<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended October 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From to
Commission File Number 01-1097
THE STANDARD REGISTER COMPANY
OHIO CORPORATION 31-0455440
600 ALBANY STREET, DAYTON, OHIO 45401
TELEPHONE NUMBER 513-443-1000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Secu-
rities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No. .
CLASS OUTSTANDING AS OF October 1, 1995
Common Stock - $1.00 Par Value 23,940,017
Class A Stock - $1.00 Par Value 4,725,000
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THE STANDARD REGISTER COMPANY
INDEX
Page
No.
PART I - FINANCIAL STATEMENTS
Consolidated Balance Sheet
October 1, 1995, January 1, 1995 3
Consolidated Statement of Income
13 Weeks Ended October 1, 1995 and October 2, 1994 4
39 Weeks Ended October 1, 1995 and October 2, 1994
Consolidated Statement of Cash Flows
39 Weeks Ended October 1, 1995 and October 2, 1994 5
The consolidated financial statements of the Registrant included
herein have been prepared, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Although
certain information normally included in financial statements
prepared in accordance with generally accepted accounting
principles has been condensed or omitted, the Registrant believes
that the disclosures are adequate to make the information presented
not misleading. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Annual Report on Form 10-K of the
Registrant for the year ended January 1, 1995.
The consolidated financial statements included herein reflect all
adjustments (consisting only of normal recurring accruals) which,
in the opinion of management, are necessary to present a fair
statement of the results for the interim periods.
The results for interim periods are not necessarily indicative of
trends or of results to be expected for a full year.
Management's Discussion and Analysis of the Interim
Financial Statements 6-7
PART II - OTHER INFORMATION AND SIGNATURE 8-10
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<TABLE>
THE STANDARD REGISTER COMPANY
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
<CAPTION>
October 1, January 1,
1995 1995
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 29,212 $ 55,235
Accounts Receivable, less Allowance
for Losses 163,621 151,952
Inventories 114,424 100,673
Deferred Income Tax 9,592 9,592
Prepaid Expense 4,965 4,039
Total Current Assets $321,814 $321,491
PLANT AND EQUIPMENT
Buildings and Improvements $ 59,787 $ 57,472
Machinery and Equipment 213,933 193,187
Office Equipment 39,567 37,904
Total 313,287 288,563
Less Accumulated Depreciation 139,961 121,267
Depreciated Cost 173,326 167,296
Construction in Process 33,698 28,720
Land 3,277 2,789
Total Plant and Equipment $210,301 $198,805
OTHER ASSETS
Goodwill, Patents, and Other 2,909 2,391
Investment in F3 Corporation 3,500
Investment in Polyforms Joint Venture 4,661 2,972
Total Other Assets $ 11,070 $ 5,363
TOTAL ASSETS $543,185 $525,659
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current Maturities of Long-Term Debt $ 6,471 $ 6,471
Accounts Payable 17,221 19,071
Dividends Payable - 5,149
Accrued Compensation 28,474 27,994
Accrued Retirement Expense 5,546 4,139
Accrued Other Expense 1,159 2,230
Accrued Taxes, except Income 4,371 5,181
Income Taxes Payable 1,473 2,278
Customer Deposits 10,961 9,807
Deferred Service Contract Income 9,190 7,360
Total Current Liabilities $ 84,866 $ 89,680
LONG-TERM LIABILITIES
Long-Term Debt $ 7,835 $ 11,071
Retiree Healthcare 25,491 25,125
Deferred Income Taxes 15,817 15,817
Total Long-Term Liabilities $ 49,143 $ 52,013
SHAREHOLDERS' EQUITY
Common Stock, $1.00 Par Value
24,141,758 Shares Issued in 1995 $ 24,142
24,084,632 Shares Issued in 1994 $ 24,085
Class A Stock, $1.00 Par Value
4,725,000 Shares Outstanding 4,725 4,725
Capital in Excess of Stated Value 27,450 26,507
Retained Earnings 356,711 332,501
Treasury Stock, 201,741 Shares at Cost (3,852) (3,852)
Total Shareholders' Equity $409,176 $383,966
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $543,185 $525,659
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</TABLE>
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<TABLE>
THE STANDARD REGISTER COMPANY
CONSOLIDATED STATEMENT OF INCOME
(In Thousands except Data Per Share)
(Unaudited)
<CAPTION>
Third Quarter Nine Months
13 Weeks Ended 39 Weeks Ended
Oct 1, Oct 2, Oct 1, Oct 2,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
TOTAL REVENUE $ 227,922 $ 190,008 $ 654,944 $ 558,189
COSTS AND EXPENSES
Cost of Products Sold $ 149,467 $ 120,379 $ 424,890 $ 351,443
Engineering & Research 2,016 1,849 5,940 5,613
Selling and Administrative 48,976 43,536 142,939 129,273
Depreciation and Amortization 7,578 6,986 22,496 19,592
Interest 225 269 765 806
Total Costs and Expenses $ 208,262 $ 173,019 $ 597,030 $ 506,727
INCOME BEFORE INCOME TAXES $ 19,660 $ 16,989 $ 57,914 $ 51,462
Income Taxes 7,942 6,682 23,374 20,579
NET INCOME $ 11,718 $ 10,307 $ 34,540 $ 30,883
Average Number of Shares
Outstanding (000) 28,657 28,693 28,657 28,693
DATA PER SHARE
Net Income Primary and
Fully Diluted $ 0.41 $ 0.36 $ 1.21 $ 1.08
Dividends Paid $ 0.18 $ 0.17 $ 0.54 $ 0.51
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</TABLE>
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<TABLE>
THE STANDARD REGISTER COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Nine Months
39 Wks Ended
Oct 1, Oct 2,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $34,540 $ 30,883
Add Items not Affecting Cash:
Depreciation and Amortization $ 22,496 $ 19,592
Loss (Gain) on Sale of Facilities (896) 201
Net Change to Post-Retirement Healthcare 366 -
Increase (Decrease) in Cash Arising from
Changes in Asset and Liabilities:
Accounts Receivable (11,669) 2,776
Inventories (13,751) (6,864)
Other Assets (1,563) 636
Accounts Payable (1,849) (4,288)
Accrued Expenses 7 (5,151)
Income Taxes Payable (806) (1,992)
Customer Deposits 1,153 -
Deferred Service Income 1,830 1,911
Net Adjustments (4,684) 6,821
Net Cash Provided by Operating Activities $ 29,856 $ 37,704
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Sale of Facilities $ 1,998 $ 50
Additions to Plant and Equipment (34,973) (45,522)
Investment in F3 Corporation (3,500) -
Investment in Polyforms Joint Venture (1,690) -
Net Cash (Used in) Investing Activities $(38,165) $(45,472)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Long-Term Debt $ (3,235) $ (3,240)
Proceeds from Issuance of Common Stock 1,000 993
Redemption of Common Stock - (1,109)
Dividends Paid (15,479) (14,644)
Net Cash (Used in) Financing Activities $(17,714) $(18,000)
NET (DECREASE) IN CASH AND
CASH EQUIVALENTS $(26,023) $(25,768)
Cash and Cash Equivalents, Beginning $ 55,235 $ 78,994
CASH AND CASH EQUIVALENTS, ENDING $ 29,212 $ 53,226
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</TABLE>
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THE STANDARD REGISTER COMPANY
MANAGEMENT DISCUSSION AND ANALYSIS
OF THE INTERIM FINANCIAL STATEMENTS
Net income for the third quarter 1995 was $11.7 million, a 13.7%
increase compared to the $10.3 million result for the comparable
quarter of 1994; earnings per share were $.41 vs. $.36 a year earlier.
For the nine months year-to-date period, net income was $34.5 million
or $1.21 per share, an 11.8% increase compared to 1994's $30.9 million
and $1.08 per share result.
Total revenue increased 20.0% and 17.3% for the quarter and year-to-
date periods, respectively. Business forms products, representing 76%
of all revenue, increased 18.0% and 14.9% for the respective reporting
periods. The 18.0% third quarter increase was driven by higher forms
prices which were, in turn, the result of higher paper costs. Revenue
from promotional direct mail, representing 13% of all revenue, was up
28.4% and 41.2% for the quarter and year-to-date periods, respectively.
The 28.4% third quarter increase in promotional direct mail resulted
from a 5.5% growth in units coupled with an average 14.8% increase in
net selling prices due to increased paper costs. The 41.2% year-to-
date increase is a result of the mid-year 1994 acquisition of the
Promotional Graphics Division of UARCO and an average 11.4% increase in
net selling prices due to increased paper costs. Equipment and related
maintenance services and supplies revenues increased 21.1% for the
quarter which raised the year-to-date revenue increase for these
products and services to 10.4%.
The Company experienced a stabilizing of paper costs in the third
quarter of 1995 following sharp rises in paper costss during the first
half of 1995. As a result of higher paper costs, the Company continues
to expect an unfavorable LIFO charge to pretax earnings in 1995. The
third quarter pretax LIFO charge was $4.7 million or $.10 per share
after tax which increased the year-to-date pretax LIFO charge to $12.2
million or $.26 per share after tax. Additional LIFO adjustments are
expected for the fourth quarter of 1995.
Excluding the effects of LIFO, gross margin (revenue less cost of
products sold) increased $13.5 million and $35.5 million for the
quarter and year-to-date periods, respectively. Gross margin as a
percentage of revenue was down only .1% for the quarter, 36.5% versus a
prior year of 36.6%, and was equal to the prior year's gross margin
percentage of 37.0% on a year-to-date basis, reflecting the Company's
generally successful efforts to recover increased paper costs.
The total of selling, administrative, and R&D expenses increased 12.4%
and 10.4% for the quarter and year-to-date periods, below the
comparable 20.0% and 17.3% rates of revenue growth.
Depreciation expense rose 14.8% year-to-date, reflecting higher capital
spending and the effects of the Promotional Graphics acquisition and an
FCA Division of Capital Graphics, Inc. acquisition. Interest expense
decreased 16.4% and 5.1% on a quarter and year-to-date basis due to a
decrease in debt of $6.5 million.
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Net cash flow for the first nine months of 1995 was a negative $26.0
million, resulting primarily from the FCA acquisition, a third quarter
$3.5 million equity investment in F3 Software Corporation, and
increased working capital due to higher paper costs. The F3 Software
Corporation develops and markets forms design and forms automation
software, a key building block for the Company's electronic products
offering to customers. 1995 capital expenditures are forecasted at $45
million dollars, including the acquisition of FCA and the $3.5 million
equity investment in F3 Software Corporation.
At quarter-end, cash and cash equivalents stood at $29.2 million.
Total debt, including current maturities, was $14.3 million, producing
a net cash position of $14.9 million. Current assets were 3.8 times
the level of current liabilities. The Company believes that a
combination of internally generated funds and current cash reserves
will be adequate to meet operating and financing needs for the near
term.
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THE STANDARD REGISTER COMPANY
PART II - OTHER INFORMATION
ITEMS 1 THRU 5
None
ITEM 6 -
(a) Exhibits
Exhibit No. Description
27 Financial Data Schedule
(b) There have been no reports on Form 8-K filed during the
quarter for which this report on Form 10-Q is being filed.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
November 10,1995
THE STANDARD REGISTER COMPANY
/s/ C. J. Brown
By C. J. Brown, Senior Vice President-
Administration, Finance,
Treasurer & Chief
Financial Officer
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EXHIBIT INDEX
Number Description
27 Financial Data Schedule
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Standard Register Company
Financial Data Schedule
This schedule contains summary financial information extracted from The
Standard Register Company financial statements for the nine months ended
October 1, 1995, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> OCT-01-1995
<CASH> 29,212
<SECURITIES> 0
<RECEIVABLES> 169,201
<ALLOWANCES> 5,580
<INVENTORY> 114,424
<CURRENT-ASSETS> 321,814
<PP&E> 350,263
<DEPRECIATION> 139,961
<TOTAL-ASSETS> 543,185
<CURRENT-LIABILITIES> 84,866
<BONDS> 14,306
0
0
<COMMON> 28,867
<OTHER-SE> 380,309
<TOTAL-LIABILITY-AND-EQUITY> 543,185
<SALES> 652,785
<TOTAL-REVENUES> 654,944
<CGS> 424,890
<TOTAL-COSTS> 597,030
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,552
<INTEREST-EXPENSE> 765
<INCOME-PRETAX> 57,914
<INCOME-TAX> 23,374
<INCOME-CONTINUING> 34,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,540
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.21
</TABLE>
