-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SMLuMrcw+VPnbPQLfABet5IMqCoHz4czXvIfqk4J/I2W32kAvM3nOT5L3hsJyxnv l9FD4K+H+CyTSSKWhreuLg== 0000093456-97-000004.txt : 19970814 0000093456-97-000004.hdr.sgml : 19970814 ACCESSION NUMBER: 0000093456-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970629 FILED AS OF DATE: 19970813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD REGISTER CO CENTRAL INDEX KEY: 0000093456 STANDARD INDUSTRIAL CLASSIFICATION: MANIFOLD BUSINESS FORMS [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: 001-11699 FILM NUMBER: 97658365 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 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 29, 1997 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 937-443-1000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No. . ---- ---- CLASS OUTSTANDING AS OF June 29, 1997 ----- ------------------------------- Common Stock - $1.00 Par Value 23,707,532 Class A Stock - $1.00 Par Value 4,725,000 - 1 of 10 - 2 THE STANDARD REGISTER COMPANY INDEX Page No. ---- PART I - FINANCIAL STATEMENTS - ----------------------------- Balance Sheet June 29, 1997, December 29, 1996 3 Statement of Income 13 Weeks Ended June 29, 1997 and June 30, 1996 26 Weeks Ended June 29, 1997 and June 30, 1996 4 Statement of Cash Flows 26 Weeks Ended June 29, 1997 and June 30, 1996 5 The 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 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 December 29, 1996. The 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 Results of Operations and Financial Condition 6-7 PART II - OTHER INFORMATION AND SIGNATURE 8-10 - ----------------------------------------- - 2 of 10 - 3 THE STANDARD REGISTER COMPANY BALANCE SHEET (Dollars in Thousands)
ASSETS June 29, December 29, 1997 1996 (Unaudited) (Audited) ---------- ----------- CURRENT ASSETS Cash and Cash Equivalents $ 79,657 $ 64,550 Investment held to maturity 1,215 1,215 Accounts Receivable, less Allowance for Losses 159,498 178,711 Inventories Finished Products 56,929 55,449 Jobs in Process 18,485 18,573 Materials and Supplies 9,568 12,130 Deferred Income Tax 8,206 8,206 Prepaid Expense 5,719 6,153 -------- -------- Total Current Assets 339,277 344,987 -------- -------- PLANT AND EQUIPMENT Buildings and Improvements 61,654 61,711 Machinery and Equipment 255,377 224,702 Office Equipment 45,312 60,894 -------- -------- Total 362,343 347,307 Less Accumulated Depreciation 154,356 141,021 -------- -------- Depreciated Cost 207,987 206,286 Construction in Process 36,162 26,160 Land 3,512 3,512 -------- -------- Total Plant and Equipment 247,661 235,958 -------- -------- OTHER ASSETS Goodwill, Patents, and Other 3,175 3,278 Investment in F3 5,625 2,890 Investment in Polyforms Joint Venture 500 1,000 -------- -------- Total Other Assets 9,300 7,168 -------- -------- TOTAL ASSETS 596,238 588,113 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable 19,149 20,225 Dividends Payable - 5,738 Accrued Compensation 30,751 34,355 Accrued Other Expense 942 5,536 Accrued Taxes, except Income 6,966 5,902 Income Taxes Payable 2,540 2,624 Customer Deposits 7,218 4,185 Deferred Service Contract Income 8,010 7,274 -------- -------- Total Current Liabilities 75,576 85,839 -------- -------- LONG-TERM LIABILITIES Long-Term Debt 4,600 4,600 Retiree Healthcare 28,553 27,643 Deferred Income Taxes 16,785 16,785 -------- -------- Total Long-Term Liabilities 49,938 49,028 -------- -------- SHAREHOLDERS' EQUITY Common Stock, $1.00 Par Value 24,295,318 Shares Issued in 1997 24,295 24,204,392 Shares Issued in 1996 24,204 Class A Stock, $1.00 Par Value 4,725,000 Shares Outstanding 4,725 4,725 Capital in Excess of Par Value 31,198 28,705 Retained Earnings 426,646 400,387 Treasury Stock, 587,786 Shares at Cost (16,140) -------- -------- 239,486 Shares at Cost (4,775) -------- Total Shareholders' Equity 470,724 453,246 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $596,238 $588,113 ======== ========
- 3 of 10 - 4 THE STANDARD REGISTER COMPANY STATEMENT OF INCOME (In Thousands except Data Per Share) (Unaudited)
Second Quarter Six Months 13 Weeks Ended 26 Weeks Ended June 29, June 30, June 29, June 30, 1997 1996 1997 1996 -------- -------- -------- -------- TOTAL REVENUE $236,467 $239,352 $466,581 $469,025 -------- -------- -------- -------- COSTS AND EXPENSES Cost of Products Sold 139,930 147,708 276,455 292,091 Engineering & Research 2,312 1,995 4,793 4,014 Selling and Administrative 56,587 53,563 112,951 105,731 Depreciation and Amortization 9,471 8,433 18,627 16,688 Interest 70 142 147 307 -------- -------- -------- -------- Total Costs and Expenses 208,370 211,841 412,973 418,831 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 28,097 27,511 53,608 50,194 Income Taxes 11,098 11,425 21,661 20,545 -------- -------- -------- -------- NET INCOME $ 16,999 $ 16,086 $ 31,947 $ 29,649 ======== ======== ======== ======== Average Number of Shares Outstanding (000) 28,507 28,686 28,507 28,686 DATA PER SHARE Net Income $ 0.60 $ 0.56 $ 1.12 $ 1.03 Dividends Paid 0.20 0.19 0.40 0.38
- 4 of 10 - 5 THE STANDARD REGISTER COMPANY STATEMENT OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Six Months 26 Weeks Ended June 29, June 30, 1997 1996 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 31,947 $ 29,649 -------- -------- Add Items not Affecting Cash: Depreciation and Amortization 18,627 16,688 Loss (Gain) on Sale of Facilities 183 (171) Net Change to Investments 793 780 Net Change to Retiree Healthcare 910 374 Increase (Decrease) in Cash Arising from Changes in Asset and Liabilities: Accounts Receivable 19,213 23,934 Inventories 1,170 10,725 Other Assets 436 (1,046) Accounts Payable (1,076) (3,231) Accrued Expenses (7,134) (829) Income Taxes Payable (84) (104) Customer Deposits 3,033 (2,851) Deferred Service Income 736 858 -------- -------- Net Adjustments 36,807 45,127 -------- -------- Net Cash Provided by Operating Activities 68,754 74,776 ======== ======== CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sale of Facilities 199 240 Proceeds from Sale of Short-term investments - 15 Additions to Plant and Equipment (30,610) (28,226) Investment in F3 Corporation (3,028) (500) Investment in Polyforms Joint Venture - (157) -------- -------- Net Cash (Used in) Investing Activities (33,439) (28,628) ======== ======== CASH FLOWS FROM FINANCING ACTIVITIES Principal Payments on Debt - (3,235) Proceeds from Issuance of Common Stock 2,584 1,118 Redemption of Common Stock (11,365) (51) Dividends Paid (11,427) (10,904) -------- -------- Net Cash (Used in) Financing Activities (20,208) (13,072) ======== ======== NET INCREASE IN CASH AND CASH EQUIVALENTS 15,107 33,076 Cash and Cash Equivalents, Beginning 64,550 33,646 -------- -------- CASH AND CASH EQUIVALENTS, ENDING $ 79,657 $ 66,722 ======== ========
- 5 of 10 - 6 THE STANDARD REGISTER COMPANY MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations - --------------------- Net Income for the second quarter 1997 rose 5.7% to $17.0 million or $.60 per share, compared to $16.1 million or $.56 per share for the comparable quarter of 1996. Revenue for the quarter was $236.5 million, compared to $239.4 million in the second quarter 1996. For the six months year-to-date period, Net Income was $31.9 million or $1.12 per share, a 7.8% increase compared to 1996's $29.6 million and $1.03 per share result. Revenue for the first six months was $466.6 million compared with $469.0 million for 1996. The growth in net income was primarily attributable to improved gross margins as the result of lower paper costs for both the quarter and year-to-date periods. The Document Management Division reported revenue of $171.5 million and $339.8 million for the quarter and year-to-date periods, representing increases of .7% and 1.8%, respectively. Within the Document Management Division, volume continued to shift from traditional rotary products, down 3.2% year-to-date, to targeted growth areas consisting of Stanfast's on demand printing, Imaging Services Group's print processing and fulfillment, and Distribution Service's inventory management. These three areas, taken as a whole, were up 10.5% year-to-date and accounted for 37.5% of total division revenue. The Communicolor Division's revenue continued to decline for both the quarter, down 9.4% to $22.7 million, and the first half, down 9.7% to $45.3 million. Fifty percent of the decline was attributable to lower prices on a year-to-date basis. The benefits of recent changes in sales management and staffing levels, the announcement of two new product offerings, and continued cost control are not expected to have a noteworthy effect until late fourth quarter. The Document Systems Division reported revenue of $41.6 million for the second quarter, down 2.1%, and $80.2 million year-to-date, down 2.6%. During the second quarter, equipment and maintenance revenues declined 19.2% and .8%, respectively, while the Pressure Sensitive Group and supplies revenues increased 5.2% and .4%, respectively. On a year-to- date basis, equipment and maintenance revenues declined 16.9% and 6.9%, respectively, while the Pressure Sensitive Group and supplies revenues increased 4.4% and 5.8%, respectively. Maintenance revenue declined as expected as a result of last year's pruning of unprofitable accounts. Document Systems Division's dollar gross margin increased 15.0% and 14.1% on a quarter and year-to-date basis, respectively, due to improved gross margins in both the maintenance and Pressure Sensitive groups, up 90.7% and 24.2%, respectively, on a year-to-date basis. The Company's gross margin for all products and services continued to improve for both the second quarter and first half, increasing 5.3% and 7.5%, respectively. Gross margin as a percentage of revenue in the current quarter was 40.8%, consistent with the first quarter's 40.7%. Gross margin as a percentage of revenue improved 2.5 percentage points - - 6 of 10 - 7 over the prior year's 38.3% for the current quarter and 3.0 percentage points over the prior year-to-date's 37.7%. The improvements in gross margin were attributable to lower paper price levels in both the Document Management Division and the Document Systems Division's Pressure Sensitive Group, along with improved cost controls in the Document Systems Division's maintenance group. Paper prices are expected to increase in the near term to levels experienced at the end of last year. No LIFO inventory adjustments were recorded on a year-to- date basis in either year. Selling, administrative, and engineering expenses increased 6.0% and 7.3% for the quarter and year-to-date periods, respectively, as a result of increased sales support personnel related to the rollout of the STAR sales office automation project and increased information systems expense to support the development of new client server applications. Depreciation and amortization increased approximately 12% for both the quarter and year-to-date periods in line with current higher capital spending levels. Interest expense decreased fifty percent as a result of a $3.2 million decrease in debt level compared to the prior year. Liquidity and Capital Resources - ------------------------------- The Company's financial condition remains strong. Cash and cash equivalents of $79.7 million exceeded total long term debt of $4.6 million by $75.1 million. Net cash flow from operating activities for the first half of 1997 was $68.8 million resulting primarily from increased net income and reductions in accounts receivable, down 10.8%. Current assets were 4.5 times the level of current liabilities. Capital expenditures for the first half of 1997 totaled $30.6 million, in line with the Company's anticipated $60 million annual capital expenditure level. In addition, the Company continued its stock repurchase program, purchasing $6.1 million in the current quarter and $11.4 million in the first half. The Company believes that a combination of internally generated funds and current cash reserves will be adequate to meet operating and financing needs for the near term. - 7 of 10 - 8 THE STANDARD REGISTER COMPANY PART II - OTHER INFORMATION ITEMS 1 THRU 5 - -------------- None ITEM 6 (a) Exhibits - ------ Exhibit No. Description 27 Financial Data Schedule (b) There have been no reports on Form 8-K filed during the quarter for which this report on Form 10-Q is being filed. - 8 of 10 - 9 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. August 12, 1997 THE STANDARD REGISTER COMPANY /s/ C. J. Brown ----------------------------------------- By C. J. Brown, Sr. Vice President, Administration, Treasurer & Chief Financial Officer - 9 of 10 - 10 EXHIBIT INDEX Number Description 27 Financial Data Schedule - 10 of 10 - EX-27 2 EXHIBIT 27
5 This schedule contains summary financial information extracted from The Standard Register Company Financial Statements for the six months ended June 29, 1997, and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS DEC-28-1997 JUN-29-1997 79,657 1,215 164,921 5,423 84,982 339,277 402,017 154,356 596,238 75,576 4,600 29,020 0 0 441,704 596,238 465,322 466,581 276,455 412,973 0 225 147 53,608 21,661 31,947 0 0 0 31,947 1.12 1.12
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