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Standard Register Reports Reduced Revenue in Q4

Tuesday, March 07, 2006

Press release from the issuing company

DAYTON, Ohio, March 6 -- Standard Register today reported its financial results for the fourth quarter and total year ended January 1, 2006. This news release updates a February 23, 2006, announcement of the Company's preliminary unaudited pretax results for the quarter and year. The revenue, pretax profit, cash flow and other information included in the earlier announcement are unchanged in the final audited report. Results of Operations Revenue on Continuing Operations was $223.0 million in the quarter, compared to $236.2 million for the fourth quarter 2004. The prior year reporting period included an extra accounting week, which added an approximation of $17.0 million to 2004's fourth-quarter and total-year revenues. On a normalized 13-week quarter basis, revenue was up 1.8 percent. Total 2005 Revenue on Continuing Operations was $901.9 million, up 1.3 percent from the prior year; adjusting for the extra week, revenue increased by an estimated 3.3 percent. Net Income was at break-even for the quarter, versus a profit last year of $13.4 million. The prior year fourth quarter included a $12.8 million after- tax gain on the sale of the Company's former equipment service business. For the total year, Net Income was $1.4 million, compared to a Net Loss in 2004 of $30.2 million. The gain on sale and the operating results of the equipment service business are reported as discontinued operations. Net Income on Continuing Operations was at break-even for the fourth quarter, compared to a profit of $0.3 million in the prior year. The current quarter's results included an unfavorable income tax adjustment of $1.4 million to reserve against a Canadian deferred tax asset. For the year, Net Income on Continuing Operations improved from a loss last year of $44.7 million to a profit in 2005 of $0.8 million. The Company's 2004 results included impairment charges of $48.5 million, including a $47.1 million charge to eliminate the goodwill of its InSystems subsidiary. The improved 2005 operating profit is attributed primarily to the increase in revenue, lower costs, and significantly reduced restructuring and impairment expenses. "We continued to make good operating progress in 2005," said Dennis Rediker, president and chief executive officer of Standard Register. "Setting aside restructuring and impairment charges, our 2005 Pre-tax Income on Continuing Operations increased $21.9 million over 2004 and was $36.0 million higher than in 2003." Cash Flow The Company continued to generate cash and pay down debt. "The Company netted positive cash flow of $15.9 million during 2005 -- after funding all of our operating needs, $20.2 million in capital expenditures, $15.0 million in pension contributions, $5.2 million in restructuring costs, and $26.6 million in dividend payments," said Rediker. The balance sheet remains very strong with net debt (total debt less cash and short-term investments) ending the year at $21.4 million. End-of-year net debt balances for 2004 and 2003 were $37.3 million and $48.1 million, respectively. Outlook "The market for many of our products and services, particularly our traditional printed products, remains very price competitive. Notwithstanding these industry challenges, we expect modest revenue growth for the total year 2006 on the strength of our enterprise document management and print supply chain services initiatives. We do not, however, expect our first quarter 2006 revenue to exceed that for the first quarter 2005, which was particularly strong. We will also continue to focus on productivity improvements, asset management, and maintaining a strong balance sheet," said Rediker.

 

 

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