SR Spire Inc

DAYTON, Ohio, April 27 /PRNewswire-FirstCall/ -- Standard Register (NYSE:SR) today reported its financial results for the first quarter ended April 2, 2006. "Our revenue exceeded our expectations in the first quarter and our quarterly earnings, before restructuring and impairment, increased 19 percent over the prior year - our seventh consecutive quarterly improvement," said Dennis L. Rediker, president and CEO of Standard Register. Revenue was $231.7 million, compared to last year's $232.0 million. The net earnings were dampened by restructuring and impairment charges totaling $2.9 million, primarily related to the closing of the Company's Terre Haute plant. The plant's productive capacity is being redistributed to other facilities to improve overall efficiency and lower ongoing operating costs starting in the third quarter. Excluding the restructuring and impairment charges, first quarter pre-tax income from continuing operations improved from $5.0 million last year to $5.9 million in the current year. The following table isolates the effects of restructuring and impairment on the quarter's earnings. The Company adopted SFAS 123 (R), accounting for share-based compensation, which had a negligible effect on earnings in the quarter. [ $ Millions, rounded ] Effect on First Quarter Income 2006 2005 Chg CONTINUING OPERATIONS Operations before Restructuring & Impairment 5.9 5.0 1.0 Restructuring Expense -1.2 -0.5 -0.7 Impairment Expense -1.7 -- -1.7 Income on Operations 3.0 4.5 -1.5 Interest & Other Income / (Expense) -0.5 -0.6 0.1 Pretax Income 2.5 3.9 -1.4 Income Taxes 1.1 1.7 -0.6 Net Income 1.4 2.2 -0.8 DISCONTINUED OPERATIONS -- 0.1 -0.1 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 0.1 -- 0.1 TOTAL NET INCOME 1.5 2.4 -0.9 "The improved operating performance resulted from good progress made on several fronts," said Rediker. "We saw good top-line growth plus cost improvement in our POD Services segment, which accounted for the majority of our improved gross margin. In addition, our Commercial Print, Document Systems and InSystems businesses also contributed to the quarter-over-quarter increase in margins." Net debt (total debt less cash and short-term investments) increased $10.5 million in the quarter to $31.9 million, primarily the result of seasonal payments of bonuses earned in the prior year and pension contributions. One year ago, the net debt balance was $42.8 million, indicating a trailing 12 months net positive cash flow of $10.9 million. The balance sheet remains strong, as indicated by a quarter-end net debt to total capital ratio of 15.4 percent. Outlook "We are encouraged by the good start to the year," said Rediker. "In addition, recent new contract signings are expected to help our top-line in 2006 and offset the continuing pressure on the price of traditional products. Our guidance for 2006 remains unchanged - modest revenue growth for the whole of the year." Paper companies have announced additional price hikes in the quarter and we have raised our target selling prices in an effort to recover these increases. We expect to recover these cost increases over the next several quarters. Dividend Standard Register's board of directors today declared a quarterly dividend of $0.23 per share to be paid on June 9, 2006, to shareholders of record as of May 26, 2006. Presentation of Information in This Press Release This press release presents information that excludes restructuring and impairment charges. 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). We believe that this information will enhance an overall understanding of our 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 our 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. Conference Call Standard Register president and chief executive officer, Dennis L. Rediker, and chief financial officer, Craig Brown, will host a conference call at 10 a.m. EDT on April 28, 2006, 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 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, Lean Six Sigma methodologies and leading technologies, we help organizations increase efficiency, reduce costs, mitigate risks, grow revenue and meet the challenges of a changing business landscape. It offers document and label solutions, e-business solutions, consulting, and print supply chain services to help clients manage documents across their enterprise. 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 2006 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 1, 2006. 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 02-Apr-06 03-Apr-05 TOTAL REVENUE $231,658 $231,979 COST OF SALES 147,644 150,187 GROSS MARGIN 84,014 81,792 COSTS AND EXPENSES Research and Development 4,536 2,666 Selling, General and Administrative 64,732 63,960 Depreciation and Amortization 8,812 10,173 Restructuring 1,213 528 Asset Impairment 1,694 - TOTAL COSTS AND EXPENSES 80,987 77,327 INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 3,027 4,465 OTHER INCOME (EXPENSE) Interest Expense (515) (666) Investment and Other Income 35 99 Total Other Expense (480) (567) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 2,547 3,898 Income Tax Expense 1,126 1,690 NET INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 1,421 2,208 DISCONTINUED OPERATIONS Gain on sale of discontinued operations, net of taxes - 146 NET INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 1,421 2,354 Cumulative effect of a change in accounting principle 78 - NET INCOME $1,499 $2,354 Average Number of Shares Outstanding - Basic 28,877 28,544 Average Number of Shares Outstanding - Diluted 28,985 28,565 BASIC AND DILUTED EARNINGS PER SHARE $0.05 $0.08 Dividends Paid Per Share $0.23 $0.23 BALANCE SHEET (In Thousands) 02-Apr-06 01-Jan-06 ASSETS Cash & Short Term Investments $2,949 $13,609 Accounts Receivable 127,531 123,006 Inventories 46,266 47,033 Other Current Assets 31,282 30,255 Total Current Assets 208,028 213,903 Plant and Equipment 125,658 129,989 Goodwill and Intangible Assets 16,146 16,866 Deferred Taxes 83,556 83,937 Other Assets 30,949 31,217 Total Assets $464,337 $475,912 LIABILITIES AND SHAREHOLDERS' EQUITY Current Portion Long-Term Debt $615 $611 Current Liabilities 83,474 99,437 Deferred Compensation 16,454 16,357 Long-Term Debt 34,232 34,379 Retiree Healthcare 42,940 43,885 Pension Liability 110,324 107,236 Other Long-Term Liabilities 545 555 Shareholders' Equity 175,753 173,452 Total Liabilities and Shareholders' Equity $464,337 $475,912 DATASOURCE: Standard Register CONTACT: Media, Julie McEwan, +1-937-221-1825, or ; or Investors, Robert J. Cestelli, +1-937-221-1304, or , both Standard Register Web site: http://www.standardregister.com/ http://www.standardregister.com/investorcenter

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