Subsections 1.06(b)(ii) and (iii), the indemnification obligations of Owners provided for in Section 1.06(a) shall:

(A)not require Owners to indemnify Purchaser’s Indemnitees for Losses incurred by Purchaser’s Indemnitees under this Section 1.06 until the aggregate amount of such Losses exceeds Five Hundred Thousand Dollars ($500,000.00) (“Owners’ Basket”), in which event the aggregate amount of such Losses are deemed to be material and Purchaser’s Indemnitees may claim indemnification for all of such Losses in excess of the Owners’ Basket; and

(B)not exceed in the aggregate Eight Million Dollars ($8,000,000.00) (“Cap”);

(ii)Exceptions to Owners’ Basket. The Owners’ Basket shall not apply to breaches of the following representations and warranties contained in the Local Purchase Agreement’s Sections or subsections with the following titles: Authority, Enforceability, Noncontravention, Title to Assets, Accounts Receivable, Inventory, Taxes, Environmental, and Benefit Plans. Notwithstanding anything to the contrary herein or in any Local Purchase Agreement, the Owners’ Basket shall not apply to any non-performance or non-payment of: (a) any covenant of an Owner to make a payment as required hereunder, (b) any covenant in which an Owner willfully does not perform, and (c) any brokerage fees owed by an Owner. Notwithstanding anything to the contrary contained herein or in any Local Purchase Agreement, the Owners’ Basket shall not apply to the indemnification obligations in Sections 1.06(a)(iv) or (v) above.

(iii)Exceptions to Cap. The Cap shall not apply to breaches of the following representations and warranties contained in the Local Purchase Agreements: Authority, Enforceability, Noncontravention, Title to Assets, Accounts Receivable, Inventory, Taxes, Environmental and Benefit Plans. Notwithstanding anything to the contrary contained herein or in any Local Purchase Agreement, the Cap shall not apply to the indemnification obligations in Sections 1.06(a)(iv) or (v) above.

(iv)Survival of Obligations. The obligations of the Owners pursuant to Sections 1.06(a) and 1.06(b) shall survive the Closing for the period set forth in Section 4.01(a) hereof; provided that the indemnification obligations set forth in Sections 1.06(a)(iv) or (v) above shall not expire due to the passage of time and shall forever remain in effect.

(v)Source of Indemnity Funds. With respect to Losses asserted by Purchaser’s Indemnitees for which indemnification is required of Owners, Purchaser’s Indemnitees shall first assert their right to payment against any insurance policy in effect at such time covering such Losses.

(c)Purchaser’s Indemnification. Purchasers that are signatories to a Local Purchase Agreement jointly and severally agree to indemnify, defend and hold harmless Owners from and against any and all Losses imposed on, asserted against or incurred by Owners which arise out of, in connection with, result from or are incident to any breach of any representation or warranty, Purchasers’ indemnification obligation under Section 2.07 hereof, or failure to perform any obligation, covenant or agreement of Purchasers in this Agreement or in any Local Purchase Agreement or in any Schedule hereto or thereto or in any of the other ancillary documents to be executed and delivered to Owners by Purchasers in connection with the acquisition of the Purchased Assets.

(d)Claim for Indemnification. Any party seeking indemnification under the provisions of this Agreement, within ninety (90) days of the time it discovers that it has a claim against another party (“Inter-Party Claim”) or promptly upon receipt of written notice of any claim or the service of a summons or other initial legal process upon it in any action instituted against it which relates to this Agreement (“Third-Party Claim”), shall give written notice of such claim, or the commencement of such action, to the party from whom indemnification will be sought hereunder.

(i)Third-Party Claim. In the event of a Third-Party Claim, the Tendering Party shall tender the defense of such Third Party Claim to the Non-Tendering Party. The Non-Tendering Party shall, within ten (10) Business Days of the receipt thereof, inform the Tendering Party in writing that the Non-Tendering Party will either accept or reject the tender of the defense of such Third Party Claim as set forth below.

(A)Accept the Tender of the Defense Without a Reservation of Rights. If the Non-Tendering Party agrees that the Third Party Claim is a Proper Claim, the Non-Tendering Party shall accept the tender of the defense without a reservation of rights. In such an event the Non-Tendering Party shall control all aspects of the defense of such Third Party Claim and shall defend, indemnify and hold harmless the Tendering Party in accordance with this Section 1.06.

(B)Accept the Tender of the Defense With a Reservation of Rights. If the Non-Tendering Party questions whether the Third Party Claim is a Proper Claim, the Non-Tendering Party may accept the tender of the defense with a reservation of rights. In such an event, the Non-Tendering Party shall submit such Third Party Claim to arbitration promptly in order to determine whether it is a Proper Claim. While the arbitration is pending, the Non-Tendering Party shall control all aspects of the defense of such Third Party Claim. If the decision of the arbitrator(s) is that such Third Party Claim is:

(i)a Proper Claim, and the Third Party Claim is still pending, the Non-Tendering Party shall continue the defense of such Third Party Claim and shall defend, indemnify and hold harmless the Tendering Party in accordance with this Section 1.06;

(ii)a Proper Claim, but the Third Party Claim has already been concluded, the Non-Tendering Party shall indemnify and hold harmless the Tendering Party in accordance with this Section 1.06;

(iii)an Improper Claim, and the Third Party Claim is still pending, the Non-Tendering Party shall transfer the control of all aspects of the defense of such Third Party Claim immediately to the Tendering Party; (In such an event, the Tendering Party shall assume the control of all aspects of the defense of such Third Party Claim immediately and shall reimburse the Non-Tendering Party for all costs and expenses (including, but not limited to, reasonable attorneys fees and related disbursements of such attorneys) incurred by the Non-Tendering Party in the defense of such Third Party Claim); or

(iv)an Improper Claim, but the Third Party Claim has already been concluded, the Tendering Party shall reimburse the Non-Tendering Party for all costs and expenses (including, but not limited to, reasonable attorneys fees and related disbursements of such attorneys) incurred by the Non-Tendering Party in the defense of such Third Party Claim, and shall reimburse the Non-Tendering Party for all amounts paid by the Non-Tendering Party for any judgments or settlements relating to such Third Party Claim, provided any negotiated settlement shall have been approved by the Tendering Party which approval shall not be unreasonably withheld, delayed or conditioned.

(C)Reject the Tender of the Defense. If the Non-Tendering Party decides that the Third Party Claim is an Improper Claim, the Non-Tendering Party may reject the tender of the defense. In such an event, the Non-Tendering Party shall submit such Third Party Claim to arbitration immediately in order determine whether it is a Proper Claim. While the arbitration is pending, the Tendering Party shall control all aspects of the defense of such Third Party Claim. If the decision of the arbitrator(s) is that such Third Party Claim is:

(i)a Proper Claim, and the Third Party Claim is still pending, the Tendering Party shall transfer the control of all aspects of the defense of such Third Party Claim immediately to the Non-Tendering Party; (In such an event, the Non-Tendering Party shall assume the control of all aspects of the defense of such Third Party Claim immediately and shall reimburse the Tendering Party for all costs and expenses (including, but not limited to, reasonable attorneys fees and related disbursements of such attorneys) incurred by the Tendering Party in the defense of such Third Party Claim and shall defend, indemnify and hold harmless the Tendering Party in accordance with this Section 1.06);

(ii)a Proper Claim, but the Third Party Claim has already been concluded, the Non-Tendering Party shall indemnify and hold harmless the Tendering Party in accordance with this Section 1.06;

(iii)an Improper Claim, and the Third Party Claim is still pending, the Tendering Party shall continue to control all aspects of the defense of such Third Party Claim; or

(iv)an Improper Claim, but the Third Party Claim has already been concluded, the Tendering Party shall bear all losses incurred by the Tendering Party relating to such Third Party Claim.

For purposes of this Section 1.06(a), if upon receipt of notice of a Third Party Claim the Non-Tendering Party fails to timely give notice of its intention to accept the tender of defense (either with or without a reservation of rights), then the Non-Tendering Party shall be considered as having rejected the defense of the Third Party Claim and the procedures under this Section 1.06(d)(i)(C) shall be followed.

(ii)Inter-Party Claim. In the event of an Inter-Party Claim, the Indemnifying Party shall, within thirty days of the receipt of the claim for indemnification, send written notice to the Indemnified Party indicating whether the claim is disputed. If the claim is disputed, the Indemnifying Party shall submit the matter to arbitration in order to determine if it is a Proper Claim and, if it is a Proper Claim, to determine the amount of such claim. To the extent that the arbitrator(s) or applicable court rules that a Inter-Party Claim is a Proper Claim and/or to the extent that a Inter-Party Claim is not disputed, the Indemnifying Party shall promptly indemnify the Indemnified Party in accordance with this Section 1.06 and the Indemnified Party shall be entitled to set-off against any amounts owed to the Indemnifying Party.

(e)Definition of “Loss.” As used in this Section 1.06, the term “Loss” or “Losses” means the amount of any and all claims, liabilities, obligations, demands, damages, losses, costs, expenses (including reasonable attorneys’ fees and disbursements of counsel), fines, penalties, judgments and amounts paid in settlement incurred or sustained by a party entitled to indemnification hereunder (provided such settlement is permitted or authorized under the other terms of this Section 1.06).

(f)Exclusive Remedy. The remedies for indemnification provided for in this Section 1.06 shall be the exclusive remedy of the parties hereto and their respective successors or assigns in respect of any claims for breach of this Agreement or any related agreement and shall be exclusive of any remedy conferred by law or equity upon any party thereto; provided, however, that this Section 1.06 shall not apply to Losses resulting from fraud.

ARTICLE 2

COVENANTS

2.01.Payment of Transaction Expenses. Except as otherwise provided in this Agreement, Purchasers and Owners will each bear their own respective costs and expenses, including, without limitation, legal counsel and accountants’ fees and expenses, in connection with the preparation and negotiation of this Agreement and the transactions contemplated by this Agreement and the Local Purchase Agreements.

2.02.Payment of Brokers. Each of the parties hereto covenants and agrees to pay all fees, commissions, costs and expenses relating to such party’s use of any broker, finder, financial adviser, agent or other person in connection with this Agreement or any Local Purchase Agreement, or the transactions contemplated by this Agreement or any Local Purchase Agreement.

2.03.Employees.

(a)Except for the employees of a Seller Local Entity who shall remain employees of such Seller Local Entity (the “Retained Employees”) as set forth on a Schedule to each Local Purchase Agreement, Purchasers shall offer at-will employment to all persons who are employees of the Global Business at such time (the “Continuing Employees”). Each Owner shall attach a list of all Continuing Employees, their rate of compensation, job title and exempt/non-exempt status.

(b)Purchasers will evaluate all of each Owners’ bonus and other compensation plans generally applicable to the Continuing Employees as of the date of this Agreement and from and after the Closing Date, Purchasers shall provide bonus and/or other compensation plans substantially similar to those provided to other similarly situated employees employed by Purchasers. On or prior to Closing, Owners shall pay all bonus or other amounts (other than severance) due employees of each Seller Local Entity as of the date of Closing or in the alternative, except with respect to any such amounts due to employees employed by Shanghai Printing and Wing Hung Dongguan Printing which shall be paid by Owners on or prior to Closing as set forth above. Additionally, Owners shall pay all severance amounts due employees of each Seller Local Entity triggered by the transactions consummated at Closing prior to Closing. With respect to any Wing Hung Employees that will be employed by a Purchaser in seniority-carry-over manner and are entitled to severance due to a voluntary termination of employment occurring subsequent to the Closing Date through and including December 31, 2011, Owners and Purchasers shall share equally in the payment of such severance costs (“2011 Severance Costs”). In such event, Purchasers shall provide written notice to Owners’ Representative providing details of such termination and a calculation of such severance costs and Owners shall remit one half (1/2) of such severance costs to Purchasers within ten (10) Business Days following receipt of such written notice.

(c)Except for wages, bonuses, vacation pay and sick pay assumed pursuant to this Agreement, or as expressly contemplated by this Agreement, Purchaser shall assume no liability for any agreements, arrangements, Plans, commitments, policies or understandings of any kind relating to employment, compensation or benefits for the present or former employees of the Global Business for all employment prior to the Closing Date. The parties agree that no employee shall be entitled to any third party beneficiary status by virtue of this Section 2.03(c). Nothing in this Agreement shall obligate Purchaser to employ a Continuing Employee for any specified of minimum period of time, and nothing in this Agreement shall constitute a limitation on the right of Purchaser to terminate any Continuing Employee at will, subject to any applicable Laws and other legal requirements.

(d)Purchasers and the applicable Owner shall mutually agree on the timing and content of any notification or discussions with such Owners’ Employees or any other parties and/or representatives of the Employees with respect to the transactions contemplated by this Agreement.

2.04.Public Announcements. Except as otherwise required under any applicable Laws, stock exchange authority or securities regulations, none of the parties to this Agreement shall make any public announcement relating to the transactions contemplated by this Agreement, without the prior written consent of the other party which consent shall not be unreasonably withheld.

2.05.Confidentiality. Following Closing, except for disclosure to their or its accountants, attorneys and other such professional representatives and as otherwise required by law, Owners shall keep confidential and shall not disclose to any person, corporation, firm or entity, any confidential, proprietary and/or financial information (including the Financial Statements) concerning any Owner, or the economic terms of this Agreement.

2.06.Creditors/Bulk Sales and Similar Laws. The parties hereto waive compliance with the provisions of all bulk sales laws including, without limitation, the bulk transfer provisions of the Uniform Commercial Code (or equivalent thereof, if applicable) of any country, state or territory or any similar statute, if and to the extent applicable to the transactions contemplated by this Agreement or a Local Purchase Agreement. Owners agree to indemnify, defend and hold harmless Purchasers in accordance with Section 1.06 of this Agreement from all Losses which Purchaser’s Indemnities may suffer or incur by virtue of Owners’ failure to pay the amounts that constitute Excluded Liabilities under the Local Purchase Agreements. Purchasers agree to indemnify, defend and hold harmless Owners in accordance with Section 1.06 of this Agreement from all Losses which any Owner may suffer or incur by virtue of Purchasers’ failure to pay or perform any Assumed Obligations.

2.07. Additional Insured Status. Owners and Purchasers agree that Owners’ Representative shall cause Purchasers (and any other Affiliates of Purchaser as designated in writing to Owners’ Representative by Checkpoint) to be additional insureds under all commercial liability policies of Owners covering or related to the operation of the Global Business prior to Closing. At Closing or within five (5) Business days following Closing, Owners’ Representative shall deliver to Purchasers a certificate of insurance or other evidence showing the applicable Purchasers as an additional insured in a form reasonably satisfactory to Purchaser. Owners and Purchasers agree that Checkpoint shall cause Owners (and any other Affiliates of Purchaser as designated in writing to Owners’ Representative by Purchaser) to be an additional insured under all commercial liability policies of Purchasers covering or related to the operation of the Global Business subsequent to Closing. At Closing or within five (5) Business days following Closing, Checkpoint shall deliver to Owners’ Representative a certificate of insurance or other evidence showing the applicable Owners as additional insureds in a form reasonably satisfactory to Owners’ Representative.

ARTICLE 3

CONDITIONS PRECEDENT/DELIVERIES AT CLOSING

3.01.Conditions Precedent/Deliveries by Owners at Closing. All of the obligations of Purchasers under this Agreement are subject to the fulfillment prior to or at Closing of each of the following conditions (and as to agreements listed below, Owners agree to execute, or cause the execution of, such agreements in the form agreed upon by the parties), any one or more of which may be waived in writing by Purchasers:

(a)Each Owner shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to Closing;

(b)Each Seller Local Entity shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to Closing;

(c)Purchasers shall have been provided access to Owners’ personnel and records in order for Purchasers to complete its due diligence to its satisfaction;

(d)No federal, state or local governmental unit, agency, body or authority with competent jurisdiction over the subject matter shall have given official written notice of its intention to institute proceedings to prohibit the transactions contemplated by this Agreement, or which would interfere with the use of the Purchased Assets or the operation of the Global Business;

(e)Evidence that all consents necessary in connection with this transaction have been obtained (which shall consist of the original copies of all consents required to be obtained in writing and a certificate from Owners stating that all other consents have been obtained);

(f)John Lau shall have entered into Non-Competition Agreements, a form of which is attached hereto as Exhibit 3.01(f);

(g)Employment and Noncompetition Agreements shall have been entered into by a Purchaser and the following employees, in substantially the form mutually acceptable to the Purchaser: Howard Kurdin and other key employees identified by Purchaser;

(h)Owners shall have executed and delivered the Escrow Agreement, executed by Owners;

(i)Each Owner, as applicable, shall have executed and delivered the Transition Services Agreement (“Transition Services Agreement”);

(j)John Lau shall have executed and delivered the Consulting Agreement for fixed amount of US$1, 225,000 (“Consulting Agreement”);

(k)Each Owner shall have delivered to Purchasers unanimous written resolutions of its board of directors and stockholders approving this Agreement and the transactions contemplated thereby, or alternatively, an officer’s certificate evidencing approval of such resolutions at a meeting or meetings;

(l)Receipt of an opinion of Owners’ counsel for the jurisdictions requested by Purchasers in a form reasonably acceptable to Purchasers;

(m)Each Owners’ deeds (if applicable) and bill of sale, in form reasonably acceptable to Purchasers, conveying the Purchased Assets;

(n)Each Owners’ assignment of all of its right, title and interest in and to the Assumed Liabilities in form acceptable to Purchaser;

(o)All payoff letters relating to UCC-3 release and termination statements related to Owners’ secured creditors (or filed on their behalf) which will, when filed with the appropriate filing offices, release all liens and encumbrances against the Purchased Assets, except Permitted Liens;

(p)Each Owner shall have simultaneously executed all applicable Purchase Agreements and otherwise taken all actions to close all transactions associated therewith, unless the parties have agreed otherwise in writing;

(q)Each Purchaser’s board of directors shall have adopted resolutions approving this Agreement, the Local Purchase Agreements and all transactions set forth herein and therein;

(r)Current instructions to banks are cancelled and replaced with new instructions pursuant to Purchaser’s requests;

(s)Statements of the balance standing to the credit/debit of all accounts of each Local Entity certified to be correct by the relevant banks seven days preceding the Closing Date with the relevant notices and consents completed by Closing;

(t)Evidence of termination/release of any relationship between Owners/Local Entities and Bangladesh joint venture;

(u)Owners shall have delivered to Checkpoint consolidated financial statements as of and for the year ended December 31, 2010 for the Global Business (exclusive of the Wing Hung Production Centre);

(v)The Operating Agreement dated December 15, 2009 between W Print Europe Limited and Shore to Shore Bangladesh Ltd. shall have been terminated prior to Closing and Sellers shall provide to Purchaser evidence acceptable to Purchaser that said Operating Agreement was terminated; and

(w)Such other instruments and documents as Purchasers may reasonably request.

3.02.Conditions Precedent/Deliveries by Purchasers at Closing. All of the obligations of Owners under this Agreement are subject to the fulfillment prior to or at Closing of each of the following conditions (and as to agreements listed below, Purchasers agree to execute such agreements in the form agreed upon by the parties), any one or more of which may be waived in writing by Owners’ Representative:

(a)Wire transfers, in immediately available funds, in the amounts described in Section 1.02(a) hereof;

(b)Each Purchaser shall have performed and complied in all material respects with all agreements and conditions required by this Agreement and under each Local Purchase Agreement to be performed or complied with prior to Closing;

(c)No federal, state or local governmental unit, agency, body or authority with competent jurisdiction over the subject matter shall have given official written notice of its intention to institute proceedings to prohibit the transactions contemplated by this Agreement;

(d)Purchasers shall have delivered the Escrow Agreement, executed by Purchasers;

(e)Purchasers shall have delivered the Employment and Noncompetition Agreements, executed by the appropriate Purchasers.

(f)Purchasers shall have delivered the Consulting Agreement for fixed amount of US$1, 225,000, executed by the appropriate Purchaser;

(g)Purchasers shall have delivered the Transition Services Agreement, executed by Purchasers;

(h)Purchasers shall have delivered to Owners unanimous written resolutions of each of its board of directors approving this Agreement and the transactions contemplated thereby, or alternatively, an officer’s certificate evidencing approval of such resolutions at a meeting or meetings;

(i)Purchasers’ assumption of the Assumed Obligations in form acceptable to Owners, and Purchasers’ pay off of Local Entity Debt;

(j)Each Purchaser shall have simultaneously executed all applicable Purchase Agreements to which it is a party and otherwise taken all actions to close all transactions associated therewith, unless the parties have agreed otherwise in writing:

(k)Each Owner that is an entity shall have had its board of directors (or equivalent governing body/equity holder(s)) adopt resolutions approving this Agreement, the Local Purchase Agreements and all transactions set forth herein and therein; and

(l)Such other instruments and documents as Owners may reasonably request.

ARTICLE 4

SURVIVAL/DISPUTE RESOLUTION

4.01.Survival of Representations and Warranties.

(a)Owners’ Representations and Warranties. The representations and warranties of the Owners contained herein and in the Local Purchase Agreements shall survive the Closing (as defined herein and therein, as applicable), and such representations and warranties shall expire eighteen (18) months after the Closing Date (“Survival Period”). Notwithstanding the foregoing, the representations and warranties of the Owners contained in the Local Purchase Agreements with respect to (i) Taxes and (ii) Environmental shall survive for the applicable statutes of limitation. In no event shall Owners’ indemnification obligations for breaches of any representations and warranties with respect to Authority, Enforceability, Noncontravention; and Title to Assets shall expire due to the passage of time but rather shall forever remain in effect.

(b)Notice of Claim. In the event that Purchaser provides Owners timely notice as provided in Section 1.06(d) and within the Survival Period, the obligations of the Owners under Section 1.06 shall survive until the claim is finally resolved.

(c)No Expiration of Covenants. Except where limited by a specific restriction on duration set forth herein, the obligations of Owners to perform their respective covenants hereunder shall expire when each such covenant is performed.

ARTICLE 5

MISCELLANEOUS

5.01.Notices. Any notices, requests, claims, demands, instructions and other communications required or permitted to be given hereunder to any party shall be in writing and shall be deemed to have been duly given when delivered in person or by a nationally recognized overnight courier service or by registered or certified mail, return receipt requested, to the following addresses (or at such other address or number as is given in writing by such party in accordance with this Section 5.01).

If to Owners: John Lau

Wing Hung Group

Flat A, 6/F., Kin Ho Industrial Building

Block 1, 14-24 Au Pui Wan St., Fo Tan

N.T., Hong Kong

Howard Kurdin

8170 Washington Village Drive

Dayton, OH 45458

With a copy to: Jonas Gruenberg

Coolidge Wall Co., LPA

Suite 600

33 West First Street

Dayton, OH 45402

If to Purchaser:                                     Stephen Davidson

Leat House

Overbridge Square

Newbury, Berkshire RG14 5UX

United Kingdom

with a copy to:                                      John R. Van Zile

SVP & General Counsel

Checkpoint Systems Inc.

One Commerce Square

2005 Market Street, Suite 2410

Philadelphia, PA 19103

Any such notice, communication or delivery shall be deemed given or made (i) on the date of delivery, if delivered in person; (ii) on the first Business Day following delivery to a national overnight service; (iii) on the third Business Day following delivery to an international overnight service or (iv) on the fifth (5th) Business Day following it being mailed by registered or certified mail.

5.02.Amendments. This Agreement may be amended and/or modified, only in a written document signed by Purchasers and Owners that specifically states that it is an amendment to this Agreement.

5.03.Duplicates, Originals Counterparts. This Agreement may be executed in one or more counterparts and/or with one or more signature pages, all of which shall be deemed to be one and the same Agreement.

5.04.Non-Assignability. Except as set forth in the preamble of this Agreement, none of the parties hereto may assign its rights, interests, obligations or liabilities under this Agreement or delegate its duties without the prior written consent of the other parties.

5.05.Headings. The headings contained in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.

5.06.Governing Law/Arbitration.

(a)This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania, United States of America, exclusive of any conflicts of laws principles.

(b)All Actions arising out of or relating to this Agreement shall be heard and determined exclusively pursuant to Sections 5.06(c) or 5.06(d), at the option of the party instituting the controversy or claim.

(c)Any controversy, dispute, claim or question arising out of or relating to this Agreement, including without limitation its interpretation, performance or non-performance by any party, or any breach thereof (hereinafter, collectively, (“Controversy”) shall be referred to and resolved exclusively by three arbitrators through private, confidential arbitration conducted in Philadelphia, PA. Such arbitrators shall be disinterested, neutral individuals who have experience and qualifications in the subject matter of the Controversy. One arbitrator shall be chosen by each party to the arbitration and the third by the two so chosen. If either party refuses or neglects to appoint an arbitrator within thirty (30) days after receipt of written notice from the other party requesting it to do so, the requesting party may choose a total of two arbitrators who shall choose the third. If the arbitrators fail to select the third arbitrator within ten (10) days after both have been named, the party plaintiff shall notify the American Arbitration Association (AAA) who shall appoint the third arbitrator. The AAA shall select an arbitrator who is disinterested, neutral and who has experience and qualifications in the subject matter of the Controversy. Each party to the arbitration shall bear the expense of its own arbitrator and shall jointly and equally bear the cost of the third arbitrator. In the event of the death, disability or incapacity of any arbitrator, a replacement shall be named pursuant to the process, which resulted in the selection of the arbitrator to be replaced. The majority decision of the panel shall be final and binding upon the parties to this Agreement. Judgment may be entered upon the award of the arbitrators in any court of competent jurisdiction. Except as otherwise specifically provided in this Article, the arbitration of any Controversy shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association.

(d)Any controversy or claim arising out of or relating to this Agreement, or any breach of this Agreement, may be initiated, maintained and finally determined by binding arbitration under the auspices of the Hong Kong International Arbitration Center (the “HKIAC”) and the site of the arbitration shall be in Hong Kong. The arbitral tribunal shall be appointed within 30 days of the notice of dispute, and shall consist of three arbitrators, each opposing party to a dispute shall be entitled to appoint one arbitrator and the third shall be jointly appointed by the disputing parties or, failing such agreement within such 300 day period, the HKIAC shall appoint the third arbitrator. The arbitration proceeding shall be conducted in English. The arbitration tribunal shall apply the UNCITRAL Arbitration Rules as administered by the HKIAC at the time of the arbitration. The award of the arbitration tribunal shall be final and binding upon the disputing parties, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award. Any party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

5.07.Remedies. Nothing expressed or implied in this Agreement is intended or will be construed to confer upon or give any person, firm or corporation, other than the parties hereto, any rights or remedies under or by reason of this Agreement or any transaction contemplated hereby.

5.08.Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if the Agreement was drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

5.09.Severability. In the event any term or provision of this Agreement shall be deemed to be illegal, invalid or unenforceable for any reason, such illegality, invalidity or unenforceability will not affect any other term or provision of this Agreement and the parties shall endeavor to replace the invalid or null and void provision(s) with such which correspond best to the intentions of the parties hereto.

5.10.Amended and Restatement of MPA; Entire Agreement. This Agreement amends and restates the MPA. This Agreement, including all Exhibits and the Schedules which are hereby incorporated into this Agreement and made a part hereof, constitutes the entire integrated understanding and agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings between the parties. The parties agree that any Exhibit or Schedule not agreed to and attached hereto at execution as indicated by the initials of the parties hereto shall be agreed upon by the parties and attached hereto prior to Closing. There are no representations, warranties, undertakings or agreements between the parties with respect to the subject matter of this Agreement except as set forth herein and Purchaser has not relied on any representations, warranties, undertakings or agreements not set forth herein.

[Signatures appear on the following page]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

		PURCHASER: Checkpoint Systems, Inc.
		By:	/s/ John R Van Zile
		OWNERS:
			/s/ Lau Shun Keung
			Lau Shun Keung aka John Lau, individually
			/s/ Howard J Kurdin
			Howard J. Kurdin, individually
	/		/s/ Lau Wing Ting
			Lau Wing Ting aka Shirley Lau, individually
		SHORE TO SHORE, INC. (“STS INC.”)
		By:	/s/ Howard J Kurdin
			Name:
			Title:
		J&F INTERNATIONAL LTD. (HK) (“J&F”)
		By:	/s/ Lau Shun Keung
			Name:
			Title:
		SHANGHAI WH PRINTING CO. LTD
		By:	/s/
			Name:
			Title:
		WING HUNG DONGGUAN PRINTING CO., LTD.
		By:	/s/
			Name:
			Title:
WING HUNG PRINTING CO., LTD.		ALPHA PRINT (CHINA) TRADING CO., LTD.
By:	/s/ Howard J Kurdin	By:	/s/ Lau Wing Ting
	Name:		Name:
	Title:		Title:

SCHEDULES

[to be listed]

APPENDIX I

Defined Terms

Each of the following terms as used in the Agreement is defined in the Section set forth opposite such term or as otherwise described or defined; provided, however, not every defined term included in the Agreement is listed below.

“2010 EBITDA” shall have the meaning set forth in Section 1.05(a)(iii) of this Agreement.

“Acquired Equity”shall have the meaning set forth in Section 1.01(b)(iii).

“Adjusted Purchase Price” shall have the meaning set forth in Section 1.03 of this Agreement.

“Affiliate”shall mean, as to any Person, any other Person which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person.

“Agency Commitment” means a distribution, dealer or sales agency agreement, arrangement or commitment.

“Agreement” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Assumed Contracts”shall have the meaning set forth in Section 1.01(b)(v)(A)(ii) of this Agreement.

“Assumed Liabilities” shall have the meaning set forth in Section 1.01(b)(v)(A)(i) of this Agreement.

“Assumed Obligations” shall have the meaning set forth in Section 1.01(b)(v)(A) of this Agreement.

“Business Day(s)” shall mean any day other than: (a) Saturday or Sunday; or (b) any other day on which banks in the State of Pennsylvania, U.S.A. are permitted or required to be closed.

“Buyer Local Entity” shall have the meaning set forth in Section 1.01(a) of this Agreement.

“Cap” shall have the meaning set forth in Section 1.06(b)(i)(B) of this Agreement.

“Checkpoint” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Chinese Asset Transfer Agreements” shall have the meaning set forth in Section 1.02(e) of this Agreement.

“Claim(s)” shall mean any suit, claim, action, arbitration, proceeding or investigation, notice of potential responsibility or violation, demand letters, requests for information, actions, litigation, proceedings or investigations (including, without limitation, any of such which have been initiated by private parties), pending or threatened, from third party, administrative, governmental or judicial entity.

“Closing” shall mean the time of the closing of the transactions contemplated by this Agreement and the Local Purchase Agreements.

“Closing Date” means May 16, 2011.

“Closing Date Balance Sheet” shall have the meaning set forth in Section 1.03 of this Agreement.

“Closing Date Purchase Payment” shall have the meaning set forth in Section 1.02(a) of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time.

“Completion of the Wing Hung Production Centre Transfer” shall have the meaning set forth in Section 1.05(a)(vi) of this Agreement.

“Contingent Additional Purchase Price Payments” shall have the meaning set forth in Section 1.02(a).

“Contingent Payment Escrowed Funds” shall have the meaning set forth in Section 1.04(a)(iii) of this Agreement.

“Continuing Employees” shall have the meaning set forth in Section 2.03(a).

“Consulting Agreement” shall have the meaning set forth in Section 3.01(j) of this Agreement.

“Contracts” shall mean contracts and purchase orders, including without limitation, maintenance and service agreements, purchase commitments for raw materials, goods and other services, advertising and promotional agreements, licenses, leases, instruments, employment agreements.

“EBITDA” shall have the meaning set forth in Section 1.05(a)(i)(A) of this Agreement.

“EBITDA Adjustment Statement” shall have the meaning set forth in Section 1.05(a)(vi) of this Agreement.

“EBITDA Payment” shall have the meaning set forth in Section 1.05(a)(iii) of this Agreement.

“EBITDA Target” shall have the meaning set forth in Section 1.05(a)(i)(B) of this Agreement.

“Effective Time” shall have the meaning set forth in Section 1.01(b)(ii) of this Agreement.

“Employee(s)” means the persons employed by any Owner or, when used in connection with the Seller Local Entities, the persons employed by the Seller Local Entities.

“Environmental Laws” means any and all Laws in effect at the relevant times to which Owners or its predecessors is or may be subject in relation to the assets and/or operations of Owners in any jurisdiction with regard to the pollution or protection of the natural environment or harm to or the protection of human health. Environmental Laws shall include, without limitation, and to the extent governed by the Laws of the United States of America, each of the following: (A) the Federal Comprehensive Environmental Response Compensation and Liability Act; (B) the Superfund Amendments and Reauthorization Act; (C) the Federal Water Pollution Control Act; (D) the Federal Clean Air Act; (E) the Federal Resource Conservation and Recovery Act; (F) the Hazardous and Solid Waste Amendments to RCRA; (G) the Federal Solid Waste Disposal Act; (H) the Federal Toxic Substances Control Act; (I) the Federal Insecticide, Fungicide and Rodenticide Act; and (J) any and all Laws relating to public and workers’ health and safety, including without limitation the Occupational Safety and Health Act of 1970, as amended, emissions, regulation of chemical substances or products, emissions, discharges or releases of any Hazardous Substances or Hazardous Wastes into the natural environment or otherwise relating to the manufacture, processing, use, treatment, storage and warehousing, distribution, sale, import or export, disposal, transport or handling of Hazardous Substances or Hazardous Wastes.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Escrow Agent” shall have the meaning set forth in Section 1.04(a)(i) of this Agreement.

“Escrow Agreement” shall have the meaning set forth in Section 1.04(a) of this Agreement.

“Escrow Term” shall mean the period extending eighteen (18) months from the Closing Date.

“Escrowed Funds” shall have the meaning set forth in Section 1.04(a)(i)(B) of this Agreement.

“Excluded Assets” shall have the meaning set forth in Section 1.01(b)(iv)(E) of this Agreement.

“Excluded Liabilities” shall have the meaning set forth in Section 1.01(b)(v)(B) of this Agreement.

“Financial Statements” means the Financial Statements of Owners as and for the periods December 31, 2008, December 31, 2009 and December 31, 2010, individually and collectively.

“GAAP” means generally accepted accounting principles in the United States of America, as established from time to time.

“General Escrowed Funds” shall have the meaning set forth in Section 1.04(a)(i)(A) of this Agreement.

“Global Business” shall have the meaning set forth in the first “Whereas” clause of this Agreement.

“Global Business Exclusions” shall have the meaning set forth in the second “Whereas” clause and Section 1.01(b)(iv)(E) of this Agreement.

“Governmental Authority or Governmental Authorities” shall mean any federal, state or local or foreign government, any political subdivision or municipal corporation thereof or any court, administrative or regulatory agency, department, instrumentality, body or commission or other governmental authority or agency, domestic or foreign.

“Hazardous Substances” and “Hazardous Wastes” means any and all pollutants, minerals, metals, materials, contaminants, chemicals or industrial substances, radioactive substances, dangerous or toxic substances, hazardous materials, hazardous substances or hazardous wastes as such terms are defined pursuant to or within the Environmental Laws.

“Independent Accountant” shall have the meaning set forth in Section 1.03(c)(ii)(A) of this Agreement.

“Improper Claim” means a claim for which indemnification is not provided for pursuant to the terms of this Agreement.

“Indemnified Party” means, in the event of an Inter-Party Claim, the party seeking indemnification.

“Indemnifying Party” means, in the event of an Inter-Party Claim, the party from whom indemnification is sought.

“Inter-company Payable” with respect to an Acquired Entity, means any debt of such Seller Acquired Entity owed to any of the Owners or any Affiliate of any of the Owners, including, without limitation, any account payable of such Acquired Entity which is payable to any of the Owners or Affiliates of the any of the Owners or any other amount due to any of the Owners or Affiliates of any of the Owners by such Acquired Entity.

“Inter-company Receivable” with respect to an Acquired Entity, means any debt of any of the Owners or Affiliate of any of the Owners owed to such Acquired Entity, including, without limitation, any account receivable of such Acquired Entity related to amounts owed by any of the Owners or Affiliates of the any of the Owners to such Acquired Entity or any other amount due to such Acquired Entity by any of the Owners or Affiliates of any of the Owners.

“Inter-Party Claim” shall have the meaning set forth in Section 1.06(d) of this Agreement.

“IRS” means the Internal Revenue Service.

“Knowledge” shall mean (i) when used in connection with Owners, the actual knowledge of John Lau, Howard Kurdin, Edwin Wong and Katherine Li and the knowledge that such individuals should have had if they had performed their normal duties on behalf of Owners in a reasonably prudent manner; and (ii) when used in connection with Purchasers, the actual knowledge of the executive officers of Purchasers and the knowledge that such individuals should have had if they had performed their normal duties on behalf of the Purchasers in a reasonably prudent manner.

“Law(s)” means all federal, state, local and foreign statutes, ordinances, Regulations, rules, codes, executive orders, decrees, writs, judgments, injunctions.

“Leases” means all leases entered into by Owners that currently exist for the lease of any real property by Owners.

“Leased Real Property” means all real property leased by Owners, whether as landlord or tenant.

“Liens” means any and all pledges, mortgages, liens, charges, encumbrances, security interests, options, conditional sales and/or other types of title retention arrangements, claims, restrictions, leases, options, rights of first offer or first refusal, confidentiality or secrecy agreements, noncompetition agreements, defects in title and other encumbrances or rights of others whether perfected or otherwise.

“Local Purchase Agreements” shall have the meaning set forth in the second “Whereas” clause of this Agreement.

“Local Entity Debt” shall mean (i) interest bearing debt including inter alia Seller Local Entity or Acquired Entity bank debt, bank loans, and lines of credit, (ii) any transfer, excise, sales or other similar taxes triggered by the transactions contemplated hereunder, (iii) any unfunded obligations under any defined benefit pension plans, and (iv) interest accrued and unpaid as of the Closing Date, if any, with respect to items (i) through (iii) above.

“Loss” or “Losses” shall have the meaning set forth in Section 1.06(e) of this Agreement.

“Material Adverse Effect” means an occurrence, change, event or circumstance that has, or may reasonably likely have a material adverse effect on the business, assets, financial condition, results of operations or cash flows of Owners taken as a whole, other than as a result of changes generally adversely affecting the economic environment in which the Owners and their Subsidiaries do business, or changes as a result of the execution by Owners of this Agreement or any related agreements and completion of the transactions.

“Material Contract” means Contracts of Owners which:

(a)with respect to customers thereof, guarantees any obligations of, or lends money to, such customers;

(b)provides for non-cancelable future payments by Owners thereunder of more than One Hundred Thousand Dollars ($100,000) per year;

(c)is a commitment for capital expenditures of more than Twenty-Five Thousand Dollars ($25,000);

(d)is an Agency Commitment;

(e)is a guarantee of third party obligations;

(f)is a commitment for the sale of any material assets, except as made in the ordinary course of the Global Business consistent with past practice;

(g)restricts the kinds of businesses or activities in which Owners may engage or the geographical area in which Owners may conduct business;

(h)is an indenture, mortgage, loan agreement or other commitment for the borrowing of money or a line of credit;

(i)is a license (whether as licensor or licensee) or similar agreement permitting the use of any Proprietary Rights;

(j)is a broker or finder’s agreement;

(k)constitute a Joint Venture;

(l)is a stock purchase agreement, asset purchase agreement or other acquisition or divestiture agreement for a third-party business acquisition for which the subject transaction remains to be completed pursuant to which any Owner has continuing material obligations or rights; or

(m)is an employment or consulting agreement with any current or former Employee or consultant of any Owner pursuant to which any Owner has continuing material obligations or rights.

“Non-Tendering Party” means, in the event of a Third-Party Claim, the party from whom indemnification is sought.

“Notice of Objection” shall have the meaning set forth in Section 1.03(d)(ii) of this Agreement.

“Order(s)” shall mean any order, judgment, award, writ, injunction or other ruling of any court, administrative or Governmental Authority.

“Owned Real Property” shall mean the real property owned by any Owner or by any of the Subsidiaries, together with all buildings and other structures, facilities or improvements, currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property of the any Owner or any of the Subsidiaries attached thereto and all easements, licenses, rights and appurtenances related to the foregoing.

“Owners” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Owners’ Basket” shall have the meaning set forth in Section 1.06(b)(i)(A) of this Agreement.

“Permit(s)” means all material franchises, permits, licenses certificates, approvals and other authorizations from all persons and entities, including all Governmental Authorities.

“Permitted Liens” means (a) Liens for current taxes and assessments not yet due and payable, (b) Liens as reflected in title or other public records relating to the Owned Real Property, (c) Liens that would be disclosed by an accurate survey, (d) Liens arising or created by municipal and zoning ordinances, (e) Liens that do not materially detract from the value, or impair in any material manner the use, of the properties or assets subject thereto and (g) those Liens set forth in Schedule [___].

“Post-Closing Transfers/Actions” shall have the meaning set forth in Section 1.04(a)(i)(C) of this Agreement.

“Prepayment Penalties” shall mean any prepayment penalties incurred as a result of the payment of Local Entity Debt at Closing.

“Production Centre Funds” shall have the meaning set forth in Section 1.04(a)(i)(B) of this Agreement.

“Proper Claim” means a claim for which indemnification is provided pursuant to the terms of this Agreement.

“Purchase Agreements” shall have the meaning set forth in the second “Whereas” clause of this Agreement.

“Purchase Price” shall have the meaning set forth in Section 1.02(a) of this Agreement.

“Purchased Assets” shall have the meaning set forth in Section 1.01(b)(i) of this Agreement.

“Purchasers” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Purchasers’ Indemnitees” means Purchasers, and their respective directors, officers, employees, subsidiaries, affiliates and their respective successors, assigns and heirs, as applicable.

“Real Property” means collectively the Owned Real Property and the Leased Real Property.

“Regulations” shall mean and include proposed, temporary and final regulations promulgated under the Code as of the Closing Date and corresponding sections of any regulations subsequently issued that amend or supersede such regulations.

“Retained Employees” shall have the meaning set forth in Section 2.03(a).

“Review Period” shall have the meaning set forth in Section 1.03(d) of this Agreement.

“Seller Local Entity” shall have the meaning set forth in Section 1.01(a) of this Agreement.

“Shanghai Printing” means Shanghai WH Printing Co., Ltd., a company organized and existing under the laws of the Peoples Republic of China.

“Sri Lanka Bank Debt” shall have the meaning set forth in Section 1.02(b) of this Agreement.

“STS Sri Lanka” means Shore to Shore (Private) Limited, a Sri Lanka private company.

“Subsidiaries” means (i) STS Sri Lanka, (ii) Shore to Shore Lacar, Limitada S.A., a Guatemala sociedad anonima, (iii) Shore to Shore Merchandise Identification Systems Private Ltd, an Indian private limited company and any other entities to be transferred to Checkpoint in order to transfer the Global Business as contemplated hereunder.

“Survival Period” shall have the meaning set forth in Section 4.01(a) of this Agreement.

“Tax” and “Taxes” shall mean income taxes (whether federal, provincial, state, local or foreign or other taxes on or measured by income, gross receipts, profits or occupations), franchise taxes, excise taxes, employment taxes, unemployment taxes, payroll taxes, withheld taxes from Employee compensation, employer taxes, sales and use taxes, real property taxes, personal property taxes (including any liability for personal property taxes accruing, arising or in any way resulting from or determined with respect to or in any way relating to or referenced by any period prior to the date hereof), transfer taxes, ad valorem taxes, value added taxes, taxes levied on assets, per capita taxes, head taxes, and any other tax or taxes imposed, whether or not assessed, by any federal, provincial, state, municipal, local or other governmental agency, foreign or domestic, including assessments in the nature of taxes, as well as interest and penalties on any of the foregoing of Owners relating to a period ending on or prior to the date hereof.

“Tax Authority” means any federal, state, local or foreign government, any administrative agency, department, instrumentality, body or commission thereof empowered or authorized to enforce, interpret or administer any Tax.

“Tax Return(s)” means any return, report, declaration, document or election (including any schedules thereto) required or permitted to be provided to any Governmental Authority in any way resulting from or relating to any type of Tax.

“Tendering Party” means, in the event of a Third Party Claim, the party seeking indemnification.

“Third Party Claim” shall have the meaning set forth in Section 1.06(d) of this Agreement.

“Transition Services Agreement” shall have the meaning set forth in Section 3.01(i) of this Agreement.

“WHPC/O EBITDA Report” shall have the meaning set forth in Section 1.05(a)(iv) of this Agreement.

“Wing Hung Printing” means Wing Hung (Dongguan) Printing Co., Ltd., a company registered and existing under the laws of the Peoples Republic of China.

“Wing Hung Production Centre/Office” means that portion of the business of Wing Hung Printing and Shanghai Printing to be transferred to Purchasers as part of the Global Business as contemplated by this Agreement and under the Chinese Asset Transfer Agreements.

EXHIBIT 1.01(E)(I)

General Representations and Warranties

1.01           Authority; Enforceability; Noncontravention.

(a)Owners have the requisite corporate or company power, capacity and legal authority to execute, deliver and perform under this Agreement and the documents and agreements furnished hereunder.

(b)The execution and delivery of this Agreement and the documents and agreements furnished or caused to be furnished hereunder by Owners, and the performance by Owners of the transactions contemplated herein have been duly authorized by all necessary action on the part of Owners (if such action is necessary as to any Owner because such Owner is an entity). No further action on the part of Owners is or will be necessary to make this Agreement and such other documents or agreements valid and binding on each of them and enforceable against each of them in accordance with their terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

(c)Owners’ execution, delivery and performance of this Agreement and the documents contemplated hereby, and the consummation of the transactions contemplated herein and therein, do not and will not (as the case may be), with the passing of time or the giving of notice or both:

(i)result in a violation or breach of any provision of or constitute a default under the Certificate of Incorporation or Bylaws (or the equivalent thereof) (as amended) of a Seller Local Entity or any other of its charter documents, or of any resolution of the stockholders or directors of a Seller Local Entity;

(ii)except with respect to obligations which shall be satisfied at the Closing, and subject to the obtaining of any consents listed on the schedules to the Local Purchase Agreements, conflict with, violate or result in a breach, acceleration or termination of any provisions, or constitute a default, under any term or provision of any stockholders’ agreement, indenture or other trust document, loan agreement, promissory note, credit agreement, security agreement, lease, license, deed of trust, order, arbitration award, contract, lien, instrument, other agreement, or to the Knowledge of Owners, any Law, in either case to which a Seller Local Entity is a party or by which a Seller Local Entity is otherwise subject or bound; and

(iii)violate or conflict with any other restrictions of transfer of any kind or nature with respect to the Purchased Assets nor result in the creation of any lien other than Permitted Liens on any Purchased Assets.

1.02           Organization, Capital Structure and Standing of Owners.

(a)Organization. The Owners in the forms of entities in the jurisdiction where formed, as listed on schedules to the Local Purchase Agreements are each duly organized, validly existing and in good standing (or if an LLC, as full force and effect) under the laws of the jurisdictions specified on schedules to the Local Purchase Agreements. Each Seller Local Entity has all requisite corporate (or company) power and authority to own, lease, hold and operate its assets and properties and to conduct its business as and where now owned, leased, held, operated and/or conducted, as the case may be, and to hold all Permits necessary or required therefore.

(b)Qualification to Conduct Business. Each Seller Local Entity is duly qualified to do business as a foreign corporation and is in good standing in all jurisdictions where the character of its activities or the location of the properties owned or leased by it requires such qualification or registration, except where the failure to be qualified or registered would not have a Material Adverse Effect or can be cured solely by qualifying in such jurisdiction along with the associated filing fee. The schedules to the Local Purchase Agreements set forth a true and complete list of all jurisdictions (foreign and domestic) in which each Seller Local Entity is presently licensed or qualified to conduct business.

1.03           Charter and Bylaws. The copies of the Charter/Certificate of Incorporation/Articles of Incorporation and the Bylaws (or the equivalent thereof) of each Seller Local Entity, which have been provided to Purchasers are:

(c)true and complete copies of such documents;

(d)include all amendments thereto; and

(e)are in full force and effect.

1.04           Consents and Approvals. Except as set forth on schedules to the Local Purchase Agreements, no consent, approval or authorization of or except where the failure to obtain a consent, authorization or approval would not have a Material Adverse Effect on any third party with respect to any written Contract is required in connection with the execution and delivery by Owners of this Agreement and/or the consummation by Owners of the transactions contemplated hereby.

1.05           Books and Accounts. The books, records and accounts of Owners and their respective Subsidiaries maintained with respect to the Global Business accurately and fairly reflect, in reasonable detail, the transactions and the assets and liabilities of the Global Business. Neither Owners nor any Subsidiary has engaged in any transaction with respect to the Global Business, maintained any bank account or used any of its funds in the conduct of the Global Business except for transactions, bank accounts and funds which have been and are reflected in the books and records of Owners relating to the Global Business maintained on a basis consistent with past practices.

1.06           Financial Statements.

(a)Financial Statements. Copies of the financial statements for the Owners for the years ended December 31, 2008 through December 31, 2010 (collectively the “Annual Financial Statements”) are attached to each Local Purchase Agreement sometimes collectively referred to herein as the “Financial Statements”).

(b)Exceptions to GAAP. Except as disclosed in the Financial Statements, as of their respective dates, the Financial Statements fairly present in all material respects, the financial position and results of operations of the Owners as of the dates and for the periods covered thereby.

(c)Backlog. Attached to the schedules of the Local Purchase Agreements are true and correct copies of the backlog/open order reports of the Global Business as of a date agreed to therein.

1.07           Indebtedness Relating to Stockholders, Employees and Directors. Owners are not indebted to any of its stockholders, Employees or directors of Owners (or to members of their immediate families) in any amount whatsoever which will not be satisfied at Closing, other than for salaries incurred on behalf of Owners in the ordinary course of business and consistent with past practices. No stockholder, Employee or director of Owners (nor members of their immediate families) is indebted to Owners in any amount whatsoever which will not be satisfied at Closing.

1.08           Distributors, Sales Representatives and Agents. Attached to the schedules to the Local Purchase Agreements are complete and accurate lists of all distributors, third party sales representatives and sales agents, and business finders used by a Seller Local Entity, identifying the relevant entity with which such relationship exists. No applicable Seller Local Entity is in material breach of any such distribution, sales representative, sales agent or business finder agreements. Owners have not duplicated the award of exclusive rights to different persons or entities within the same territory.

1.09           Transactions with Related Parties. Except as set forth in the schedules to the Local Purchase Agreements neither Owners nor any of their directors, officers or Employees, or any member of his or her immediate family, or any corporation, trust, partnership or other entity in which any of the foregoing has an interest (excluding an interest of less than 3% of a publicly-traded company), is or was during the past three (3) years, a party to any contract, agreement, understanding or business relationship of any nature with Owners or any Subsidiary.

1.10           No Undisclosed Liabilities. Owners and/or the Subsidiaries are not obligated for, nor are any of its assets or properties subject to, any liabilities, absolute or contingent, of the nature required to be reflected in, reserved for or otherwise disclosed in the Financial Statements except for current liabilities incurred in the ordinary course of business since the date of the Interim Financial Statements or liabilities which will be satisfied by Owners at Closing.

1.11           Absence of Certain Changes or Events. Except as set forth on the schedules to the Local Purchase Agreements, since September 30, 2010, the Global Business has been operated in the ordinary course of the Global Business consistent with past practices and no occurrences, changes, events or circumstances have occurred that would cause a Material Adverse Effect on the Global Business or the Purchased Assets which are not reflected on the unaudited financial statements provided to Purchasers. Specifically, and without limitation as to the generality of the foregoing, since September 30, 2010 neither Owners or, as applicable, a Subsidiary has not:

(a)incurred any liabilities or obligations in excess of One Hundred Thousand Dollars ($100,000.00) except liabilities or obligations incurred in the usual and ordinary course of the Global Business consistent with past practices;

(b)sold, leased or otherwise transferred, or contracted to sell, lease or otherwise transfer, any of the Purchased Assets, or mortgaged, pledged or subjected any of the Purchased Assets to any Lien, except:

(i)sales of inventory in the ordinary course of business consistent with past practices; and

(ii)payments on account of accounts payable incurred in the usual and ordinary course of business consistent with past practices;

(c)made any change in, taken any steps to implement any change in, or made any arrangement for the payment of any additional or increased, wages, salaries, compensation, pension or other benefits payable to any director, officer, Employee, agent or sales representative or paid any severance or termination pay to, or became obligated to pay any severance or termination pay to, any director, officer, Employee, agent or representative, except where any of the same were in the ordinary course of Global Business, in accordance with past practices;

(d)suffered any damage, destruction or casualty loss to any assets whether by fire, accident, labor disturbance or otherwise, whether or not insured, in excess of One Hundred Thousand Dollars ($100,000);

(e)committed any event of default under, terminated or amended or revised any Material Contract with any of its customers and/or suppliers, nor have any such customers and/or suppliers terminated or amended or revised any Material Contract;

(f)cancelled any debts or claims related to the Global Business, or waived any rights of value, except for such claims that are not in the aggregate material and which were incurred in the ordinary course of the Global Business consistent with past practices;

(g)made any commitments or incurred any liabilities or obligations for capital expenditures in excess of One Hundred Thousand Dollars ($100,000), all of which capital expenditures committed to or incurred are set forth on the schedules to the Local Purchase Agreements;

(h)incurred, became a party to or became subject to, any agreement, contract or commitment requiring an expenditure by Owners for the purchase of raw materials or other finished goods inventory, in each case and other than in the ordinary course of the Global Business consistent with past practices;

(i)made any loan or advance to any supplier, vendor, stockholder, officer, director or Employee of any Owner, or members of the immediate family of any stockholder, officer, director or Employee of any Owner that will not be satisfied at Closing;

(j)entered into any sale, license, assignment or transfer of any patents, trademarks, trade names or other similar intangible assets, or disposed of or permitted or caused the lapse of any rights in, to or for the use of any patent, trademark, trade name or copyright;

(k)made any commitment (through negotiations or otherwise) or incurred any liability to any labor organization, or suffered any labor related work stoppage or interruption or strike;

(l)instituted any new bonus, stock option, profit-sharing, pension, deferred compensation plan or similar arrangement or made any material changes in any such existing plans;

(m)suffered any material adverse change in collection loss experience;

(n)made any change in accounting principles or practices, eliminated any reserves established on any Owners’ books or changed the method of accrual pertaining to any reserves which would justify their elimination;

(o)suffered any change in the financial condition, assets, liabilities, business or operations, which alone or in the aggregate would have a Material Adverse Effect;

(p)authorized for issuance, issued, delivered or sold any equity securities of Owners, or altered the terms of any outstanding securities issued by Owners; or

(q)entered into any commitment or agreement to do any of the forgoing.

1.12           Litigation/Governmental Orders. Except as set forth on the schedules to the Local Purchase Agreements, to Owners’ Knowledge there are no Claims before any Governmental Authority pending or threatened against a Seller Local Entity, or any Seller Local Entity’s assets. To Owners’ Knowledge, Owners are not bound by, subject to, or in default under, any Order or other ruling of any Governmental Authority.

1.13           Bankruptcy. No proceedings, whether voluntary or involuntary, are pending or threatened to Owners’ Knowledge against any Seller Local Entity nor is any Seller Local Entity contemplating any such proceedings, under the bankruptcy Laws and/or receivership or similar Laws of the United States, or any State thereof, or of any other country or jurisdiction.

1.14           Compliance with Laws.

(a)Operations; No Investigations. To Owners’ Knowledge, each Seller Local Entity has materially complied with and is in material compliance with all Laws applicable to its Global Business, operations and assets. There is no pending, or to the Knowledge of Owners, threatened, investigation by any Governmental Authority with regard to the operations of the Sellers Local Entity.

(b)Permits. Each Seller Local Entity is and has been:

(i)duly licensed and possesses all material Permits for its Global Business from all persons and entities, including all Governmental Authorities under all applicable Laws that are necessary to permit it to engage in the Global Business and to own and operate its assets in all applicable jurisdictions; and

(ii)in compliance with all such Permits.

To Owners’ Knowledge, all such Permits are valid, in full force and effect. All other material reports, informational returns and updates which any Seller Local Entity is required to file under any applicable Laws with regard to the foregoing have been filed in a timely manner and all fees relating to the same have been paid. No action, proceeding or investigation contemplating the revocation or suspension of any Permit is pending, or to Owners’ Knowledge, threatened.

1.15           Taxes.

(a)Tax Returns; Payment of Taxes. Each Seller Local Entity has:

(i)timely filed all Tax Returns required to be filed by it in any jurisdiction to which it is or has been subject;

(ii)timely paid in full Taxes due and to Owners’ Knowledge, all Taxes claimed to be due by each such jurisdiction, which are not being contested in good faith by such Seller Local Entity; and

(iii)made timely withholdings and timely payments of any Taxes required to be deducted and withheld from the wages or other amounts paid to Employees or to others.

All Tax Returns filed by Owners correctly reflect in all material respects the matters required to be reported therein and have not been amended except as set forth on the schedules to the Local Purchase Agreements. There are no audits, controversies or claims by any taxing authorities pending or, to Owners’ Knowledge, threatened against Owners, the Global Business and the Purchased Assets. There are no tax liens (other than any lien for current taxes not yet due and payable) on any of the Purchased Assets or the Global Business.

(b)Audits. There are no outstanding agreements or waivers (by operation of law or otherwise) extending the statutory period of limitations applicable to any Tax Return of any Seller Local Entity for any period. Except as set forth on the schedules to the Local Purchase Agreements, no Tax Authority has audited any Seller Local Entity.

(c)Returns. Owners have provided to Purchaser complete copies of each Owners’ federal and state income Tax Returns as filed (together with any amended Tax Returns or refund claims) for each taxable period beginning on and after January 1, 2007. Each Seller Local Entity has provided to Purchaser complete copies of each Owners’ sales and use, personal property and payroll tax filings (together with any amended Tax Returns or refund claims) for each taxable period beginning on and after January 1, 2007.

1.16           Environmental.

(a)Environmental Permits. Each Seller Local Entity has in full force and effect all governmental Permits, authorizations or approvals that are necessary or required for the operation of its business pursuant to any and all Environmental Laws. Each Seller Local Entity has made timely application for renewal of such Permits where necessary. To Owners’ Knowledge, no proceeding is pending or threatened to revoke, suspend and/or limit any such Permits, authorizations or approvals. Each Seller Local Entity has made available to Purchasers for its review such Permits, authorizations and approvals.

(b)Operational Compliance. Except as set forth on the schedules to the Local Purchase Agreements, Owners are in material compliance with all applicable Environmental Laws and Regulations and has not been notified by any regulatory authority that any Seller Local Entity was, may be or is in violation of or has liability or potential liability under the Environmental Laws. Owners have provided to Purchasers true and complete copies of all inspection reports, letters, stop orders and communications issued or released by any environmental agency relating to the Global Business which have been received by a Seller Local Entity, or sent or issued by any such agency within the past three (3) years.

(c)Records. Except as set forth on the schedules to the Local Purchase Agreements, each Seller Local Entity has timely filed and currently maintains all material, data, reports, documentation and records required under the Environmental Laws.

(d)Manufacturing, Distribution Facilities. Except as set forth on the schedules to the Local Purchase Agreements, Owners do not own, lease, operate or otherwise use, nor have Owners owned, leased, operated or otherwise used, any distribution facility or manufacturing plant.

(e)Disposal of Hazardous Wastes. To Owners’ Knowledge, Owners have not caused or permitted any of their assets or properties to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Substances and/or Hazardous Wastes, except in material compliance with the Environmental Laws. To Owners’ Knowledge, Owners have not caused or permitted the release or discharge of any Hazardous Substances and/or Hazardous Wastes into the environment except in material compliance with the Environmental Laws.

(f)Claims. To Owners’ Knowledge and except as set forth on the schedules to the Local Purchase Agreements, there are no Claims pending or threatened by any administrative, governmental or judicial agency, arising out of, in connection with or resulting from a violation or alleged violation of, or related to, the Environmental Laws.

1.17           Brokers. No broker, finder, financial adviser, agent or other person has acted directly or indirectly for any Owner in connection with the negotiations, this Agreement or the transactions contemplated hereby who is or will become entitled to any fee, commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of any Owner.

1.8           Insurance. The schedules to the Local Purchase Agreements contain a correct and complete list of all insurance policies, binders and surety bonds in force in which a Seller Local Entity is named as an insured party or beneficiary as a loss payable payee which covers the Global Business or Purchased Assets and any life insurance for which a Seller Local Entity has paid or contributed to the payment of any premiums and/or is designated as the beneficiary. The name(s) of each insurer, insured party and beneficiary and the type and amount of coverage, deductible amounts, if any, as well as the expiration date(s) and the premium amount(s) of each such policy or bond are set forth on the schedules to the Local Purchase Agreements. All such policies and/or bonds are currently in full force and effect and Owners have not received any notice of cancellations with respect to any of the policies. All premiums due and payable on such policies and/or bonds have been paid. To Owners’ Knowledge each Seller Local Entity has timely served proper notices of claims and all other notices required to be served under such insurance policies (including any notices of circumstances under any insurance policies) upon each insurance company issuing any of such insurance policies regarding any event, happening, set of circumstances, claim, threat or fact related to its business and/or its assets. There are no pending claims against such insurance policies by a Seller Local Entity as to which the insurers have denied coverage and/or liability.

1.19           Disclosure. To Owners’ Knowledge, no representation or warranty of Owners contained in this Agreement, and no statements contained herein or in any Schedule, exhibit, agreement or other document that is appended to and made a part of this Agreement, contains any untrue statement of fact, or omits to state a fact which is necessary in order to make the statements contained herein or therein in light of the circumstances under which they were made not misleading.

Exhibit 1.01(e)(ii)

Tangible Assets

Title to and Sufficiency of Purchased Tangible Assets (other than Owned Real Property).

(a)Title to Assets. Owners have good title to all of the Purchased Assets, which are used in the operation of Owners’ Global Business. Except as set forth on the schedules to the Local Purchase Agreements, all Purchased Assets are free and clear of Liens as well as any other claims, demands, options, rights, privileges, or restrictions of any third party other than Permitted Liens.

(b)Condition of Owners’ Assets. All of the Purchased Assets are in Owners’ possession or under its control, as applicable, and have been maintained in good operating or working condition and repair, reasonable wear and tear excepted and taking into consideration the need for routine repairs and asset obsolescence required to be made in ordinary course of business, and are usable in the ordinary course of business. Owners enjoy peaceful and quiet possession in all material respects of all of the Purchased Assets.

Exhibit 1.01(e)(iii)

Contracts

Contracts.

(a)Owners’ Contracts. Owners have provided to Purchasers a true and complete copy of all Material Contracts. All Material Contracts are valid, subsisting and enforceable in accordance with their terms, and are in full force and effect. Owners have no material oral Contracts. Except as reflected in the schedules to the Local Purchase Agreements, neither Owners, nor, to the Owners’ Knowledge, any third party is in default (i.e. an uncured material breach) in any respect under the terms of any of the Material Contracts. Except as reflected in the schedules to the Local Purchase Agreements, there exists no event or condition which, with the giving of notice, the lapse of time, or both, would (A) become a default under any Material Contracts on the part of Owners, (B) to Owners’ Knowledge, on the part of any other party thereto, give any person the right to declare a default or exercise any remedy under any Material Contract, (C) to Owners’ Knowledge, give any person the right to accelerate the maturity or performance of any Material Contract or (D) to Owners’ Knowledge terminate or modify any Material Contract. Except as disclosed in the schedules to the Local Purchase Agreements, Owners have not received any written notice from any party to any of the Material Contracts having proposed or threatened to terminate their contractual arrangements with Owners due to breach or violation of the terms thereof or prior to the scheduled expiration thereof. Each of the Material Contracts were entered into by Owners in the ordinary course of the Global Business and Owners have not waived, or agreed to waive, any material right or material rights under any of the same. None of Owners’ interests under any of its Material Contracts are encumbered or subject to any term, condition or restriction except as stated in the applicable Material Contract, or as provided by Law.

Exhibit 1.01(e)(iv)

Accounts Receivable/Inventory/Products/Relationships

(a)Accounts Receivable. Owners have delivered to Purchasers an aging schedule of all accounts receivable for Global Business as of a date two (2) days prior to the date hereof. All accounts, accounts receivable, notes and notes receivable reflected on such aging schedule arose from bona fide transactions in the ordinary course of business, are collectible in full (net of any applicable reserve set forth on the (Closing Date Balance Sheet (“Net Accounts Receivable”)) within ninety (90) days following Closing and are not subject to any defenses, set-offs, or counterclaims.

(b)Inventory; Goods. Owners’ Inventory, packaging materials, work in process and finished goods consist of items that are of a quality usable and, in case of finished goods inventory, salable in the ordinary course of business.

(c)Products.

(i)Compliance With Laws. The products sold by each Seller Local Entity materially conform to and meet or exceed the standards required by all applicable Laws.

(ii)Warranties. The schedules to the Local Purchase Agreements contain:

(A)a description of all warranty claims made in the past three (3) years and, to the Knowledge of Owners, pending;

(B)copies or explanations of any warranties contained in outstanding agreements, contracts or proposals that depart from the standard warranties and practices of a Seller Local Entity; and

(C)a description of any recurring warranty problems.

(iii)Except as may be listed on the schedules to the Local Purchase Agreements, no claims of customers or others based on an alleged or admitted defect of material, workmanship or design or otherwise in or in respect of any of the products of a Seller Local Entity are presently pending.

(iv)Recalls. The schedules to the Local Purchase Agreements identify all product recalls (whether voluntary, required by customer or pursuant to any Governmental Authority) by Owners since January 1, 2008.

(d)Satisfactory Relationships. Since June 30, 2010, Owners have received no notice from any material customers or material suppliers that any such parties have proposed or threatened to terminate or significantly curtail their historic activity levels with Owners. Owners are not required, in the ordinary course of its business, to provide any surety bonding nor any other financial security arrangements in connection with any transactions with any customers or suppliers.

Exhibit 1.01(e)(v)

Intellectual Property

Proprietary Rights.

(a)Proprietary Rights Defined. For purposes of this Section 1.01(e)(v), the Registered Proprietary Rights together with any other names, inventions, marks, unpatented formulas, symbols, trade secrets, technical know-how, methods, operations, logos, designs, specifications, and all other proprietary rights, documents, information and records, owned by a Seller Local Entity and/or used in the operations of the Global Business are herein collectively referred to as the “Proprietary Rights.”

(b)Registered Proprietary Rights. The schedules to the Local Purchase Agreements list all (U.S. and foreign) patents, patent applications, trade names, trademarks, service marks, copyrights and copyright applications, owned (or used by) a Seller Local Entity, that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded with any Governmental Authority or other public body (herein collectively referred to as the “Registered Proprietary Rights”).

(c)Licenses Given. The schedules to the Local Purchase Agreements list all licenses and agreements under which a Seller Local Entity has given the right to use any of the Proprietary Rights to any third party.

(d)Licenses Acquired. The schedules to the Local Purchase Agreements list all licenses and agreements under which a Seller Local Entity has the right to use any third party’s property.

(e)No Proceedings. No proceedings are pending or, to Owners’ Knowledge, threatened that challenge the validity of the ownership or use by a Seller Local Entity of the Proprietary Rights or any third party’s similar type of property.

(f)No Conflicts. Owners have no Knowledge of the infringing use of any Proprietary Rights by a Seller Local Entity or the infringement of any Seller Local Entity’s Proprietary Rights by any other person. No Seller Local Entity has received any notice of conflict with the asserted rights of others with respect to the Proprietary Rights or any third party’s similar type of property.

(g)No Conveyance of Proprietary Rights. No Seller Local Entity has sold, assigned or transferred, or entered into any agreement or any other arrangement within the past five years, to and/or with any other person, corporation, firm or entity for the ownership and/or use of Proprietary Rights used in the Global Business.

(h)Transfer of Proprietary Rights. Each Seller Local Entity is the sole and exclusive owner of all right, title and interest in and/or has valid enforceable licenses or other rights to use, the Proprietary Rights in the manner presently used by it and/or as now conducted. Subject to obtaining consents of licensors and licensees, Owners have the right to convey (either by sale or change of control with respect to the Subsidiary, as applicable) such right, title, interest and authority free and clear of all Liens, except any Permitted Liens, subject to any legal requirement that any assignment or transfer of a trademark or similar intangible property right be accompanied by the transfer of the goodwill pertaining thereto.

Exhibit 1.01(e)(vi)

Employees/Labor Relations

(a)Labor Relations. The Employees of the Seller Local Entities are solely and exclusively those indicated in the payrolls and records of such Seller Local Entity. The Employees have been duly remunerated for all services performed by them in the course of their working relationship with the applicable Seller Local Entity. No Seller Local Entity is a party to any collective bargaining agreements. There is no labor strike, dispute, slowdown or stoppage actually pending or, to the Owners’ Knowledge, threatened against any Seller Local Entity. To Owners’ Knowledge, no employment complaint or grievance exists on the date hereof as regards any Employee of a Seller Local Entity or any former Employee thereof. All vacation pay, bonuses, commissions and other employee benefit payments are reflected and have been accrued, respectively, in the Financial Statements and other books and records of the Global Business, as applicable. The terms of employment applicable and actually applied to the Employees are solely those provided by the applicable Laws and by the provisions of any applicable agreement, commitment or policy of a Seller Local Entity, including the Plans, deferred compensation plans or arrangements (as described in the schedules to the Local Purchase Agreements, and any general employment policies as reflected in its employee handbook or personnel manual). No Claim for remuneration adjustments by any Employee of a Seller Local Entity, or by the relevant trade unions, are pending. To the best of Owners’ Knowledge and except as set forth on the schedules to the Local Purchase Agreements, no executive, key employee, or group of employees has any plans to terminate employment with a Seller Local Entity prior to Closing.

(b)Benefit Plans.

(i)List of Benefit Plans. The schedules to the Local Purchase Agreements set forth a true and complete list of each and every:

(A)“employee pension benefit plan,” “employee welfare benefit plan” or “multi-employer plan,” all as defined under ERISA;

(B)profit sharing, pension, retirement, deferred compensation, bonus, stock option, stock purchase, cash or deferral arrangement, severance, health, welfare, dependent care or incentive plan or arrangement; and

(C)written plan or policy providing for “fringe benefits” to Owners’ Employees including, but not limited to, vacation, paid holidays, personal leave, medical, hospitalization, dental, life insurance, Employee discount, automobile, severance or similar programs, or educational assistance;

(individually referred to herein as a “Plan” and collectively referred to herein as the “Plans”) to which a Seller Local Entity is a party with regard to its Employees or individual consultants working for a Seller Local Entity.

(ii)List of Employees. The schedules to the Local Purchase Agreements set forth a complete list of Employees of the Seller Local Entities, as well as each Employee’s date of hire, title (or other job classification), current compensation, including base salary, bonuses (for most recent year), commissions and other benefits of any kind and participation in each of the Plans. The schedules to the Local Purchase Agreements also set forth the names of the officers of each Subsidiary as well as any compensation paid to each such officer during 2010 to the date hereof. Except as set forth on the schedules to the Local Purchase Agreements, Owners do not maintain any plans or programs providing post-retirement medical, death or other welfare benefits (other than benefits required by law).

(iii)Documentation Relating to Benefit Plans. Owners have furnished Purchaser:

(A)correct and complete copies of the most current form of each Plan and related trust agreements, including any amendments thereto;

(B)the most recent annual actuarial evaluation, if any, prepared for each Plan, in case of any defined benefit type pension plan;

(C)the most recent annual report (series 5500), if any, required under ERISA with respect to each Plan;

(D)the most recent determination letter received from the IRS, if any, for each Plan; and

(E)copies of the most current form of summary plan descriptions or summary of material modifications, Employee communications and other significant materials, handbooks, beneficiary designation forms and communications to Employees.

(iv)Benefit Plan Compliance. Except as set forth in the schedules to the Local Purchase Agreements:

(A)with respect to each Plan that is intended to be qualified under Section 401(a) of the Code, and is maintained by Owners for Employees of Owners or any of its affiliates:

(i)Owners have obtained a favorable determination letter from the IRS, and there has been no occurrence since the date of such determination letters that has adversely affected the qualified status of any such plan;

(ii)such Plan has been operated in compliance with the Code and ERISA and in accordance with the provisions of, and the rules and Regulations covering, such Plan; and

(iii)Owners are not, and to Owners’’ Knowledge, no other person is, engaged in a transaction prohibited by Section 4975 of the Code or Section 406 of ERISA which would result in a liability to any Owner;

(B)each Plan which is subject to Part III of Subtitle B of Title I or ERISA or Section 412 of the Code has been maintained in compliance with the minimum funding standards of ERISA and the Code;

(C)no reportable event, within the meaning of Section 4043 of ERISA has occurred with respect to any Plan that is subject to Title IV of ERISA, other than reportable events with respect to which notice has been waived by the Pension Benefit Guaranty Corporation (“PBGC”);

(D)Owners have not received notice of any audit or investigation with respect to any Plan by the IRS, PBGC or the Department of Labor (“DOL”);

(E)Neither any Owner nor any entity which is treated as a single employer with any Owner under Sections 414(b), (c), (m) or (o) of the Code (an “ERISA Affiliate”) has engaged in any transaction that could subject Purchaser to any liability under Section 4069 of ERISA;

(F)Neither Owners nor any ERISA Affiliate has incurred any liability under Title IV of ERISA that could become a liability of Purchaser following the Closing and no event has occurred with respect to any Plan subject to Title IV of ERISA that could result in any liability to Purchaser;

(G)All contributions required to have been made by Owners pursuant to the terms of each Plan or pursuant to ERISA, the Code or applicable law have been made within the time prescribed by such Plan and by applicable law;

(H)There are no material claims pending, or to the Owners’ Knowledge, threatened involving any Plan (other than routine claim for benefits) or any other litigation involving any Plan that could result in any liability to Purchaser;

(I)Each Plan maintained by any Owner may be amended, terminated, modified or otherwise revised by such Owner, other than benefits protected under Section 411(d) of the Code, on and after Closing, without further liability to such Owner or Purchaser (excluding ordinary administrative expenses and routine claims for benefits);

(J)The consummation of the transactions contemplated by this Agreement will not (i) entitle any current or former employee of any Owner or such Owners’ ERISA Affiliates to severance pay, unemployment compensation, accrued vacation pay, or any similar payment for which Purchaser could be liable except as otherwise expressly provided herein, (ii) accelerate the time of payment or vesting or increase the amount of any compensation to or in respect of any current or former employee of any Owner or such Owners’ ERISA Affiliates for which Purchaser could be liable, or (iii) result in or satisfy any condition to the payment of compensation to any current or former employee of any Owner or such Owners’ ERISA Affiliates for which Purchaser could be liable that would, in combination with any other payment, result in an “excess parachute payment” within the meaning of Section 280G of the Code.

(K)Each “non-qualified deferred compensation plan”, within the meaning of Section 409A of the Code, maintained by Owners complies in form and operation with the requirements of Section 409A of the Code and no such plan has been materially modified with respect to amounts deferred under the plan for taxable years beginning before January 1, 2008; and

(L)Owners have no indemnity obligation for any taxes imposed under Section 409A of the Code.

(M)Owners have not incurred any excise tax liability that has not been satisfied with respect to any Plan.

Exhibit 1.01(e)(vii)

Subsidiaries

(a)Subsidiaries.

(i)Owners own of record and beneficially the number of shares of capital stock in each of the Subsidiaries set forth in the schedules to the Local Purchase Agreements, free and clear of any restrictions on change of control, Taxes, Liens, options, warrants, purchase rights, contracts, commitments, equities, claims, demands and liabilities except for Permitted Liens. Owners are not a party to any option, warrant, purchase right, or other contract or commitment that could require any Owner to sell, transfer, or otherwise dispose of any capital stock of any Subsidiary. Owners are not parties to any voting trust, voting agreement, proxy, or other agreement or understanding with respect to the voting of any capital stock of any Subsidiary. Except as set forth on the schedules to the Local Purchase Agreements, as of the date hereof Owners own, and at the Closing will own, all of the issued and outstanding shares of capital stock of each Subsidiary. No former shareholder of any Subsidiary has any claim against such Subsidiary or, except as disclosed in the schedules to the Local Purchase Agreements, is owed any amount by such Subsidiary. All of the issued and outstanding shares of capital stock of each Subsidiary are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive rights or similar rights or applicable securities laws.

(ii)Except for the Subsidiaries and as set forth in the schedules to the Local Purchase Agreements, Owners have no subsidiaries and does not own, directly or indirectly, any stock, partnership interest, limited liability company interest or other security or ownership interest in, or any security issued by, any other Person. Except as set forth on the schedules to the Local Purchase Agreements, each Subsidiary has no subsidiaries and does not own, directly or indirectly, any stock, partnership interest, limited liability company interest or other security or ownership interest in, or any security issued by, any other Person.

Exhibit 1.01(e)(viii)

Real Property

(a)Title to and Condition of Real Property.

(i)Owned Real Property. The schedules to the Local Purchase Agreements set forth:

(A)all Owned Real Property; and

(B)the complete legal description of each parcel of Owned Real Property.

The Seller Local Entity as indicated on the schedules to the Local Purchase Agreements own title to the Owned Real Property, in fee simple, which title shall be, on the Closing Date, recorded, marketable and free and clear of any and all Liens, claims, demands or rights of any third party whatsoever, and any and all easements under which such real property may be a subservient estate as well as all rights of way, encroachments, restrictions, covenants, recorded or unrecorded, except for Permitted Liens.

(ii)Leased Real Property. All Leases for the Leased Real Property are attached as schedules to the Local Purchase Agreements. With respect to such Leases and Leased Real Property, except as set forth in the schedules to the Local Purchase Agreements:

(A)all Leases are in writing and are duly executed, valid and binding among the parties thereto and in full force and effect for their full term, and none have been modified, amended, sublet or assigned except as noted on the schedules to the Local Purchase Agreements;

(B)the provisions of each Lease set forth the annual rent and there are no separate agreements or understandings with respect to the same other than contained in the body of the Lease;

(C)there is no default by Owners or to the Owners’ Knowledge by the other party to any Lease;

(D)to the Owners’ Knowledge, all surety bonds, insurance, security and other deposits required by such Leases have been made and have not been refunded or returned, or their forfeiture claimed, in whole or in part, by any lessor; and

(E)where any Owner is the lessee:

(i)all leasehold improvements made by such Owner or an affiliate are in good operating or working condition and repair, after taking into account ordinary wear and tear and repairs required in ordinary course of business, and are reasonably adequate for the day to day operation of the business of such Owner as presently conducted; and

(ii)such Owner has not received any notice of a violation of any Laws relating to the use or occupancy of such Leased Real Property by such Owner or an affiliated company.

(iii)such Owner has not sublet, underlet or assigned any portion of the Leased Real Property, and no third party is in possession of any portion of the Leased Real Property other than such Owner.

(iii)Condition of Real Property. With respect to the Real Property to Owners’ Knowledge, except as set forth on the schedules to the Local Purchase Agreements:

(A)there is no condemnation or eminent domain proceeding of any kind pending or threatened against any of the Leased Real Property;

(B)the Real Property is occupied under valid and current certificates of occupancy, Permits or the like;

(C)the Real Property and all improvements comply with all applicable Laws, and Owners have obtained all material Permits and approvals required to possess and operate its Leased Real Property and conduct its business as it is presently being conducted;

(D)there are no outstanding variances or special use Permits affecting the Real Property or its uses;

(E)no notice of a violation of any Laws, or of any covenant, condition, easement or restriction, affecting the Real Property or relating to its use or occupancy has been given to Owners;

(F)Owners have no Knowledge of improvements made or contemplated to be made by any Governmental Authority, the costs of which are to be assessed as special taxes or charges against the Real Property and which are not reflected as special assessments on the most recent property tax bill for the Real Property;

(G)the Real Property either:

(i)is freely accessible directly from all public streets on which it abuts, or

(ii)uses adjoining land to access the same in accordance with validly granted and recorded easements. Owners have no Knowledge of any condition that would result in the termination of such access.

EXHIBIT 1.01(e)(ix)

Title to Shares

Title to Shares. Except as set forth on the schedules to the Local Purchase Agreements, the Acquired Equity has been duly authorized and validly issued, fully paid and non-assessable, and are owned beneficially and of record by Seller Local Entity as set forth on the schedules to the Local Purchase Agreements. Except as set forth on the schedules to the Local Purchase Agreements, on the Closing Date, upon completion of the sale and transfer of the Acquired Equity from each Buyer Local Entity to Buyer Local Entity in accordance with this Agreement, Purchaser Local Entity shall be the sole legal, record and beneficial owner of all of the Acquired Equity, free and clear of any and all Liens of any kind or nature, except Permitted Liens.

Exhibit 3.01(f);

Non Compete Undertakings

I, John Lau, a Hong Kong permanent resident holding Hong Kong Permanent Identity Card, whose address of residence is at____________________________, Hong Kong, refer to Clause 3.01(f); of the MPA (defined below) which requires the execution and delivery of these undertakings (“Agreement”) to Checkpoint as a Condition Precedent to Closing (as defined in the MPA). The execution and delivery of this Master Purchase Agreement (“MPA”) dated ____________ and entered into among Checkpoint Systems Inc. (as defined in the MPA, “Checkpoint”) and myself and the other signatories thereto is a material inducement for Checkpoint to enter into and perform under the MPA and the transactions contemplated therein. Capitalized terms used but not defined herein shall have the same meanings as defined in the MPA.

In consideration of Checkpoint entering into the MPA and the transactions contemplated therein, I hereby undertake that, for a period commencing on the Closing Date and ending on the 5th anniversary of the Closing Date I shall not, and shall procure my Affiliates not to, directly or indirectly:

1)   be involved, engaged or interested in any capacity in any business which is in competition with, or which is the same or similar to the Global Business (as defined in the MPA). This restriction applies throughout all jurisdictions where Checkpoint (including Affiliates, subsidiaries and agents) have operations provided that it shall not prohibit (i) the holding (directly or though nominees) or investments listed on any stock exchange as long as such holding is not more than 3 percent of any single class of securities in the relevant company to be held or (ii) any holding of shares or equity interest in any company on the date hereof which is known to Checkpoint and which does not expand its operations beyond its operations on the date hereof (it being understood that such “operations” shall not be deemed to include any operations that are being sold and transitioned to Checkpoint as part of the MPA and other agreements contemplated by the MPA) and with respect to which I do not, directly or indirectly, participate in the management or serve as a director thereof or increase my equity ownership therein;

2)   solicit any person or entity who was a customer or prospect of the Global Business at any time in the one year before the Closing Date to do business within the product lines of the Global Business;

3)   canvass or solicit anyone who was a supplier of the Global Business at any time in the one year before the Closing Date or was a prospective supplier of the Global Business for those products utilized in the Global Business and to the detriment of Checkpoint; and

4)   solicit for employment any person who is an employee or a consultant of the Global Business (“Employee”) or encourage any Employee to leave the employ of Checkpoint.

I hereby also undertake that I shall not, and shall procure my Affiliates not to, directly or indirectly use any logos, symbols, trademarks or business names or techniques or know-how substantially identical or deceptively similar to that of any owned or utilized by Checkpoint or its Affiliates as at or at any time after the Closing Date.

I recognize and acknowledge that the time and scope limitations and the absence of any territorial limitation [QN: for local counsel review] set forth in this Agreement are reasonable and are required for the protection of Checkpoint. In the event that any provision of this Agreement or application thereof, becomes or is declared by a court or competent jurisdiction to be the unreasonable, illegal, void and enforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties. The Parties further agree to replace such unreasonable, void or unenforceable provision of this Agreement with a reasonable, valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

I further recognize that any breach by me of the covenants herein will cause irreparable injury to Checkpoint and that damages may be difficult to ascertain, and in any event, may be inadequate. Accordingly, without limiting such other remedies which may be available to Checkpoint, I agree that in the event of any such breach, Checkpoint shall be entitled to injunctive relief and/or specific performance. If any action is brought at law and/or in equity in order to enforce the terms of this Agreement, or such Parties’ rights herein, the substantially prevailing party shall be entitled to reimbursement from the other party hereto of all legal costs and expenses (including reasonable attorney’s fees and costs) incurred as a result of such action or actions.

This Agreement is governed by the laws of Hong Kong and the courts of Hong Kong shall have exclusive jurisdiction over any disputes arising from this Deed. This Agreement and the MPA contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, between the Parties hereto with respect to the subject matter hereof. This Agreement may not be amended orally, but only by an agreement in writing signed by the Parties hereto

IN WITNESS whereof I have executed this Agreement the day and year first above written.

SIGNED, [SEALED] AND DELIVERED

by Lau, John

in the presence of :

Schedule 1.02(d)

Purchase Price Allocation

Schedule 1.05(a)(i)(A)

EBITDA Calculation

Schedule 1.05(a)(iv)

Production Center Financials; Method of Preparing Report

Owners shall provide such independent accounting firm full access to all personnel and Information requested by such independent accounting firm.

Accounting firm will deliver a vendor due diligence report along with financial statements. The vendor due diligence must include the management accounts of Wing Hung (Dongguan) Printing Co., Ltd and the procedures will include a detailed analysis on both WHDG and Wing Hung Production Centre and the Shanghai Trading Office.  

Owner shall fully cooperate in connection with such accounting firm’s preparation of the WHPC/O 2010 EBITDA Report as contemplated by this Agreement.

For purposes of this Section 1.05(a)(iv), the term “Information” shall include, but not be limited to, the following related to the management accounts of WHPC/O: all available raw data and information contained in applicable accounting books and records, charts of accounts, general ledger, general journal, disbursements journal, trial balances, adjusting entries, accounts payable register, accounts receivable register, check register, bank and investment statements, payroll records, any applicable customized ERP system, OES/World system, accounting system (Kingdee), the off-loaded accounting records in Excel, audited accounts and management accounts of all customer invoices.

Schedule 1.06(a)(iv)

Indemnity Items

Schedule 1.01(b)(iv)

to

Amended and Restated Master Purchase Agreement

List of Excluded Property

1. None

Schedule 1.02(d)

to

Amended and Restated Master Purchase Agreement

Preliminary Purchase Price Allocation

1. Please see the attached Purchase Price Allocation Worksheet.

Ruby Acquisition
Purchase Price Allocation May 6, 2011
		Seller Allocation Low Pt of Range	Checkpoint Recommendation
Transaction A - STS Group
	US Assets		4,681
	87.61% India Equity		1,796
	50% Guatemala		142
	51% Sri Lanka		3,381
	Elimination
	Total Transaction A	29,950	10,000
Transaction B - From WH Printing HK Ltd
	12.38% India		254
	HK Intangibles/Receivables		24,696
	Total Transaction B	5,000	24,950
Transaction C - Adapt Group
C1	JF International USA Inc
			4,368
C2	Adapt Identification HK LTD
	Total Transaction C		5,632
	Per Seller	10,000	10,000
Transaction D
	STS HK
	STS Korea
	Total Transaction D	10,000	10,000
Transaction E&F Dongguan / SH Printing
	China Printing Operations	4,500	4,500
	Sh Printing	500	500
Transaction G
	W Print UK	3,000	3,000
Total Acquired EBITDA		62,950	62,950

Allocation based on initial purchase price. EBITDA Based Contingent Payment to be allocated pro-rata based on above.

Schedule 1.05(a)(iv)

to

Amended and Restated Master Purchase Agreement

Production Center Financials; Method of Preparing Report

1.           Owners shall provide such independent accounting firm full access to all personnel and Information requested by such independent accounting firm.

Accounting firm will deliver a vendor due diligence report along with financial statements. The vendor due diligence must include the management accounts of Wing Hung (Dongguan) Printing Co., Ltd and the procedures will include a detailed analysis on both WHDG and Wing Hung Production Centre and the Shanghai Trading Office.

Owner shall fully cooperate in connection with such accounting firm's preparation of the WHPC/O 2010 EBITDA Report as contemplated by this Agreement.

For purposes of this Section 1.05(a)(iv), the term "Information" shall include, but not be limited to, the following related to the management accounts of WHPC/O: all available raw data and information contained in applicable accounting books and records, charts of accounts, general ledger, general journal, disbursements journal, trial balances, adjusting entries, accounts payable register, accounts receivable register, check register, bank and investment statements, payroll records, any applicable customized ERP system, OES/World system, accounting system (Kingdee), the off-loaded accounting records in Excel, audited accounts and management accounts of all customer invoices.

Schedule 1.06(a)(iv)

to

Amended and Restated Master Purchase Agreement

Litigation Indemnification Matters

1. Please see the attached list of matters.

SCHEDULES TO WING HUNG PRINTING CO., LTD. ASSET PURCHASE AGREEMENT

Schedule 3.17

Litigation/Governmental Orders

Wing Hung Printing Co., Ltd.

Saito/New Zealand - On or about July 21, 2008, Saito Offshore Pty Limited ("Plaintiff') filed suit against Wing Hung Printing Co. Ltd, Adapt Identification, LLC, and Shore to Shore BV (collectively the "Companies") in the High Court of New Zealand Auckland Registry captioned as case number CIV 2008-404-4621. The Companies initially protested the jurisdiction of the New Zealand Courts to consider the case. While the lower court agreed with the Companies' position on jurisdiction, that decision was reversed on appeal. The case has now been remanded to the trial court and the Companies have only recently submitted their Amended Statement of Defence to Plaintiff's Third Statement of Claim (the "Complaint"). In the Complaint, Plaintiff alleges that some or all of the Companies are in Breach of the Fair Trading Act of 1986, are in breach of contract for wrongfully misusing confidential information, have breached an equitable duty of confidence, and have engaged in unlawful interference with contractual relations. Plaintiff seeks damages in an unspecified amount, exemplary damages in excess of $100,000, lost profits, interest, and costs. The Companies have denied liability and intend to defend this claim vigorously. This matter has been primarily handled in New Zealand by Matt Sumpter of the Chapman Tripp law firm in New Zealand and further questions should be directed to his attention at +6493579075 or via e-mail at Matt.Sumpter@chapmantripp.com.

Wing Hung Printing (USA), Inc.

None.

STS India

1. Disputed Sales Tax demand pending appeal relating to earlier years (USD $60,000).

2. Disputed Sales Tax demand pending appeal relating to 2004-2005 (USD $18,000).

SCHEDULES TO SHORE TO SHORE, INC. ASSET PURCHASE AGREEMENT

Schedule 3.17

Litigation/Governmental Orders

Seller

Saito/New Zealand - On or about July 21, 2008, Saito Offshore Pty Limited ("Plaintiff') filed suit against Wing Hung Printing Co. Ltd, Adapt Identification, LLC, and Shore to Shore BV (collectively the "Companies") in the High Court of New Zealand Auckland Registry captioned as case number CIV 2008-404-4621. The Companies initially protested the jurisdiction of the New Zealand Courts to consider the case. While the lower court agreed with the Companies' position on jurisdiction, that decision was reversed on appeal. The case has now been remanded to the trial court and the Companies have only recently submitted their Amended Statement of Defence to Plaintiffs Third Statement of Claim (the "Complaint"). In the Complaint, Plaintiff alleges that some or all of the Companies are in Breach of the Fair Trading Act of 1986, are in breach of contract for wrongfully misusing confidential information, have breached an equitable duty of confidence, and have engaged in unlawful interference with contractual relations. Plaintiff seeks damages in an unspecified amount, exemplary damages in excess of $100,000, lost profits, interest, and costs. The Companies have denied liability and intend to defend this claim vigorously. This matter has been primarily handled in New Zealand by Matt Sumpter of the Chapman Tripp law firm in New Zealand and further questions should be directed to his attention at +6493579075 or via e-mail at Matt.Sumpter@chapmantripp.com.

STS India

1. Disputed Sales Tax demand pending appeal relating to earlier years (USD $60,000)

2. Disputed Sales Tax demand pending appeal relating to 2004-2005 (USD $18,000)

STS Guatemala

In 2004, STS Guatemala purchased/imported a KBA machine pursuant to a Credit Contract with Koenig & Bauer, AG ("K&B") in Germany. Upon receipt of the equipment in Guatemala, the person completing the custom papers forgot to include two tool boxes in the declaration. The tool boxes were not purchased by STS Guatemala, but rather were used to install the equipment and were to be returned to K&B. STS Guatemala has attempted for nearly six years to correct the original documentation so that the tool boxes can be returned; however, little or no progress has been made with the Guatemalan government to make this correction.

STS Sri Lanka

None.

SCHEDULES TO J & F INTERNATIONAL LIMITED ASSET PURCHASE AGREEMENT

Schedule 3.17

Litigation/Governmental Orders

Seller

Not applicable.

J&F International (US)

None.

Adapt Identification

Saito/New Zealand - On or about July 21, 2008, Saito Offshore Pty Limited ("Plaintiff') filed suit against Wing Hung Printing Co. Ltd, Adapt Identification, LLC, and Shore to Shore BV (collectively the "Companies") in the High Court of New Zealand Auckland Registry captioned as case number CIV 2008-404-4621 . The Companies initially protested the jurisdiction of the New Zealand Courts to consider the case. While the lower court agreed with the Companies' position on jurisdiction, that decision was reversed on appeal. The case has now been remanded to the trial court and the Companies have only recently submitted their Amended Statement of Defence to Plaintiffs Third Statement of Claim (the "Complaint"). In the Complaint, Plaintiff alleges that some or all of the Companies are in Breach of the Fair Trading Act of 1986, are in breach of contract for wrongfully misusing confidential information, have breached an equitable duty of confidence, and have engaged in unlawful interference with contractual relations. Plaintiff seeks damages in an unspecified amount, exemplary damages in excess of $100,000, lost profits, interest, and costs. The Companies have denied liability and intend to defend this claim vigorously. This matter has been primarily handled in New Zealand by Matt Sumpter of the Chapman Tripp law firm in New Zealand and further questions should be directed to his attention at +6493579075 or via e-mail at Matt.Sumpter@chapmantripp.com.

Cybsa Adapt

None.

STS Guatemala

In 2004, STS Guatemala purchased/imported a KBA machine pursuant to a Credit Contract with Koenig & Bauer, AG ("K&B") in Germany. Upon receipt of the equipment in Guatemala, the person completing the custom papers forgot to include two tool boxes in the declaration. The tool boxes were not purchased by STS Guatemala, but rather were used to install the equipment and were to be returned to K&B. STS Guatemala has attempted for nearly six years to correct the original documentation so that the tool boxes can be returned; however, little or no progress has been made with the Guatemalan government to make this correction.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Robert P. van der Merwe, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Checkpoint Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By: /s/ Robert P. van der Merwe
	Name: Robert P. van der Merwe
	Title: Chairman of the Board of Directors, President and Chief Executive Officer
Date: August 2, 2011

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Raymond D. Andrews, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Checkpoint Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By: /s/ Raymond D. Andrews
	Name: Raymond D. Andrews
	Title: Senior Vice President and Chief Financial Officer
Date: August 2, 2011

EX-32.1

EXHIBIT 32.1

CERTIFICATION FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

The undersigned executive officers of the Registrant hereby certify that this Quarterly Report on Form 10-Q for the quarter ended June 26, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

By: /s/ Robert P. van der Merwe

Name: Robert P. van der Merwe

Title: Chairman of the Board of Directors, President and Chief Executive Officer

By: /s/ Raymond D. Andrews

Name: Raymond D. Andrews

Title: Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request. This certification accompanies the Report and shall not be treated as having been filed as part of the Report.

Date: August 2, 2011

XML



Stock-Based Compensation (Nonvested Service Based Restricted Stock Units) (Details) (Restricted Stock Units (RSUs) [Member], USD $)	6 Months Ended
	Jun. 26, 2011
Restricted Stock Units (RSUs) [Member]
Number of Shares, Nonvested at beginning of period	630,244
Number of Shares, Granted	246,142
Number of Shares, Vested	(150,949)
Number of Shares, Forfeited	(13,297)
Number of Shares, Nonvested at end of period	712,140
Number of Shares, Vested and expected to vest	590,013
Number of Shares, Vested at end of period	62,590
Weighted-Average Vest Date, Nonvested at beginning in years	0.81
Weighted-Average Vest Date, Nonvested at end in years	1.16
Weighted-Average Vest Date, Vested and expected to vest in years	1.14
Weighted-Average Grant Date Fair Value, Nonvested at beginning of period	$ 20.48
Weighted-Average Grant Date Fair Value, Granted	$ 20.91
Weighted-Average Grant Date Fair Value, Vested	$ 21.52
Weighted-Average Grant Date Fair Value, Forfeited	$ 15.09
Weighted-Average Grant Date Fair Value, Nonvested at end of period	$ 20.51

XML



Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Jun. 26, 2011	Dec. 26, 2010
Consolidated Balance Sheets
Allowance for doubtful accounts receivable	$ 11,161	$ 10,472
Preferred stock, no par value	$ 0	$ 0
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.1	$ 0.1
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	44,131,952	43,843,095
Treasury stock, shares	4,035,912	4,035,912

XML



Consolidated Statements of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Consolidated Statements of Operations
Net revenues	$ 219,931	$ 208,176	$ 404,604	$ 395,632
Cost of revenues	134,439	117,412	248,738	224,317
Gross profit	85,492	90,764	155,866	171,315
Selling, general, and administrative expenses	80,695	70,233	155,078	140,035
Research and development	5,347	5,216	10,136	9,908
Restructuring expense	1,495	1,199	3,092	1,635
Acquisition costs	2,017		2,203
Other operating income	16,672		16,672
Operating income	12,610	14,116	2,029	19,737
Interest income	727	698	1,693	1,366
Interest expense	1,918	1,421	3,560	3,021
Other gain (loss), net	(376)	(1,462)	(266)	(1,196)
Earnings (loss) before income taxes	11,043	11,931	(104)	16,886
Income taxes	1,521	2,898	(315)	4,416
Net earnings	9,522	9,033	211	12,470
Less: income (loss) attributable to non-controlling interests	2	(7)	2	(76)
Net earnings attributable to Checkpoint Systems, Inc.	$ 9,520	$ 9,040	$ 209	$ 12,546
Net earnings attributable to Checkpoint Systems, Inc. per Common Shares:
Basic earnings per share	$ 0.23	$ 0.23	$ 0.01	$ 0.32
Diluted earnings per share	$ 0.23	$ 0.22	$ 0.01	$ 0.31

XML



Earnings Per Share (Schedule of Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Earnings Per Share
Basic earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$ 9,520	$ 9,040	$ 209	$ 12,546
Diluted earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$ 9,520	$ 9,040	$ 209	$ 12,546
Weighted-average number of common shares outstanding	40,084	39,476	39,990	39,330
Shares issuable under deferred compensation agreements	458	469	447	436
Basic weighted-average number of common shares outstanding	40,542	39,945	40,437	39,766
Common shares assumed upon exercise of stock options and awards	360	552	461	526
Shares issuable under deferred compensation arrangements	12	13	5	9
Diluted weighted-average number of common shares outstanding	40,914	40,510	40,903	40,301
Basic earnings attributable to Checkpoint Systems, Inc. per share	$ 0.23	$ 0.23	$ 0.01	$ 0.32
Diluted earnings attributable to Checkpoint Systems, Inc. per share	$ 0.23	$ 0.22	$ 0.01	$ 0.31

XML



Inventories (Tables)

6 Months Ended

Jun. 26, 2011

Inventories

Schedule of Inventory

	June 26, 2011	December 26, 2010
Raw materials	$   27,587	$   21,976
Work-in-process	7,205	5,416
Finished goods	99,323	79,582
Total	$ 134,115	$ 106,974

XML



Document and Entity Information	6 Months Ended
	Jun. 26, 2011	Jul. 27, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 26, 2011
Entity Registrant Name	CHECKPOINT SYSTEMS INC
Entity Central Index Key	0000215419
Current Fiscal Year End Date	--12-25
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		40,098,852
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2

XML



Stock-Based Compensation (Stock Option Activity Under the Principal Option Plans) (Details) (Stock Options [Member], USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 26, 2011
Stock Options [Member]
Number of Shares, Outstanding at beginning of period	2,745,796
Number of Shares, Granted	93,144
Number of Shares, Exercised	(124,098)
Number of Shares, Forfeited or expired	(18,965)
Number of Shares, Outstanding at end of period	2,695,877
Number of Shares, Vested and expected to vest	2,653,406
Number of Shares, Exercisable	2,187,179
Weighted-Average Exercise Price, Outstanding at beginning of period	$ 19.11
Weighted-Average Exercise Price, Granted	$ 21.91
Weighted-Average Exercise Price, Exercised	$ 12.50
Weighted-Average Exercise Price, Forfeited or expired	$ 17.44
Weighted-Average Exercise Price, Outstanding at end of period	$ 19.52
Weighted-Average Exercise Price, Vested and expected to vest	$ 19.52
Weighted-Average Exercise Price, Exercisable	$ 19.66
Weighted-Average Remaining Contractual Term, Outstanding at beginning of period in years	5.320
Weighted-Average Remaining Contractual Term, Outstanding at end of period in years	5.030
Weighted-Average Remaining Contractual Term, Vested and expected to vest in years	4.970
Weighted-Average Remaining Contractual Term, Exercisable in years	4.390
Aggregate Intrinsic Value, Outstanding at beginning of period	$ 8,731
Aggregate Intrinsic Value, Outstanding at end of period	3,571
Aggregate Intrinsic Value, Vested and expected to vest	3,533
Aggregate Intrinsic Value, Exercisable	$ 2,722

XML



Stock-Based Compensation (Tables)

6 Months Ended

Jun. 26, 2011

Stock-Based Compensation

Stock Option Activity Under the Principal Option Plans

	Number of Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 26, 2010	2,745,796	$ 19.11	5.32	$ 8,731
Granted	93,144	21.91
Exercised	(124,098)	12.50
Forfeited or expired	(18,965)	17.44
Outstanding at June 26, 2011	2,695,877	$ 19.52	5.03	$ 3,571
Vested and expected to vest at June 26, 2011	2,653,406	$ 19.52	4.97	$ 3,533
Exercisable at June 26, 2011	2,187,179	$ 19.66	4.39	$ 2,722

Assumption and Weighted-Average Fair Values Used in the Black Scholes Model

Six months ended	June 26, 2011		June 27, 2010
Weighted-average fair value of grants	$   9.88		$   7.39
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	49.85	%	48.11	%
Expected life (in years)	4.96		4.93
Risk-free interest rate	2.178	%	1.893	%

Nonvested Service Based Restricted Stock Units

	Number of Shares	Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 26, 2010	630,244	0.81	$ 20.48
Granted	246,142		$ 20.91
Vested	(150,949)		$ 21.52
Forfeited	(13,297)		$ 15.09
Nonvested at June 26, 2011	712,140	1.16	$ 20.51
Vested and expected to vest at June 26, 2011	590,013	1.14
Vested at June 26, 2011	62,590	—

XML



Stock-Based Compensation (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Share-based compensation expense	$ 2,000,000	$ 2,200,000	$ 4,800,000	$ 4,500,000
Share-based compensation expense net of tax	1,500,000	1,500,000	3,500,000	3,100,000
Actual tax benefit realized for tax deduction from option exercises			1,100,000	1,800,000
Stock Options [Member]
Total intrinsic value of options exercised			1,000,000	3,000,000
Unrecognized compensation cost	1,700,000		1,700,000
Weighted-average period over which unrecognized compensation cost will be recognized (years)			1.8
Restricted Stock Units (RSUs) [Member]
Unrecognized compensation cost	5,000,000		5,000,000
Weighted-average period over which unrecognized compensation cost will be recognized (years)			2.0
Total fair value of restricted stock awards			3,200,000	2,100,000
Time-Vested Cash Unit Awards [Member]
Deferred compensation arrangement liability, current and noncurrent	200,000	100,000	200,000	100,000
Deferred compensation arrangement with individual, share-based compensation expense	$ 200,000	$ 8,000	$ 300,000	$ 100,000
Vesting period			three

XML



Stock-Based Compensation

6 Months Ended

Jun. 26, 2011

Stock-Based Compensation

Stock-Based Compensation

Note 5. STOCK-BASED COMPENSATION

Stock-based compensation cost recognized in operating results (included in selling, general, and administrative expenses) for the three and six months ended June 26, 2011 was $2.0 million and $4.8 million ($1.5 million and $3.5 million, net of tax), respectively. For the three and six months ended June 27, 2010, the total compensation expense was $2.2 million and $4.5 million ($1.5 million and $3.1 million, net of tax), respectively. The associated actual tax benefit realized for the tax deduction from option exercises of share-based payment units and awards released equaled $1.1 million and $1.8 million for the six months ended June 26, 2011 and June 27, 2010, respectively.

Stock Options

Option activity under the principal option plans as of June 26, 2011 and changes during the six months ended June 26, 2011 were as follows:

	Number of Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 26, 2010	2,745,796	$ 19.11	5.32	$ 8,731
Granted	93,144	21.91
Exercised	(124,098)	12.50
Forfeited or expired	(18,965)	17.44
Outstanding at June 26, 2011	2,695,877	$ 19.52	5.03	$ 3,571
Vested and expected to vest at June 26, 2011	2,653,406	$ 19.52	4.97	$ 3,533
Exercisable at June 26, 2011	2,187,179	$ 19.66	4.39	$ 2,722

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of the second quarter of fiscal 2011 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 26, 2011. This amount changes based on the fair market value of the Company's stock. The total intrinsic value of options exercised for the six months ended June 26, 2011 and June 27, 2010 was $1.0 million and $3.0 million, respectively.

As of June 26, 2011, $1.7 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.8 years.

The fair value of share-based payment units was estimated using the Black Scholes option pricing model. The table below presents the weighted-average expected life in years. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

The assumptions and weighted-average fair values were as follows:

Six months ended	June 26, 2011		June 27, 2010
Weighted-average fair value of grants	$   9.88		$   7.39
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	49.85	%	48.11	%
Expected life (in years)	4.96		4.93
Risk-free interest rate	2.178	%	1.893	%

Restricted Stock Units

Nonvested service based restricted stock units as of June 26, 2011 and changes during the six months ended June 26, 2011 were as follows:

	Number of Shares	Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 26, 2010	630,244	0.81	$ 20.48
Granted	246,142		$ 20.91
Vested	(150,949)		$ 21.52
Forfeited	(13,297)		$ 15.09
Nonvested at June 26, 2011	712,140	1.16	$ 20.51
Vested and expected to vest at June 26, 2011	590,013	1.14
Vested at June 26, 2011	62,590	—

The total fair value of restricted stock awards vested during the first six months of 2011 was $3.2 million as compared to $2.1 million in the first six months of 2010. As of June 26, 2011, there was $5.0 million of unrecognized stock-based compensation expense related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.0 years.

Other Compensation Arrangements

On March 15, 2010, we initiated a plan in which time-vested cash unit awards were granted to eligible employees. The time-vested cash unit awards under this plan vest one-third each year over three years from the date of grant. The total amount accrued related to the plan equaled $0.2 million at June 26, 2011, of which $0.2 million and $0.3 million was expensed for the three and six months ended June 26, 2011. The total amount accrued related to the plan equaled $0.1 million at June 27, 2010, of which $8 thousand and $0.1 million was expensed for the three and six months ended June 27, 2010. The associated liability is included in Accrued Compensation and Related Taxes in the accompanying Consolidated Balance Sheets.

XML



Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 26, 2011

Supplemental Cash Flow Information

Schedule of Cash Payments for Interest and Income Taxes

Six months ended	June 26, 2011	June 27, 2010
Interest	$ 2,895	$   2,266
Income tax payments	$ 4,819	$ 10,715

XML



Debt (Long-Term Debt) (Details)								6 Months Ended
	Jun. 26, 2011 USD ($)	Jun. 26, 2011 EUR (€)	Dec. 26, 2010 USD ($)	Jun. 26, 2011 Senior Secured Credit Facility [Member] USD ($)		Dec. 26, 2010 Senior Secured Credit Facility [Member] USD ($)		Jun. 26, 2011 Senior Secured Credit Facility [Member] $125 Million Variable Interest Rate Revolving Credit Facility Maturing in 2014 [Member] USD ($)	Dec. 26, 2010 Senior Secured Credit Facility [Member] $125 Million Variable Interest Rate Revolving Credit Facility Maturing in 2014 [Member] USD ($)	Jun. 26, 2011 Senior Secured Notes [Member] USD ($)		Dec. 26, 2010 Senior Secured Notes [Member] USD ($)		Jun. 26, 2011 Senior Secured Notes [Member] $25 Million 4.00% Fixed Interest Rate Series A Senior Secured Notes Maturing in 2015 [Member] USD ($)	Dec. 26, 2010 Senior Secured Notes [Member] $25 Million 4.00% Fixed Interest Rate Series A Senior Secured Notes Maturing in 2015 [Member] USD ($)	Jun. 26, 2011 Senior Secured Notes [Member] $25 Million 4.38% Fixed Interest Rate Series B Senior Secured Notes Maturing in 2016 [Member] USD ($)	Dec. 26, 2010 Senior Secured Notes [Member] $25 Million 4.38% Fixed Interest Rate Series B Senior Secured Notes Maturing in 2016 [Member] USD ($)	Jun. 26, 2011 Senior Secured Notes [Member] $25 Million 4.75% Fixed Interest Rate Series C Senior Secured Notes Maturing in 2017 [Member] USD ($)	Dec. 26, 2010 Senior Secured Notes [Member] $25 Million 4.75% Fixed Interest Rate Series C Senior Secured Notes Maturing in 2017 [Member] USD ($)
Full-recourse factoring liabilities	$ 1,636,000	€ 1,200,000	$ 1,740,000
Other capital leases with maturities through 2016	1,815,000		2,313,000
Long-term debt	148,355,000		121,740,000							75,000,000	[1]	75,000,000	[1]	25,000,000	25,000,000	25,000,000	25,000,000	25,000,000	25,000,000
Long-term revolving credit facility				69,904,000	[1]	42,687,000	[1]	69,904,000	42,687,000
Revolving credit facility, current	1,866,000		1,808,000
Less current portion	1,651,000		2,016,000
Total long-term portion	146,704,000		119,724,000
Face amount								$ 125,000,000
Interest rate														4.00%		4.38%		4.75%
Maturity date								2014

[1] The carrying amounts are reported on the balance sheet under the indicated captions.

XML



Goodwill and Other Intangible Assets (Estimated Future Amortization Expense) (Details) (USD $) In Thousands	6 Months Ended
	Jun. 26, 2011
Goodwill and Other Intangible Assets
2011	$ 12,163
2012	11,465
2013	10,303
2014	9,788
2015	$ 9,614

XML



Debt (Tables)

6 Months Ended

Jun. 26, 2011

Debt

Short-term Borrowings and Current Portion of Long-term Debt

(amounts in thousands)	June 26, 2011	December 26, 2010
Line of credit	$   1,866	$   1,808
Overdraft	613	—
Full-recourse factoring liabilities	15,983	13,065
Term loans	5,307	4,950
Revolving loan facility	385	386
Other short-term borrowings	562	—
Current portion of long-term debt	1,651	2,016
Total short-term borrowings and current portion of long-term debt	$ 26,367	$ 22,225

Schedule of Long-term Debt

	June 26, 2011	December 26, 2010
Senior Secured Credit Facility:
$125 million variable interest rate revolving credit facility maturing in 2014	$   69,904	$   42,687
Senior Secured Notes:
$25 million 4.00% fixed interest rate Series A senior secured notes maturing in 2015	25,000	25,000
$25 million 4.38% fixed interest rate Series B senior secured notes maturing in 2016	25,000	25,000
$25 million 4.75% fixed interest rate Series C senior secured notes maturing in 2017	25,000	25,000
Full-recourse factoring liabilities	1,636	1,740
Other capital leases with maturities through 2016	1,815	2,313
Total	148,355	121,740
Less current portion	1,651	2,016
Total long-term portion	$ 146,704	$ 119,724

XML



Fair Value Measurement, Financial Instruments and Risk Management

6 Months Ended

Jun. 26, 2011

Fair Value Measurement, Financial Instruments and Risk Management

Fair Value Measurement, Financial Instruments and Risk Management

Note 10. FAIR VALUE MEASUREMENT, FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair Value Measurement

We utilize the market approach to measure fair value for our financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The fair value hierarchy is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

Level 1	Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2	Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.
Level 3	Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Because the Company's derivatives are not listed on an exchange, the Company values these instruments using a valuation model with pricing inputs that are observable in the market or that can be derived principally from or corroborated by observable market data. The Company's methodology also incorporates the impact of both the Company's and the counterparty's credit standing.

The following tables represent our assets and liabilities measured at fair value on a recurring basis as of June 26, 2011 and December 26, 2010 and the basis for that measurement:

(amounts in thousands)	Total Fair Value Measurement June 26, 2011	Quoted Prices In Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Foreign currency revenue forecast contracts	$   45	$ —	$   45	$ —
Foreign currency forward exchange contracts	7		7
Total assets	$   52	$ —	$   52	$ —
Foreign currency revenue forecast contracts	$ 724	$ —	$ 724	$ —
Foreign currency forward exchange contracts	—	—	—	—
Total liabilities	$ 724	$ —	$ 724	$ —

(amounts in thousands)	Total Fair Value Measurement December 26, 2010	Quoted Prices In Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Foreign currency revenue forecast contracts	$ 938	$ —	$ 938	$ —
Foreign currency forward exchange contracts	27	—	27	—
Total assets	$ 965	$ —	$ 965	$ —
Foreign currency revenue forecast contracts	$ 278	$ —	$ 278	$ —
Foreign currency forward exchange contracts	20	—	20	—
Total liabilities	$ 298	$ —	$ 298	$ —

The following table provides a summary of the activity associated with all of our designated cash flow hedges (foreign currency) reflected in accumulated other comprehensive income for the six months ended June 26, 2011:

(amounts in thousands)

	June 26, 2011
Beginning balance, net of tax	$       377
Changes in fair value gain, net of tax	(2,350)
Reclassification to earnings, net of tax	588
Ending balance, net of tax	$ (1,385)

We believe that the fair values of our current assets and current liabilities (cash, restricted cash, accounts receivable, accounts payable, and other current liabilities) approximate their reported carrying amounts. The carrying values and the estimated fair values of non-current financial assets and liabilities that qualify as financial instruments and are not measured at fair value on a recurring basis at June 26, 2011 and December 26, 2010 are summarized in the following table:

(amounts in thousands)	June 26, 2011		December 26, 2010
	Carrying Amount	Estimated Fair Value	Carrying Amount	Estimated Fair Value
Long-term debt (including current maturities and excluding capital leases and factoring) (1)
Senior secured credit facility	$ 69,904	$ 69,904	$ 42,687	$ 42,687
Senior secured notes	$ 75,000	$ 76,096	$ 75,000	$ 75,787

(1)   The carrying amounts are reported on the balance sheet under the indicated captions.

Long-term debt is carried at the original offering price, less any payments of principal. Rates currently available to us for long-term borrowings with similar terms and remaining maturities are used to estimate the fair value of existing borrowings as the present value of expected cash flows.

Financial Instruments and Risk Management

We manufacture products in the U.S., the Caribbean, Europe, and the Asia Pacific region for both the local marketplace and for export to our foreign subsidiaries. The foreign subsidiaries, in turn, sell these products to customers in their respective geographic areas of operation, generally in local currencies. This method of sale and resale gives rise to the risk of gains or losses as a result of currency exchange rate fluctuations on inter-company receivables and payables. Additionally, the sourcing of product in one currency and the sales of product in a different currency can cause gross margin fluctuations due to changes in currency exchange rates.

Our major market risk exposures are movements in foreign currency and interest rates. We have historically not used financial instruments to minimize our exposure to currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries. We have used third-party borrowings in foreign currencies to hedge a portion of our net investments in and cash flows derived from our foreign subsidiaries. A reduction in our third party foreign currency borrowings will result in an increase of foreign currency fluctuations on our net investments in and cash flows derived from our foreign subsidiaries.

We enter into forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts are entered into with major financial institutions, thereby minimizing the risk of credit loss. We will consider using interest rate derivatives to manage interest rate risks when there is a disproportionate ratio of floating and fixed-rate debt. We do not hold or issue derivative financial instruments for speculative or trading purposes. We are subject to other foreign exchange market risk exposure resulting from anticipated non-financial instrument foreign currency cash flows which are difficult to reasonably predict, and have therefore not been included in the table of fair values. All listed items described are non-trading.

The following table presents the fair values of derivative instruments included within the Consolidated Balance Sheets as of June 26, 2011 and December 26, 2010:

(amounts in thousands)	June 26, 2011				December 26, 2010
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign currency revenue forecast contracts	Other current assets	$   45	Other current liabilities	$  724	Other current assets	$  938	Other current liabilities	$  278
Total derivatives designated as hedging instruments		45		724		938		278
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts	Other current assets	7	Other current liabilities	—	Other current assets	27	Other current liabilities	20
Total derivatives not designated as hedging instruments		7		—		27		20
Total derivatives		$ 52		$ 724		$ 965		$ 298

The following tables present the amounts affecting the Consolidated Statement of Operations for the three months ended June 26, 2011 and June 27, 2010:

(amounts in thousands)	June 26, 2011				June 27, 2010
	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$  (354)	Cost of sales	$  (276)	$  (124)	$  978	Cost of sales	$  382	$  (11)
Interest rate swap contracts	—	Interest expense	—	—	—	Interest expense	—	—
Total designated cash flow hedges	$ (354)		$ (276)	$ (124)	$ 978		$ 382	$ (11)

The following tables present the amounts affecting the Consolidated Statement of Operations for the six months ended June 26, 2011 and June 27, 2010:

(amounts in thousands)	June 26, 2011				June 27, 2010
	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$  (2,725)	Cost of sales	$  (494)	$  (105)	$  2,082	Cost of sales	$       10	$  (26)
Interest rate swap contracts	—	Interest expense	—	—	171	Interest expense	(159)	—
Total designated cash flow hedges	$ (2,725)		$ (494)	$ (105)	$ 2,253		$ (149)	$ (26)

(amounts in thousands)	Quarter (13 weeks) Ended				Six Months (26 weeks) Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments
Foreign exchange forwards and options	$ (158)	Other gain (loss), net	$ 237	Other gain (loss), net	$ (495)	Other gain (loss), net	$ 410	Other gain (loss), net

We selectively purchase currency forward exchange contracts to reduce the risks of currency fluctuations on short-term inter-company receivables and payables. These contracts guarantee a predetermined exchange rate at the time the contract is purchased. This allows us to shift the effect of positive or negative currency fluctuations to a third party. Transaction gains or losses resulting from these contracts are recognized at the end of each reporting period. We use the fair value method of accounting, recording realized and unrealized gains and losses on these contracts. These gains and losses are included in other gain (loss), net on our Consolidated Statements of Operations. As of June 26, 2011, we had currency forward exchange contracts with notional amounts totaling approximately $3.3 million. The fair values of the forward exchange contracts were reflected as a $7 thousand asset and are included in other current assets and in the accompanying Balance Sheets. The contracts are in the various local currencies covering primarily our operations in the U.S., the Caribbean, and Western Europe. Historically, we have not purchased currency forward exchange contracts where it is not economically efficient, specifically for our operations in South America and Asia, with the exception of Japan.

Beginning in the second quarter of 2008, we entered into various foreign currency contracts to reduce our exposure to forecasted Euro-denominated inter-company revenues. These contracts were designated as cash flow hedges. The foreign currency contracts mature at various dates from July 2011 to June 2012. The purpose of these cash flow hedges is to eliminate the currency risk associated with Euro-denominated forecasted inter-company revenues due to changes in exchange rates. These cash flow hedging instruments are marked to market and the changes are recorded in other comprehensive income. Amounts recorded in other comprehensive income are recognized in cost of goods sold as the inventory is sold to external parties. Any hedge ineffectiveness is charged to other gain (loss), net on our Consolidated Statements of Operations. As of June 26, 2011, the fair value of these cash flow hedges were reflected as a $45 thousand asset and a $0.7 million liability and are included in other current assets and other current liabilities in the accompanying Consolidated Balance Sheets. The total notional amount of these hedges is $28.1 million (€20.2 million) and the unrealized loss recorded in other comprehensive income was $1.4 million (net of taxes of $0.2 million), of which $1.4 million (net of taxes of $0.2 million) is expected to be reclassified to earnings over the next twelve months. During the three and six months ended June 26, 2011, a $0.3 million and $0.5 million expense related to these foreign currency hedges was recorded to cost of goods sold as the inventory was sold to external parties, respectively. The Company recognized $0.1 million of hedge ineffectiveness during the six months ended June 26, 2011.

XML



Summary of Significant Accounting Policies

6 Months Ended

Jun. 26, 2011

Summary of Significant Accounting Polices

Summary of Significant Accounting Polices

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

The Consolidated Financial Statements include the accounts of Checkpoint Systems, Inc. and its majority-owned subsidiaries (collectively, the Company). All inter-company transactions are eliminated in consolidation. The Consolidated Financial Statements and related notes are unaudited and do not contain all disclosures required by generally accepted accounting principles in annual financial statements. Refer to our Annual Report on Form 10-K for the fiscal year ended December 26, 2010 for the most recent disclosure of the Company's accounting policies, except for the revisions to the Revenue Recognition Policy in Item 2 Critical Accounting Policies and Estimates.

The Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position at June 26, 2011 and December 26, 2010 and our results of operations for the thirteen and twenty-six weeks ended June 26, 2011 and June 27, 2010 and changes in cash flows for the twenty-six weeks ended June 26, 2011 and June 27, 2010. The results of operations for the interim period should not be considered indicative of results to be expected for the full year.

Restricted Cash

We classify restricted cash as cash that cannot be made readily available for use. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits. As of June 26, 2011, the unused portion of a grant from the Chinese government of $0.5 million (RMB 3.3 million) and $0.2 million in compensating balances were recorded within restricted cash in the accompanying Consolidated Balance Sheets.

.

Accounts Receivable

At June 26, 2011, proceeds from the sale of accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaled $30.9 million. Proceeds from the initial sale of the accounts receivable are used to fund operations. We have presented the earnings recognized on the sale of the receivables separately under the line item captioned other operating income on our Consolidated Statements of Operations for the three and six months ended June 26, 2011 and June 27, 2010. This transaction meets the criteria for sale treatment in accordance with ASC 860 "Accounting for Transfers and Servicing of Financial Assets".

Internal-Use Software

Included in fixed assets is the capitalized cost of internal-use software. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over their estimated useful lives, which generally range from three to five years. Costs incurred related to design or maintenance of internal-use software is expensed as incurred.

During 2009, we announced that we were in the initial stages of implementing a company-wide ERP system to handle the business and finance processes within our operations and corporate functions. The total amount of internal-use software costs capitalized since the beginning of the ERP implementation as of June 26, 2011 and December 26, 2010 were $16.8 million and $13.1 million, respectively. As of June 26, 2011, $15.4 million was recorded in machinery and equipment related to supporting software packages that were placed in service. The remaining costs of $1.4 million and $12.7 million as of June 26, 2011 and December 26, 2010, respectively, are capitalized as construction-in-progress until such time as the ERP system has been placed in service.

Warranty Reserves

We provide product warranties for our various products. These warranties vary in length depending on product and geographical region. We establish our warranty reserves based on historical data of warranty transactions.

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)

Six months ended	June 26, 2011
Balance at beginning of year	$   6,170
Accruals for warranties issued	3,132
Settlements made	(3,343)
Foreign currency translation adjustment	213
Balance at end of period	$   6,172

Recently Adopted Accounting Standards

In October 2009, the FASB issued ASU 2009-13, "Multiple-Deliverable Revenue Arrangements, (amendments to ASC Topic 605, Revenue Recognition)" (ASU 2009-13) and ASU 2009-14, "Certain Arrangements That Include Software Elements, (amendments to ASC Topic 985, Software)" (ASU 2009-14). ASU 2009-13 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. The amendments eliminate the residual method of revenue allocation and require revenue to be allocated using the relative selling price method. ASU 2009-14 removes tangible products from the scope of software revenue guidance and provides guidance on determining whether software deliverables in an arrangement that includes a tangible product are covered by the scope of the software revenue guidance. ASU 2009-13 and ASU 2009-14 are effective on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of these standards did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2010, FASB issued ASU 2010-13 "Compensation-Stock Compensation (Topic 718) Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades" (ASU 2010-13). Topic 718 is amended to clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades shall not be considered to contain a market, performance, or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies as equity classification. The amendments in this standard are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The guidance should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings for all outstanding awards as of the beginning of the fiscal year in which the amendments are initially applied. The adoption of the standard did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In December 2010, FASB issued ASU 2010-28 "Intangibles - Goodwill and Other (Topic 350)" (ASU 2010-28). Topic 350 is amended to clarify the requirement to test for impairment of goodwill. Topic 350 has required that goodwill be tested for impairment if the carrying amount of a reporting unit exceeds its fair value. Under ASU 2010-28, when the carrying amount of a reporting unit is zero or negative an entity must assume that it is more likely than not that a goodwill impairment exists, perform an additional test to determine whether goodwill has been impaired and calculate the amount of that impairment. The modifications to ASC Topic 350 resulting from the issuance of ASU 2010-28 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of the standard did not have a material impact on our Consolidated Results of Operations and Financial Condition.

In December 2010, the FASB issued ASU 2010-29 "Business Combinations (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations" (ASU 2010-29). This standard update clarifies that, when presenting comparative financial statements, SEC registrants should disclose revenue and earnings of the combined entity as though the current period business combinations had occurred as of the beginning of the comparable prior annual reporting period only. The update also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective prospectively for material (either on an individual or aggregate basis) business combinations entered into in fiscal years beginning on or after December 15, 2010, which for us was December 27, 2010, the first day of our 2011 fiscal year. The adoption of the standard did not have a material impact on our Consolidated Financial Statements.

New Accounting Pronouncements and Other Standards

In January 2011, the FASB issued ASU 2011-01 "Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20" (ASU 2011-01). This standard update defers the effective date of new disclosure requirements for troubled debt restructurings prescribed by ASU 2010-20, "Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses." ASU 2011-01 is effective upon issuance. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2011, the FASB issued ASU 2011-02 "A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring" (ASU 2011-02). The amendments to Topic 310 (Receivables) clarify the guidance on a creditor's evaluation of whether a debtor is experiencing financial difficulties and when a loan modification or restructuring is considered a troubled debt restructuring. In determining whether a loan modification represents a troubled debt restructuring, an entity should consider whether the debtor is experiencing financial difficulty and the lender has granted a concession to the borrower. ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In April 2011, the FASB issued ASU 2011-03 "Reconsideration of Effective Control for Repurchase Agreements" (ASU 2011-03). The amendments to Topic 860 (Transfers and Servicing) affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments do not affect other transfers of financial assets. The amendments remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. ASU 2011-03 is effective for the first interim or annual periods beginning on or after December 15, 2011, and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. We do not expect the adoption of the standard to have a material impact on our Consolidated Results of Operations and Financial Condition.

In May 2011, the FASB issued ASU 2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs" (ASU 2011-04). The amendments to Topic 820 (Fair Value Measurement) establish common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United Sates and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for the first interim and annual periods beginning after December 15, 2011, and should be applied prospectively. We do not expect the adoption of the standard to have a material effect on our Consolidated Results of Operations and Financial Condition.

In June 2011, the FASB issued ASU 2011-05 "Presentation of Comprehensive Income" (ASU 2011-05). The amendments to Topic 220 (Comprehensive Income) eliminate the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders' equity, require consecutive presentation of the statement of net income and other comprehensive income and require reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. ASU 2011-05 is effective for the first interim and annual periods beginning after December 15, 2011. We do not expect the adoption of the standard to have a material effect on our Consolidated Results of Operations and Financial Condition.

XML



Inventories (Schedule of Inventory) (Details) (USD $) In Thousands	Jun. 26, 2011	Dec. 26, 2010
Inventories
Raw materials	$ 27,587	$ 21,976
Work-in-process	7,205	5,416
Finished goods	99,323	79,582
Total	$ 134,115	$ 106,974

XML



Earnings Per Share

6 Months Ended

Jun. 26, 2011

Earnings Per Share

Earnings Per Share

Note 7. EARNINGS PER SHARE

The following data shows the amounts used in computing earnings per share and the effect on net earnings from continuing operations and the weighted-average number of shares of dilutive potential common stock:

(amounts in thousands, except per share data)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Basic earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$   9,520	$   9,040	$      209	$  12,546
Diluted earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$   9,520	$   9,040	$      209	$  12,546
Shares:
Weighted-average number of common shares outstanding	40,084	39,476	39,990	39,330
Shares issuable under deferred compensation agreements	458	469	447	436
Basic weighted-average number of common shares outstanding	40,542	39,945	40,437	39,766
Common shares assumed upon exercise of stock options and awards	360	552	461	526
Shares issuable under deferred compensation arrangements	12	13	5	9
Dilutive weighted-average number of common shares outstanding	40,914	40,510	40,903	40,301
Basic earnings attributable to Checkpoint Systems, Inc. per share	$       .23	$       .23	$       .01	$       .32
Diluted earnings attributable to Checkpoint Systems, Inc. per share	$       .23	$       .22	$       .01	$       .31

Anti-dilutive potential common shares are not included in our earnings per share calculation. The Long-term Incentive Plan restricted stock units were excluded from our calculation due to the performance of vesting criteria not being met.

The number of anti-dilutive common share equivalents for the three and six month periods ended June 26, 2011 and June 27, 2010 were as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS	1,847	1,380	1,608	1,509

XML



Contingent Liabilities and Settlements

6 Months Ended

Jun. 26, 2011

Contingent Liabilities and Settlements

Contingent Liabilities and Settlements

Note 12. CONTINGENT LIABILITIES AND SETTLEMENTS

We are involved in certain legal actions, all of which have arisen in the ordinary course of business. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on our Consolidated Results of Operations and/or Financial Condition, except as disclosed in our Annual Report on Form 10-K for the year ended December 26, 2010 for which there have been no material changes.

XML



Income Taxes

6 Months Ended

Jun. 26, 2011

Income Taxes

Income Taxes

Note 8. INCOME TAXES

The effective tax rate for the twenty-six weeks ended June 26, 2011 was 302.9% as compared to 26.2% for the twenty-six weeks ended June 27, 2010. The increase in the 2011 tax rate was due to the decrease in year-to-date pretax income.

In accordance with ASC 740, "Accounting for Income Taxes", we evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. ASC 740 requires that companies assess whether valuation allowances should be established against their deferred tax assets based on all available evidence, both positive and negative, using a "more likely than not" standard. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company's experience with loss carryforwards not expiring and tax planning alternatives. The Company operates and derives income across multiple jurisdictions. As the geographic footprint of the business changes, we may encounter losses in jurisdictions that have been historically profitable, and as a result might require additional valuation allowances to be recorded against certain deferred tax asset balances. At June 26, 2011 and December 26, 2010, the Company had net deferred tax assets of $60.9 million and $61.5 million, respectively.

During 2010 negative evidence arose in the form of cumulative losses in two material jurisdictions with net deferred tax assets of $41.8 million and $10.1 million, respectively. The Company considered all available evidence and was able to conclude on a more likely than not basis that the effects of our commitment to specific tax planning actions provided a sufficient amount of positive evidence to support the continued benefit of the jurisdictions' deferred tax assets. The Company is committed to implementing tax planning actions, when deemed appropriate, in jurisdictions that experience losses in order to realize deferred tax assets prior to their expiration.

The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate was $12.2 million and $12.8 million at June 26, 2011 and December 26, 2010, respectively. Penalties and tax-related interest expense are reported as a component of income tax expense. During the six months ended June 26, 2011, we did not recognize any interest and penalties expense compared to an interest and penalties expense of $0.4 million during the six months ended June 27, 2010, in the Statement of Operations. At June 26, 2011 and December 26, 2010, the Company had accrued interest and penalties related to unrecognized tax benefits of $3.6 million and $3.6 million, respectively.

We file income tax returns in the U.S. and in various states, local and foreign jurisdictions. We are routinely examined by tax authorities in these jurisdictions. It is possible that these examinations may be resolved within twelve months. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the gross unrecognized tax benefits balance may decrease within the next twelve months by a range of $3.4 million to $5.3 million.

We are currently under audit in the following major jurisdictions: United States 2007 – 2008, Germany 2002 – 2005, Finland 2005 – 2009, and Sweden 2007 – 2009.

XML



Business Segments (Tables)

6 Months Ended

Jun. 26, 2011

Business Segments

Schedule of Earnings from Business Segments

(amounts in thousands)	Quarter (13 weeks) Ended				Six Months (26 weeks) Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
Business segment net revenue:
Shrink Management Solutions	$ 148,298		$ 143,837		$ 273,809		$ 273,267
Apparel Labeling Solutions	53,857		48,185		95,217		88,408
Retail Merchandising Solutions	17,776		16,154		35,578		33,957
Total revenues	$ 219,931		$ 208,176		$ 404,604		$ 395,632
Business segment gross profit:
Shrink Management Solutions	$   61,435		$   64,738		$ 109,253		$ 120,943
Apparel Labeling Solutions	15,574		18,313		29,480		33,709
Retail Merchandising Solutions	8,483		7,713		17,133		16,663
Total gross profit	85,492		90,764		155,866		171,315
Operating expenses, net	72,882	(1)	76,648	(2)	153,837	(3)	151,578	(4)
Interest (expense) income, net	(1,191)		(723)		(1,867)		(1,655)
Other gain (loss), net	(376)		(1,462)		(266)		(1,196)
Earnings before income taxes	$   11,043		$    11,931		$     (104)		$   16,886

(1)   Includes a $1.5 million restructuring charge and $2.0 million in acquisition costs.

(2)   Includes a $1.2 million restructuring charge.

(3)   Includes a $3.1 million restructuring charge and $2.2 million in acquisition costs.

(4)   Includes a $1.6 million restructuring charge.

XML



Supplemental Cash Flow Information

6 Months Ended

Jun. 26, 2011

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Note 6. SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest and income taxes for the six months ended June 26, 2011 and June 27, 2010 were as follows:

(amounts in thousands)

Six months ended	June 26, 2011	June 27, 2010
Interest	$ 2,895	$   2,266
Income tax payments	$ 4,819	$ 10,715

In January 2011, the Company entered into an agreement to acquire the business of Shore to Shore, through the acquisition of equity and/or assets, which together is a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $39.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and a payable to be settled in the third quarter of 2011 of $27.8 million for a 2010 performance based purchase accounting adjustment and other post-closing items.  The acquisition payment, net of cash acquired, is reflected in the acquisition of businesses line within investing activities on the Consolidated Statement of Cash Flows.

XML



Supplemental Cash Flow Information (Schedule of Cash Payments for Interest and Income Taxes) (Details) (USD $) In Thousands	6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010
Supplemental Cash Flow Information
Interest	$ 2,895	$ 2,266
Income tax payments	$ 4,819	$ 10,715

XML



Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Consolidated Statements of Comprehensive Income (Loss)
Net earnings	$ 9,522	$ 9,033	$ 211	$ 12,470
Amortization of pension plan actuarial losses (gains), net of tax	12	(33)	(244)	51
Change in realized and unrealized gains (losses) on derivative hedges, net of tax	57	584	(1,762)	2,136
Foreign currency translation adjustment	3,490	(16,067)	22,085	(31,302)
Comprehensive income (loss)	13,081	(6,483)	20,290	(16,645)
Less: comprehensive income (loss) attributable to noncontrolling interests	2	25	2	(57)
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.	$ 13,079	$ (6,508)	$ 20,288	$ (16,588)

XML



Inventories

6 Months Ended

Jun. 26, 2011

Inventories

Inventories

Note 2. INVENTORIES

Inventories consist of the following:

(amounts in thousands)

	June 26, 2011	December 26, 2010
Raw materials	$   27,587	$   21,976
Work-in-process	7,205	5,416
Finished goods	99,323	79,582
Total	$ 134,115	$ 106,974

XML



Goodwill and Other Intangible Assets (Schedule of Components of Goodwill) (Details) (USD $) In Thousands	Jun. 26, 2011	Dec. 26, 2010	Dec. 27, 2009
Gross Amount	$ 431,158	$ 373,359
Accumulated Impairment Losses	148,496	142,034
Goodwill	282,662	231,325	244,062
Shrink Management Solutions [Member]
Gross Amount	226,562	219,771
Accumulated Impairment Losses	54,768	54,447
Goodwill	171,794	165,324	171,878
Apparel Labeling Solutions [Member]
Gross Amount	63,585	23,102
Accumulated Impairment Losses	19,764	19,187
Goodwill	43,821	3,915	4,300
Retail Merchandising Solutions [Member]
Gross Amount	141,011	130,486
Accumulated Impairment Losses	73,964	68,400
Goodwill	$ 67,047	$ 62,086	$ 67,884

XML



Provision for Restructuring (Tables)

6 Months Ended

Jun. 26, 2011

Provision for Restructuring

Schedule of Restructuring Expense

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
SG&A Restructuring Plan
Severance and other employee-related charges	$   874	$   741	$ 2,459	$   837
Other exit costs	578	—	610	—
Manufacturing Restructuring Plan
Severance and other employee-related charges	(32)	274	(41)	569
Other exit costs	75	184	64	229
Total	$ 1,495	$ 1,199	$ 3,092	$ 1,635

Schedule of Restructuring Accrual Activity

Accrual at Beginning of Year	Charged to Earnings	Charge Reversed to Earnings	Cash Payments	Exchange Rate Changes	Accrual at 6/26/2011
SG&A Restructuring Plan
Severance and other employee-related charges	$ 6,660	$ 2,577	$ (118)	$ (2,545)	$ 314	$ 6,888
Other exit costs(1)	—	610	—	(128)	—	482
Manufacturing Restructuring Plan
Severance and other employee-related charges	719	69	(110)	(494)	—	184
Other exit costs(2)	143	75	(11)	(132)	—	75
Total	$ 7,522	$ 3,331	$ (239)	$ (3,299)	$ 314	$ 7,629

(1)   During the first six months of 2011, there was a net charge to earnings of $0.6 million due to the closing of an operating facility and one-time payment related to a lease modification for an operating facility.

(2)   During 2010, costs were recorded due to the closing of a manufacturing facility. For the first six months of 2011, there was a net charge to earnings of $0.1 million due to other exit costs associated with the manufacturing closings.

XML



Fair Value Measurement, Financial Instruments and Risk Management (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Thousands	Jun. 26, 2011	Dec. 26, 2010
Assets	$ 52	$ 965
Liabilities	724	298
Foreign Currency Revenue Forecast Contracts [Member]
Assets	45	938
Liabilities	724	278
Foreign Currency Revenue Forecast Contracts [Member] | Level 1 [Member]
Assets
Liabilities
Foreign Currency Revenue Forecast Contracts [Member] | Level 2 [Member]
Assets	45	938
Liabilities	724	278
Foreign Currency Revenue Forecast Contracts [Member] | Level 3 [Member]
Assets
Liabilities
Foreign Currency Forward Exchange Contracts [Member]
Assets	7	27
Liabilities		20
Foreign Currency Forward Exchange Contracts [Member] | Level 1 [Member]
Assets
Liabilities
Foreign Currency Forward Exchange Contracts [Member] | Level 2 [Member]
Assets	7	27
Liabilities		20
Foreign Currency Forward Exchange Contracts [Member] | Level 3 [Member]
Assets
Liabilities
Level 1 [Member]
Assets
Liabilities
Level 2 [Member]
Assets	52	965
Liabilities	724	298
Level 3 [Member]
Assets
Liabilities

XML



Fair Value Measurement, Financial Instruments and Risk Management (Carrying and Fair Values of Non-Current Financial Assets and Liabilities not Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Thousands	Jun. 26, 2011		Dec. 26, 2010
Long-term debt	$ 148,355		$ 121,740
Senior Secured Credit Facility [Member] | Estimated Fair Value [Member]
Long-term Line of Credit, Noncurrent	69,904	[1]	42,687	[1]
Senior Secured Notes [Member] | Estimated Fair Value [Member]
Long-term debt	76,096	[1]	75,787	[1]
Senior Secured Credit Facility [Member]
Long-term Line of Credit, Noncurrent	69,904	[1]	42,687	[1]
Senior Secured Notes [Member]
Long-term debt	$ 75,000	[1]	$ 75,000	[1]

[1] The carrying amounts are reported on the balance sheet under the indicated captions.

XML



Supplemental Cash Flow Information (Narrative) (Details) (USD $) In Millions	0 Months Ended	6 Months Ended
	May 16, 2011	Jun. 26, 2011
Proceeds from sale-type lease receivable		$ 30.9
Business acquisition, purchase price	78.7
Cash acquired on acquisition	1.9
Assumption of debt	4.2
Purchase price, cash	78.7
Purchase price, cash	39.7
Cash payment to escrow	27.8
Purchase Price Funded By Cash [Member]
Purchase price, cash	39.7
Purchase Price Funded By Senior Secured Credit Facility [Member]
Business acquisition, purchase price	9.2
Purchase price, cash	$ 9.2

XML



Provision for Restructuring (Schedule of Restructuring Expense) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Total	$ 1,495	$ 1,199	$ 3,092	$ 1,635
SG&A Restructuring Plan [Member]
Severance and other employee-related charges	874	741	2,459	837
Other exit costs	578		610
Manufacturing Restructuring Plan [Member]
Severance and other employee-related charges	(32)	274	(41)	569
Other exit costs	$ 75	$ 184	$ 64	$ 229

XML



Goodwill and Other Intangible Assets

6 Months Ended

Jun. 26, 2011

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 3. GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $103.1 million and $90.8 million as of June 26, 2011 and December 26, 2010, respectively.

The following table reflects the components of intangible assets as of June 26, 2011 and December 26, 2010:

(dollar amounts in thousands)

		June 26, 2011		December 26, 2010
	Amortizable Life (years)	Gross Amount	Gross Accumulated Amortization	Gross Amount	Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6to 20	$   97,812	$   47,035	$   79,696	$   41,226
Trade name	1to 30	31,745	18,355	29,148	16,634
Patents, license agreements	3to 14	62,960	49,038	60,410	45,048
Other	2to 6	7,259	4,343	10,701	8,320
Total amortized finite-lived intangible assets		199,776	118,771	179,955	111,228
Indefinite-lived intangible assets:
Trade name		22,140	—	22,096	—
Total identifiable intangible assets		$ 221,916	$ 118,771	$ 202,051	$ 111,228

Amortization expense for the three and six months ended June 26, 2011 was $3.0 million and $5.6 million, respectively.

Amortization expense for the three and six months ended June 27, 2010 was $3.0 million and $6.1 million, respectively.

Estimated amortization expense for each of the five succeeding years is anticipated to be:

(amounts in thousands)

2011	$ 12,163
2012	$ 11,465
2013	$ 10,303
2014	$   9,788
2015	$   9,614

The changes in the carrying amount of goodwill are as follows:

(amounts in thousands)

	Shrink Management Solutions	Apparel Labeling Solutions	Retail Merchandising Solutions	Total
Balance as of December 27, 2009	$ 171,878	$   4,300	$ 67,884	$ 244,062
Acquired during the year	—	467	—	467
Purchase accounting adjustment	—	(1,077)	—	(1,077)
Translation adjustments	(6,554)	225	(5,798)	(12,127)
Balance as of December 26, 2010	$ 165,324	$   3,915	$ 62,086	$ 231,325
Acquired during the year	—	39,850	—	39,850
Translation adjustments	6,470	56	4,961	11,487
Balance as of June 26, 2011	$ 171,794	$ 43,821	$ 67,047	$ 282,662

The following table reflects the components of goodwill as of June 26, 2011 and December 26, 2010:

(amounts in thousands)

	June 26, 2011			December 26, 2010
	Gross Amount	Accumulated Impairment Losses	Goodwill, Net	Gross Amount	Accumulated Impairment Losses	Goodwill, Net
Shrink Management Solutions	$ 226,562	$   54,768	$ 171,794	$ 219,771	$   54,447	$ 165,324
Apparel Labeling Solutions	63,585	19,764	43,821	23,102	19,187	3,915
Retail Merchandising Solutions	141,011	73,964	67,047	130,486	68,400	62,086
Total goodwill	$ 431,158	$ 148,496	$ 282,662	$ 373,359	$ 142,034	$ 231,325

On January 28, 2011, Checkpoint Systems, Inc. and certain of its direct subsidiaries (collectively, the "Company") entered into a Master Purchase Agreement. The Master Purchase Agreement outlines the general terms and conditions pursuant to which the Company agreed to acquire, through the acquisition of equity and/or assets, a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels. The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $39.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and a payable to be settled in the third quarter of 2011 of $27.8 million for a 2010 performance based purchase accounting adjustment and other post-closing items, which includes the acquisition of the following:

·   100% of the voting equity interests of J&F International, Inc. (U.S.), Shore to Shore Far East (Hong Kong), Shore to Shore MIS (India), Shore to Shore Lacar SA (Guatemala), Adapt Identification (HK) Ltd., and W Print Europe Ltd. (UK);

·   Assets of Shore to Shore, Inc. (U.S.), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., and Wing Hung Printing Co., Ltd. (U.S.);

·   51% of the voting equity interests of Shore to Shore PVT Ltd. (Sri Lanka);

·   50% of the voting equity interests of the Cybsa Adapt SA de CV (El Salvador) joint venture. In accordance with ASC 323 "Investments—Equity Method and Joint Ventures", we have applied the Equity Method in recording this joint venture.

Included in the $27.8 million payable, which is recorded in other current liabilities on our Consolidated Balance Sheets, is $17.5 million of purchase price related to the 2010 performance of the acquired business. This amount is subject to adjustment pending final determination of the 2010 performance and could result in an additional purchase price payment of up to $6.3 million. We expect to conclude on the 2010 performance of the acquired businesses during the third quarter of 2011.  After final determination of the 2010 performance including final payment amount due, an adjustment will be recorded to the purchase price and goodwill. Acquisition costs incurred in connection with the transaction are recognized within acquisition costs in the Consolidated Statement of Operations and approximate $2.0 million and $2.2 million for the three and six months ended June 26, 2011.

As the Company acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash, we have classified the non-controlling interests as equity on our Consolidated Balance Sheets as of June 26, 2011 and December 26, 2010, and presented net income attributable to non-controlling interests separately on our Consolidated Statements of Operations for the three and six months ended June 26, 2011 and June 27, 2010. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

At June 26, 2011, the financial statements reflected the preliminary allocation of the purchase price based on estimated fair values at the date of acquisition, including $22.8 million in Property, Plant, and Equipment, $7.2 million in Accounts Receivable, and $2.2 million in Inventories. This preliminary allocation resulted in acquired goodwill of $39.9 million and intangible assets of $16.2 million. The intangible assets were composed of a non-compete agreement ($0.3 million), customer lists ($15.4 million), and trade names ($0.5 million). The useful lives were 5 years for the non-compete agreement, 10 years for the customer lists, and 7.5 months for the trade names. The Company continues to evaluate certain assets and liabilities related to this business combination. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill. Also, the allocation of the purchase price remains open for final valuation results, quantification of acquired income and non-income based tax exposures, and certain information related to deferred income taxes. The measurement period is expected to be completed by May of 2012. The tax deductible portion of the acquired goodwill will also be determined during the measurement period. The results from the acquisition date through June 26, 2011 are included in the Apparel Labeling Solutions segment and were not material to the Consolidated Financial Statements (revenues of $6.0 million and net earnings of $0.5 million).

In July 2009, the Company entered into an agreement to purchase the business of Brilliant, a China-based manufacturer of woven and printed labels, and settled the acquisition on August 14, 2009 for approximately $38.3 million, including cash acquired of $0.6 million and the assumption of debt of $19.6 million. The transaction was paid in cash and the purchase price includes the acquisition of 100% of Brilliant's voting equity interests. Acquisition costs incurred in connection with the transaction are recognized within selling, general and administrative expenses in the Consolidated Statement of Operations and approximate $0.3 million during the first six months of 2010 without a comparable charge in 2011.

During the second quarter of 2010 we finalized our purchase accounting related to income taxes for the Brilliant acquisition and as a result we recorded a decrease to goodwill of $1.1 million. As of June 27, 2010, the financial statements reflect the final allocations of the purchase price based on the estimated fair values at the date of acquisition.

We perform an assessment of goodwill by comparing each individual reporting unit's carrying amount of net assets, including goodwill, to their fair value at least annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Future assessments could result in impairment charges, which would be accounted for as an operating expense.

XML



Debt (Short-term Borrowings and Current Portion of Long-term Debt) (Details) (USD $) In Thousands	Jun. 26, 2011	Dec. 26, 2010
Debt
Line of credit	$ 1,866	$ 1,808
Overdraft	613
Full-recourse factoring liabilities	15,983	13,065
Term loans	5,307	4,950
Revolving loan facility	385	386
Other short-term borrowings	562
Current portion of long-term debt	1,651	2,016
Total short-term borrowings and current portion of long-term debt	$ 26,367	$ 22,225

XML



Earnings Per Share (Tables)

6 Months Ended

Jun. 26, 2011

Earnings Per Share

Schedule of Earnings Per Share

(amounts in thousands, except per share data)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Basic earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$   9,520	$   9,040	$      209	$  12,546
Diluted earnings attributable to Checkpoint Systems, Inc. available to common stockholders	$   9,520	$   9,040	$      209	$  12,546
Shares:
Weighted-average number of common shares outstanding	40,084	39,476	39,990	39,330
Shares issuable under deferred compensation agreements	458	469	447	436
Basic weighted-average number of common shares outstanding	40,542	39,945	40,437	39,766
Common shares assumed upon exercise of stock options and awards	360	552	461	526
Shares issuable under deferred compensation arrangements	12	13	5	9
Dilutive weighted-average number of common shares outstanding	40,914	40,510	40,903	40,301
Basic earnings attributable to Checkpoint Systems, Inc. per share	$       .23	$       .23	$       .01	$       .32
Diluted earnings attributable to Checkpoint Systems, Inc. per share	$       .23	$       .22	$       .01	$       .31

Schedule of Anti-dilutive Common Share Equivalents

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS	1,847	1,380	1,608	1,509

XML



Business Segments (Schedule of Earnings from Business Segments) (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 26, 2011		Jun. 27, 2010		Jun. 26, 2011		Jun. 27, 2010
Net revenues	$ 219,931,000		$ 208,176,000		$ 404,604,000		$ 395,632,000
Gross profit	85,492,000		90,764,000		155,866,000		171,315,000
Operating expenses, net	72,882,000	[1]	76,648,000	[2]	153,837,000	[3]	151,578,000	[4]
Interest (expense) income, net	(1,191,000)		(723,000)		(1,867,000)		(1,655,000)
Other gain (loss), net	(376,000)		(1,462,000)		(266,000)		(1,196,000)
Earnings (loss) before income taxes	11,043,000		11,931,000		(104,000)		16,886,000
Restructuring charges	1,500,000		1,200,000		3,100,000		1,600,000
Acquisition costs	2,017,000				2,203,000
Segment, Shrink Management Solutions [Member]
Net revenues	148,298,000		143,837,000		273,809,000		273,267,000
Gross profit	61,435,000		64,738,000		109,253,000		120,943,000
Segment, Apparel Labeling Solutions [Member]
Net revenues	53,857,000		48,185,000		95,217,000		88,408,000
Gross profit	15,574,000		18,313,000		29,480,000		33,709,000
Segment, Retail Merchandising Solutions [Member]
Net revenues	17,776,000		16,154,000		35,578,000		33,957,000
Gross profit	$ 8,483,000		$ 7,713,000		$ 17,133,000		$ 16,663,000

[1] Includes a $1.5 million restructuring charge and $2.0 million in acquisition costs.

[2] Includes a $1.2 million restructuring charge.

[3] Includes a $3.1 million restructuring charge and $2.2 million in acquisition costs.

[4] Includes a $1.6 million restructuring charge.

XML



Fair Value Measurement, Financial Instruments and Risk Management (Amounts Affecting Consolidated Statement of Operations) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Foreign Currency Revenue Forecast Contracts [Member] | Cash Flow Hedges [Member]
Amount of gain (loss) recognized in Other Comprehensive Income on derivatives	$ (354)	$ 978	$ (2,725)	$ 2,082
Amount of forward points recognized in Other Gain (Loss), net	(124)	(11)	(105)	(26)
Foreign Currency Revenue Forecast Contracts [Member] | Cash Flow Hedges [Member] | Cost of Sales [Member]
Amount of gain (loss) reclassified from Accumulated Other Comprehensive Income into Income	(276)	382	(494)	10
Cash Flow Hedges [Member]
Amount of gain (loss) recognized in Other Comprehensive Income on derivatives	(354)	978	(2,725)	2,253
Amount of gain (loss) reclassified from Accumulated Other Comprehensive Income into Income	(276)	382	(494)	(149)
Amount of forward points recognized in Other Gain (Loss), net	(124)	(11)	(105)	(26)
Cash Flow Hedges [Member] | Interest Expense [Member] | Interest Rate Swap Contracts [Member]
Amount of gain (loss) reclassified from Accumulated Other Comprehensive Income into Income				(159)
Cash Flow Hedges [Member] | Interest Rate Swap Contracts [Member]
Amount of gain (loss) recognized in Other Comprehensive Income on derivatives				171
Derivatives Not Designated as Hedging Instruments [Member] | Other Gain (Loss), Net [Member] | Foreign Exchange Forwards and Options [Member]
Amount gain (loss) recognized in income on derivatives	$ (158)	$ 237	$ (495)	$ 410

XML



Summary of Significant Accounting Policies (Narrative) (Details)	6 Months Ended					6 Months Ended
	Jun. 26, 2011 USD ($)	Dec. 26, 2010 USD ($)	Jun. 26, 2011 Grant from Chinese Government [Member] USD ($)	Jun. 26, 2011 Grant from Chinese Government [Member] CNY	Jun. 26, 2011 Other Restricted Cash [Member] USD ($)	Jun. 26, 2011 Machinery and Equipment [Member] USD ($)	Jun. 26, 2011 Construction in Progress [Member] USD ($)	Dec. 26, 2010 Construction in Progress [Member] USD ($)
Restricted cash	$ 652,000	$ 140,000	$ 500,000	3,300,000	$ 200,000
Proceeds from sale-type lease receivable	30,900,000
Total amount of internal-use software costs capitalized	16,800,000	13,100,000
Total amount of internal-use software costs capitalized							1,400,000	12,700,000
Value of supporting software packages capitalized						$ 15,400,000

XML



Debt (Short-term Borrowings and Current Portion of Long-term Debt) (Narrative) (Details)						6 Months Ended									6 Months Ended
	Jun. 26, 2011 USD ($)	May 16, 2011 USD ($)	Dec. 26, 2010 USD ($)	Jun. 26, 2011 Shore To Shore [Member] USD ($)	May 16, 2011 Shore To Shore [Member] USD ($)	Jun. 26, 2011 Revolving Loan Facility [Member] Hong Kong Banking Facility [Member] USD ($)	Jun. 26, 2011 Revolving Loan Facility [Member] Hong Kong Banking Facility [Member] HKD	Jun. 26, 2011 Term Loan [Member]	Jun. 26, 2011 Term Loan Maturing in 2012 [Member] USD ($)	Jun. 26, 2011 Term Loan Maturing in 2012 [Member] CNY	Jun. 26, 2011 Full-Recourse Factoring Agreement [Member] USD ($)	Jun. 26, 2011 Full-Recourse Factoring Agreement [Member] EUR (€)	Oct. 31, 2009 Full-Recourse Factoring Agreement [Member] USD ($)	Oct. 31, 2009 Full-Recourse Factoring Agreement [Member] EUR (€)	Jun. 26, 2011 Full-Recourse Factoring Agreement [Member] Hong Kong Banking Facility [Member] USD ($)	Jun. 26, 2011 Full-Recourse Factoring Agreement [Member] Hong Kong Banking Facility [Member] HKD	Jun. 26, 2011 Japanese Local Line of Credit [Member] USD ($)	Jun. 26, 2011 Japanese Local Line of Credit [Member] JPY (¥)	Jun. 26, 2011 Hong Kong Banking Facility [Member] USD ($)	Jun. 26, 2011 Hong Kong Banking Facility [Member] HKD	Mar. 18, 2010 Hong Kong Banking Facility [Member] USD ($)	Mar. 18, 2010 Hong Kong Banking Facility [Member] HKD
Assumption of debt		$ 4,200,000			$ 4,200,000
Business acquisition, debt outstanding	26,367,000		22,225,000	4,400,000
Maximum borrowing availability under credit facility						400,000	3,000,000								3,200,000	25,000,000			7,600,000	59,500,000
Book value of collateral																			9,200,000	71,600,000
Interest rate						Hong Kong Best Lending Rate + 1.0%	Hong Kong Best Lending Rate + 1.0%	HIBOR + 2.5%			EURIBOR plus a margin of 3.00%	EURIBOR plus a margin of 3.00%			HIBOR + 2.5%	HIBOR + 2.5%
Amount outstanding under credit facility						400,000	3,000,000				11,400,000	8,000,000	12,000,000	8,000,000	2,700,000	21,100,000	1,900,000	150,000,000
Current portion of term loan	1,866,000		1,808,000						200,000	1,500,000
Amount outstanding under term loan	$ 5,307,000		$ 4,950,000																$ 4,000,000	31,500,000	$ 5,400,000	42,000,000
Maturity date								March 2015	May 2012	May 2012							November 2011	November 2011
Rate of interest											4.43%	4.43%

XML



Fair Value Measurement, Financial Instruments and Risk Management (Tables)

3 Months Ended

6 Months Ended

12 Months Ended

Jun. 26, 2011

Jun. 26, 2011

Dec. 26, 2010

Fair Value Measurement, Financial Instruments and Risk Management

Assets and Liabilities Measured at Fair Value on a Recurring Basis

(amounts in thousands)	Total Fair Value Measurement June 26, 2011	Quoted Prices In Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Foreign currency revenue forecast contracts	$   45	$ —	$   45	$ —
Foreign currency forward exchange contracts	7		7
Total assets	$   52	$ —	$   52	$ —
Foreign currency revenue forecast contracts	$ 724	$ —	$ 724	$ —
Foreign currency forward exchange contracts	—	—	—	—
Total liabilities	$ 724	$ —	$ 724	$ —

(amounts in thousands)	Total Fair Value Measurement December 26, 2010	Quoted Prices In Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Foreign currency revenue forecast contracts	$ 938	$ —	$ 938	$ —
Foreign currency forward exchange contracts	27	—	27	—
Total assets	$ 965	$ —	$ 965	$ —
Foreign currency revenue forecast contracts	$ 278	$ —	$ 278	$ —
Foreign currency forward exchange contracts	20	—	20	—
Total liabilities	$ 298	$ —	$ 298	$ —

Summary of Activity Associated with all Designated Cash Flow Hedges Reflected in AOCI

	June 26, 2011
Beginning balance, net of tax	$       377
Changes in fair value gain, net of tax	(2,350)
Reclassification to earnings, net of tax	588
Ending balance, net of tax	$ (1,385)

Carrying and Fair Values of Non-Current Financial Assets and Liabilities not Measured at Fair Value on a Recurring Basis

(amounts in thousands)	June 26, 2011		December 26, 2010
	Carrying Amount	Estimated Fair Value	Carrying Amount	Estimated Fair Value
Long-term debt (including current maturities and excluding capital leases and factoring) (1)
Senior secured credit facility	$ 69,904	$ 69,904	$ 42,687	$ 42,687
Senior secured notes	$ 75,000	$ 76,096	$ 75,000	$ 75,787

(1)   The carrying amounts are reported on the balance sheet under the indicated captions.

Fair Values of Derivative Instruments Included within the Consolidated Balance Sheets

(amounts in thousands)	June 26, 2011				December 26, 2010
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign currency revenue forecast contracts	Other current assets	$   45	Other current liabilities	$  724	Other current assets	$  938	Other current liabilities	$  278
Total derivatives designated as hedging instruments		45		724		938		278
Derivatives not designated as hedging instruments
Foreign currency forward exchange contracts	Other current assets	7	Other current liabilities	—	Other current assets	27	Other current liabilities	20
Total derivatives not designated as hedging instruments		7		—		27		20
Total derivatives		$ 52		$ 724		$ 965		$ 298

Amounts Affecting the Consolidated Statement of Operations

(amounts in thousands)	June 26, 2011				June 27, 2010
	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$  (354)	Cost of sales	$  (276)	$  (124)	$  978	Cost of sales	$  382	$  (11)
Interest rate swap contracts	—	Interest expense	—	—	—	Interest expense	—	—
Total designated cash flow hedges	$ (354)		$ (276)	$ (124)	$ 978		$ 382	$ (11)

(amounts in thousands)	June 26, 2011				June 27, 2010
	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net	Amount of  Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Amount of  Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into  Income	Amount of Forward Points Recognized in Other Gain (Loss), net
Derivatives designated as cash flow hedges:
Foreign currency revenue forecast contracts	$  (2,725)	Cost of sales	$  (494)	$  (105)	$  2,082	Cost of sales	$       10	$  (26)
Interest rate swap contracts	—	Interest expense	—	—	171	Interest expense	(159)	—
Total designated cash flow hedges	$ (2,725)		$ (494)	$ (105)	$ 2,253		$ (149)	$ (26)

Effect of Non-designated Hedging Instruments on Financial Performance

(amounts in thousands)	Quarter (13 weeks) Ended				Six Months (26 weeks) Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives	Location of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments
Foreign exchange forwards and options	$ (158)	Other gain (loss), net	$ 237	Other gain (loss), net	$ (495)	Other gain (loss), net	$ 410	Other gain (loss), net

XML



Provision for Restructuring

6 Months Ended

Jun. 26, 2011

Provision for Restructuring

Provision for Restructuring

Note 11. PROVISION FOR RESTRUCTURING

Restructuring expense for the three and six months ended June 26, 2011 and June 27, 2010 was as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
SG&A Restructuring Plan
Severance and other employee-related charges	$   874	$   741	$ 2,459	$   837
Other exit costs	578	—	610	—
Manufacturing Restructuring Plan
Severance and other employee-related charges	(32)	274	(41)	569
Other exit costs	75	184	64	229
Total	$ 1,495	$ 1,199	$ 3,092	$ 1,635

Restructuring accrual activity for the six months ended June 26, 2011 was as follows:

(amounts in thousands)

Accrual at Beginning of Year	Charged to Earnings	Charge Reversed to Earnings	Cash Payments	Exchange Rate Changes	Accrual at 6/26/2011
SG&A Restructuring Plan
Severance and other employee-related charges	$ 6,660	$ 2,577	$ (118)	$ (2,545)	$ 314	$ 6,888
Other exit costs(1)	—	610	—	(128)	—	482
Manufacturing Restructuring Plan
Severance and other employee-related charges	719	69	(110)	(494)	—	184
Other exit costs(2)	143	75	(11)	(132)	—	75
Total	$ 7,522	$ 3,331	$ (239)	$ (3,299)	$ 314	$ 7,629

(1)   During the first six months of 2011, there was a net charge to earnings of $0.6 million due to the closing of an operating facility and one-time payment related to a lease modification for an operating facility.

(2)   During 2010, costs were recorded due to the closing of a manufacturing facility. For the first six months of 2011, there was a net charge to earnings of $0.1 million due to other exit costs associated with the manufacturing closings.

SG&A Restructuring Plan

During 2009, we initiated a plan focused on reducing our overall operating expenses by consolidating certain administrative functions to improve efficiencies. The first phase of this plan was implemented in the fourth quarter of 2009 with the remaining phases of the plan expected to be substantially complete by the end of 2011.

As of June 26, 2011, the net charge to earnings of $3.1 million represents the current year activity related to the SG&A Restructuring Plan. The anticipated total costs related to the plan are expected to approximate $20 million to $25 million, of which $12.9 million have been incurred. The total number of employees currently affected by the SG&A Restructuring Plan were 204, of which 141 have been terminated. Termination benefits are planned to be paid one month to 24 months after termination.

Manufacturing Restructuring Plan

In August 2008, we announced a manufacturing and supply chain restructuring program designed to accelerate profitable growth in our Apparel Labeling Solutions (ALS) business, formerly Check-Net®, and to support incremental improvements in our EAS systems and labels businesses. For the six months ended June 26, 2011, there was a net charge to earnings of $23 thousand recorded in connection with the Manufacturing Restructuring Plan. This net charge was primarily due to other exit costs associated with the closing of manufacturing facilities partially offset by lower than estimated severance accruals.

The total number of employees currently affected by the Manufacturing Restructuring Plan was 420, of which 417 have been terminated. As of June 26, 2011 the implementation of the Manufacturing Restructuring Plan is substantially complete, with total costs incurred of $4.2 million. Termination benefits are planned to be paid one month to 24 months after termination.

XML



Pension Benefits (Components of Net Periodic Benefit Cost) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010	Dec. 25, 2011
Pension Benefits
Service cost	$ 252,000	$ 206,000	$ 489,000	$ 429,000
Interest cost	1,140,000	1,043,000	2,221,000	2,175,000
Expected return on plan assets	40,000	(14,000)	78,000	(30,000)
Amortization of actuarial (gain)	13,000	(6,000)	25,000	(12,000)
Amortization of transition obligation	33,000	30,000	65,000	62,000
Amortization of prior service costs			1,000	1,000
Net periodic pension cost	1,478,000	1,259,000	2,879,000	2,625,000
Estimated employer contributions					5,100,000
Pension contributions			$ 2,800,000

XML



Fair Value Measurement, Financial Instruments and Risk Management (Fair Values of Derivative Instruments Included within the Consolidated Balance Sheets) (Details) (USD $) In Thousands	Jun. 26, 2011	Dec. 26, 2010
Derivative Assets, Fair Value	$ 52	$ 965
Derivative Liabilities, Fair Value	724	298
Other Current Assets [Member] | Foreign Currency Revenue Forecast Contracts [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivative Assets, Fair Value	45	938
Other Current Liabilities [Member] | Foreign Currency Revenue Forecast Contracts [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivative Liabilities, Fair Value	724	278
Derivatives Designated as Hedging Instruments [Member]
Derivative Assets, Fair Value	45	938
Derivative Liabilities, Fair Value	724	278
Other Current Assets [Member] | Foreign Currency Forward Exchange Contracts [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivative Assets, Fair Value	7	27
Other Current Liabilities [Member] | Foreign Currency Forward Exchange Contracts [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivative Liabilities, Fair Value		20
Derivatives Not Designated as Hedging Instruments [Member]
Derivative Assets, Fair Value	7	27
Derivative Liabilities, Fair Value		20
Foreign Currency Revenue Forecast Contracts [Member]
Derivative Assets, Fair Value	45	938
Derivative Liabilities, Fair Value	724	278
Foreign Currency Forward Exchange Contracts [Member]
Derivative Assets, Fair Value	7	27
Derivative Liabilities, Fair Value		$ 20

XML



Debt

6 Months Ended

Jun. 26, 2011

Debt

Debt

Note 4. DEBT

Short-term Borrowings and Current Portion of Long-term Debt

Short-term borrowings and current portion of long-term debt as of June 26, 2011 and December 26, 2010 consisted of the following:

(amounts in thousands)	June 26, 2011	December 26, 2010
Line of credit	$   1,866	$   1,808
Overdraft	613	—
Full-recourse factoring liabilities	15,983	13,065
Term loans	5,307	4,950
Revolving loan facility	385	386
Other short-term borrowings	562	—
Current portion of long-term debt	1,651	2,016
Total short-term borrowings and current portion of long-term debt	$ 26,367	$ 22,225

In connection with the acquisition of the Shore to Shore businesses, the Company assumed debt of $4.2 million. As of June 26, 2011, $4.4 million related to the assumed debt remained outstanding. The debt assumed includes capital leases, accounts receivable factoring arrangements, term loans, an overdraft facility, and other short-term loans. With the exception of the capital leases, the banking facilities are subject to the banks' rights to call the liabilities at any time, and are therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

On December 30, 2009, we entered into a new Hong Kong banking facility. The banking facility includes a trade finance facility, a revolving loan facility, and a term loan. The maximum availability under the facility is $7.6 million (HKD 59.5 million). The banking facility is secured by all plant, machinery, fittings and equipment. The book value of the collateral as of June 26, 2011 is $9.2 million (HKD 71.6 million). The banking facility is subject to the bank's right to call the liabilities at any time, and is therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

Trade Finance Facility - The trade finance facility is a full-recourse factoring arrangement that has a maximum borrowing limit of $3.2 million (HKD 25.0 million) and totaled $2.7 million (HKD 21.1 million) at June 26, 2011. The interest rate on this arrangement is HIBOR + 2.5%. The trade finance facility is secured by the related receivables.

Revolving Loan Facility – The revolving loan facility has a maximum borrowing limit of $0.4 million (HKD 3.0 million). The interest rate on this arrangement is Hong Kong Best Lending Rate + 1.0%. As of June 26, 2011, the revolving loan facility is $0.4 million (HKD 3.0 million) and is fully drawn.

Term Loan – On March 18, 2010, the Company borrowed $5.4 million (HKD 42.0 million). The interest rate on this arrangement is HIBOR + 2.5% and matures in March 2015. As of June 26, 2011, $4.0 million (HKD 31.5 million) was outstanding.

Included in Term loans is a $0.2 million (RMB 1.5 million) term loan maturing in May 2012. The term loan is subject to the bank's right to call the liabilities at any time, and is therefore included in short-term borrowings in the accompanying Consolidated Balance Sheets.

In October 2009, the Company entered into a $12.0 million (€8.0 million) full-recourse factoring arrangement. The arrangement is secured by trade receivables. Borrowings bear interest at rates of EURIBOR plus a margin of 3.00%. At June 26, 2011, the interest rate was 4.43%. At June 26, 2011, our short-term full-recourse factoring arrangement equaled $11.4 million (€8.0 million) and is included in short-term borrowings in the accompanying Consolidated Balance Sheets since the agreement expires in December 2011.

As of June 26, 2011, the Japanese local line of credit is $1.9 million (¥150 million) and is fully drawn. The line of credit matures in November 2011.

Long-Term Debt

Long-term debt as of June 26, 2011 and December 26, 2010 consisted of the following:

(amounts in thousands)

	June 26, 2011	December 26, 2010
Senior Secured Credit Facility:
$125 million variable interest rate revolving credit facility maturing in 2014	$   69,904	$   42,687
Senior Secured Notes:
$25 million 4.00% fixed interest rate Series A senior secured notes maturing in 2015	25,000	25,000
$25 million 4.38% fixed interest rate Series B senior secured notes maturing in 2016	25,000	25,000
$25 million 4.75% fixed interest rate Series C senior secured notes maturing in 2017	25,000	25,000
Full-recourse factoring liabilities	1,636	1,740
Other capital leases with maturities through 2016	1,815	2,313
Total	148,355	121,740
Less current portion	1,651	2,016
Total long-term portion	$ 146,704	$ 119,724

Revolving Credit Facility

The Senior Secured Credit Facility includes an expansion option that will allow us to request an increase in the Senior Secured Credit Facility of up to an aggregate of $50.0 million, for a potential total commitment of $175.0 million. As of June 26, 2011, we did not elect to request the $50.0 million expansion option.

The Senior Secured Credit Facility contains a $25.0 million sublimit for the issuance of letters of credit of which $1.4 million, issued under the Secured Credit Facility, are outstanding as of June 26, 2011. The Senior Secured Credit Facility also contains a $15.0 million sublimit for swingline loans.

All obligations of domestic borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. The obligations of foreign borrowers under the Senior Secured Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by certain of our foreign subsidiaries as well as the domestic guarantors. Collateral under the Senior Secured Credit Facility includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary.

Pursuant to the terms of the Senior Secured Credit Facility, we are subject to various requirements, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Credit Facility also contains customary representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults. Upon a default under the Senior Secured Credit Facility, including the non-payment of principal or interest, our obligations under the Senior Secured Credit Facility may be accelerated and the assets securing such obligations may be sold. Certain wholly-owned subsidiaries with respect to the Company are guarantors of our obligations under the Senior Secured Credit Facility. As of June 26, 2011, we were in compliance with all covenants.

Senior Secured Notes

The Senior Secured Notes Agreement provides that for a three-year period ending on July 22, 2013, we may issue, and our lender may, in its sole discretion, purchase, additional fixed-rate senior secured notes (the "Shelf Notes"); together with the 2010 Notes, (the "Notes"), up to an aggregate amount of $50.0 million. As of June 26, 2011, we did not issue additional fixed-rate senior secured notes.

All obligations under the Senior Secured Notes are irrevocably and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries. Collateral under the Senior Secured Notes includes a 100% stock pledge of domestic subsidiaries and a 65% stock pledge of all first-tier foreign subsidiaries, excluding our Japanese sales subsidiary.

The Senior Secured Notes Agreement is subject to covenants that are substantially similar to the covenants in the Senior Secured Credit Facility Agreement, including covenants requiring the maintenance of a maximum total leverage ratio of 2.75 and a minimum fixed charge coverage ratio of 1.25. The Senior Secured Notes Agreement also contains representations and warranties, affirmative and negative covenants, notice provisions and events of default, including change of control, cross-defaults to other debt, and judgment defaults that are substantially similar to those contained in the Senior Secured Credit Facility, and those that are customary for similar private placement transactions. Upon a default under the Senior Secured Notes Agreement, including the non-payment of principal or interest, our obligations under the Senior Secured Notes Agreement may be accelerated and the assets securing such obligations may be sold. Certain of our wholly-owned subsidiaries are also guarantors of our obligations under the Senior Secured Notes. As of June 26, 2011, we were in compliance with all covenants.

Full-recourse Factoring Arrangements

In December 2009, we entered into new full-recourse factoring arrangements. The arrangements are secured by trade receivables. The Company received a weighted average of 92.4% of the face amount of receivables that it desired to sell and the bank agreed, at its discretion, to buy. At June 26, 2011 the factoring arrangements had a balance of $1.6 million (€1.2 million), of which $0.4 million (€0.3 million) was included in the current portion of long-term debt and $1.2 million (€0.9 million) was included in long-term borrowings in the accompanying Consolidated Balance Sheets since the receivables are collectable through 2016.

XML



Summary of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 26, 2011

Summary of Significant Accounting Polices

Restricted Cash

Restricted Cash

We classify restricted cash as cash that cannot be made readily available for use. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits. As of June 26, 2011, the unused portion of a grant from the Chinese government of $0.5 million (RMB 3.3 million) and $0.2 million in compensating balances were recorded within restricted cash in the accompanying Consolidated Balance Sheets.

Accounts Receivable

Accounts Receivable

At June 26, 2011, proceeds from the sale of accounts receivable related to a sales-type lease extension with a customer to a third party financial institution totaled $30.9 million. Proceeds from the initial sale of the accounts receivable are used to fund operations. We have presented the earnings recognized on the sale of the receivables separately under the line item captioned other operating income on our Consolidated Statements of Operations for the three and six months ended June 26, 2011 and June 27, 2010. This transaction meets the criteria for sale treatment in accordance with ASC 860 "Accounting for Transfers and Servicing of Financial Assets".

Internal-Use Software

Internal-Use Software

Included in fixed assets is the capitalized cost of internal-use software. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over their estimated useful lives, which generally range from three to five years. Costs incurred related to design or maintenance of internal-use software is expensed as incurred.

During 2009, we announced that we were in the initial stages of implementing a company-wide ERP system to handle the business and finance processes within our operations and corporate functions. The total amount of internal-use software costs capitalized since the beginning of the ERP implementation as of June 26, 2011 and December 26, 2010 were $16.8 million and $13.1 million, respectively. As of June 26, 2011, $15.4 million was recorded in machinery and equipment related to supporting software packages that were placed in service. The remaining costs of $1.4 million and $12.7 million as of June 26, 2011 and December 26, 2010, respectively, are capitalized as construction-in-progress until such time as the ERP system has been placed in service.

Warranty Reserves

Warranty Reserves

We provide product warranties for our various products. These warranties vary in length depending on product and geographical region. We establish our warranty reserves based on historical data of warranty transactions.

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)

Six months ended	June 26, 2011
Balance at beginning of year	$   6,170
Accruals for warranties issued	3,132
Settlements made	(3,343)
Foreign currency translation adjustment	213
Balance at end of period	$   6,172

XML



Provision for Restructuring (Schedule of Restructuring Accrual Activity) (Details) (USD $)	6 Months Ended
	Jun. 26, 2011
Accrual at beginning of year	$ 7,522,000
Charged to earnings	3,331,000
Charge reversed to earnings	(239,000)
Cash payments	(3,299,000)
Exchange rate changes	314,000
Accrual at 6/26/2011	7,629,000
Lease termination costs	100,000
SG&A Restructuring Plan [Member]
Charged to earnings	3,100,000
SG&A Restructuring Plan [Member] | Severance and Other Employee-Related Charges [Member]
Accrual at beginning of year	6,660,000
Charged to earnings	2,577,000
Charge reversed to earnings	(118,000)
Cash payments	(2,545,000)
Exchange rate changes	314,000
Accrual at 6/26/2011	6,888,000
SG&A Restructuring Plan [Member] | Other Exit Costs [Member]
Charged to earnings	610,000	[1]
Cash payments	(128,000)	[1]
Accrual at 6/26/2011	482,000	[1]
Manufacturing Restructuring Plan [Member]
Charged to earnings	23,000
Lease termination costs	600,000
Manufacturing Restructuring Plan [Member] | Severance and Other Employee-Related Charges [Member]
Accrual at beginning of year	719,000
Charged to earnings	69,000
Charge reversed to earnings	(110,000)
Cash payments	(494,000)
Accrual at 6/26/2011	184,000
Manufacturing Restructuring Plan [Member] | Other Exit Costs [Member]
Accrual at beginning of year	143,000	[2]
Charged to earnings	75,000	[2]
Charge reversed to earnings	(11,000)	[2]
Cash payments	(132,000)	[2]
Accrual at 6/26/2011	$ 75,000	[2]

[1] During the first six months of 2011, there was a net charge to earnings of $0.6 million due to the closing of an operating facility and one-time payment related to a lease modification for an operating facility.

[2] During 2010, costs were recorded due to the closing of a manufacturing facility. For the first six months of 2011, there was a net charge to earnings of $0.1 million due to other exit costs associated with the manufacturing closings.

XML



Provision for Restructuring (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 26, 2011
Charged to earnings	$ 3,331,000
Cash payments	3,299,000
Maximum [Member] | SG&A Restructuring Plan [Member]
Anticipated total costs	25,000,000
Minimum [Member] | SG&A Restructuring Plan [Member]
Anticipated total costs	20,000,000
SG&A Restructuring Plan [Member]
Charged to earnings	3,100,000
Costs incurred	12,900,000
Total number of employees affected by restructuring	204
Number of employees terminated	141
Manufacturing Restructuring Plan [Member]
Charged to earnings	23,000
Costs incurred	$ 4,200,000
Total number of employees affected by restructuring	420
Number of employees terminated	417

XML



Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) (USD $) In Thousands	6 Months Ended	12 Months Ended
	Jun. 26, 2011	Dec. 26, 2010
Beginning Balance	$ 231,325	$ 244,062
Acquired during the year	39,850	467
Purchase accounting adjustment		(1,077)
Translation adjustments	11,487	(12,127)
Ending Balance	282,662	231,325
Shrink Management Solutions [Member]
Beginning Balance	165,324	171,878
Translation adjustments	6,470	(6,554)
Ending Balance	171,794	165,324
Apparel Labeling Solutions [Member]
Beginning Balance	3,915	4,300
Acquired during the year	39,850	467
Purchase accounting adjustment		(1,077)
Translation adjustments	56	225
Ending Balance	43,821	3,915
Retail Merchandising Solutions [Member]
Beginning Balance	62,086	67,884
Translation adjustments	4,961	(5,798)
Ending Balance	$ 67,047	$ 62,086

XML



Pension Benefits (Tables)

6 Months Ended

Jun. 26, 2011

Pension Benefits

Components of Net Periodic Benefit Cost

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Service cost	$    252	$    206	$489	$    429
Interest cost	1,140	1,043	2,221	2,175
Expected return on plan assets	40	(14)	78	(30)
Amortization of actuarial (gain)	13	(6)	25	(12)
Amortization of transition obligation	33	30	65	62
Amortization of prior service costs	—	—	1	1
Net periodic pension cost	$ 1,478	$ 1,259	$ 2,879	$ 2,625

XML



Consolidated Statements of Equity (USD $) In Thousands	Common Stock [Member]	Additional Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]	Noncontrolling Interests [Member]	Total
Balance at Dec. 27, 2009	$ 4,307	$ 390,379	$ 205,951	$ (71,520)	$ 28,603	$ 834	$ 558,554
Balance, shares at Dec. 27, 2009	43,078			4,036
Net earnings			27,371			(116)	27,255
Exercise of stock-based compensation and awards released	77	5,945					6,022
Exercise of stock-based compensation and awards released, shares	765
Tax benefit on stock-based compensation		133					133
Stock-based compensation expense		8,751					8,751
Deferred compensation plan		2,112					2,112
Repurchase of non-controlling interests		63				(755)	(692)
Amortization of pension plan actuarial losses (gains), net of tax					103		103
Change in realized and unrealized gains (losses) on derivative hedges, net of tax					679		679
Recognized loss on pension, net of tax					(3,405)		(3,405)
Foreign currency translation adjustment					(15,258)	37	(15,221)
Balance at Dec. 26, 2010	4,384	407,383	233,322	(71,520)	10,722		584,291
Balance, shares at Dec. 26, 2010	43,843			4,036
Net earnings			209			2	211
Exercise of stock-based compensation and awards released	29	1,540					1,569
Exercise of stock-based compensation and awards released, shares	289
Tax benefit on stock-based compensation		90					90
Stock-based compensation expense		4,779					4,779
Deferred compensation plan		351					351
Non-controlling interests of acquired entities						1,271	1,271
Amortization of pension plan actuarial losses (gains), net of tax					(244)		(244)
Change in realized and unrealized gains (losses) on derivative hedges, net of tax					(1,762)		(1,762)
Foreign currency translation adjustment					22,085		22,085
Balance at Jun. 26, 2011	$ 4,413	$ 414,143	$ 233,531	$ (71,520)	$ 30,801	$ 1,273	$ 612,641
Balance, shares at Jun. 26, 2011	44,132			4,036

XML



Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 26, 2011

Summary of Significant Accounting Polices

Schedule of Movement of Warranty Reserves

Six months ended	June 26, 2011
Balance at beginning of year	$   6,170
Accruals for warranties issued	3,132
Settlements made	(3,343)
Foreign currency translation adjustment	213
Balance at end of period	$   6,172

XML



Debt (Revolving Credit Facility) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 26, 2011
Senior Secured Credit Facility [Member] | Maximum [Member]
Leverage ratio	2.75
Senior Secured Credit Facility [Member] | Minimum [Member]
Fixed charge coverage ratio	1.25
Senior Secured Credit Facility [Member]
Expansion option under credit facility	50.0
Potential total commitment with expansion option	175.0
Letters of credit sublimit	25.0
Percentage of stock pledge of domestic subsidiaries	100.00%
Percentage of stock pledge of all first-tier foreign subsidiaries	65.00%
Letter of Credit [Member]
Letters of credit outstanding	1.4
Swingline Loan [Member]
Swingline loans sublimit	15.0

XML



Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 26, 2011

Goodwill and Other Intangible Assets

Components of Intangible Assets

		June 26, 2011		December 26, 2010
	Amortizable Life (years)	Gross Amount	Gross Accumulated Amortization	Gross Amount	Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6to 20	$   97,812	$   47,035	$   79,696	$   41,226
Trade name	1to 30	31,745	18,355	29,148	16,634
Patents, license agreements	3to 14	62,960	49,038	60,410	45,048
Other	2to 6	7,259	4,343	10,701	8,320
Total amortized finite-lived intangible assets		199,776	118,771	179,955	111,228
Indefinite-lived intangible assets:
Trade name		22,140	—	22,096	—
Total identifiable intangible assets		$ 221,916	$ 118,771	$ 202,051	$ 111,228

Estimated Future Amortization Expense

2011	$ 12,163
2012	$ 11,465
2013	$ 10,303
2014	$   9,788
2015	$   9,614

Changes in Carrying Amount of Goodwill

	Shrink Management Solutions	Apparel Labeling Solutions	Retail Merchandising Solutions	Total
Balance as of December 27, 2009	$ 171,878	$   4,300	$ 67,884	$ 244,062
Acquired during the year	—	467	—	467
Purchase accounting adjustment	—	(1,077)	—	(1,077)
Translation adjustments	(6,554)	225	(5,798)	(12,127)
Balance as of December 26, 2010	$ 165,324	$   3,915	$ 62,086	$ 231,325
Acquired during the year	—	39,850	—	39,850
Translation adjustments	6,470	56	4,961	11,487
Balance as of June 26, 2011	$ 171,794	$ 43,821	$ 67,047	$ 282,662

Schedule of Components of Goodwill

	June 26, 2011			December 26, 2010
	Gross Amount	Accumulated Impairment Losses	Goodwill, Net	Gross Amount	Accumulated Impairment Losses	Goodwill, Net
Shrink Management Solutions	$ 226,562	$   54,768	$ 171,794	$ 219,771	$   54,447	$ 165,324
Apparel Labeling Solutions	63,585	19,764	43,821	23,102	19,187	3,915
Retail Merchandising Solutions	141,011	73,964	67,047	130,486	68,400	62,086
Total goodwill	$ 431,158	$ 148,496	$ 282,662	$ 373,359	$ 142,034	$ 231,325

XML



Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010
Cash flows from operating activities:
Net earnings	$ 211	$ 12,470
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	17,861	17,200
Deferred taxes	1,812	596
Stock-based compensation	4,779	4,496
Provision for losses on accounts receivable	889	443
Excess tax benefit on stock compensation	(594)	(1,259)
Loss on disposal of fixed assets	5	62
(Increase) decrease in current assets, net of the effects of acquired companies:
Accounts receivable	(3,043)	14,064
Inventories	(21,245)	(23,224)
Other current assets	(10,894)	(3,206)
Increase (decrease) in current liabilities, net of the effects of acquired companies:
Accounts payable	4,526	10,805
Income taxes	(5,331)	(4,882)
Unearned revenues	16,163	(3,788)
Restructuring reserve	(62)	(1,712)
Other current and accrued liabilities	28,152	(12,900)
Net cash provided by operating activities	33,229	9,165
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(9,416)	(8,857)
Acquisitions of businesses, net of cash acquired	(48,937)
Change in restricted cash	(355)	(336)
Other investing activities	192	78
Net cash (used in) investing activities	(58,516)	(9,115)
Cash flows from financing activities:
Proceeds from stock issuances	1,569	3,980
Excess tax benefit on stock compensation	594	1,259
Proceeds from short-term debt	196	5,411
Payment of short-term debt	(877)	(3,979)
Net change in factoring and bank overdrafts	47	1,833
Proceeds from long-term debt	31,117	6,105
Payment of long-term debt	(5,310)	(1,890)
Debt issuance costs		(280)
Net cash provided by financing activities	27,336	12,439
Effect of foreign currency rate fluctuations on cash and cash equivalents	7,980	(11,855)
Net increase in cash and cash equivalents	10,029	634
Cash and cash equivalents:
Beginning of period	173,802	162,097
End of period	$ 183,831	$ 162,731

XML



Pension Benefits

6 Months Ended

Jun. 26, 2011

Pension Benefits

Pension Benefits

Note 9. PENSION BENEFITS

The components of net periodic benefit cost for the three and six months ended June 26, 2011 and June 27, 2010 were as follows:

(amounts in thousands)	Quarter (13 weeks) Ended		Six Months (26 weeks) Ended
	June 26, 2011	June 27, 2010	June 26, 2011	June 27, 2010
Service cost	$    252	$    206	$489	$    429
Interest cost	1,140	1,043	2,221	2,175
Expected return on plan assets	40	(14)	78	(30)
Amortization of actuarial (gain)	13	(6)	25	(12)
Amortization of transition obligation	33	30	65	62
Amortization of prior service costs	—	—	1	1
Net periodic pension cost	$ 1,478	$ 1,259	$ 2,879	$ 2,625

We expect the cash requirements for funding the pension benefits to be approximately $5.1 million during fiscal 2011, including $2.8 million which was funded during the six months ended June 26, 2011.

XML



Income Taxes (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Dec. 26, 2010
Effective tax rate	302.90%	26.20%
Net deferred tax assets	$ 60.9		$ 61.5
Total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate	12.2		12.8
Interest and penalties expense	0	0.4
Accrued interest and penalties related to unrecognized tax benefits	3.6		3.6
Expected change of gross unrecognized benefits, minimum	3.4
Expected change of gross unrecognized benefits, maximum	5.3
Maximum [Member] | United States [Member]
Open tax years currently under audit	2008
Maximum [Member] | Germany [Member]
Open tax years currently under audit	2005
Maximum [Member] | Finland [Member]
Open tax years currently under audit	2009
Maximum [Member] | Sweden [Member]
Open tax years currently under audit	2009
Minimum [Member] | United States [Member]
Open tax years currently under audit	2007
Minimum [Member] | Germany [Member]
Open tax years currently under audit	2002
Minimum [Member] | Finland [Member]
Open tax years currently under audit	2005
Minimum [Member] | Sweden [Member]
Open tax years currently under audit	2007
Jurisdiction One [Member]
Net deferred tax assets			41.8
Jurisdiction Two [Member]
Net deferred tax assets			$ 10.1

XML



Fair Value Measurement, Financial Instruments and Risk Management (Summary of Activity Associated with Cash Flow Hedges Reflected in AOCI) (Details) (USD $) In Thousands	6 Months Ended
	Jun. 26, 2011
Fair Value Measurement, Financial Instruments and Risk Management
Beginning balance, net of tax	$ 377
Changes in fair value gain, net of tax	(2,350)
Reclassification to earnings, net of tax	588
Ending balance, net of tax	$ (1,385)

XML



Summary of Significant Accounting Policies (Schedule of Movement of Warranty Reserves) (Details) (USD $) In Thousands	6 Months Ended
	Jun. 26, 2011
Summary of Significant Accounting Polices
Balance at beginning of year	$ 6,170
Accruals for warranties issued	3,132
Settlements made	(3,343)
Foreign currency translation adjustment	213
Balance at end of period	$ 6,172

XML



Business Segments

6 Months Ended

Jun. 26, 2011

Business Segments

Business Segments

Note 13. BUSINESS SEGMENTS

During the three and six months ended June 26, 2011, the Company's acquisition of the Shore to Shore businesses resulted in an increase in Apparel Labeling Solutions segment assets. Specific segment data are as follows:

(amounts in thousands)	Quarter (13 weeks) Ended				Six Months (26 weeks) Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
Business segment net revenue:
Shrink Management Solutions	$ 148,298		$ 143,837		$ 273,809		$ 273,267
Apparel Labeling Solutions	53,857		48,185		95,217		88,408
Retail Merchandising Solutions	17,776		16,154		35,578		33,957
Total revenues	$ 219,931		$ 208,176		$ 404,604		$ 395,632
Business segment gross profit:
Shrink Management Solutions	$   61,435		$   64,738		$ 109,253		$ 120,943
Apparel Labeling Solutions	15,574		18,313		29,480		33,709
Retail Merchandising Solutions	8,483		7,713		17,133		16,663
Total gross profit	85,492		90,764		155,866		171,315
Operating expenses, net	72,882	(1)	76,648	(2)	153,837	(3)	151,578	(4)
Interest (expense) income, net	(1,191)		(723)		(1,867)		(1,655)
Other gain (loss), net	(376)		(1,462)		(266)		(1,196)
Earnings before income taxes	$   11,043		$    11,931		$     (104)		$   16,886

(1)   Includes a $1.5 million restructuring charge and $2.0 million in acquisition costs.

(2)   Includes a $1.2 million restructuring charge.

(3)   Includes a $3.1 million restructuring charge and $2.2 million in acquisition costs.

(4)   Includes a $1.6 million restructuring charge.

XML



Consolidated Balance Sheets (USD $) In Thousands	Jun. 26, 2011	Dec. 26, 2010
CURRENT ASSETS:
Cash and cash equivalents	$ 183,831	$ 173,802
Restricted cash	652	140
Accounts receivable, net of allowance of $11,161 and $10,472	197,310	178,636
Inventories	134,115	106,974
Other current assets	44,599	32,655
Deferred income taxes	20,189	20,622
Total Current Assets	580,696	512,829
REVENUE EQUIPMENT ON OPERATING LEASE, net	2,202	2,340
PROPERTY, PLANT, AND EQUIPMENT, net	146,089	121,258
GOODWILL	282,662	231,325
OTHER INTANGIBLES, net	103,145	90,823
DEFERRED INCOME TAXES	53,158	52,506
OTHER ASSETS	24,008	24,192
TOTAL ASSETS	1,191,960	1,035,273
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term debt	26,367	22,225
Accounts payable	75,852	63,366
Accrued compensation and related taxes	32,413	29,308
Other accrued expenses	70,056	47,646
Income taxes	46	4,395
Unearned revenues	29,225	12,196
Restructuring reserve	7,629	7,522
Accrued pensions - current	4,672	4,358
Other current liabilities	61,081	23,019
Total Current Liabilities	307,341	214,035
LONG-TERM DEBT, LESS CURRENT MATURITIES	146,704	119,724
ACCRUED PENSIONS	82,036	75,396
OTHER LONG-TERM LIABILITIES	31,454	30,502
DEFERRED INCOME TAXES	11,784	11,325
COMMITMENTS AND CONTINGENCIES
CHECKPOINT SYSTEMS, INC. STOCKHOLDERS EQUITY:
Preferred stock, no par value, 500,000 shares authorized, none issued
Common stock, par value $.10 per share, 100,000,000 shares authorized, issued 44,131,952 and 43,843,095	4,413	4,384
Additional capital	414,143	407,383
Retained earnings	233,531	233,322
Common stock in treasury, at cost, 4,035,912 and 4,035,912 shares	(71,520)	(71,520)
Accumulated other comprehensive income, net of tax	30,801	10,722
TOTAL CHECKPOINT SYSTEMS, INC. STOCKHOLDERS' EQUITY	611,368	584,291
NON-CONTROLLING INTERESTS	1,273
TOTAL EQUITY	612,641	584,291
TOTAL LIABILITIES AND EQUITY	$ 1,191,960	$ 1,035,273

XML



Goodwill and Other Intangible Assets (Narrative) (Details) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended	12 Months Ended	6 Months Ended					6 Months Ended
	May 16, 2011	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010	Dec. 26, 2010	Sep. 25, 2011	Jun. 26, 2011 Apparel Labeling Solutions [Member]	Dec. 26, 2010 Apparel Labeling Solutions [Member]	Jun. 26, 2011 Noncompete Agreements [Member] years	Jun. 26, 2011 Customer Lists [Member] years	Jun. 26, 2011 Trade Names [Member] months	May 16, 2011 Purchase Price Funded By Cash [Member]	May 16, 2011 Purchase Price Funded By Senior Secured Credit Facility [Member]	Jun. 26, 2011 Brilliant Acquisition [Member]	Jun. 27, 2010 Brilliant Acquisition [Member]	Aug. 14, 2009 Brilliant Acquisition [Member]	Jun. 26, 2011 J&F International, Inc. (U.S.) [Member]	May 16, 2011 J&F International, Inc. (U.S.) [Member]	Jun. 26, 2011 Shore to Shore PVT Ltd. (Sri Lanka) [Member]	May 16, 2011 Shore to Shore PVT Ltd. (Sri Lanka) [Member]	May 16, 2011 Cybasa Adapt SA de CV (El Salvador) [Member]	May 16, 2011 Shore To Shore [Member]	May 16, 2011 Far East (Hong Kong) [Member]	May 16, 2011 Shore to Shore MIS (India) [Member]	May 16, 2011 Shore to Shore Lacar SA (Guatemala) [Member]	May 16, 2011 Adapt Identification (HK) Ltd [Member]	May 16, 2011 W Print Europe Ltd. (UK) [Member]
Intangible assets, net		$ 103,145,000		$ 103,145,000		$ 90,823,000
Amortization expense		3,000,000	3,000,000	5,600,000	6,100,000
Settlement date of acquisition				May 16, 2011											August 14, 2009
Business acquisition, purchase price	78,700,000													9,200,000			38,300,000
Cash payment to escrow	27,800,000
Cash acquired on acquisition	1,900,000														600,000
Purchase price, cash	39,700,000												39,700,000							1,700,000
Assumption of debt	4,200,000														19,600,000								4,200,000
Percentage of voting interests acquired															100.00%			100.00%	100.00%		51.00%	50.00%	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%
Additional purchase price contingent on performance of acquired businesses		17,500,000		17,500,000			6,300,000
Acquisition costs		2,017,000		2,203,000												300,000
Business acquisition, purchase price allocation, property, plant, and equipment		22,800,000		22,800,000
Business acquisition, purchase price allocation, accounts receivable		7,200,000		7,200,000
Business acquisition, purchase price allocation, inventories		2,200,000		2,200,000
Business acquisition, purchase price allocated to goodwill		39,900,000		39,900,000
Business acquisition, purchase price allocated to intangible assets		16,200,000		16,200,000						300,000	15,400,000	500,000
Useful life of intangible assets										5	10	7.5
Purchase accounting adjustment						1,077,000			1,077,000
Revenues attributable to Apparel Labeling Solutions								6,000,000
Net earnings								$ 500,000

XML



Stock-Based Compensation (Assumption and Weighted-Average Fair Values Used in the Black Scholes Model) (Details) (USD $)	6 Months Ended
	Jun. 26, 2011 years	Jun. 27, 2010 years
Stock-Based Compensation
Weighted-average fair value of grants	$ 9.88	$ 7.39
Expected dividend yield	0.00%	0.00%
Expected volatility	49.85%	48.11%
Expected life (in years)	4.96	4.93
Risk-free interest rate	2.178%	1.893%

XML



Fair Value Measurement, Financial Instruments and Risk Management (Narrative) (Details)	3 Months Ended		6 Months Ended		12 Months Ended			3 Months Ended	6 Months Ended
	Jun. 26, 2011 USD ($)	Jun. 27, 2010 USD ($)	Jun. 26, 2011 USD ($)	Jun. 27, 2010 USD ($)	Dec. 26, 2010 USD ($)	Jun. 26, 2011 Foreign Currency Forward Exchange Contracts [Member] USD ($)	Dec. 26, 2010 Foreign Currency Forward Exchange Contracts [Member] USD ($)	Jun. 26, 2011 Foreign Currency Revenue Forecast Contracts [Member] USD ($)	Jun. 26, 2011 Foreign Currency Revenue Forecast Contracts [Member] USD ($)	Jun. 26, 2011 Foreign Currency Revenue Forecast Contracts [Member] EUR (€)	Dec. 26, 2010 Foreign Currency Revenue Forecast Contracts [Member] USD ($)
Notional amount of derivatives								$ 28,100,000	$ 28,100,000	€ 20,200,000
Notional amount of derivatives not designated as hedging instruments						3,300,000
Assets	52,000		52,000		965,000	7,000	27,000	45,000	45,000		938,000
Liabilities	724,000		724,000		298,000		20,000	724,000	724,000		278,000
Unrealized loss recorded in Other Comprehensive Income, net of tax	57,000	584,000	(1,762,000)	2,136,000	679,000				1,400,000
Tax of unrealized loss recorded in Other Comprehensive Income									200,000
Reclassification of unrealized loss on foreign currency hedge to earning within 12 months	1,400,000		1,400,000
Reclassification of unrealized loss on foreign currency hedge to earning within 12 months, tax			200,000
Expense related to foreign currency hedges recorded in cost of goods sold								300,000	500,000
Hedge ineffectiveness									$ 100,000

XML



Debt (Senior Secured Notes) (Details) (USD $)	6 Months Ended
	Jun. 26, 2011
Senior Secured Notes [Member] | Maximum [Member]
Leverage ratio	2.75
Senior Secured Notes [Member] | Minimum [Member]
Fixed charge coverage ratio	1.25
High [Member] | Shelf Notes [Member]
Additional Fixed Rate Senior Secured Note	50,000,000
Senior Secured Notes [Member]
Percentage of stock pledge of domestic subsidiaries	100.00%
Percentage of stock pledge of all first-tier foreign subsidiaries	65.00%

XML



Debt (Full-Recourse Factoring Agreements) (Details)	Jun. 26, 2011 USD ($)	Jun. 26, 2011 EUR (€)	Dec. 26, 2010 USD ($)	Dec. 31, 2009
Debt
Weighted average percentage of the face amount of receivables				92.40%
Full-recourse factoring arrangements	$ 1,636,000	€ 1,200,000	$ 1,740,000
Current portion of full-recourse factoring agreements	400,000	300,000
Long-term portion of full-recourse factoring agreements	$ 1,200,000	€ 900,000

XML



Earnings Per Share (Schedule of Anti-dilutive Common Share Equivalents) (Details) In Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Earnings Per Share
Weighted-average common share equivalents associated with anti-dilutive stock options and restricted stock units excluded from the computation of diluted EPS	1,847	1,380	1,608	1,509

XML



Goodwill and Other Intangible Assets (Components of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 26, 2011	Dec. 26, 2010
Finite-lived customer lists, gross amount	$ 97,812	$ 79,696
Finite-lived trade names, gross amount	31,745	29,148
Finite-lived patents, license agreements, gross amount	62,960	60,410
Finite-lived other intangibles, gross amount	7,259	10,701
Total amortized finite-lived intangible assets, gross amount	199,776	179,955
Indefinite-lived trade names, gross amount	22,140	22,096
Total identifiable intangible assets, gross amount	221,916	202,051
Amortized finite-lived intangible assets, gross accumulated amortization	118,771	111,228
Customer Lists [Member]
Finite-lived intangible assets, amortizable life minimum (years)	6
Finite-lived intangible assets, amortizable life maximum (years)	20
Amortized finite-lived intangible assets, gross accumulated amortization	47,035	41,226
Trade Names [Member]
Finite-lived intangible assets, amortizable life minimum (years)	1
Finite-lived intangible assets, amortizable life maximum (years)	30
Finite-lived trade names, gross amount	18,355
Amortized finite-lived intangible assets, gross accumulated amortization		16,634
Patents, License Agreements [Member]
Finite-lived intangible assets, amortizable life minimum (years)	3
Finite-lived intangible assets, amortizable life maximum (years)	14
Amortized finite-lived intangible assets, gross accumulated amortization	49,038	45,048
Other Intangibles [Member]
Finite-lived intangible assets, amortizable life minimum (years)	2
Finite-lived intangible assets, amortizable life maximum (years)	6
Amortized finite-lived intangible assets, gross accumulated amortization	$ 4,343	$ 8,320