EX-99 2 ex991.htm EXHIBIT 99.1 Converted by EDGARwiz




Standard Register



600 Albany St.  ·  Dayton, OH   45408

News media contact:

937.221.1000  ·  937.221.1486 (fax)

Lesley Sprigg· 937.221.1825

www.standardregister.com

lesley.sprigg@standardregister.com


Investor contact:

Robert J. Cestelli  ·  937.221.1304

robert.cestelli@standardregister.com


For Release on February 22, 2008 at 8 a.m. ET



Standard Register Reports Fourth Quarter and 2007 Financial Results

Mid-Year 2007 Cost Reductions Establish Improved Earnings Outlook for 2008


DAYTON, Ohio (February 22, 2008) – Standard Register (NYSE: SR) today reported its financial results for the fourth quarter and total year ended December 30, 2007.


Results of Operations


Fourth Quarter


Revenue on continuing operations for the quarter was $218.6 million, down $9.4 million or 4.1% compared to $228.0 million reported for the same quarter of 2006.  

“Despite a challenging environment for some business segments and lower revenue, our operating result before restructuring, impairment, pension loss amortization, and pension settlement charges increased from $10.0 million last year to $19.0 million in the current period.   This was the second consecutive quarter that this [non-GAAP] measure of operating earnings has been up sharply from the prior year,” said Dennis Rediker, president and CEO of Standard Register.


“The cost reduction actions initiated in our mid-year 2007 restructuring have provided improved operating margins and cash flows and will also serve to finance future investments essential for our long-term success,” added Rediker.



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The gross margin was down $2.4 million as a result of the lower revenue, but SG&A expense (excluding pension loss amortization and settlement) was $11.8 million lower than the 2006 quarter, producing the increase in operating income.  This SG&A expense improvement can be traced primarily to the mid-year 2007 cost restructuring.  There were also favorable non-recurring expense items totaling $4.6 million, including a $2.7 million reversal of accruals for previous restricted stock grants.


Cash flow was strong in the quarter, fueled primarily by the improved operating earnings.  Net debt was reduced by $12.4 million to end the year at $51.3 million.    


There were no pension contributions in the quarter, as the Company completed its planned $20 million in annual funding during the first three quarters of the year.  Current plans call for $20.0 million in pension funding for 2008.   Capital expenditures ended 2007 at $21.6 million; capital spending for 2008 is currently estimated at approximately $23.0 million.


Total Year


Revenue on continuing operations was $865.4 million for the full year, down $28.9 million or 3.2% compared to the $894.3 million reported for all of 2006.  This decrease was primarily in traditional products within the Company’s Document Management and Label segments.   


“Pension amortization and settlement charges obviously had a big impact on our year, reducing earnings by $0.99 per share.  Operating income before these charges and before restructuring and impairment costs was $45.4 million for the year – up $2.9 million despite the nearly $29 million drop in revenue.  This reflected a much stronger second half following the mid-year restructuring,” said Rediker.  

Outlook

Our investments in 2008 will be focused in several areas.  We see long term growth opportunities in our label business and will begin to report this business as a separate segment.  In addition, our print-on-demand business will continue as a major focus, attracting a significant share of our capital.  We also see significant promise in our extensive secure document offering and in our various software and service initiatives.


Our investment priorities and the natural forces in the marketplace will continue to fuel a favorable shift in our revenue mix in 2008.  However, as a result of continuing pressure on some of our traditional products, we do not expect a substantial change in our total year top line.  For the first quarter of the year, we expect to see a return to a more traditional seasonal pattern of revenue with the first quarter below that of the preceding fourth.



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Our mid-year restructuring targeted a $15.0 million reduction in costs for the second half of 2007 versus the first half.  We exceeded our target, which was a major contributor to our stronger second half performance.  On an annualized basis, our cost savings currently stand at approximately $35.0 million.  As we move into 2008, we will reinvest a portion of our cost savings on marketing, technology, people, and other initiatives important to our long-term success.  

Our earnings goal for the whole of 2008 is to see a low double-digit percentage increase in operating income (before pension amortization and before any pension settlement, restructuring, and impairment charges).  


GAAP Reconciliation

The net loss after tax for the quarter was $4.0 million or $0.14 per share, compared to a net income of $1.1 million or $0.04 per share in the prior year.  For the total year, the net loss was $7.3 million or $0.25 per share, versus a net loss of $11.7 million or $0.41 in 2006.


The table below reconciles these GAAP results to [non-GAAP] operating earnings before restructuring, impairment, pension loss amortization, and pension settlement.


 

Effect on 4Q Income

 

Effect on YTD Income

[$ Millions, rounded]

2007

 

2006

 

Chg

 

2007

 

2006

 

Chg

CONTINUING OPERATIONS

           

  Operations before Restructuring, Impairment

           

    Amortization of Past Pension Losses &

           

    the Pension Settlement Charge

19.0

 

10.0

 

9.0

 

45.4

 

42.4

 

2.9

            

  Reconciliation to Net Income / (Loss):

           

  Restructuring Expense

-0.3

 

-0.3

 

0.0

 

-8.0

 

-2.7

 

-5.3

  Impairment Expense

-0.2

 

-1.1

 

0.9

 

0.4

 

-2.7

 

3.2

  Amortization of Past Pension Losses

-6.4

 

-6.5

 

0.1

 

-26.1

 

-25.6

 

-0.5

  Pension Settlement Charge

-17.7

 

0.0

 

-17.7

 

-20.9

 

-1.6

 

-19.3

  Income / (Loss) on Continuing Operations

-5.6

 

2.1

 

-7.7

 

-9.2

 

9.8

 

-19.0

            

  Interest & Other Income / (Expense)

-1.0

 

-0.6

 

-0.4

 

-3.6

 

-2.1

 

-1.5

  Pretax Income / (Loss)

-6.6

 

1.5

 

-8.1

 

-12.8

 

7.7

 

-20.5

            

  Income Taxes

-2.6

 

0.9

 

-3.5

 

-5.2

 

4.5

 

-9.7

  Net Income / (Loss) on Continuing Operations

-4.0

 

0.6

 

-4.6

 

-7.6

 

3.2

 

-10.8

            

DISCONTINUED OPERATIONS

0.0

 

0.5

 

-0.5

 

0.3

 

-15.0

 

15.2

            

TOTAL NET INCOME / (LOSS)

-4.0

 

1.1

 

-5.1

 

-7.3

 

-11.7

 

4.4

            

Earnings Per Share on Continuing Operations

-0.14

 

0.02

 

-0.16

 

-0.26

 

0.11

 

-0.38

  Restructuring & Impairment Expenses

-0.01

 

-0.03

 

0.02

 

-0.16

 

-0.11

 

-0.04

  Pension Loss Amortization & Pension Settlement

-0.51

 

-0.14

 

-0.37

 

-0.99

 

-0.57

 

-0.41

  All Other Continuing Operations

0.38

 

0.19

 

0.19

 

0.89

 

0.84

 

0.05

            

  Discontinued Operations

0.00

 

0.02

 

-0.02

 

0.01

 

-0.52

 

0.53

  Total Earnings Per Share

-0.14

 

0.04

 

-0.18

 

-0.25

 

-0.41

 

0.15


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Pension loss amortization and settlement charges accounted for a total of $24.1 million and $47.0 million in expense for the quarter and total year periods, respectively, equivalent to $0.51 and $0.99 per share.  These non-cash charges have their origin primarily in the weak stock markets of 2001 and 2002 which reduced pension trust assets in those years.  Those losses, together with other actuarial gains and losses are being amortized through subsequent years’ income statements.  The current outlook for 2008 calls for significantly lower pension amortization.   

Conference Call

Standard Register president and chief executive officer Dennis L. Rediker and chief financial officer Craig J. Brown will host a conference call at 10 a.m. ET on February 22, 2008, to review the fourth quarter and full-year results.  The call can be accessed via an audio web cast which is accessible at:  http://www.standardregister.com/investorcenter.

Presentation of Information in This Press Release

This press release presents information that excludes restructuring, impairment charges, amortization of past pension losses, and pension settlement charges.  These financial measures are considered non-GAAP.  Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows where amounts are either excluded or included not in accordance with generally accepted accounting principles (GAAP).  This information is intended to enhance an overall understanding of the financial performance due to the non-operational nature of these items and the significant change from period to period.  This presentation is consistent with the manner in which the Board of Directors internally evaluates performance.  

The presentation of non-GAAP information is not meant to be considered in isolation or as a substitute for results prepared in accordance with principles generally accepted in the United States.

About Standard Register

Standard Register is a premier document services provider, trusted by companies to manage the critical documents they need to thrive in today’s competitive climate.  Employing nearly a century of industry expertise, Lean Six Sigma methodologies and leading technologies, the company helps organizations increase efficiency, reduce costs, mitigate risks, grow revenue and meet the challenges of a changing business landscape.  It offers document and label solutions, technology solutions, consulting and print supply chain services to help clients manage documents across their enterprises.  More information is available at www.standardregister.com.


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Safe Harbor Statement

This report includes forward-looking statements covered by the Private Securities Litigation Reform Act of 1995.  Because such statements deal with future events, they are subject to various risks and uncertainties and actual results for fiscal year 2008 and beyond could differ materially from the Company’s current expectations.  

Forward-looking statements are identified by words such as “anticipates,” “projects,” “expects,” “plans,” “intends,” “believes,” “estimates,” “targets,” and other similar expressions that indicate trends and future events.  

Factors that could cause the Company’s results to differ materially from those expressed in forward-looking statements include, without limitation, variation in demand and acceptance of the Company’s products and services, the frequency, magnitude and timing of paper and other raw-material-price changes, general business and economic conditions beyond the Company’s control, timing of the completion and integration of acquisitions, the consequences of competitive factors in the marketplace, cost-containment strategies, and the Company’s success in attracting and retaining key personnel.  Additional information concerning factors that could cause actual results to differ materially from those projected is contained in the Company’s filing with The Securities and Exchange Commission, including its report on Form 10-K for the year ended December 30, 2007.  The Company undertakes no obligation to revise or update forward-looking statements as a result of new information since these statements may no longer be accurate or timely.  

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THE STANDARD REGISTER COMPANY

  

Fourth Quarter

 

STATEMENT OF OPERATIONS

 

Y-T-D

13 Weeks Ended

13 Weeks Ended

 

(Dollars in thousands, except per share amounts)

 

52 Weeks Ended

52 Weeks Ended

30-Dec-07

31-Dec-06

   

30-Dec-07

31-Dec-06

       

$218,551 

$228,012 

 

TOTAL REVENUE

 

$865,432 

$894,291 

       

144,176 

151,254 

 

COST OF SALES

 

577,396 

587,529 

       

74,375 

76,758 

 

GROSS MARGIN

 

288,036 

306,762 

       
   

COSTS AND EXPENSES

   

72,736 

66,873 

 

Selling, general and administrative

 

263,104 

263,441 

6,793 

6,371 

 

Depreciation and Amortization

 

26,575 

28,128 

214 

1,146 

 

Asset Impairment

 

(439)

2,738 

276 

274 

 

Restructuring

 

7,996 

2,671 

       

80,019 

74,664 

 

TOTAL COSTS AND EXPENSES

 

297,236 

296,978 

       

(5,644)

2,094 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

(9,200)

9,784 

       
   

OTHER INCOME (EXPENSE)

   

(1,031)

(694)

 

Interest expense

 

(3,763)

(2,285)

36 

54 

 

Other income

 

208 

228 

(995)

(640)

 

Total Other Expense

 

(3,555)

(2,057)

       
   

INCOME (LOSS) FROM CONTINUING OPERATIONS

   

(6,639)

1,454 

 

   BEFORE INCOME TAXES

 

(12,755)

7,727 

       

(2,615)

858 

 

Income Tax (Benefit) Expense

 

(5,176)

4,500 

       

(4,024)

596 

 

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

 

(7,579)

3,227 

       
   

DISCONTINUED OPERATIONS

   

(2)

(229)

 

Loss from discontinued operations, net of taxes

 

(752)

(4,922)

11 

711 

 

Gain (loss) on sale of discontinued operations, net of taxes

 

1,026 

(10,044)

       
   

NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF A

   

(4,015)

1,078 

 

   CHANGE IN ACCOUNTING PRINCIPLE

 

(7,305)

(11,739)

       

- 

- 

 

Cumulative effect of a change in accounting principle, net of taxes

 

- 

78 

       

($4,015)

$1,078 

 

NET INCOME (LOSS)

 

($7,305)

($11,661)

       

28,721 

28,616 

 

Average Number of Shares Outstanding - Basic

 

28,684 

28,543 

28,721 

28,635 

 

Average Number of Shares Outstanding - Diluted

 

28,684 

28,579 

       
   

BASIC AND DILUTED INCOME (LOSS) PER SHARE

   

($0.14)

$0.02 

 

Income (loss) from continuing operations

 

($0.26)

$0.11 

- 

(0.01)

 

Loss from discontinued operations

 

(0.03)

(0.17)

- 

0.03 

 

Gain (loss) on sale of discontinued operations

 

0.04 

(0.35)

($0.14)

$0.04 

 

Net income (loss) per share

 

($0.25)

($0.41)

       

$0.23 

$0.23 

 

Dividends Paid Per Share

 

$0.92 

$0.92 

     
  

BALANCE SHEET

 
   

(In Thousands)

30-Dec-07

31-Dec-06

       
   

ASSETS

   
   

Cash & Short Term Investments

 

$697 

$488 

   

Accounts Receivable

 

130,212 

135,839 

   

Inventories

 

45,351 

49,189 

   

Other Current Assets

 

22,523 

32,507 

   

Total Current Assets

 

198,783 

218,023 

       
   

Plant and Equipment

 

110,975 

119,206 

   

Goodwill and Intangible Assets

 

7,861 

8,107 

   

Deferred Taxes

 

80,852 

87,709 

   

Other Assets

 

21,075 

20,033 

       
   

Total Assets

 

$419,546 

$453,078 

       
   

LIABILITIES AND SHAREHOLDERS' EQUITY

   
   

Current Portion Long-Term Debt

 

$21 

$358 

   

Current Liabilities

 

87,342 

100,210 

   

Deferred Compensation

 

12,010 

17,190 

   

Long-Term Debt

 

51,988 

41,021 

   

Retiree Healthcare

 

19,496 

20,398 

   

Pension Liability

 

133,647 

156,469 

   

Other Long-Term Liabilities

 

5,083 

782 

   

Shareholders' Equity

 

109,959 

116,650 

       
   

Total Liabilities and Shareholders' Equity

 

$419,546 

$453,078