Standard Register Launches New Corporate Strategy, Posts Financial Results
DAYTON, OH—April 28, 2011—Standard Register introduced its new corporate focus on advancing its customers’ reputations to shareholders at its annual meeting, along with a new brand identity that reflects how the nearly 100-year-old company delivers value to its customers. A new corporate logo and complementary brand logos for its three business units—commercial, healthcare and industrial—emphasize Standard Register’s market-driven strategy.
The company reported revenue of $164.9 million and net income of $0.5 million for the first quarter, which ended April 3, 2011. Those results compare to revenue of $167.4 million and a net loss of $0.8 million for the same quarter of last year. Revenue was down slightly relative to the prior year. Increases in core growth solutions were offset by expected declines in legacy products in every segment but industrial. Legacy products represent the majority of the Standard Register’s portfolio and provide a foundation of stability, however the company expects that future revenue growth will be driven by increases in core solution sales throughout all focus markets.
“Solutions that we call core are where the majority of our investment and innovation will continue to take place,” said Joseph Morgan, president and CEO. “These core solutions have been developed as the result of deep market expertise in assisting our customers to solve problems, operate more efficiently, build brand consistency, reduce risk and ultimately advance their reputations. The ability to provide these high-value solutions is a fundamental advantage that differentiates Standard Register from our competitors.”
The new focus was developed after significant research on market trends, engagement with leading strategy consultants and discussions with customers, suppliers, partners and supply chain participants. After thoughtful assessment of industry growth drivers, the company determined it can best serve its customers by moving from a document management services company to one that aligns a business’ mission-critical communications with corporate priorities and standards.
“Throughout our history, Standard Register has been an innovator. We’ve grown by helping our customers adapt to changing business conditions,” explained Morgan. “We have devoted significant resources to planning our future direction and found that our strengths intersect with what our customers value most. With our deep market-specific expertise and ability to partner to solve problems, we’ve demonstrated we can help them operate more efficiently, build brand consistency, reduce risk and advance their company reputations.
“Even the world’s top companies need help executing critical communications and managing inherent compliance, safety and security risks, because they often don’t have the required resources or expertise in-house. We have a compelling portfolio of solutions that often can be applied enterprise-wide to help customers address their strategic issues. We can help them develop innovative solutions to build, protect and enhance their brands,” he said.
The company’s portfolio is comprised of document management and process improvement services and solutions that are customized for its respective markets.
• Its commercial business provides marketing, training and customer communications solutions that help companies ensure brand consistency, increase customer loyalty and enhance security.
• In healthcare, Standard Register offers solutions to accelerate performance, attract and educate patients, enhance patient safety and improve the quality of care.
• Its Industrial business helps manufacturers realize efficiencies by removing waste from the manufacturing process, reduce product liability claims through improved compliance, and gain distinction with the latest product decoration technology.
Morgan said that the company’s refined strategy is already gaining traction. “Market analysis showed us we have significant opportunities to grow market share in each of our three segments, and it’s evident we are on the right path. We’ve stabilized the company, made significant investments in technology, and introduced new solutions and services that are driving growth.”
Other First Quarter 2011 Financial Results
Gross margin as a percent of revenue improved to 32.5 percent for the quarter vs. 32.0 percent in the prior year. LIFO inventory adjustment was negligible for the current quarter versus a favorable LIFO adjustment of $1.7 million for the prior year. Selling, general and administrative expenses, excluding pension loss amortization were down $3.3 million from the prior year. Continuous improvement initiatives allowed the Company to enhance its cost structure which, allowed all three business units to show increases in their operating profit over the prior year.
Adjusting for pension loss amortization and restructuring charges, non-GAAP net income was $4.2 million for the current quarter compared with non-GAAP net income of $2.3 million for the prior year quarter.
During the quarter, capital expenditures were $1.9 million and are expected to be in the range of $18-21 million for the year, the majority of which will support the advancement of our core growth solutions. Pension funding contributions were $8.0 million during the quarter and are expected to be approximately $30 million for the year. Non-GAAP cash on a net debt basis was $5.8 million positive for the quarter, driven by working capital improvements previously predicted.
“Generating profit and positive cash flow during the quarter demonstrates our progress toward a more enduring environment,” noted Morgan. “However, we know that to be a sustainable organization, we need to deliver growth on the top-line as well. Driving revenue growth by advancing our core growth solutions is the primary focus for this year.”
About Standard Register
Standard Register (NYSE:SR) is trusted by the world’s leading companies to advance their reputations by aligning their communications with corporate standards and priorities. Providing market-specific insights and a compelling portfolio of solutions to address the changing business landscape in healthcare, commercial and industrial markets, Standard Register is the recognized leader in the management and execution of mission-critical communications. More information is available at www.standardregister.com.
Source: company release.