Business News
Standard Register Reports First Quarter 2008 Financial Results
Monday 28. April 2008 - Standard Register (NYSE: SR) today reported its financial results for the first quarter ended March 30, 2008.
Results of Operations
Net Income for the first quarter was $2.5 million or $0.09 per share, compared to a net loss of $0.8 million or $0.03 per share in the prior year. First quarter revenue was $207.2 million versus $227.4 million in 2007.
“Despite the lower revenue, our operating earnings improved in the quarter and we had very strong cash flow,” said Dennis Rediker, president and CEO of Standard Register.
Operating income before pension loss amortization, restructuring, and impairment was $10.4 million this quarter, up 10.6 percent compared to the comparable $9.4 million result a year earlier. The reconciliation of these operating results to the GAAP results appears later in this release.
Net cash flow was a positive $9.7 million in the quarter, after funding $5.0 million in pension contributions, $3.2 million in capital expenditures, and $6.7 million in dividends. Net debt ended the quarter at $41.6 million, representing just 26.5 percent of total capital. The Company has generated $9.3 million in positive net cash flow over the trailing four quarters.
About one-third of our revenue decline was from a single customer who ended purchases after the first quarter of 2007. The balance of the business was off 6.0 percent. “The economy definitely played a role in our manufacturing market, where we saw decreased units. The impetus for our customers to continue to aggressively pursue cost reductions was to some degree also likely reinforced by economic conditions,” said Rediker.
The Company’s mid-year 2007 cost reduction plan contributed significantly to the improved operating performance. This was evident in the percentage gross margin, which remained nearly identical to last year despite the lower revenue. In addition, SG&A expenses were $8.0 million lower in the quarter, excluding the pension loss amortization.
Earlier this week, the Company announced a benefit freeze to its pension plan participants, which comprise about one-third of employees. Affected employees will become eligible for enhanced 401K benefits in line with other employees that do not participate in the traditional pension plan.
The table below reconciles the operating earnings cited earlier to our net earnings in accordance with GAAP.
($ Millions, rounded) Effect on 1Q Income
———————-
CONTINUING OPERATIONS 2008 2007 Chg
———————-
Operations before Restructuring, Impairment
———————-
Amortization of Past Pension Losses &
the Pension Settlement Charge 10.4 9.4 1.0
———————-
Reconciliation to Net Income / (Loss):
Restructuring Expense 0.0 -2.4 2.4
Impairment Expense -0.2 0.4 -0.6
Amortization of Past Pension Losses -5.2 -7.0 1.8
———————-
Income / (Loss) on Continuing Operations 5.1 0.4 4.7
Interest & Other Income / (Expense) -0.7 -0.7 0.0
———————-
Pretax Income / (Loss) 4.4 -0.4 4.7
Income Taxes 1.9 -0.2 2.1
———————-
Net Income / (Loss) on Continuing Operations 2.5 -0.2 2.7
———————-
DISCONTINUED OPERATIONS 0.0 -0.6 0.6
———————-
TOTAL NET INCOME / (LOSS) 2.5 -0.8 3.3
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Earnings Per Share on Continuing Operations 0.09 -0.01 0.09
———————-
Restructuring & Impairment Expenses 0.00 -0.04 0.04
Pension Loss Amortization & Pension Settlement -0.11 -0.15 0.04
All Other Continuing Operations 0.20 0.18 0.02
———————-
Discontinued Operations 0.00 -0.02 0.02
———————-
Total Earnings Per Share 0.09 -0.03 0.11
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Dividend
Standard Register’s board of directors declared on April 24, 2008 a quarterly dividend of $0.23 per share to be paid on June 6, 2008, to shareholders of record as of May 23, 2008.
Chief Operating Officer
The board of directors yesterday named Joseph P. Morgan, Jr. as chief operating officer reporting to Dennis L. Rediker. In this position, Mr. Morgan will have responsibility for all operations of the Company. Prior to this he was vice president, chief technology officer and general manager, On Demand Solutions Group. He has served as an officer of the Company since 2003.
Board of Directors
At the Company’s Annual Meeting held April 24, 2008, shareholders approved setting the number of directors at eight, as well as electing five incumbent directors and three new directors including David P. Bailis, Michael E. Kohlsdorf and R. Eric McCarthey.