-----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, E+UIfNMryb+uwTs7g7cDIZIgVSV3t4wZ+Kgis0iU6wl0zCgHXKmnnTfjl6H6JuFF Bc1GiogA3j7jqGIqRrKvsw== 0000950152-97-003801.txt : 19970514 0000950152-97-003801.hdr.sgml : 19970514 ACCESSION NUMBER: 0000950152-97-003801 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970330 FILED AS OF DATE: 19970513 SROS: NASD 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: 97602223 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 STANDARD REGISTER COMPANY FORM 10-Q 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 March 30, 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 March 30, 1997 ----- -------------------------------- Common Stock - $1.00 Par Value 23,879,343 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 March 30, 1997, December 29, 1996 3 Statement of Income 13 Weeks Ended March 30, 1997 and March 31, 1996 4 Statement of Cash Flows 13 Weeks Ended March 30, 1997 and March 31, 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 the Interim Financial Statements 6-7 PART II - OTHER INFORMATION AND SIGNATURE 8-10 - ----------------------------------------- - 2 of 10 - 3 THE STANDARD REGISTER COMPANY BALANCE SHEET (Dollars in Thousands) (Unaudited)
ASSETS March 30, December 29, 1997 1996 ----------- ------------ CURRENT ASSETS Cash and Cash Equivalents $ 81,052 $ 64,550 Investment held to maturity 1,215 1,215 Accounts Receivable, less Allowance for Losses 164,437 178,711 Inventories Finished Products 56,190 55,449 Jobs in Process 19,864 18,573 Materials and Supplies 10,528 12,130 Deferred Income Tax 8,206 8,206 Prepaid Expense 5,170 6,153 --------- --------- Total Current Assets 346,662 344,987 --------- --------- PLANT AND EQUIPMENT Buildings and Improvements 61,170 61,711 Machinery and Equipment 251,614 224,702 Office Equipment 44,192 60,894 --------- --------- Total 356,976 347,307 Less Accumulated Depreciation 145,092 141,021 --------- --------- Depreciated Cost 211,884 206,286 Construction in Process 24,607 26,160 Land 3,512 3,512 --------- --------- Total Plant and Equipment 240,003 235,958 --------- --------- OTHER ASSETS Goodwill, Patents, and Other 3,227 3,278 Investment in F3 5,417 2,890 Investment in Polyforms Joint Venture 750 1,000 --------- --------- Total Other Assets 9,394 7,168 --------- --------- TOTAL ASSETS 596,059 588,113 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable 19,551 20,225 Dividends Payable -- 5,738 Accrued Compensation 26,338 34,355 Accrued Pension Expense 789 -- Accrued Other Expense 28 5,536 Accrued Taxes, except Income 7,405 5,902 Income Taxes Payable 10,801 2,624 Customer Deposits 7,159 4,185 Deferred Service Contract Income 9,394 7,274 --------- --------- Total Current Liabilities 81,465 85,839 --------- --------- LONG-TERM LIABILITIES Long-Term Debt 4,600 4,600 Retiree Healthcare 28,098 27,643 Deferred Income Taxes 16,785 16,785 --------- --------- Total Long-Term Liabilities 49,483 49,028 --------- --------- SHAREHOLDERS' EQUITY Common Stock, $1.00 Par Value 24,280,229 Shares Issued in 1997 24,280 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 30,834 28,705 Retained Earnings 415,322 400,387 Treasury Stock, 400,886 Shares at Cost (10,050) --------- --------- 239,486 Shares at Cost (4,775) --------- Total Shareholders' Equity 465,111 453,246 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 596,059 $ 588,113 ========= =========
- 3 of 10 - 4 THE STANDARD REGISTER COMPANY STATEMENT OF INCOME (In Thousands except Data Per Share) (Unaudited)
First Quarter 13 Weeks Ended March 30, March 31, 1997 1996 -------- ------ TOTAL REVENUE $230,114 $229,673 -------- -------- COSTS AND EXPENSES Cost of Products Sold 136,525 144,383 Engineering & Research 2,481 2,019 Selling and Administrative 56,364 52,168 Depreciation and Amortization 9,156 8,255 Interest 77 165 -------- -------- Total Costs and Expenses 204,603 206,990 -------- -------- INCOME BEFORE INCOME TAXES 25,511 22,683 Income Taxes 10,563 9,120 --------- -------- NET INCOME $ 14,948 $ 13,563 ======== ======== Average Number of Shares Outstanding (000) 28,616 28,687 DATA PER SHARE Net Income Primary and Fully Diluted $ 0.52 $ 0.47 Dividends Paid 0.20 0.19
- 4 of 10 - 5 THE STANDARD REGISTER COMPANY STATEMENT OF CASH FLOWS (Dollars in Thousands) (Unaudited)
First Quarter 13 Wks Ended March 30, March 31, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 14,948 $ 13,563 -------- -------- Add Items not Affecting Cash: Depreciation and Amortization 9,156 8,255 Loss on Sale of Facilities 56 1 Net Change to Investments 750 390 Net Change to Retiree Healthcare 455 - Increase (Decrease) in Cash Arising from Changes in Asset and Liabilities: Accounts Receivable 14,275 17,264 Inventories (430) 749 Other Assets 983 (1,329) Accounts Payable (674) 284 Accrued Expenses (11,233) (7,887) Income Taxes Payable 8,177 6,629 Customer Deposits 2,974 6,504 Deferred Service Income 2,120 2,310 -------- -------- Net Adjustments 26,609 33,170 -------- -------- Net Cash Provided by Operating Activities 41,556 46,733 ======== ======== CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sale of Facilities 120 18 Proceeds from Sale of Short-term investments - 15 Additions to Plant and Equipment (13,326) (12,455) Investment in F3 Corporation (3,028) Investment in Polyforms Joint Venture - (64) -------- -------- Net Cash (Used in) Investing Activities (16,233) (12,486) ======== ======== CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Issuance of Common Stock 2,204 1,118 Redemption of Common Stock (5,275) - Dividends Paid (5,750) (5,452) -------- -------- Net Cash (Used in) by Financing Activities (8,821) (4,334) ======== ======== NET INCREASE IN CASH AND CASH EQUIVALENTS 16,502 29,913 Cash and Cash Equivalents, Beginning 64,550 33,646 -------- -------- CASH AND CASH EQUIVALENTS, ENDING $ 81,052 $ 63,559 ======== ========
- 5 of 10 - 6 THE STANDARD REGISTER COMPANY MANAGEMENT DISCUSSION AND ANALYSIS OF THE INTERIM FINANCIAL STATEMENTS Results of Operations - --------------------- Net Income from the first quarter 1997 was $14.9 million, a 10.2% increase from the $13.6 million recorded in the comparable quarter of 1996. Net Income Per Share rose to $.52 per share up from $.47 per share for the comparable quarter in 1996. Total Company revenue was $230.1 million compared with $229.7 million for the prior year period. The growth in net income was primarily attributable to improved gross margins as the result of lower paper costs. Recently, the Company announced the realignment of the Pressure Sensitive Group and the Electronic Systems Group from the Document Management Division to the Document Systems Division. This realignment will facilitate improved customer solutions and capitalize on the natural synergy between the groups. As such, the following divisional results have been restated to reflect this change. The Document Management Division reported revenue of $168.3 million for the quarter representing an increase of 2.7%. Revenues from the Stanfast, Imaging Services and Distribution Services Groups, all strategically targeted growth opportunities, rose 11.9% and accounted for 37.5% of total division revenue. By comparison, revenues from traditional business forms products declined 2.1%. The Communicolor Division's revenue declined 10.1% for the quarter to $22.6 million. A majority of this decline is attributable to an 8% decline in price levels between the comparable years' quarters. The Company's promotional direct mail division continues to experience softened demand. The benefits of expanded feature offerings and new sales initiatives are not expected to have an impact before the second half of the year. The Document Systems Division's revenue declined 2.4% in the first quarter to $38.6 million as a result of declines in equipment and maintenance revenues of 14.4% and 12.5%, respectively. Offsetting these declines were improved sales in supplies, up 11.7%, the Pressure Sensitive Group, up 5.2%, and the Electronic Services Group, up 212.1%. Equipment gross margin improved from 30.5% of revenue last year to 35.0% in the current period due to increased sales of higher margin intelligent printing application products. Maintenance gross margin increased 32.4% reflecting the full impact of last year's pruning of unprofitable accounts and the restructuring of the service organization. The Company's gross margin for all products and services continued to improve for the first quarter, increasing 9.7% over the comparable period in 1996. Gross margin as a percentage of revenue was 40.7% in the current quarter compared to 37.1% in the prior year period. No LIFO inventory adjustments were recorded in either quarter. The improvement is attributed to lower paper price levels and favorable product mix. Future paper price levels are expected to align more closely with price levels experienced in the prior year's comparable periods. - 6 of 10 - 7 Selling, administrative, and engineering expenses increased 8.6% for the quarter as a result of increased sales support personnel related to the rollout of the STAR sales office automation project, increased advertising costs associated with the SMARTworks(TM) suite of software forms automation tools, and an additional $250,000 charge related to the Company's Russian joint venture. The Company also recorded a non-recurring $764,000 charge for equipment modification costs associated with the Travelers Express Company, Inc. August 1995 patent settlement agreement; the Company does not expect further material costs related to this matter. Depreciation and amortization increased 10.9% to $9.2 million in line with prior years higher capital spending levels. Interest expense decreased 53% as a result of a $6.5 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 $81.1 million exceeded total debt of $4.6 million by $76.5 million. Net cash flow from operating activities for the first three months of 1997 was $41.6 million resulting primarily from increased net income and reductions in accounts receivable, down 8.0%. Current assets were 4.3 times the level of current liabilities. Capital expenditures for the quarter totaled $13.3 million. 1997 capital expenditures are estimated to range from $55 - $60 million. The Company also invested an additional $3.0 million in F3 Software Corporation, a developer of application software for our SMARTworks(TM) product offering, increasing the Company's ownership position to 44%. In addition, the Company repurchased $5.3 million in company stock. 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 3 - -------------- None ITEM 4 Submission of Matters to a Vote of Security Holders - ------ The Company's Annual Meeting of Shareholders was held April 16, 1997. Following is the result of voting by the Shareholders regarding fixing and determining the number of Directors to be ten. IN FAVOR OPPOSED ABSTAINED -------- ------- --------- 44,406,069 323,520 73,256 As a result of voting of the Shareholders, the following were elected to the Company's Board of Directors to hold office for the ensuing year. NOMINEE IN FAVOR WITHHELD ------- -------- -------- Roy W. Begley, Jr 44,738,243 64,602 F. David Clarke, III 44,751,450 51,395 Paul H. Granzow 44,750,974 51,871 Graeme G. Keeping 44,733,085 69,760 Peter S. Redding 44,750,914 51,931 Dennis L. Rediker 44,732,885 69,960 Ann Scavullo 44,738,924 63,921 John J. Schiff, Jr 44,751,920 50,925 Charles F. Sherman 44,749,543 53,302 John Q. Sherman, II 44,749,749 53,096 The Standard Register Company Management Incentive Compensation Plan was approved as a result of the following vote: IN FAVOR OPPOSED ABSTAINED -------- ------- --------- 43,710,628 213,591 878,625 Following is the result of voting by the Shareholders regarding selection of Battelle & Battelle LLP as the Company's Auditors for the year 1997. IN FAVOR OPPOSED ABSTAINED -------- ------- --------- 44,743,512 13,083 46,250 No broker non-votes were recorded. ITEM 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. May 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 THREE MONTHS ENDED MARCH 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-28-1997 MAR-30-1997 81,052 1,215 170,432 5,995 86,582 346,662 385,095 145,092 596,059 81,465 4,600 29,005 0 0 436,106 596,059 229,447 230,114 136,525 204,603 0 355 77 25,511 10,563 14,948 0 0 0 14,948 0.52 0.52
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