Standard Register Reports 1.4M Profit for Second Quarter
Tuesday, July 29, 2008
Press release from the issuing companyDAYTON, Ohio, Jul 25, 2008 -- Standard Registertoday reported its financial results for the second quarter ended June 29, 2008.
Results of Operations
Net Income for the second quarter, 2008 was $1.4 million or $0.05 per share, compared to a Net Loss in the comparable quarter of 2007 of $4.6 million or $0.16 per share. Through six months, Net Income was $3.9 million or $0.14 per share versus a Net Loss of $5.5 million or $0.19 per share in the prior year.
Revenue in the current quarter was $198.8 million, compared to $211.2 million in the same quarter of 2007. On a year-to-date basis, revenue was $406.0 million versus $438.6 million in the prior year. "Our revenue definitely reflects the effects of softening business activity among many of our customers during the first two quarters of this year," said Dennis Rediker, president and chief executive officer.
"Notwithstanding the lower revenue, cost improvement gains achieved in the last half of 2007 carried forward to produce the quarter and six month earnings increases," added Rediker. The second quarter gross margin was 34.0 percent of revenue, compared to 31.8 percent a year earlier, and was in line with second half 2007 post-restructuring levels. Operating SG&A expenses were also well below the prior year level and, aside from a modest up-tick in the current quarter's healthcare costs, were also in line with the lower cost profile established at mid-year 2007.
There were no restructuring or impairment expenses in the current quarter and pension loss amortization was well below prior year levels. The table below isolates the impact of these expenses for the current and prior periods.
Operating income before restructuring, impairment, pension loss amortization / settlement, interest & other expenses, and tax (Adjusted Operating Income) was $8.1 million for the quarter, compared to $3.3 million in the prior year. On the same basis, the six month year-to-date results improved from $12.7 million last year to $18.5 million in the current year.
On the balance sheet, net debt (total debt less cash) decreased by $10.2 million during the quarter. Through the first half of the year, positive cash flow has reduced net debt by $19.9 million, after capital spending, pension funding, and dividends. The strong cash flow is attributed to improved results, lower working capital, and less capital spending.
Capital expenditures were $6.7 million through the first half and are expected to end the year in the $15 million - $18 million range, below earlier estimates. Pension funding was $11.0 million through six months with an additional $9.0 million currently planned for the balance of the year, in line with earlier estimates.
Our most recent guidance indicated that 2008 revenue would not be significantly different from 2007. Based on the condition of the economy and our experience in the second quarter, we now expect second half 2008 revenue to be slightly above the first half $406 million figure, bringing the total year in under 2007.
Our prior guidance called for modest double-digit Adjusted Operating Income for 2008. The lower revenue forecast reduces our earnings estimate somewhat, but we expect Adjusted Operating Income to come in above the comparable 2007 amount, given our reduced cost profile and on-going efforts to control expense.
Standard Register's board of directors declared on July 24, 2008 a quarterly dividend of $0.23 per share to be paid on September 5, 2008, to shareholders of record as of August 22, 2008.
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