Standard Register Emerges from Restructuring Beating Earnings Target
Press release from the issuing company
DAYTON, Ohio--Jan. 31, 2002--Standard Register today reported results for the 2001 fourth quarter ended December 30, 2001. The performance exceeded targets, reflecting the onset of benefits from its 2001 restructuring and reorganization efforts.
"One year ago, we announced our plan to restructure, reorganize, and reposition Standard Register for sustained operational improvement and growth. That plan called for the company to emerge from nine months of restructuring as a more focused and more profitableenterprise, targeting earnings of $0.45 per share, before restructuring expenses, in the 2001 fourth quarter,'' said Dennis Rediker, president and chief executive officer of Standard Register. "We are pleased to report that we did what we set out to do. And we are optimistic about our prospects going forward.''
Revenue in the 2001 fourth quarter was $286 million, compared to $351 million in the 2000 quarter. The decline reflects the elimination of unprofitable business, in line with the restructuring plan. Despite the $65-million decline in quarterly revenue, quarterly net income increased significantly over the 2000 fourth quarter as a result of an improved mix of business and the benefits of restructuring efforts.
Excluding restructuring expenses, 2001 fourth-quarter net income was $14 million or $0.51 per diluted share. This is a 56-percent increase over 2000 fourth-quarter net income of $9 million, or $0.32 per diluted share, before restructuring and asset-impairment charges. 2001 earnings benefited from solid revenues and cost savings from restructuring and process improvements. Also in the quarter was the successful completion of vendor negotiations that resulted in a payment equivalent to $1 million aftertax related to past purchases; excluding this item, net income before restructuring expenses was $13 million or $0.47 per share.
"Successfully completing our restructuring and reorganization plan over a nine-month period and also beating our target for earnings in the fourth quarter reflect the world-class team we have at Standard Register,'' Rediker said. "They did a tremendous job throughout the year in serving customers and delivering results. Congratulations go out to the 6,000 people of Standard Register for the successful 2001.''
Including restructuring expenses of $3 million after tax, related primarily to the movement of equipment, personnel and inventory, net income in the 2001 fourth quarter was $11 million or $0.41 per share. Including the restructuring and impairment charges taken in the fourth quarter of 2000, which totaled $55 million after tax, the 2000 fourth-quarter result was a loss of $46 million or $1.67 per share.
On a seasonally adjusted basis, the 2001 fourth-quarter operating performance translates into an annualized run rate of approximately $1.1 billion in revenue and $1.75 earnings per diluted share.
"For 2002, excluding acquisitions, we are targeting revenue growth of 5 to 7 percent and earnings growth of approximately 15 percent over our 2001 run rate. This would translate to net income around $56 million or $2.00 per share in 2002,'' Rediker said. "Our targets take into account the significant investments that we are making in 2002 to drive long-term growth and profit improvement. Incremental investments in Six Sigma, strategic marketing and sales, and customer relationship management systems alone exceed $12 million pretax in 2002, meaning an extra $0.26 per share that we've chosen to put back into the business to drive superior long-term results.''
Due to seasonally lower revenue in the first quarter and planned investments that will impact the income statement early in the year, management expects 2002 first-quarter results to be below those in the 2001 fourth quarter. Quarterly earnings are expected to improve sequentially as the year progresses.
"We also are striving for value-adding acquisitions that will further strengthen our technological and talent base while accelerating our efforts in fast-growing markets. As an information solutions company, we are investing in intellectual capital and technology as well as strategic physical assets,'' Rediker said. "With strong cash flow, significant cash reserves and low debt, we have the resources to make acquisitions as well as invest in internal initiatives. Our goal through all our efforts is superior value creation for shareholders, customers and associates.''
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