SR Spire Inc

Standard Register (NYSE: SR) today reported its financial results for the second quarter ended June 28, 2009.

Results of Operations

Net Income for the second quarter 2009 was $3.2 million or $0.11 per share, compared to $1.4 million or $0.05 per share in the comparable quarter of 2008. For the first six months, a net loss of $7.8 million or $0.27 per share compares to net income of $3.9 million or $0.14 per share in the prior year. The year to date net loss was primarily due to considerable non-cash pension settlement charges of $11.9 million or $0.41 per share on an after-tax basis. Cash flow on a net debt basis was strong in the quarter at $7.8 million due to the reduction in the dividend payment, additional cost savings and improvements in working capital.

Revenue for the quarter was $171.0 million, compared to $198.8 in the same quarter of 2008. On a year to date basis, revenue was $345.6 versus $406.0 in the prior year. “Our revenue continues to be challenged by significant unit declines in our traditional product offerings; however, we are seeing an increased level of activity in our core markets,” said Joe Morgan, president and chief executive officer. “The majority of the unit decline is related to economic weakness and advancements in the use of technology,” added Morgan. Despite the shortfall of $27.8 million in revenue in the quarter, gross margins as a percent of revenue remained stable at 31.7 percent compared to 32.0 percent in the prior year. “Our 2008 $33 million cost reduction plan, coupled with the successful achievement of $40 million in 2007, continued to positively impact gross margins while reducing SG&A expenses,” added Morgan. SG&A was $48.2 million in the quarter versus $61.5 million in the prior quarter, down $13.3 million.

Capital expenditures were $5.0 million through the first half and are expected to end the year in the $10-13 million range. Pension funding was $14.5 million through six months with an additional $10.5 million currently planned for the balance of the year.

Dividend

Standard Register’s board of directors today declared a quarterly dividend of $0.05 per share to be paid on September 4, 2009, to shareholders of record as of August 21, 2009. The board will consider future dividend payments on a quarter-by-quarter basis in accordance with its normal practice.

Conference Call

Standard Register’s president and chief executive officer Joe Morgan and chief financial officer Bob Ginnan will host a conference call at 10 a.m. EDT on July 24, 2009, to review the second 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 may contain information that is 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. 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. In particular, we will segregate and highlight cash flows related to restructuring and contributions to our qualified pension plan, both of which are carefully monitored by management and have a significant and variable impact on cash flow. In addition, because our outstanding debt is borrowed under a revolving credit agreement which currently permits us to borrow and repay at will up to a balance of $100 million (subject to limitations related to receivable balances and letters of credit), we measure cash flow performance prior to debt borrowing or repayment. In effect, we evaluate cash flow as the change in net debt (total debt less cash and cash equivalents).

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 2009 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 28, 2008. 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       (Dollars in thousands, except per share amounts) Second Quarter Y-T-D 13 Weeks Ended 13 Weeks Ended 26 Weeks Ended 26 Weeks Ended 28-Jun-09     29-Jun-08 28-Jun-09     29-Jun-08   $171,015 $198,827 TOTAL REVENUE $345,635 $406,012   116,833       135,180   COST OF SALES 237,218       277,580     54,182 63,647 GROSS MARGIN 108,417 128,432   COSTS AND EXPENSES 48,270 61,490 Selling, general and administrative 100,057 121,051 - (746 ) Pension curtailments and settlements 19,747 (746 ) 850 - Asset Impairment 850 164 (394 )     (4 ) Restructuring and other exit costs 207       5     48,726       60,740   TOTAL COSTS AND EXPENSES 120,861       120,474     5,456 2,907 INCOME (LOSS) FROM CONTINUING OPERATIONS (12,444 ) 7,958   OTHER INCOME (EXPENSE) (333 ) (523 ) Interest expense (636 ) (1,284 ) 209       47   Other income 257       129   (124 ) (476 ) Total Other Expense (379 ) (1,155 )     INCOME (LOSS) FROM CONTINUING OPERATIONS 5,332 2,431 BEFORE INCOME TAXES (12,823 ) 6,803     2,158       1,041   Income Tax Expense (Benefit) (5,021 )     2,919     3,174 1,390 NET INCOME (LOSS) FROM CONTINUING OPERATIONS (7,802 ) 3,884   DISCONTINUED OPERATIONS -       2   Gain on sale of discontinued operations, net of taxes -       4     $3,174       $1,392   NET INCOME (LOSS) ($7,802 )     $3,888         28,833 28,754 Average Number of Shares Outstanding - Basic 28,816 28,745 28,834 28,773 Average Number of Shares Outstanding - Diluted 28,816 28,759   $0.11 $0.05 BASIC AND DILUTED INCOME (LOSS) PER SHARE ($0.27 ) $0.14   $0.05 $0.23 Dividends Paid Per Share $0.28 $0.46       BALANCE SHEET (In Thousands) 28-Jun-09     28-Dec-08   ASSETS Cash & Short Term Investments $240 $282 Accounts Receivable 100,981 112,810 Inventories 34,938 38,718 Other Current Assets 23,108       22,060   Total Current Assets 159,267 173,870   Plant and Equipment 95,037 102,071 Goodwill and Intangible Assets 6,848 7,752 Deferred Taxes 102,006 114,121 Other Assets 16,244 15,563         Total Assets $379,402       $413,377     LIABILITIES AND SHAREHOLDERS' EQUITY Current Portion Long-Term Debt $33,480 $159 Current Liabilities 72,310 87,296 Deferred Compensation 7,272 8,362 Long-Term Debt - 33,840 Retiree Healthcare 7,652 8,063 Pension Liability 200,098 235,457 Other Long-Term Liabilities 5,798 5,231 Shareholders' Equity 52,792 34,969         Total Liabilities and Shareholders' Equity $379,402       $413,377