SR Spire Inc

Standard Register (NYSE: SR) today reported its financial results for the first quarter ended March 30, 2008. Results of Operations Net Income for the first quarter was $2.5 million or $0.09 per share, compared to a net loss of $0.8 million or $0.03 per share in the prior year. First quarter revenue was $207.2 million versus $227.4 million in 2007. �Despite the lower revenue, our operating earnings improved in the quarter and we had very strong cash flow,� said Dennis Rediker, president and CEO of Standard Register. Operating income before pension loss amortization, restructuring, and impairment was $10.4 million this quarter, up 10.6 percent compared to the comparable $9.4 million result a year earlier. The reconciliation of these operating results to the GAAP results appears later in this release. Net cash flow was a positive $9.7 million in the quarter, after funding $5.0 million in pension contributions, $3.2 million in capital expenditures, and $6.7 million in dividends. Net debt ended the quarter at $41.6 million, representing just 26.5 percent of total capital. The Company has generated $9.3 million in positive net cash flow over the trailing four quarters. About one-third of our revenue decline was from a single customer who ended purchases after the first quarter of 2007. The balance of the business was off 6.0 percent. �The economy definitely played a role in our manufacturing market, where we saw decreased units. The impetus for our customers to continue to aggressively pursue cost reductions was to some degree also likely reinforced by economic conditions,� said Rediker. The Company�s mid-year 2007 cost reduction plan contributed significantly to the improved operating performance. This was evident in the percentage gross margin, which remained nearly identical to last year despite the lower revenue. In addition, SG&A expenses were $8.0 million lower in the quarter, excluding the pension loss amortization. Earlier this week, the Company announced a benefit freeze to its pension plan participants, which comprise about one-third of employees. Affected employees will become eligible for enhanced 401K benefits in line with other employees that do not participate in the traditional pension plan. The table below reconciles the operating earnings cited earlier to our net earnings in accordance with GAAP. [$ Millions, rounded] � Effect on 1Q Income CONTINUING OPERATIONS 2008 � 2007 � Chg Operations before Restructuring, Impairment � � � � � Amortization of Past Pension Losses &�the Pension Settlement Charge 10.4 � 9.4 � 1.0 � � Reconciliation to Net Income / (Loss): Restructuring Expense 0.0 -2.4 2.4 Impairment Expense -0.2 0.4 -0.6 Amortization of Past Pension Losses -5.2 � -7.0 � 1.8 Income / (Loss) on Continuing Operations 5.1 0.4 4.7 � Interest & Other Income / (Expense) -0.7 � -0.7 � 0.0 Pretax Income / (Loss) 4.4 -0.4 4.7 � Income Taxes 1.9 � -0.2 � 2.1 Net Income / (Loss) on Continuing Operations 2.5 � -0.2 � 2.7 � DISCONTINUED OPERATIONS 0.0 -0.6 0.6 � � � � � TOTAL NET INCOME / (LOSS) 2.5 � -0.8 � 3.3 � Earnings Per Share on Continuing Operations 0.09 � -0.01 � 0.09 Restructuring & Impairment Expenses 0.00 -0.04 0.04 Pension Loss Amortization & Pension Settlement -0.11 -0.15 0.04 All Other Continuing Operations 0.20 � 0.18 � 0.02 � Discontinued Operations 0.00 � -0.02 � 0.02 Total Earnings Per Share 0.09 � -0.03 � 0.11 Dividend Standard Register�s board of directors declared on April 24, 2008 a quarterly dividend of $0.23 per share to be paid on June 6, 2008, to shareholders of record as of May 23, 2008. Chief Operating Officer The board of directors yesterday named Joseph P. Morgan, Jr. as chief operating officer reporting to Dennis L. Rediker. In this position, Mr. Morgan will have responsibility for all operations of the Company. Prior to this he was vice president, chief technology officer and general manager, On Demand Solutions Group. He has served as an officer of the Company since 2003. Board of Directors At the Company�s Annual Meeting held April 24, 2008, shareholders approved setting the number of directors at eight, as well as electing five incumbent directors and three new directors including David P. Bailis, Michael E. Kohlsdorf and R. Eric McCarthey. 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 25, 2008, to review the first quarter results. The call can be accessed via an audio web cast which is accessible at: http://www.standardregister.com/investorcenter. Presentation of Information in This Press Release This press release presents information that excludes restructuring, impairment 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 United States. 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. Employing nearly a century of industry expertise, Lean Six Sigma methodologies and other leading technologies, the company helps organizations increase efficiency, reduce costs, mitigate risks, grow revenue and meet the challenges of a changing business landscape. It offers document and label solutions, technology solutions, consulting and print supply chain services to help clients manage documents throughout their enterprises. 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 2008 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 December 30, 2007. 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 30-Mar-08 � 1-Apr-07 � TOTAL REVENUE $207,185 $227,431 � COST OF SALES 138,164 � � 151,496 � � GROSS MARGIN 69,021 75,935 � COSTS AND EXPENSES Selling, General and Administrative 56,966 66,918 Depreciation and Amortization 6,831 6,655 Asset Impairment 164 (409 ) Restructuring 9 � � 2,406 � � TOTAL COSTS AND EXPENSES 63,970 � � 75,570 � � INCOME FROM CONTINUING OPERATIONS 5,051 365 � OTHER INCOME (EXPENSE) Interest Expense (761 ) (797 ) Other income 82 � � 68 � Total Other Expense (679 ) (729 ) � � INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 4,372 (364 ) � � Income Tax Expense (Benefit) 1,878 � � (175 ) � NET INCOME (LOSS) FROM CONTINUING OPERATIONS 2,494 (189 ) � DISCONTINUED OPERATIONS Gain on sale of discontinued operations, net of taxes 2 - Loss from discontinued operations, net of taxes - (639 ) � � � � NET INCOME (LOSS) 2,496 � � ($828 ) � � Average Number of Shares Outstanding - Basic 28,736 28,635 Average Number of Shares Outstanding - Diluted 28,744 28,635 � BASIC AND DILUTED INCOME (LOSS) PER SHARE Income (Loss) from continuing operations $0.09 ($0.01 ) Loss from discontinued operations - � � (0.02 ) Net Income (Loss) per share $0.09 � � ($0.03 ) � Dividends Paid Per Share $0.23 $0.23 � � � BALANCE SHEET (In Thousands) 30-Mar-08 � 30-Dec-07 � ASSETS Cash & Short Term Investments $3,412 $697 Accounts Receivable 117,147 130,212 Inventories 43,605 45,351 Other Current Assets 22,963 � � 22,523 � Total Current Assets 187,127 198,783 � Plant and Equipment 107,283 110,975 Goodwill and Intangible Assets 7,834 7,861 Deferred Taxes 77,120 80,852 Other Assets 19,712 21,075 � � � Total Assets $399,076 � � $419,546 � � LIABILITIES AND SHAREHOLDERS' EQUITY Current Portion Long-Term Debt $0 $21 Current Liabilities 74,229 87,342 Deferred Compensation 10,521 12,010 Long-Term Debt 45,000 51,988 Retiree Healthcare 19,445 19,496 Pension Liability 129,357 133,647 Other Long-Term Liabilities 5,036 5,083 Shareholders' Equity 115,488 109,959 � � � Total Liabilities and Shareholders' Equity $399,076 � � $419,546 �