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Standard Register Reports Flat Revenue in Q1

Friday, April 28, 2006

Press release from the issuing company

DAYTON, Ohio, April 27 -- Standard Register today reported its financial results for the first quarter ended April 2, 2006. "Our revenue exceeded our expectations in the first quarter and our quarterly earnings, before restructuring and impairment, increased 19 percent over the prior year - our seventh consecutive quarterly improvement," said Dennis L. Rediker, president and CEO of Standard Register. Revenue was $231.7 million, compared to last year's $232.0 million. The net earnings were dampened by restructuring and impairment charges totaling $2.9 million, primarily related to the closing of the Company's Terre Haute plant. The plant's productive capacity is being redistributed to other facilities to improve overall efficiency and lower ongoing operating costs starting in the third quarter. Excluding the restructuring and impairment charges, first quarter pre-tax income from continuing operations improved from $5.0 million last year to $5.9 million in the current year. The following table isolates the effects of restructuring and impairment on the quarter's earnings. The Company adopted SFAS 123 , accounting for share-based compensation, which had a negligible effect on earnings in the quarter. "The improved operating performance resulted from good progress made on several fronts," said Rediker. "We saw good top-line growth plus cost improvement in our POD Services segment, which accounted for the majority of our improved gross margin. In addition, our Commercial Print, Document Systems and InSystems businesses also contributed to the quarter-over-quarter increase in margins." Net debt (total debt less cash and short-term investments) increased $10.5 million in the quarter to $31.9 million, primarily the result of seasonal payments of bonuses earned in the prior year and pension contributions. One year ago, the net debt balance was $42.8 million, indicating a trailing 12 months net positive cash flow of $10.9 million. The balance sheet remains strong, as indicated by a quarter-end net debt to total capital ratio of 15.4 percent. Outlook "We are encouraged by the good start to the year," said Rediker. "In addition, recent new contract signings are expected to help our top-line in 2006 and offset the continuing pressure on the price of traditional products. Our guidance for 2006 remains unchanged - modest revenue growth for the whole of the year." Paper companies have announced additional price hikes in the quarter and we have raised our target selling prices in an effort to recover these increases. We expect to recover these cost increases over the next several quarters.

 

 

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