Standard Register Reports $24 Million Loss in Q4, Pricing Pressure
Press release from the issuing company
DAYTON, Ohio--Feb. 12, 2004-- Standard Register today reported results for the 2003 fourth quarter and year ended December 28, 2003.
Revenue in the 2003 fourth quarter was $225.1 million, compared to $257.8 million for 2002 fourth quarter. As expected, the fourth-quarter revenue rose modestly over revenue in the third quarter.
For the full year, revenue was $916.3 million versus $1,028.1 million in 2002. Pricing pressure and decreased unit demand due in part to technology inroads negatively impacted revenue in 2003.
As previously announced, the company recorded significant charges to earnings in the fourth quarter. Charges included a $25.2-million pretax pension settlement expense triggered by significant lump-sum payments to associates retiring during the year; the unusually high number of retirements was primarily the result of favorable interest rates. An additional $13.3 million in pretax charges related to discontinued product lines, asset impairment and restructuring. Altogether the charges totaled $38.5 million pretax, which is equivalent to approximately $0.86 per share after taxes. Approximately $35.2 of the $38.5 million in expense was non-cash.
With the $0.86 per share in charges against earnings, Standard Register incurred a net loss in the 2003 fourth quarter of $24.4 million, or $0.86 per share. Net income in the 2002 fourth quarter was $4.5 million, or $0.16 per share. In addition to the charges cited above, 2003 results were adversely affected by the decline in revenue, weaker pricing, and increased plant costs stemming from overtime, training and other costs resulting from plant consolidations and associate retirements. These factors were offset in part by restructuring-related savings.
For the year, the net loss was $39.1 million, or $1.38 per share, compared to 2002's net income of $32.6 million, or $1.14 per diluted share. In addition to the impact of lower revenue, the company's performance in 2003 was hampered by the fourth-quarter charges described earlier and restructuring and impairment charges recorded in the second and third quarters, altogether 2003 charges totaled approximately $1.43 per share.
Standard Register continued to maintain a very strong balance sheet with an emphasis on cash flow. After dividends and pension funding, the company reduced its net debt (total debt less cash and short-term investments) during the fourth quarter and total year by $14.0 million and $31.7 million, respectively. At year-end, net debt stood at $48.1 million, equivalent to 16 percent of total invested capital.
"In 2004, we are focusing on leveraging our talent, technology and range of solutions to increase our share in our traditional document and label business while also positioning the company to capture emerging growth opportunities. In addition to initiatives to increase sales productivity and drive operational excellence, we will continue to make targeted investments in print on demand, digital information solutions and managed services," said Dennis Rediker, Standard Register president and chief executive officer. "Our strategy has required significant restructuring, refocusing, and time, but we believe we are on the right path to drive superior long-term value for shareholders as well as our customers and employees."
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