Results of Operations
Revenue on Continuing Operations for the fourth quarter 2006 was
Revenue growth for both the quarter and total year was driven by strong performances in the Company's Print-On-Demand Services, Commercial Print, and Document Systems business units, as indicated below. Despite modest increases in label sales, the Document & Label Solutions (DLS) business unit reported overall decreases of 4.9 percent and 3.5 percent for the quarter and total year, reflecting a very competitive market for these traditional products. Approximately 40 percent of the DLS decreases were isolated to a single customer account.
[$ Millions, rounded] 4th Quarter Total Year
Revenue by Business 2006 2005 %Chg 2006 2005 %Chg
Unit
Document & Label
Solutions 141.3 148.7 -4.9% 575.3 596.2 -3.5%
Print-On-Demand Services 70.3 57.9 21.4% 260.0 239.8 8.4%
Commercial Print 9.9 7.5 31.1% 35.6 29.7 20.1%
Document Systems 5.9 4.7 25.4% 21.1 20.9 1.1%
Digital Solutions 0.1 0.5 -78.2% 0.6 0.7 -15.9%
Other 0.6 0.9 -37.9% 2.3 3.5 -34.3%
Total 228.1 220.2 3.6% 894.9 890.7 0.5%
Gross margins also improved for both the quarter and total year 2006 periods as a result of the overall revenue increases and continuing improvement in manufacturing productivity. Depreciation and amortization expenses were also lower, continuing the trend of recent years. Increased investment in software development, higher sales and marketing compensation, and increased fringe costs pushed selling, general and administrative expense higher in both the quarter and total year.
In addition, higher expense for restructuring, impairment, pension loss
amortization, and pension settlement had a substantial unfavorable effect on
2006 reported earnings, as indicated in the table below. Excluding these
expense items, Income from Continuing Operations was
Including these expense items and after Interest & Other Expenses and
Income Taxes, the Company reported a Net Loss on Continuing Operations for the
fourth quarter of
The Company sold its InSystems subsidiary in
[$ Millions, rounded] Effect on 4Q Income Effect on Annual
Income
CONTINUING OPERATIONS 2006 2005 Chg 2006 2005 Chg
Income from Continuing
Operations
Before Restructuring,
Impairment, Pension
Loss Amortization,
& the Pension
Settlement Charge 8.7 8.8 -0.1 37.3 37.7 -0.4
Restructuring Expense -0.3 -0.2 -0.1 -2.7 -1.0 -1.7
Impairment Expense -1.1 -0.1 -1.0 -2.7 -0.3 -2.4
Amortization of Past
Pension Losses -6.5 -4.7 -1.8 -25.6 -19.0 -6.6
Pension Settlement
Charge 0.0 0.0 0.0 -1.6 0.0 -1.6
Income / (Loss) on
Continuing
Operations 0.8 3.7 -0.1 4.7 17.4 -12.8
Interest & Other Income
/ (Expense) -0.6 -0.1 -0.6 -2.1 -2.0 -0.1
Pretax Income / (Loss) 0.2 3.6 -3.5 2.6 15.5 -12.8
Income Tax Adjustments -0.1 0.2 -0.4 -1.4 -2.2 0.8
Income Taxes -0.2 -1.5 1.3 -1.0 -6.1 5.1
Net Income / (Loss) on
Continuing Operations -0.2 2.4 -2.6 0.2 7.1 0.0
DISCONTINUED OPERATIONS 1.3 -2.4 3.7 -11.9 -5.7 -6.1
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE 0.1
TOTAL NET INCOME /
(LOSS) 1.1 0.0 1.1 -11.7 1.4 -13.1
'Despite challenging industry conditions for traditional printed documents, we believe there is good business and cash flow in this industry segment if we continue our market focus and improvements in productivity. We were pleased to see the increases in revenue and gross margin in our other business units, which underscores our shifting mix and our long-term growth opportunity,' said Dennis L. Rediker, Standard Register's president and chief executive officer.
Cash flow was a negative
Outlook
'Looking forward to 2007, we expect revenue for the total year to increase
in the low-to-mid single digit range overall with a continuation of the
strategic mix change we witnessed in 2006. Capital spending is expected to
step up in 2007 to the
Presentation of Information in This Press Release
This press release presents information that excludes restructuring,
impairment charges, pension settlement charges and amortization of past
pension losses. These financial measures are considered non-GAAP. Generally,
a non-GAAP financial measure is a numerical measure of a company's
performance, financial position, or cash flows where amounts are either
excluded or included not in accordance with generally accepted accounting
principles (GAAP). This information is intended to enhance an overall
understanding of the financial performance due to the non-operational nature
of these items and the significant change from period to period. This
presentation is consistent with the manner in which the Board of Directors
internally evaluates performance. The presentation of non-GAAP information is
not meant to be considered in isolation or as a substitute for results
prepared in accordance with principles generally accepted in the
Conference Call
Standard Register president and chief executive officer Dennis L. Rediker
and chief financial officer Craig J. Brown will host a conference call at
About Standard Register
Standard Register is a premier document services provider, trusted by
companies to manage the critical documents they need to thrive in today's
competitive climate. Relying on nearly 100 years of industry expertise,
Safe Harbor Statement
This report includes forward-looking statements covered by the Private
Securities Litigation Reform Act of 1995. Because such statements deal with
future events, they are subject to various risks and uncertainties and actual
results for fiscal year 2007 and beyond could differ materially from the
Company's current expectations. Forward-looking statements are identified by
words such as 'anticipates,' 'projects,' 'expects,' 'plans,' 'intends,'
'believes,' 'estimates,' 'targets,' and other similar expressions that
indicate trends and future events. Factors that could cause the Company's
results to differ materially from those expressed in forward-looking
statements include, without limitation, variation in demand and acceptance of
the Company's products and services, the frequency, magnitude and timing of
paper and other raw-material-price changes, general business and economic
conditions beyond the Company's control, timing of the completion and
integration of acquisitions, the consequences of competitive factors in the
marketplace, cost-containment strategies, and the Company's success in
attracting and retaining key personnel. Additional information concerning
factors that could cause actual results to differ materially from those
projected is contained in the Company's filing with The Securities and
Exchange Commission, including its report on Form 10-K for the year ended
THE STANDARD REGISTER COMPANY
Fourth Quarter STATEMENT OF OPERATIONS Y-T-D
13 Weeks 13 Weeks (In Thousands, except Per Share 52 Weeks 52 Weeks
Ended Ended Amounts) Ended Ended
31-Dec-06 01-Jan-06 31-Dec-06 01-Jan-06
$228,122 $220,226 TOTAL REVENUE $894,904 $890,740
151,336 146,814 COST OF SALES 587,712 588,675
76,786 73,412 GROSS MARGIN 307,192 302,065
COSTS AND EXPENSES
Selling, General and
68,041 61,438 Administrative 268,311 249,481
6,535 7,921 Depreciation and Amortization 28,786 33,848
1,146 146 Asset Impairment 2,738 303
274 208 Restructuring 2,671 998
75,996 69,713 TOTAL COSTS AND EXPENSES 302,506 284,630
INCOME FROM CONTINUING
790 3,699 OPERATIONS 4,686 17,435
OTHER INCOME (EXPENSE)
(693) (590) Interest Expense (2,285) (2,465)
Investment and Other Income
54 519 (Expense) 228 499
(639) (71) Total Other Expense (2,057) (1,966)
INCOME FROM CONTINUING
OPERATIONS BEFORE
151 3,628 INCOME TAXES 2,629 15,469
340 1,255 Income Tax Expense 2,475 8,323
NET (LOSS) INCOME FROM
(189) 2,373 CONTINUING OPERATIONS 154 7,146
DISCONTINUED OPERATIONS
Income (Loss) from discontinued
556 (2,399) operations, net of taxes (1,849) (6,297)
Gain (loss) on sale of
discontinued operations, net
711 (3) of taxes (10,044) 550
NET INCOME (LOSS) BEFORE
CUMULATIVE EFFECT OF A
1,078 (29) CHANGE IN ACCOUNTING PRINCIPLE (11,739) 1,399
Cumulative effect of a change in
accounting principle, net of
- - taxes 78 -
$1,078 ($29) NET INCOME (LOSS) (11,661) $1,399
Average Number of Shares
28,616 28,829 Outstanding - Basic 28,543 28,738
Average Number of Shares
28,635 28,829 Outstanding - Diluted 28,579 28,766
BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE
Income (loss) from continuing
($0.01) $0.08 operations $0.01 $0.25
Income (Loss) from discontinued
$0.02 (0.08) operations (0.07) (0.22)
Gain (Loss) on sale of
0.03 - discontinued operations (0.35) 0.02
$0.04 ($0.00) Net income (loss) per share (0.41) $0.05
$0.23 $0.23 Dividends Paid Per Share $0.92 $0.92
BALANCE SHEET
(In Thousands) 31-Dec-06 01-Jan-06
ASSETS
Cash & Short Term
Investments $488 $13,609
Accounts
Receivable 135,839 120,491
Inventories 49,242 47,033
Assets of
Discontinued
Operations - 25,706
Other Current
Assets 32,201 28,692
Total Current
Assets 217,770 235,531
Plant and
Equipment 119,339 128,601
Goodwill and
Intangible Assets 8,168 8,115
Deferred Taxes 86,710 80,599
Other Assets 20,092 23,066
Total Assets $452,079 $475,912
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current Portion
Long-Term Debt $358 $611
Liabilities of
Discontinued
Operations $0 $5,756
Current
Liabilities 100,956 94,236
Deferred
Compensation 17,190 16,357
Long-Term Debt 41,021 34,379
Retiree Healthcare 20,398 43,885
Pension Liability 153,953 107,236
Other Long-Term
Liabilities 36 -
Shareholders'
Equity 118,167 173,452
Total Liabilities
and Shareholders'
Equity $452,079 $475,912
SOURCE Standard Register
