SR Spire Inc

Standard Register Reports 2005 First Quarter Results DAYTON, Ohio, April 28 /PRNewswire-FirstCall/ -- Standard Register (NYSE:SR) today reported financial results for the first quarter ended April 3, 2005. Results of Operations Total revenue on continuing operations was $232.0 million, an increase of 5.3 percent over the $220.3 million reported for the comparable quarter of 2004. Net income was $2.4 million or $0.08 per share, compared with a net loss of $6.5 million or $0.23 per share for the prior period. "We've seen good progress on our sales initiatives," said Dennis Rediker, president and chief executive officer of Standard Register. "Our core Document and Label Systems and our Print-On-Demand Services businesses each reported 4 percent revenue growth, plus we had a significant revenue increase in our new commercial print operation. During the quarter, we also received several multi-year commitments from new customers that will contribute to future revenue. The hard work of our associates is clearly beginning to pay off." The continuing margin improvement reflects our progress in recovering last year's three paper cost hikes, plus the positive results from our company-wide cost reduction and productivity improvement programs. The table below isolates the effects of restructuring and the amortization of prior years' pension losses on profitability. [$ Millions] Effect on First Quarter Income Continuing Operations 1Q05 1Q04 Chg Restructuring Expense -0.5 -3.3 2.8 Pension Loss Amortization -5.1 -4.5 -0.6 All Other Operations 9.5 -3.3 12.8 Pretax Income / (Loss) 3.9 -11.1 15.0 Income Tax 1.7 -4.3 6.0 Net Income / (Loss) 2.2 -6.8 9.0 Net Income / (Loss) on Discontinued Operations Operations 0.3 -0.3 Gain on Sale 0.2 0.2 Total 0.2 0.3 -0.1 Total Net Profit / (Loss) 2.4 -6.5 8.9 Restructuring expense was $.5 million in the current quarter, primarily residual lease facility costs related to actions undertaken in previous periods. Pension loss amortization was $5.1 million, originating in large part from weak stock market returns in earlier years. All other operations contributed $9.5 million in the current period, versus a $3.3 million deficit in the prior year -- the $12.8 million favorable swing was primarily driven by higher revenue and lower fixed operating costs. The Company recorded a $0.2 million change, net of tax, in estimated reserves in connection with the gain from the fourth quarter 2004 sale of its equipment services business. Financial Condition The Company continued to maintain its strong balance sheet. Net debt at quarter-end was $42.8 million -- total debt of $71.3 million less cash and cash equivalents of $28.5 million. The net borrowing position represented 17% of total invested capital. Capital expenditures were $6.1 million in the quarter, in-line with the lower end of the $25 - $30 million expected range for the year, and dividends paid were $0.23 per share or $6.6 million, consistent with payments made in recent quarters. Net debt rose in the quarter by $5.5 million, reflecting restructuring spending of $2.0 million and the payment of annual sales management and other associate incentives earned in 2004. Excluding spending for acquisitions, divestitures, and restructuring related to reshaping the Company's portfolio and cost structure, Standard Register has generated $19.0 million of positive net cash flow over the last four quarters -- after satisfying $24.1 million of capital expenditures and $26.4 million of dividends. Outlook "In line with previous guidance, we expect our total year revenue to show modest growth on a 52-week fiscal year basis (2004 contained 53 weeks) and for our margins to continue to improve," said Rediker. "Our specific margin goal, first announced in mid-2004, remains to achieve a five-point improvement in pretax operating profit as a percent of revenue for the second half 2005, compared to the first half 2004." The Company expects to replace its existing $150 million revolving credit agreement with a new $100 million secured revolving credit agreement prior to the May 2005 expiration of the current agreement. Dividend Standard Register's board of directors today declared a quarterly dividend of $0.23 per share to be paid on June 10, 2005 to shareholders of record as of May 27, 2005. Presentation of Information in This Press Release This press release presents information that excludes restructuring and impairment expense, and amortization of prior years' 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. Standard Register believes that this information will enhance an overall understanding of its financial performance due to the non-operational nature in the above items and the significant change from period to period. The presentation of non-GAAP information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States. 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 10 a.m. EDT on April 29, 2005, to review the first quarter results. The call can be accessed via an audio webcast which is accessible at: http://www.standardregister.com/investorcenter . About Standard Register Standard Register (NYSE:SR) is a leading information solutions company, with more than 90 years of innovation in improving the way business gets done in healthcare, financial services, manufacturing and other industries. The company helps organizations increase efficiency, reduce costs, enhance security and grow revenue by effectively capturing, managing and using information. Its offerings range from document and label solutions to e- business solutions to consulting and managed services. More information is available at http://www.standardregister.com/ . 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 2005 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 January 2, 2005. The Company undertakes no obligation to revise or update forward-looking statements as a result of new information since these statements may no longer be accurate or timely. THE STANDARD REGISTER COMPANY STATEMENT OF OPERATIONS Y-T-D (In Thousands, except Per Share Amounts) 13 Weeks Ended 13 Weeks Ended 03-Apr-05 28-Mar-04 TOTAL REVENUE $231,979 $220,276 COST OF SALES 147,870 137,307 GROSS MARGIN 84,109 82,969 COSTS AND EXPENSES Research and Development 2,666 3,605 Selling, General and Administrative 66,277 75,837 Depreciation and Amortization 10,173 10,619 Restructuring 528 3,341 TOTAL COSTS AND EXPENSES 79,644 93,402 INCOME (LOSS) FROM CONTINUING OPERATIONS 4,465 (10,433) OTHER INCOME (EXPENSE) Interest Expense (666) (690) Investment and Other Income 99 50 Total Other Expense (567) (640) INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 3,898 (11,073) Income Tax Expense (Benefit) 1,690 (4,267) NET INCOME (LOSS) FROM CONTINUING OPERATIONS 2,208 (6,806) DISCONTINUED OPERATIONS Income from discontinued operations, net of taxes - 307 Gain on sale of discontinued operations, net of taxes 146 - NET INCOME (LOSS) $2,354 ($6,499) Average Number of Shares Outstanding - Basic 28,544 28,483 Average Number of Shares Outstanding - Diluted 28,565 28,483 BASIC AND DILUTED EARNINGS (LOSS) PER SHARE Income (loss) from continuing operations $0.08 ($0.24) Income from discontinued operations - 0.01 Gain on sale of discontinued operations - - Net income (loss) per share $0.08 ($0.23) Dividends Paid Per Share $0.23 $0.23 BALANCE SHEET (In Thousands) 03-Apr-05 02-Jan-05 ASSETS Cash & Short Term Investments $28,529 $44,088 Accounts Receivable 124,181 128,396 Inventories 50,160 51,796 Other Current Assets 28,930 27,960 Total Current Assets 231,800 252,240 Plant and Equipment 144,072 147,160 Goodwill and Intangible Assets 19,026 19,746 Deferred Taxes 84,595 86,505 Other Assets 35,351 37,322 Total Assets $514,844 $542,973 LIABILITIES AND SHAREHOLDERS' EQUITY Current Portion Long-Term Debt $70,552 $80,549 Current Liabilities 86,505 108,475 Deferred Compensation 14,758 16,832 Long-Term Debt 728 867 Retiree Healthcare 46,581 46,826 Pension Liability 86,157 83,273 Other Long-Term Liabilities 646 746 Shareholders' Equity 208,917 205,405 Total Liabilities and Shareholders' Equity $514,844 $542,973 DATASOURCE: Standard Register CONTACT: News media, Julie McEwan, +1-937-221-1845, or , or Investors, Robert J. Cestelli, +1-937-221-1304, or , both of Standard Register Web site: http://www.standardregister.com/ http://www.standardregister.com/investorcenter

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