|By Business Wire||
|April 25, 2014 08:00 AM EDT||
Standard Register (NYSE: SR) today announced its financial results for the first quarter of 2014. The Company reported revenue of $228.5 million and a net loss of $7.1 million or $0.83 per diluted share. The results compare to revenue of $141.6 million for the first quarter of 2013 and net income of $4.7 million or $0.80 per diluted share.
Adjusted EBITDA, which excludes certain items as detailed in the attached reconciliation, was $13.2 million compared to $12.2 million for the first quarter of 2013.
Results for the first quarter of 2013 do not include results from WorkflowOne, which Standard Register acquired on August 1, 2013.
“Although we are not satisfied with the overall results, first-quarter revenue increased in a number of our growth solutions,” said Joseph P. Morgan, Jr., president and chief executive officer. “We are investing in the growing areas of our business and have a healthy pipeline. However, many of our solutions have long sales cycles and lengthy customized implementations, which delay realization of revenue. Throughout 2014, we will be focused on driving sales of our entire portfolio into our large customer base. The acquisition brought us many new opportunities and the integration is proceeding on track with, and in some respects ahead of our internal plan.”
First Quarter Results
Total revenue increased 61 percent to $228.5 million compared to $141.6 million in the 2013 first quarter. On a pro forma basis, including WorkflowOne revenue for the first quarter of 2013, the Company would have reported revenue of $253.7 million.
Gross Margin as a percentage of revenue was 27.3 percent, compared to 29.6 percent for the first quarter last year. Unit and volume decreases, and costs associated with integration of the acquisition contributed to the decrease in gross margin. Selling, general and administrative (SG&A) expenses were $58.7 million compared to $34.7 million for the first quarter last year. The increase is primarily attributable to the acquisition and integration.
The Company incurred $5.5 million of additional expense in the first quarter of 2014 related to executing the acquisition, restructuring and integration. Capital expenditures were $3.6 million compared to $3.9 million in the first quarter last year. The Company expects to invest approximately $15 to $21 million in 2014 capital expenditures.
Standard Register contributed $5.9 million to the Company’s qualified pension plan in the first quarter of 2014 compared to $5.8 million in the first quarter last year. Total pension contributions to meet minimum funding requirements for 2014 are expected to be $42.0 million compared to contributions of $24.7 million for 2013.
Standard Register operates two business units: Healthcare and Business Solutions.
Healthcare revenue was $64.8 million, an increase of 31 percent over revenue of $49.5 million in the first quarter of 2013. Technology-enabled patient information systems continued a double-digit growth rate in the first quarter, however regulatory changes in requirements for distribution of printed materials, and a large kitting project in the first quarter of 2013 also impacted the overall comparable business unit results. Operating profit was $1.9 million compared to $2.1 million in the 2013 first quarter.
Business Solutions revenue was $163.7 million, an increase of 78 percent over revenue of $92.1 million in the 2013 first quarter. The increase was attributable to business added from the acquisition and growth in revenue from Mexico-based label manufacturing operations. Declines in demand for traditional printed forms and transactional documents continue to outpace growth in the other solutions in the business unit performance. Operating profit was $1.4 million compared to $2.9 million in the 2013 first quarter.
First Quarter Highlights
- The acquisition integration process is proceeding on track with internal plans and the Company is beginning to realize expected synergies. In the first quarter of 2014, systems and data centers were integrated, headcount reduced, three production facilities closed and three warehouse facilities closed.
- The first of two high-speed ink jet presses was installed in Sacramento, California. The second, larger press was delivered to Columbus, Ohio, early in April. Both are expected to contribute to customer communications solutions sales during 2014.
- An efficient consolidation of the Dayton workforce into one headquarters location will result in significant savings as the lease of the former WorkflowOne offices has been assigned.
- Standard Register Healthcare launched an innovative SMARTworks® EffectiveResponse solution for patient follow-up, an important accountable care requirement for healthcare providers.
- The Company’s Mexico-based operations received a supplier award from Carrier Mexico for superior quality performance, including 100 percent on-time delivery.
- Standard Register’s Product Marking and Labeling launched the first on-demand labeling solution to allow businesses to order durable UL/CUL approved digital labels online economically, regardless of volume, to address a significant pain point for the industry.
Standard Register’s president and chief executive officer Joseph P. Morgan, Jr., and chief financial officer Robert Ginnan will host a conference call at 10:00 a.m. EDT on Friday, April 25, 2014, to review the first quarter results. The call can be accessed via an audio webcast at http://www.standardregister.com.
About Standard Register
Standard Register (NYSE:SR), is trusted by the world’s leading companies to advance their reputations and add value to their operations by aligning communications with corporate brand standards. Providing market-specific insights and a compelling portfolio of workflow, content and analytics solutions to address the changing business landscape in healthcare, financial services, manufacturing, transportation and retail markets, Standard Register is the recognized leader in the management and execution of mission-critical communications. More information is available at http://www.standardregister.com.
Safe Harbor Statement
This press release contains 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 could differ materially from the Company’s current expectations. Factors that could cause the Company’s results to differ materially from those expressed in forward-looking statements include, without limitation, our ability to successfully integrate the acquired assets or achieve the expected synergies of the WorkflowOne acquisition, access to capital for expanding in our solutions, the pace at which digital technologies and electronic health records (EHR) adoption erode the demand for certain products and services, the success of our plans to deal with the threats and opportunities brought by digital technology, results of cost containment strategies and restructuring programs, our ability to attract and retain key personnel, variation in demand and acceptance of the Company’s products and services, frequency, magnitude and timing of paper and other raw material price changes, the timing of the completion and integration of acquisitions, general business and economic conditions beyond the Company’s control, and the consequences of competitive factors in the marketplace, including the ability to attract and retain customers. 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. For more information, see the Company’s most recent Form 10-K and other filings with the Securities and Exchange Commission.
Non-GAAP Measures Presented in This Press Release
The Company reports its results in accordance with Generally Accepted Accounting Principles in the United States (GAAP). However, we believe that certain non-GAAP measures found in this press release, when presented in conjunction with comparable GAAP measures, are useful for investors. 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. We discuss several measures of operating performance, including Adjusted EBITDA and cash flow on a net debt basis, which are not calculated in accordance with GAAP. These non-GAAP measures should not be considered as substitutes for, or superior to, results determined in accordance with GAAP.
Management uses Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization and excludes pension benefit cost, restructuring and impairment charges, acquisition and integration expense and certain acquisition fair value and other miscellaneous adjustments, to evaluate the Company’s results. We believe this non-GAAP financial measure is useful to investors because it provides a more complete understanding of our current underlying operating performance, a clearer comparison of current period results with past reports of financial performance, and greater transparency regarding information used by management in its decision-making. Internally, management and our Board of Directors use this non-GAAP measure to evaluate our business performance. The Company’s debt covenants are also based on the Adjusted EBITDA calculation.
In addition, because our credit facility is borrowed under a revolving credit agreement, which currently permits us to borrow and repay at will up to a balance of $125 million (subject to limitations related to receivables, inventories, and letters of credit), we take the measure of cash flow performance prior to borrowing or repayment of the credit facility. In effect, we evaluate cash flow as the change in net debt (credit facility debt less cash equivalents).
The table below provides a reconciliation of these non-GAAP measures to their most comparable measure calculated in accordance with GAAP.
|THE STANDARD REGISTER COMPANY|
|CONSOLIDATED STATEMENTS OF INCOME|
|(In thousands, except per share amounts)|
13 Weeks Ended
|13 Weeks Ended|
|Mar 30, 2014||
Mar 31, 2013
|COST OF SALES||166,023||99,700|
|Selling, general and administrative||58,679||34,736|
|Acquisition and integration costs||2,697||1,107|
|Restructuring and other exit costs||2,806||626|
|TOTAL OPERATING EXPENSES||64,618||36,469|
|(LOSS) INCOME FROM OPERATIONS||(2,152||)||5,451|
|OTHER INCOME (EXPENSE)|
|Other income (expense)||163||(1||)|
|Total other expense||(4,825||)||(625||)|
|(LOSS) INCOME BEFORE INCOME TAXES||(6,977||)||4,826|
|Income tax expense||151||127|
|NET (LOSS) INCOME||$||(7,128||)||$||4,699|
|Average Number of Shares Outstanding - Basic||8,590||5,872|
|Average Number of Shares Outstanding - Diluted||8,590||5,906|
|BASIC (LOSS) INCOME PER SHARE||$||(0.83||)||$||0.80|
DILUTED (LOSS) INCOME PER SHARE
|Depreciation and amortization||
|SEGMENT OPERATING RESULTS|
|13 Weeks Ended||13 Weeks Ended|
|Mar 30, 2014||
Mar 31, 2013
NET (LOSS) INCOME BEFORE TAXES
|Total Net (Loss) Income Before Taxes||$||(6,977||)||$||4,826|
|CONSOLIDATED BALANCE SHEETS|
|Mar 30, 2014||Dec 29, 2013|
|Cash and cash equivalents||$||3,081||$||2,342|
|Other current assets||15,561||14,508|
|Total current assets||234,178||236,356|
|Plant and equipment||90,593||93,003|
|Goodwill and intangible assets||130,904||133,444|
LIABILITIES AND SHAREHOLDERS' DEFICIT
|Pension benefit liability||185,531||192,779|
|Other long-term liabilities||6,887||6,989|
|Total liabilities and shareholders' deficit||$||473,490||$||480,877|
|CONSOLIDATED STATEMENT OF CASH FLOWS|
|13 Weeks Ended||13 Weeks Ended|
|Mar 30, 2014||Mar 31, 2013|
|Net (loss) income plus non-cash items||$||5,772||$||10,169|
|Contributions to qualified pension plan||(5,932||)||(5,839||)|
|Net cash (used in) provided by operating activities||(1,111||)||4,873|
|Additions to plant and equipment||(3,637||)||(3,889||)|
|Proceeds from sale of equipment||49||77|
|Net cash used in investing activities||(3,588||)||(3,812||)|
|Net change in borrowings under credit facility||6,761||(629||)|
|Principal payments on long-term debt||(1,107||)||(592||)|
|Net cash provided by (used in) financing activities||5,508||(1,221||)|
|Effect of exchange rate||(70||)||211|
|Net change in cash||$||739||$||51|
|RECONCILIATION OF GAAP TO NON-GAAP MEASURES|
|13 Weeks Ended||13 Weeks Ended|
Mar 30, 2014
|Mar 31, 2013|
|GAAP Net (Loss) Income||$||(7,128||)||$||4,699|
|Depreciation and amortization||9,196||5,066|
|Restructuring and impairment||3,242||626|
|Acquisition and integration costs||2,697||1,107|
|Non-cash stock compensation||681||469|
|GAAP Net Cash Flow||$||739||$||51|
|Credit facility (borrowed) paid||(6,761||)||629|
|Non-GAAP Net Cash Flow||$||(6,022||)||$||680|
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Feb. 28, 2017 09:30 AM EST Reads: 1,728
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
Feb. 28, 2017 09:30 AM EST Reads: 148
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Feb. 28, 2017 09:30 AM EST Reads: 1,054
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed ...
Feb. 28, 2017 09:15 AM EST Reads: 851
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Feb. 28, 2017 09:15 AM EST Reads: 2,323
Unsecured IoT devices were used to launch crippling DDOS attacks in October 2016, targeting services such as Twitter, Spotify, and GitHub. Subsequent testimony to Congress about potential attacks on office buildings, schools, and hospitals raised the possibility for the IoT to harm and even kill people. What should be done? Does the government need to intervene? This panel at @ThingExpo New York brings together leading IoT and security experts to discuss this very serious topic.
Feb. 28, 2017 09:15 AM EST Reads: 3,232
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Feb. 28, 2017 09:15 AM EST Reads: 6,555
LogMeIn has completed its previously disclosed merger with Citrix Systems, Inc.’s GetGo, Inc. subsidiary, a wholly owned subsidiary consisting of Citrix’s GoTo family of service offerings. The merger officially closed after market hours on January 31, 2017. Effected through a Reverse Morris Trust transaction, the merger brings together two of the preeminent players in cloud connectivity to instantly create one of the world’s top 10 public SaaS companies, and a market leader with the scale, resou...
Feb. 28, 2017 09:00 AM EST Reads: 619
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
Feb. 28, 2017 09:00 AM EST Reads: 6,798
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Feb. 28, 2017 08:45 AM EST Reads: 1,115
Ayehu provides IT Process Automation & Orchestration solutions for IT and Security professionals to identify and resolve critical incidents and enable rapid containment, eradication, and recovery from cyber security breaches. Ayehu provides customers greater control over IT infrastructure through automation. Ayehu solutions have been deployed by major enterprises worldwide, and currently, support thousands of IT processes across the globe. The company has offices in New York, California, and Isr...
Feb. 28, 2017 08:30 AM EST Reads: 931
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, discussed DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He also covered various styles and...
Feb. 28, 2017 08:00 AM EST Reads: 4,164
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
Feb. 28, 2017 07:45 AM EST Reads: 104
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Feb. 28, 2017 07:30 AM EST Reads: 268
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
Feb. 28, 2017 07:30 AM EST Reads: 208