Standard Register held their first quarter earnings call today. Revenue for the quarter was $232 million, up 5.3% from the same period last year, but down about 2% from last quarter. Net income in the first quarter was $2.4 million, or $0.08 per share, versus a net loss of $6.5 million, or $0.23 per share, during the first quarter of 2004. Excluding the gain from the sale of its equipment service business, Standard Register posted net income of $600,000 last quarter.

Topics of this Summary

  • Quarter Highlights
  • Segment Performance
  • Guidance
  • Raine Radar
  • Q & A

Quarter Highlights

  • Price improvements drove the majority of the 5% revenue growth.
  • The Document/Label and Print on Demand businesses both saw sales increases.
  • The company expects to replace its existing $150 million dollar credit agreement with a new $100 million secured agreement prior during May when the original expires.
  • Sales, General, and Administrative costs were down nearly $10 million, or 12.5% from the same period last year.
  • Standard Register is trying to position itself in the market as an Enterprise Document Management Services company.

Segment Performance

Document Label Solutions saw revenue increase 4.1% to $159 million during the first quarter.

Print-on-Demand Services (which includes digital color) had revenues up 3.6% to 62 million.

InSystems revenue was down 21% to $3 million.

Digital pen and paper is still in “start-up” mode and has not generated any revenue.

All other businesses accounted for $8 million in revenue, including commercial print service which was up 80% from the first quarter last year.


Standard Register expects “modest” revenue growth over 2004. The company also has a target of achieving a 5 point increase in pretax operating profit as a percentage of sales in the second half of 2005 compared to the first half of 2004 of 2.8% or better.

Raine Radar

Standard Register has tried very hard to redefine itself and has done so with mixed results. The majority of their revenue still comes from labels, and they seem to be having some trouble in growing business in their high “value-add” areas of Document Solutions and Marketing Automation. Digital pen and paper was announced over a year ago and although it had promise, it has yet to produce any revenue. For all their investments over the years in e-commerce solutions, Standard Register has yet to find the new business model for growth and continues to go sideways. Analysts seem to concur given how few questions they receive on their earnings calls. Although they do seem to have plenty of places where they can cut costs and achieve their profitability goals, organic growth looks to be pretty soft in 2005

Q & A

  1. Pricing will probably not continue to increase as they have over the last two or three quarters, but there shouldn’t be any erosion moving forward.
  2. Standard Register’s commercial print business is a service based on print supply chain improvement, and not an asset-based printer.
  3. The Commercial Print Exchange is a program that allows printers to bid on jobs put out by Standard Register clients.
  4. Standard Register does not see itself participating in the current print consolidations, but instead sees itself being a leader in the new document management arena.