Standard Register Reports Strong 3rd Quarter

After following Standard Register for more than a decade, I find the company’s 3rd quarter results very encouraging. Joe Morgan has been in the CEO role for a couple of years. He is an extremely dynamic leader that is making big changes in the company. For those of you who attended the Print CEO Forum and had an opportunity to hear him speak on a highly-rated panel with Vistaprint President of North America, Wendy Cebula, or to network with him during the session, I am sure you will agree he has taken this challenge very personally, and that, in turn, has been an inspiration to his team to deliver against that challenge. The 3rd quarter of 2010 marks the sixth consecutive quarter of stability for the company.

Although Standard Register’s revenues are still heavily weighted toward legacy products and services such as forms, a segment which is declining and has been for some time, the company is taking a two-pronged approach to the transformation: increasing focus on specific markets to grow revenues and working hard inside the organization to bring expenses into alignment. The fascinating thing for me in these results is the dynamic cultural change one sees under Morgan’s leadership. He is a very inclusive CEO and has put a number of programs in place, including MyC3, which engages employees at every level to uncover cost savings opportunities. This MyC3 effort was targeted to generate $30-$40 million improvement in net annual earnings by 2012. To date, the company has implemented 397 ideas that have realized $19 million in savings YTD, and are projected to ultimately improve earnings by $40 million. The company has also reinvested $12 million into technology enhancements, go-to-market, employee development and incentives, and reported $7.7 million in positive cash flow for the quarter. Part of the investment was an update of Standard Register’s SmartWorks customer facing web services platform which was completed in about a quarter, as well as a complete technology refresh in the company’s 22 StanFast digital centers. Morgan took over a company that was quite distressed and is delivering on turnaround promises. This has not only helped with employee morale, but also with customer retention and customer acquisition/growth in market share in the company’s target segments. Morgan has established a new operational framework the company calls 5 Points of Change as well as an outside-in growth strategy. At the same time, Morgan and his team are reenergizing the culture to be more market- and customer-focused.

As the economy begins its slow recovery, we are hearing more positive stories from owners and managers of printing companies, many of whom are smaller firms. Sometimes turning the ship in a large company like Standard Register can be difficult—just ask the captain of the Titanic. While Morgan admits the company still has a distance to go, he and his team should be congratulated on the progress that has been made under his leadership in a very short time. Having had the opportunity to visit there a couple of times this year, I can tell you first-hand that there is a very different feeling in the building, and employees are excited and engaged. WhatTheyThink will be keeping tabs on the company’s progress, both financially and it its overall transformational efforts.

Discussion

By Chuck on Nov 01, 2010

Yes, Joe Morgan seems to be very passionate. He should use that passion to get his passengers (read shareholders) into lifeboats now before they hit that iceberg-- forget about trying to turn that ship.

What I heard at the PrintCEO forum was an exciting, energizing story from Wendy Cebulla, with a very specific vision, very specific metrics and plans to execute. Coupled, of course, with some pretty outstanding execution over the last few years (presumably resulting in Wendy being named WW COO last week).

In contrast, poor Joe sounded like he didn't have any idea what they are doing now, or what they can expect in the future. I found it downright depressing.

What I found missing was the one big idea: what the heck is Standard Register? Having 397 ideas sounds to me like the suggestion box is overflowing.

I think it is sort of telling that the company history on their web site ENDS DURING WORLD WAR II.

My suggestion: spend less time counting suggestions, and more time coming up with what you want to be for your next 150 years. Or get in the boats.

By Christine WInters on Nov 09, 2010

I can appreciate that some people might be skeptical about Standard Register’s results. Recent years have been a struggle, but as an employee of eight years I have a real appreciation for the progress that is being made now. Going from a $5.5 million net loss in Q3 2009 to net profits of $1.4 million in Q3 2010 is no small accomplishment.

Through the MyC3 initiative, Joe Morgan has made a conscious effort to engage employees to be a part of our transformation and create a culture that’s focused on driving efficiency, revenue and innovation. The fact that this program has already generated $19 million in savings (with more to come) speaks to its effectiveness. And that’s half of the equation -- the revenue-generating programs it has created are gaining traction now.

For anyone who hasn’t been following the news this year, Standard Register made serious investments in both our technology platform and and digitial print network that provide a solid foundation for the future. We established strategic partnerships. We introduced some very innovative solutions for the industrial customers. By moving from a product-driven company and creating market-focused business units, we’ve gained important market insights that are creating big ideas to drive value for our customers and results for our shareholders.

If the company hasn’t shared specifics about the future, you have to remember it’s a publicly-traded corporation. We have to be cautious about making “forward-looking” statements. However, from my own perspective, I will say I’m excited about the next 150 years. Stay tuned.

By Chuck on Nov 12, 2010

It's good to see someone from the company defending against what I said, which upon re-reading does seem kind of harsh.

Christine, I have been reading about the company in the media. I saw the news of the investments in the digital platform, and that actually led me to wonder more about the future of the company. That size of investment looks to me like one medium production copier for each of the digital facilities-- that does not sound revolutionary to me, that sounds like something that should happen every year!

I understand the industrial area is quite innovative, and from the PrintCEO forum I heard they are the only ones using social media in the company and carving out a real identity in interacting with their niche customers. Very good.

The big question I posed, though, is what are you? What is the elevator pitch, what sets you apart from the competition. Heck, who even is the competition for SR now?

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