ACQUISITION (Notes)

9 Months Ended

Sep. 29, 2013

Acquisition [Abstract]

Business Combination Disclosure [Text Block]

ACQUISITION

On August 1, 2013, the Company acquired all of the outstanding membership interests of WorkflowOne for a total purchase price of one dollar (the "Acquisition"). In connection with the Acquisition, the Company also assumed $210,000 of WorkflowOne's existing debt under two secured credit facilities (the "First Lien Term Loan" and "Second Lien Term Loan") and issued warrants with an estimated fair value of $6,509 that were subsequently converted into 2,645,945 shares of the Company's Common Stock in October 2013. The exercise price of each warrant was $0.00001 per share. The estimated fair value of the warrants issued was calculated based on the closing market price of the Company's stock on July 31, 2013, with an estimated discount for lack of marketability due to certain restrictions.

In addition, the Company issued $10,000 of non-interest bearing “Tranche B Second Lien Term Loans" that were subsequently cancelled for no consideration as part of the final working capital settlement. The working capital adjustment also resulted in (i) the conversion of $3,678 of the Tranche B Second Lien Term Loans into the Second Lien Term Debt, (ii) the reduction of $3,678 in the First Lien Term Debt, and (iii) the receipt of an additional $1,322 in cash from the Acquisition in October 2013.

WorkflowOne provides printing, document management, distribution, and marketing services to a large customer base. We believe the Acquisition will advance the Company's revenue position, enhance its product and solutions portfolio, broaden its customer base, improve its cost structure, and provide greater financial flexibility and stability.

Results of operations for WorkflowOne are included in the Company's consolidated financial statements from the date of acquisition. The Acquisition was integrated into our Healthcare and Business Solutions segments, and we are in the process of determining the allocation of goodwill to these segments. Total revenue of $68,276 and a net loss of $610 attributable to WorkflowOne are included in the Company’s unaudited consolidated statement of operations for both the 13 and 39-week periods ended September 29, 2013.

Purchase Price Allocation

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. The following summarizes a preliminary estimate of the assets acquired and the liabilities assumed by Standard Register in the Acquisition:

	August 1, 2013
Assets
Cash and cash equivalents	$	1,665
Accounts receivable	53,651
Inventories	24,707
Plant and equipment	43,132
Goodwill	75,736
Identified intangibles	53,740
Other assets	7,194
Liabilities
Long-term debt and capital leases, including current portion	(210,672		)
Other liabilities assumed	(42,644		)
Net assets acquired	6,509

The allocation of the purchase price is preliminary and is subject to change. The assets acquired and liabilities assumed from WorkflowOne have been measured at their estimated fair values at the date of acquisition. Differences between these estimates of fair value and the final acquisition accounting will occur, and those differences could also have an impact on the unaudited pro forma financial information presented below.

The final allocation is dependent upon valuation and other studies that have not yet been completed. We will finalize the purchase price allocation as soon as practicable within the measurement period prescribed by Financial Accounting Standards Board Accounting Standards Codification (ASC) 805, Business Combinations, and currently expect to finalize the amounts prior to December 29, 2013, the end of our fiscal year. We are in the process of gathering and assessing the information necessary to determine the required fair value measures including the following significant items:

• the fair value of warrants issued and debt assumed

• the fair value of trade account and other receivables as of August 1, 2013 that are not expected to be collected

• the amounts recorded for each major class of assets acquired and liabilities assumed, including valuations of inventory, identified acquired intangible assets and property and equipment

• the nature, amounts recognized, and measurement basis of assets and liabilities arising from any contingencies recognized, and

• qualitative and quantitative information related to any goodwill recorded, including the allocation of goodwill to reporting units, as appropriate.

The estimated fair value and useful lives for significant intangible assets acquired are as follows:

	Fair Value		Useful life (in years)
Customer relationships	$	45,100	6 years
Trademarks	8,500		2-10 years

Expenses Related to the Acquisition

The Company is expected to incur substantial transaction and integration expenses in connection with the Acquisition, including the necessary costs associated with integrating the operations of the two companies. Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an expense in the period in which the costs are incurred. All such costs are included in acquisition and integration costs in the accompanying Consolidated Statements of Income. Except for an immaterial amount of integration costs in the three-month period ended September 29, 2013, the balances consist of acquisition transaction costs that primarily include advisory, legal, accounting, valuation, and other professional fees.

We expect to incur approximately $8,500 over the next two years for technology and facility integration costs that do not qualify as restructuring and other exit costs under U.S. GAAP. While we have assumed a certain level of expenses will be incurred, there are many factors that could affect the total amount or the timing of these expenses, and many of the expenses are, by their nature, difficult to estimate.

Pro forma impact of the acquisition

The following table summarizes pro forma financial information for the nine-month periods ended September 29, 2013 and September 30, 2012 as if the Acquisition had occurred at the beginning of fiscal 2012. The pro forma financial information primarily includes estimated adjustments to interest expense for the long-term debt assumed and amendment to our Revolving Credit Facility, amortization associated with the acquired intangible assets, and cost of sales and depreciation expense for fair value adjustments to inventory and plant and equipment. Adjustments were also made to reduce selling, general, and administrative expense to eliminate acquisition-related transaction costs incurred by Standard Register and WorkflowOne.

The pro forma financial information does not reflect any cost savings that may be realized as a result of the Acquisition and is not necessarily indicative of what our consolidated results would have been had the Acquisition been completed on January 2, 2012.

(Unaudited)	39 Weeks Ended
	September 29, 2013			September 30, 2012
Revenue	$	733,249		$	803,130
Operating income (loss)	3,508			(3,783		)
Net loss	(12,495		)	(3,909		)
Loss per share	(2.11		)	(0.67		)