Business News
Standard Register Aligns its Strategy for Future Growth
Monday 03. November 2008 - Company to Reduce Annualized Costs by $33 Million
Standard Register (NYSE: SR) today announced a strategic and organizational realignment to position the company for long-term growth, while maintaining its strong balance sheet. The company will organize around the healthcare, industrial and commercial market segments, among other initiatives.
“Re-focusing our go-to-market approach will allow for increased market coverage in these key areas while improving overall client satisfaction,” said Standard Register’s acting chief executive officer, Joe Morgan. In addition, the company will reduce annualized costs by $33 million.
“The continued decline in demand for our traditional offerings have led us to refine our strategic direction to invest in areas with long-term growth opportunity,” said Morgan. “Current economic conditions have accelerated the pace of our actions.”
In the third quarter of 2008, a freeze of pension benefits, consolidation of some print centers and warehouses and a reorganization of field sales support were implemented resulting in annualized savings of $13 million. The actions announced today include policy changes and other measures that will result in $9 million in savings annually. In addition, a 5 percent reduction in force will be completed before year end creating an additional annualized savings of $11 million. Separation costs associated with the restructuring are estimated at $2.2 million, the majority of which will be recorded in the fourth quarter.
Last year the company was successful in achieving its full cost and expense reduction targets. Cost reduction actions of $40 million were announced in July 2007. These initiatives included a workforce reduction, consolidation of facilities and other cost-saving measures.
“For the past several months we’ve been addressing our strategic issues head on with several teams conducting external research and working on the marketplace issues we face for the long term. Simplification of what we do will be a big part of moving forward, as will the continuation of relentless cost management,” said Morgan. “Our strategy work has illuminated many exciting opportunities. We have prioritized and selected the approach that will bring the greatest return. The time is perfect to execute under a very clear model.”