Standard Register Reports Third Quarter and Nine-Month Financial Performance.Business Editors DAYTON Dayton, city (1990 pop. 182,044), seat of Montgomery co., SW Ohio, on the Great Miami River where it is joined by the Stillwater River; inc. 1805. It is the trade center for a fertile farm area, but is best known for its involvement with industry, invention, and , Ohio--(BUSINESS WIRE)--Oct. 18, 2002 Standard Register (NYSE NYSE See: New York Stock Exchange :SR) today reported results for the third quarter and nine-month period ended September September: see month. 29, 2002. Net income in the 2002 third quarter was $6.5 million or $0.23 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to a loss of $1.4 million or ($0.05) per diluted share in the 2001 third quarter. Excluding restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , net income in the 2001 third quarter was $1.7 million or $0.06 per diluted share. Revenue in the 2002 third quarter was $252.7 million compared to $278.2 million in the quarter last year. The decrease in revenue and the significant increase in net income in the quarter were primarily the result of the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). undertaken in 2001. During the restructuring, the company eliminated approximately $250 million of low-margin and nonstrategic business, reduced yearly fixed operating costs operating costs npl → gastos mpl operacionales by over $125 million, reduced production capacity by 30 percent, and improved working capital turnover by 25 percent. Revenue in the first nine months of 2002 was $770.3 million compared to $910.7 million for the comparable period of 2001. While revenues were lower, primarily as a result of restructuring, year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. gross margin improved from 33.3 percent of sales last year to 39.6 percent in 2002. Net income in the 2002 nine-month period was $28.3 million, or $0.99 per diluted share, compared to a loss of $60.6 million or ($2.20) per diluted share in the 2001 period. Excluding restructuring expenses and other nonrecurring items, net income in the nine-month period of 2001 was $13.8 million or $0.50 per diluted share. "While our earnings rose significantly in the quarter and year to date, we were striving for stronger performance," said Dennis Rediker, president and chief executive officer. "Revenue was soft in reaction to challenging market conditions, preventing us from fully reaping the benefits of the lower cost structure we created in the restructuring. At the same time, we continued to invest in initiatives to help deliver superior long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. shareholder value, including e-business and Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. process improvement. "To help drive stronger results going forward, we will increase our intensity and aggressiveness in acquiring new business and extending our reach with current customers. We have a full spectrum of solutions that uniquely positions us in the marketplace and provides us a distinct competitive advantage. With offerings ranging from consulting to personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. communications to custom e-business solutions, we can revolutionize rev·o·lu·tion·ize tr.v. rev·o·lu·tion·ized, rev·o·lu·tion·iz·ing, rev·o·lu·tion·iz·es 1. To bring about a radical change in: Television has revolutionized news coverage. 2. how companies interact with their customers, suppliers, employees, and other key constituents to achieve superior performance. We are confident in our ability to achieve long-term growth across our businesses with our innovative solutions combined with ongoing productivity improvements and our increased competitiveness." Balance Sheet Cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments totaled $138.2 million after expenditures of approximately $100 million for acquisitions in the quarter. "Excluding our acquisitions, cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was a positive $22 million in the quarter, continuing our pattern of strong cash flow in 2002," Rediker said. The balance sheet also reflects the impact of the stock market decline on the company's defined benefit pension plan, which has assets invested predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. in common stocks. Based on the cumulative effect of declines in stock values over the last several quarters, the company adjusted the pension plan's carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. on the balance sheet from a $113-million asset at the end of June to a $76-million liability at the end of the third quarter, in keeping with Statement of Financial Accounting Standards No. 87. This adjustment, net of deferred income taxes, reduced shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. by $113 million. The company expects its pension expense in 2003 to be approximately $10 million higher than in 2002, largely dependent upon the performance of the stock market over the balance of the year. The company has a well-diversified portfolio Well-diversified portfolio A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been of investments and significant capacity to make contributions to the pension plan, as necessary. Standard Register's net debt to total capital ratio was 17 percent at the end of the third quarter. "With our low debt ratio, strong cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. , and strong cash flow from operations, we have the resources to continue to invest in acquisitions and other initiatives to help us drive long-term profitable growth," Rediker said. Outlook The company expects fourth-quarter revenue and profit to be higher than in the third quarter, in line with typical seasonality. In light of year-to-date results and outlook for the fourth quarter, the company is currently estimating diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for 2002 in the $1.25 to $1.30 range. Quarterly Dividend In other news, Standard Register's Board of Directors on October 17, 2002, declared a quarterly dividend of $0.23 per share to be paid on December 6, 2002, to shareholders of record as of November 22, 2002. Webcast Standard Register will conduct a webcast about third quarter results at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today, October 18, at www.standardregister.com/investorrelations. It will also be available for replay thereafter. About Standard Register Standard Register is a leading provider of information solutions for financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , insurance, healthcare, manufacturing and other industries. Its offerings include document management; label solutions; consulting and fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. services; and e-business solutions. As a strategic partner in migrating companies from paper-based to digital processes, Standard Register helps businesses reduce costs and increase revenue. Founded in 1912, the Fortune 1000 company today employs about 6,000 people throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and serves companies in more than 40 countries through a network of international associate companies. Standard Register's annual revenues exceed $1 billion. More information is available at www.standardregister.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This report includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. covered by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results for fiscal year 2002 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 30, 2001. 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.
THE STANDARD REGISTER COMPANY
STATEMENT OF OPERATIONS (UNAUDITED)
(In Thousands except Data Per Share)
Third Quarter Nine Months Y-T-D
13 Weeks Ended 39 Weeks Ended
29-Sep-02 30-Sep-01 29-Sep-02 30-Sep-01
------------------- --------------------
$252,698 $278,174 TOTAL REVENUE $770,262 $910,742
COSTS AND EXPENSES
153,977 188,536 Cost of Sales 464,986 607,159
4,769 3,900 Engineering and Research 13,090 11,138
68,821 71,509 Selling and Administrative 205,223 231,773
11,718 10,490 Depreciation 33,587 36,765
0 Asset Impairment 0 41,512
0 5,241 Restructuring 0 78,736
------------------- --------------------
239,285 279,676 TOTAL COSTS AND EXPENSES 716,886 1,007,083
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13,413 (1,502) INCOME (LOSS) FROM OPERATIONS 53,376 (96,341)
OTHER INCOME (EXPENSE)
(3,429) (3,411) Interest Expense (9,941) (9,837)
721 653 Investment Income and Other 2,436 2,253
------------------- --------------------
(2,708) (2,758) Total Other Expense (7,505) (7,584)
10,705 (4,260) INCOME (LOSS) BEFORE
INCOME TAXES 45,871 (103,925)
4,245 (2,831) Income Taxes (Benefit) 17,552 (43,315)
------------------- --------------------
$6,460 ($1,429) NET INCOME (LOSS) $28,319 ($60,610)
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28,134 27,611 Average Number of Shares
Outstanding - Basic 27,923 27,593
28,624 27,611 Average Number of Shares
Outstanding - Diluted 28,464 27,593
$0.23 ($0.05) Income (Loss) Per Share
- Basic $1.01 ($2.20)
$0.23 ($0.05) Income (Loss) Per Share
- Diluted $0.99 ($2.20)
$0.23 $0.23 Dividends Paid Per Share $0.69 $0.69
BALANCE SHEET (UNAUDITED)
(In Thousands) 29-Sep-02 30-Dec-01
--------------------
ASSETS
Cash & Short Term
Investments $138,203 $163,792
Current Accounts Receivable 145,313 182,494
Inventories 58,310 74,042
Other Current Assets 46,063 69,908
--------------------
Total Current Assets $387,889 $490,236
Plant and Equipment 231,689 225,216
Prepaid Pension Expense 0 107,677
Other Assets 144,380 14,654
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Total Assets $763,958 $837,783
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued Restructuring Expense $5,969 $15,307
Other Current Liabilities 95,610 112,012
Deferred Compensation 11,379 12,544
Long-Term Debt 200,016 202,300
Retiree Healthcare 50,862 50,862
Pension Liability 75,835 0
Deferred Taxes 0 20,975
Other Long-Term Liabilities 5,834 8,493
Shareholders' Equity 318,453 415,290
--------------------
Total Liabilities and
Shareholders' Equity $763,958 $837,783
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