-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, FT/+hV4m4McFfkvJvhnZ2C6JSsUtT4BTs7v+nlsuPbhyRz3sW05EvrjeRSGU2XyK orpzNzeK5G7sS4Jd8VyUMg== 0000093456-94-000008.txt : 19941116 0000093456-94-000008.hdr.sgml : 19941116 ACCESSION NUMBER: 0000093456-94-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941002 FILED AS OF DATE: 19941115 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD REGISTER CO CENTRAL INDEX KEY: 0000093456 STANDARD INDUSTRIAL CLASSIFICATION: 2761 IRS NUMBER: 310455440 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01097 FILM NUMBER: 94560330 BUSINESS ADDRESS: STREET 1: 600 ALBANY ST CITY: DAYTON STATE: OH ZIP: 45401 BUSINESS PHONE: 5134341000 MAIL ADDRESS: STREET 1: 600 ALBANY STREET STREET 2: P.O. BOX 1167 CITY: DAYTON STATE: OH ZIP: 45401-1167 10-Q 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended October 2, 1994 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 Number 01-1097 THE STANDARD REGISTER COMPANY OHIO CORPORATION 31-0455440 600 ALBANY STREET, DAYTON, OHIO 45401 TELEPHONE NUMBER 513-443-1000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Secu- rities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No. . CLASS OUTSTANDING AS OF OCTOBER 2, 1994 Common Stock - $1.00 Par Value 23,942,891 Class A Stock - $1.00 Par Value 4,725,000 - 1 of 8 - No Exhibits Filed 2 THE STANDARD REGISTER COMPANY INDEX Page No. PART I - FINANCIAL STATEMENTS Consolidated Balance Sheet October 2, 1994, January 2, 1994 3 Consolidated Statement of Income 13 Weeks Ended October 2, 1994 and October 3, 1993 39 Weeks Ended October 2, 1994 and October 3, 1993 4 Consolidated Statement of Cash Flows 39 Weeks Ended October 2, 1994 and October 3, 1993 5 The consolidated financial statements of the Registrant included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted, the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K of the Registrant for the year ended January 2, 1994. The consolidated financial statements included herein reflect all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods. The results for interim periods are not necessarily indicative of trends or of results to be expected for a full year. Management's Discussion and Analysis of the Interim Financial Statements 6 PART II - OTHER INFORMATION AND SIGNATURE 8 - 2 - 3 THE STANDARD REGISTER COMPANY CONSOLIDATED BALANCE SHEET (Dollars in Thousands) (Unaudited)
Oct 2, January 2, 1994 1994 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 53,226 $ 78,994 Accounts Receivable, less Allowance for Losses 132,291 135,067 Inventories 105,111 98,248 Deferred Income Tax 10,860 10,860 Prepaid Expense 3,964 4,558 Total Current Assets $305,452 $327,727 PLANT AND EQUIPMENT Buildings and Improvements $ 58,509 $ 54,688 Machinery and Equipment 208,234 181,645 Office Equipment 38,197 36,041 Total 304,940 272,374 Less Accumulated Depreciation 136,699 118,411 Depreciated Cost 168,241 153,963 Construction in Process 26,827 17,801 Land 2,675 2,488 Total Plant and Equipment $197,743 $174,252 OTHER ASSETS Patents, Notes, and Other $ 2,501 $ 354 TOTAL ASSETS $505,696 $502,333 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current Maturities of Long-Term Debt $ 6,470 $ 6,471 Accounts Payable 16,294 20,582 Dividends Payable - 4,874 Accrued Compensation 26,267 27,224 Accrued Retirement Expense 6,290 7,805 Accrued Other Expense (994) 1,223 Accrued Taxes, except Income 4,112 4,574 Income Taxes Payable 2,769 4,761 Deferred Service Contract Income 8,551 6,640 Total Current Liabilities $ 69,759 $ 84,154 LONG-TERM LIABILITIES Long-Term Debt $ 14,306 $ 17,546 Retiree Healthcare 24,482 24,482 Deferred Income Taxes 15,168 15,168 Total Long-Term Liabilities $ 53,956 $ 57,196 SHAREHOLDERS' EQUITY Common Stock, $1.00 Par Value 24,084,632 Shares Issued in 1994 $ 24,085 24,036,796 Shares Issued in 1993 $ 24,037 Class A Stock, $1.00 Par Value 4,725,000 Shares Outstanding 4,725 4,725 Capital in Excess of Stated Value 26,507 25,562 Retained Earnings 329,527 308,413 Treasury Stock, 141,741 Shares at Cost (2,863) (1,754) Total Shareholders' Equity $381,981 $360,983 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $505,696 $502,333 - 3 -
4 THE STANDARD REGISTER COMPANY CONSOLIDATED STATEMENT OF INCOME (In Thousands except Data Per Share) (Unaudited)
Third Quarter Nine Months 13 Weeks Ended 39 Weeks Ended Oct 2, Oct 3, Oct 2, Oct 3, 1994 1993 1994 1993 TOTAL REVENUE $ 190,008 $ 179,104 $ 558,189 $ 523,127 COSTS AND EXPENSES Cost of Products Sold $ 120,379 $ 113,392 $ 351,443 $328,469 Engineering & Research 1,849 2,061 5,613 5,925 Selling and Administrative 43,536 41,460 129,273 122,561 Depreciation and Amortization 6,986 6,165 19,592 18,771 Interest 269 280 806 897 Total Costs and Expenses $ 173,019 $ 163,358 $ 506,727 $ 476,623 INCOME BEFORE INCOME TAXES $ 16,989 $ 15,746 $ 51,462 $ 46,504 Income Taxes 6,682 5,997 20,579 17,843 NET INCOME $ 10,307 $ 9,749 $ 30,883 $ 28,661 Average Number of Shares Outstanding (000) 28,693 28,746 28,693 28,746 DATA PER SHARE Net Income Primary and Fully Diluted $ 0.36 $ 0.34 $ 1.08 $ 1.00 Dividends Paid $ 0.17 $ 0.16 $ 0.51 $ 0.48 - 4 -
5 THE STANDARD REGISTER COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Nine Months 39 Weeks Ended Oct 2, Oct 3, 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 30,883 $ 28,661 Add (Deduct) Items not Affecting Cash: Depreciation and Amortization $ 19,592 $ 18,771 Loss on Sale of Facilities 201 20 Net Change to Post-Retirement Healthcare - 450 Increase (Decrease) in Cash Arising from Changes in Assets and Liabilities: Accounts Receivable 2,776 5,040 Inventories (6,864) (12,502) Other Assets 636 1,222 Accounts Payable (4,288) (2,935) Accrued Expenses (5,151) (6,523) Income Taxes Payable (1,992) (337) Deferred Service Income 1,911 1,730 Net Adjustments 6,821 4,936 Net Cash Provided by Operating Activities $ 37,704 $ 33,597 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sale of Facilities $ 50 $ 81 Additions to Plant and Equipment (45,522) (18,406) Net Cash Used in Investing Activities $(45,472) $(18,325) CASH FLOWS FROM FINANCING ACTIVITIES Principal Payments on Long-Term Debt $ (3,240) $ (3,924) Proceeds from Issuance of Common Stock 993 909 Dividends Paid (14,644) (13,803) Repurchase of Common Stock (1,109) (262) Net Cash Used in Financing Activities $(18,000) $(17,080) NET DECREASE IN CASH AND CASH EQUIVALENTS $(25,768) $ (1,808) Cash and Cash Equivalents at Beginning of Year $ 78,994 $ 86,203 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 53,226 $ 84,395 - 5 -
6 THE STANDARD REGISTER COMPANY MANAGEMENT DISCUSSION AND ANALYSIS OF THE INTERIM FINANCIAL STATEMENTS Net income for the third quarter 1994 was $10.3 million or $.36 per share, compared to $9.7 million and $.34 per share for the third quarter of 1993. Pretax profit margins edged higher from 8.8% of revenue in the 1993 quarter to 8.9% in the most recent period. Total revenue increased 6.1% for the quarter, which compared favorably to the 5.5% growth recorded for the preceding twelve month period. Business forms products, representing 77% of total revenue, continued to demonstrate growth with unit sales up approximately 6.0% and net pricing 1.0% higher. Production utilization at forms plants continued to rise, necessitating the purchase of new equipment for certain forms configurations. Shipments of promotional printing, accounting for about 12% of total revenue, was little changed from last year's third quarter, reflecting some temporary weakness in incoming order volume and prices, offset by the inclusion of business associated with the acquisition of Promotional Graphics on June 30, 1994. Promotional mail production backlogs were strong at quarter-end, however, and the outlook is for a resumption of growth for the fourth quarter. A third- class postal increase is anticipated for early 1995. Postal rate hikes have typically had a depressing effect on promotional mail volume as a lesser share of the user's advertising budget is devoted to printed material. Based on past experience and the relatively modest increase expected, management believes the effect will be minimal and that the market will adjust to the higher postal rates within three to six months. Equipment, software, and related services comprising the balance of revenue, rose approximately 6.0%. Cost of products sold was 63.4% of revenue, compared to an almost identical 63.3% for the same quarter of 1993. Paper is a significant factor, accounting for approximately 50% of the cost of production for a typical business form. As a commodity, paper prices vary with demand and paper mill utilization. Increasing demand for all paper products, due in part to higher exports, combined with high utilization and depressed paper company earnings have fueled a rapid rise in paper prices since June of this year. The weighted average cost of material, including bond and carbonless papers, will have increased approximately 30% from June 1994 to January 1995. The company has announced increases in the pricing of its forms and expects to be successful in recovering the higher paper costs as the year progresses; discounts are expected to rise for one or two quarters, however, given the unusually steep climb in prices. Selling, administration, and R&D expenses increased 5.4% overall, below the 6.1% rate of revenue growth and in line with management expectations. Depreciation rose 13.3%, reflecting higher capital -6- 7 spending and the effect of the Promotional Graphics acquisition. Interest expense was lower as a result of lower debt balances. The effective income tax rate was 39.3%, compared to 38% for the third quarter 1993; this increase is largely attributed to the 1.0% increase in the 1993 statutory federal rate, not included in reported results until the fourth quarter 1993. The balance of cash and cash equivalents declined $25.8 million from the outset of the year, reflecting the acquisition of Promotional Graphics and scheduled debt payments. Cash flow from operations for the first nine months of the year rose 12% due in large part to a slower rate of inventory growth. Capital spending, including the cost of the Promotional Graphics acquisition is expected to be in the $52-55 million range. The financial condition remains strong. At quarter-end, cash and cash equivalents stood at $53.2 million compared to $20.8 million in total debt including current maturities. Current liabilities were 4.4 times the level of current assets and long-term debt was only 3.7% of shareholders' equity. The company expects to continue to finance its operations, including debt payments, capital expenditures, and dividend payments from internally generated funds and existing cash reserves. -7- 8 THE STANDARD REGISTER COMPANY PART II - OTHER INFORMATION ITEMS 1 THRU 6 None SIGNATURE 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. October , 1994 THE STANDARD REGISTER COMPANY /s/ C. J. Brown By C. J. Brown, Vice President- Finance and Treasurer - 8 - -----END PRIVACY-ENHANCED MESSAGE-----