DAYTON, OHIO) Standard Register today reported third quarter 2000 Net Income of $8.4 million on Revenues of $304 million, compared to $14.9 million in Net Income and $326 million of Revenue on continuing operations for the third quarter of 1999. On a diluted per share basis, Net Income totaled $0.31 per share in the current quarter compared to $0.53 per share on continuing operations last year. Through nine months, Net Profit on Continuing Operations and before restructuring costs was $27.1 million or $1.00 per share, compared to $43.4 million and $1.53 per share for 1999. (These figures exclude a first quarter 2000 restructuring charge equivalent to $0.38 per share, and the operating results and gain on the 1999 sale of the former Communicolor division which added $0.50 per share to the prior year's net result.) The decline in operating profitability is attributed to a five percent decrease in revenue, and more specifically, to an 11 percent decrease in the sale of traditional business forms. Labels, imaging services, on-demand printing, and commercial printing products increased seven percent overall. Reflecting the success of cost reduction efforts and an improved account portfolio, Standard Register reported its highest gross margin in six months and lowest SG&A expense in four quarters despite increased investment in SMARTworksÆ and costs related to the strategic planning process currently underway. "Our strategic planning process continues at an intense pace," states Standard Register Chief Executive Officer Dennis L. Rediker. "Through extensive efforts involving five distinct employee leadership teams, we're developing a new understanding of our markets, competitors, and strengths in the new economy era - key elements essential for formulating our business strategy." According to Rediker, the company's board is actively engaged in the strategic planning process through a series of meetings, which will culminate mid January. "We expect to be in a position early next year to explain our strategic direction to employees, shareholders, customers and suppliers," adds Rediker. The strategic planning process is expected to result in two separate and non-recurring charges to income which may be material, but which cannot be estimated at this time. The first charge will occur in the fourth quarter 2000 as a result of an extensive review currently underway of goodwill and other asset accounts. The second will be a restructuring charge in the first quarter of 2001 related to the implementation of the business strategy. During the third quarter, Standard Register continued initiatives to improve over all performance. The company announced the closing of its Dayton, Oh io business forms printing plant in October as part of a broad effort to align production with shifting demand for traditional forms products. One-time cash closing costs are estimated at $4 million; savings are expected to be $3.7 million annually. An additional non-cash charge of $3 million for capital assets and inventory is also anticipated. These restructuring charges will be recorded in the fourth quarter results. Also, during the quarter Standard Register halted its emPOWER project, having spent approximately $24 million of the long-term information technology (IT) initiative's $52 million preliminary budget. To date, the investment includes the completed installation of human resources and financial modules of the project's PeopleSoft enterprise resource planning (ERP) system and infrastructure elements that will serve as a platform for further IT advancements. Standard Register will realign the project's scope and budget and proceed after determining the company's strategic direction early next year. Cost reduction initiatives underway include a material waste reduction program throughout Standard Register's forms and pressure-sensitive label facilities in addition to a strategic sourcing model for procurement of indirect materials and services throughout the company. Best practices and continuous improvement techniques to further reduce costs and increase productivity are being deployed throughout Standard Register's imaging services centers and nation-wide network of on-demand printing facilities. In September, Standard Register's e-commerce subsidiary SMARTworks.com, Inc., released SMARTworks version 5.0, which separated the document management and e-commerce technology platform's web application from the company's back-end systems, creating a platform open to other suppliers competing in the $115 billion U.S. print market. Via enhanced functionality, SMARTworks now provides more up-to-date reporting information and compatibility with global business-to-business e-procurement systems. Standard Register recently received from industry analyst, Kinetic Information, the Process Innovation Award for creative and effective implementation of SMARTworks at Sprint. During the quarter, Standard Register signed several large contractual agreements including a new five-year, $10 million contract with Duke University Health System and generated $4 million in new sales to the auto dealer marketplace following a joint marketing agreement the company signed with ADP in the second quarter. Accolades Standard Register received during the quarter include ranking among Information Week's top 500 most innovative users of IT and the company's selection by FedEx as overall supplier of the year for 2000. Standard Register anticipated its second-half 2000 operating earnings performance before restructuring and other non-operating charges to be similar to the first half of the year and below the prior year result. That continues to be the company's expectation during the fourth quarter. On October 19, 2000 Standard Register's board of directors declared a quarterly dividend of $0.23 per share to be paid on December 8, 2000 to shareholders of record as of November 24, 2000.