Business News

Standard Register Reports First Quarter 2011 Financial Results Profit Trends Continue to Improve

Friday 29. April 2011 - Standard Register (NYSE: SR) today announced its financial results for the first quarter, which ended April 3, 2011. The Company reported revenue of $164.9 million and a net income of $0.5 million, or $0.02 per share. The results compare to revenue of $167.4 million and a net loss of $0.8 million, or $0.03 per share, last year.

Results of Operations
Revenue was down slightly relative to the prior year. Increases in core growth solutions were offset by expected declines in legacy products in every segment but Industrial. Legacy products represent the majority of the Company’s portfolio and provide a foundation of stability, however the Company expects that future revenue growth will be driven by increases in core solution sales throughout all focus markets.
“Solutions that we call core are where the majority of our investment and innovation will continue to take place,” said Joseph Morgan, president and chief executive officer. “These core solutions have been developed as the result of deep market expertise in assisting our customers to solve problems, operate more efficiently, build brand consistency, reduce risk and ultimately advance their reputations. The ability to provide these high-value solutions is a fundamental advantage that differentiates Standard Register from our competitors.”
Gross margin as a percent of revenue improved to 32.5 for the quarter versus 32.0 in the prior year. LIFO inventory adjustment was negligible for the current quarter versus a favorable LIFO adjustment of $1.7 million for the prior year. Selling, general and administrative expenses, excluding pension loss amortization were down $3.3 million from the prior year. Continuous improvement initiatives allowed the Company to enhance its cost structure which, allowed all three business units to show increases in their operating profit over the prior year.
Adjusting for pension loss amortization and restructuring charges, non-GAAP net income was $4.2 million, or $0.15 per share for the current quarter compared with non-GAAP net income of $2.3 million, or $0.08 per share for the prior year quarter.
During the quarter, capital expenditures were $1.9 million and are expected to be in the range of $18-21 million for the year, the majority of which will support the advancement of our core growth solutions. Pension funding contributions were $8.0 million during the quarter and are expected to be approximately $30 million for the year. Non-GAAP cash on a net debt basis was $5.8 million positive for the quarter, driven by working capital improvements previously predicted.
“Generating profit and positive cash flow during the quarter demonstrates our progress toward a more enduring environment,” noted Morgan. “However, we know that to be a sustainable organization, we need to deliver growth on the top-line as well. Driving revenue growth by advancing our core growth solutions is the primary focus for this year.”
Dividend
On Thursday, April 28, 2011, Standard Register’s board of directors declared a quarterly dividend of $0.05 per share to be paid on June 10, 2011, to shareholders of record as of May 27, 2011. The board will consider future dividend payments on a quarter-by-quarter basis in accordance with its normal practice.