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 July 25, 2008 at 8 a.m. EDT


Standard Register Reports Second Quarter 2008 Financial Results

DAYTON, Ohio (July 25, 2008) – Standard Register (NYSE: SR) today reported its financial results for the second quarter ended June 29, 2008.


Results of Operations


Net Income for the second quarter, 2008 was $1.4 million or $0.05 per share, compared to a Net Loss in the comparable quarter of 2007 of $4.6 million or $0.16 per share.  Through six months, Net Income was $3.9 million or $0.14 per share versus a Net Loss of $5.5 million or $0.19 per share in the prior year.


Revenue in the current quarter was $198.8 million, compared to $211.2 million in the same quarter of 2007.  On a year-to-date basis, revenue was $406.0 million versus $438.6 million in the prior year.  “Our revenue definitely reflects the effects of softening business activity among many of our customers during the first two quarters of this year,” said Dennis Rediker, president and chief executive officer.  


“Notwithstanding the lower revenue, cost improvement gains achieved in the last half of 2007 carried forward to produce the quarter and six month earnings increases,” added Rediker.  The second quarter gross margin was 34.0 percent of revenue, compared to 31.8 percent a year earlier, and was in line with second half 2007 post-restructuring levels.  Operating SG&A expenses were also well below the prior year level and, aside from a modest up-tick in the current quarter’s healthcare costs, were also in line with the lower cost profile established at mid-year 2007.   



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There were no restructuring or impairment expenses in the current quarter and pension loss amortization was well below prior year levels.  The table below isolates the impact of these expenses for the current and prior periods.


[$ Millions, rounded]

Effect on 2Q Income

 

Effect on YTD Income

CONTINUING OPERATIONS

2008

 

2007

 

Chg

 

2008

 

2007

 

Chg

  Operations before Restructuring, Impairment

           

    Amortization of Past Pension Losses &

           

    the Pension Settlement Charge (Adjusted Operating Income)

8.1

 

3.3

 

4.8

 

18.5

 

12.7

 

5.8

            

  Reconciliation to Net Income / (Loss):

           

  Restructuring Expense

0.0

 

-1.8

 

1.8

 

0.0

 

-4.2

 

4.2

  Impairment Expense

0.0

 

0.3

 

-0.3

 

-0.2

 

0.8

 

-0.9

  Amortization of Past Pension Losses

-5.2

 

-7.1

 

1.9

 

-10.4

 

-14.1

 

3.7

  Pension Settlement Charge

0.0

 

-3.2

 

3.2

 

0.0

 

-3.2

 

3.2

  Income / (Loss) on Continuing Operations

2.9

 

-8.4

 

11.3

 

8.0

 

-8.0

 

16.0

            

  Interest & Other Income / (Expense)

-0.5

 

-0.8

 

0.3

 

-1.2

 

-1.5

 

0.4

  Pretax Income / (Loss)

2.4

 

-9.2

 

11.6

 

6.8

 

-9.5

 

16.4

            

  Income Taxes

1.0

 

-3.8

 

4.9

 

2.9

 

-4.0

 

6.9

  Net Income / (Loss) on Continuing Operations

1.4

 

-5.4

 

6.7

 

3.9

 

-5.5

 

9.4

            

DISCONTINUED OPERATIONS

0.0

 

0.7

 

-0.7

 

0.0

 

0.1

 

-0.1

            

TOTAL NET INCOME / (LOSS)

1.4

 

-4.6

 

6.0

 

3.9

 

-5.5

 

9.3

            

Earnings Per Share on Continuing Operations

0.05

 

-0.19

 

0.24

 

0.14

 

-0.19

 

0.33

  Restructuring & Impairment Expenses

0.00

 

-0.03

 

0.03

 

0.00

 

-0.07

 

0.07

  Pension Loss Amortization & Pension Settlement

-0.11

 

-0.22

 

0.11

 

-0.22

 

-0.37

 

0.15

  All Other Continuing Operations

0.16

 

0.06

 

0.10

 

0.36

 

0.24

 

0.11

            

  Discontinued Operations

0.00

 

0.03

 

-0.03

 

0.00

 

0.00

 

0.00

  Total Earnings Per Share

0.05

 

-0.16

 

0.21

 

0.14

 

-0.19

 

0.33


Operating income before restructuring, impairment, pension loss amortization / settlement, interest & other expenses, and tax (Adjusted Operating Income) was $8.1 million for the quarter, compared to $3.3 million in the prior year.  On the same basis, the six month year-to-date results improved from $12.7 million last year to $18.5 million in the current year.


On the balance sheet, net debt (total debt less cash) decreased by $10.2 million during the quarter.  Through the first half of the year, positive cash flow has reduced net debt by $19.9 million, after capital spending, pension funding, and dividends.  The strong cash flow is attributed to improved results, lower working capital, and less capital spending.  


Capital expenditures were $6.7 million through the first half and are expected to end the year in the $15 million - $18 million range, below earlier estimates.  Pension funding was $11.0 million through six months with an additional $9.0 million currently planned for the balance of the year, in line with earlier estimates.


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Outlook

Our most recent guidance indicated that 2008 revenue would not be significantly different from 2007.  Based on the condition of the economy and our experience in the second quarter, we now expect second half 2008 revenue to be slightly above the first half $406 million figure, bringing the total year in under 2007.

Our prior guidance called for modest double-digit Adjusted Operating Income for 2008.  The lower revenue forecast reduces our earnings estimate somewhat, but we expect Adjusted Operating Income to come in above the comparable 2007 amount, given our reduced cost profile and on-going efforts to control expense.   

Dividend

Standard Register’s board of directors declared on July 24, 2008 a quarterly dividend of $0.23 per share to be paid on September 5, 2008, to shareholders of record as of August 22, 2008.

Conference Call

Standard Register president and chief executive officer Dennis L. Rediker, chief operating officer Joe Morgan and chief financial officer Craig Brown will host a conference call at 10 a.m. EDT on July 25, 2008, to review the second quarter 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, and 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.




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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 other 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 throughout their enterprises. More information is available at http://www.standardregister.com.  

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

   
       

Q-T-D

 

STATEMENT OF OPERATIONS

 

Y-T-D

13 Weeks Ended

13 Weeks Ended

 

(In Thousands, except Per Share Amounts)

 

26 Weeks Ended

26 Weeks Ended

29-Jun-08

1-Jul-07

   

29-Jun-08

1-Jul-07

$198,827 

$211,165 

 

TOTAL REVENUE

 

$406,012 

$438,596 

                131,140 

                144,000 

 

COST OF SALES

 

            269,304 

                295,496 

                  67,687 

                  67,165 

 

GROSS MARGIN

 

                136,708 

                143,100 

   

COSTS AND EXPENSES

   

                  58,213 

                  67,561 

 

Selling, General and Administrative

 

                115,179 

                134,479 

                    6,571 

                    6,590 

 

Depreciation and Amortization

 

                  13,402 

                  13,245 

                         -    

                      (342)

 

Asset Impairment

 

                       164 

                      (751)

                         (4)

                    1,752 

 

Restructuring

 

                          5 

                    4,158 

                  64,780 

                  75,561 

 

TOTAL COSTS AND EXPENSES

 

                128,750 

                151,131 

                    2,907 

                   (8,396)

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

                    7,958 

                   (8,031)

   

OTHER INCOME (EXPENSE)

   

                      (523)

                      (886)

 

Interest Expense

 

                   (1,284)

                   (1,683)

                        47 

                        99 

 

Other income

 

                       129 

                       167 

                      (476)

                      (787)

 

Total Other Expense

 

                   (1,155)

                   (1,516)

   

INCOME (LOSS) FROM CONTINUING OPERATIONS

   

                    2,431 

                   (9,183)

 

BEFORE INCOME TAXES

 

                    6,803 

                   (9,547)

                    1,041 

                   (3,824)

 

Income Tax Expense (Benefit)

 

                    2,919 

                   (3,999)

                    1,390 

                   (5,359)

 

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

 

                    3,884 

                   (5,548)

   

DISCONTINUED OPERATIONS

   

                         -    

                       (81)

 

Gain on sale of discontinued operations, net of taxes

 

                         -    

                      (725)

                          2 

                       816 

 

Loss from discontinued operations, net of taxes

 

                          4 

                       821 

$1,392 

($4,624)

 

NET INCOME (LOSS)  

 

$3,888 

($5,452)

                  28,754 

                  28,677 

 

Average Number of Shares Outstanding - Basic

 

                  28,745 

                  28,656 

                  28,773 

                  28,677 

 

Average Number of Shares Outstanding - Diluted

 

                  28,759 

                  28,656 

   

BASIC AND DILUTED INCOME (LOSS) PER SHARE

   

$0.05 

($0.19)

 

Income (Loss) from continuing operations

 

$0.14 

($0.19)

                         -    

                         -    

 

Loss from discontinued operations

 

                         -    

($0.03)

                         -    

                      0.03 

 

Gain [loss] on sale of discontinued operations

 

                         -    

                      0.03 

$0.05 

($0.16)

 

Net Income (Loss) per share

 

$0.14 

($0.19)

$0.23 

$0.23 

 

Dividends Paid Per Share

 

$0.46 

$0.46 

    
  

BALANCE SHEET

 
   

(In Thousands)

29-Jun-08

30-Dec-07

   

ASSETS

   
   

Cash & Short Term Investments

 

$4,114 

$697 

   

Accounts Receivable

 

108,622 

130,212 

   

Inventories

 

40,560 

45,351 

   

Other Current Assets

 

24,441 

22,523 

   

Total Current Assets

 

177,737 

198,783 

   

Plant and Equipment

 

104,483 

110,975 

   

Goodwill and Intangible Assets

 

7,806 

7,861 

   

Deferred Taxes

 

76,171 

80,852 

   

Other Assets

 

18,473 

21,075 

   

Total Assets

 

$384,670 

$419,546 

       
   

LIABILITIES AND SHAREHOLDERS' EQUITY

   
   

Current Portion Long-Term Debt

 

$159 

$21 

   

Current Liabilities

 

75,294 

87,342 

   

Deferred Compensation

 

10,703 

12,010 

   

Long-Term Debt

 

35,319 

51,988 

   

Retiree Healthcare

 

19,275 

19,496 

   

Pension Liability

 

127,996 

133,647 

   

Other Long-Term Liabilities

 

5,200 

5,083 

   

Shareholders' Equity

 

110,724 

109,959 

   

Total Liabilities and Shareholders' Equity

 

$384,670 

$419,546