The Standard Register Company (SR, Financial) filed Quarterly Report for the period ended 2009-06-28.
The Standard Register Company\'s primary business has been the design manufacture and sale of business forms. To meet the needs of today\'s business environment the business form has evolved to incorporate a wide range of sophisticated features and related services that facilitate the recording storage and communication of business transactions and information. The Standard Register Company has a market cap of $94.6 million; its shares were traded at around $3.28 with a P/E ratio of 8.7 and P/S ratio of 0.1. The dividend yield of The Standard Register Company stocks is 6.1%. The Standard Register Company had an annual average earning growth of 3.6% over the past 5 years.
Cash flow on a net debt basis was $0.4 million compared to $20.4 million in the first half of 2008. However, cash flow in the second quarter improved to a positive $7.8 million, up from a negative $7.4 million in the first quarter.
As shown in the table below, overall SG&A expense decreased by $21.0 million or 17% on a year-to-date basis in 2009 as compared with 2008. SG&A expense declined $13.3 million or 22% in the second quarter of 2009 compared with 2008.
As part of recording the settlement, we remeasured our pension obligations and plan assets under these plans as of March 1, 2009, the settlement date. The remeasurement resulted in an actuarial gain of $52.8 due to a change in the discount rate used to measure the benefit obligations from 5.75% at December 28, 2008 to 7.0% at March 1, 2009. The change in discount rate is primarily the result of increases in long-term interest rates during the period. Additionally, we updated the fair value of our plan assets and recognized a net actuarial loss of $28.1 due to the actual rate of investment return on our qualified plan being less than the expected rate of return. As a result, we realized a net actuarial gain of $24.7 million which will be amortized into income in future years. This gain reduced our pension liabilities by $24.7, decreased our deferred tax assets by $9.8 million, and reduced accumulated comprehensive losses by $14.9 million.
The Company has undertaken cost reduction initiatives and restructuring actions in 2008 as part of ongoing efforts to improve efficiencies, reduce cost, and maintain a strong financial condition. Restructuring and other exit costs of $0.2 million for the first half of 2009 primarily relate to $0.7 for costs associated with the planned closing of facilities that are required to be expensed as incurred and a reversal of $0.5 for lower than expected involuntary termination costs.
Also during 2008, we began implementing a plan to redesign our client support infrastructure to more of a centralized model. We have been transitioning customer transactional and administrative functions from our field sales offices to one of three client support centers. The overall benefit of the change is an optimized client support model along with significant annualized cost savings. As of the end of the quarter, we had transitioned all of our field sales offices; however, we still have some customer accounts that have not been completely transitioned. We expect to complete the transition on these accounts by the end of September 2009. We originally expected these actions to generate approximately $5.6 million annually in compensation and related cost savings to be reflected in selling, general, and administrative expenses. We now expect the annual savings rate to be approximately $4.6 million after re-investing a portion of the savings into our client satisfaction operations. As a result of the extended implementation time, we expect to realize the full effect of these savings by the end of 2009. We expected to have involuntary termination costs of $1.5 million; however, as a result of the changes to the plan, we reversed approximately $0.4 million of these costs in the second quarter of 2009.
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The Standard Register Company\'s primary business has been the design manufacture and sale of business forms. To meet the needs of today\'s business environment the business form has evolved to incorporate a wide range of sophisticated features and related services that facilitate the recording storage and communication of business transactions and information. The Standard Register Company has a market cap of $94.6 million; its shares were traded at around $3.28 with a P/E ratio of 8.7 and P/S ratio of 0.1. The dividend yield of The Standard Register Company stocks is 6.1%. The Standard Register Company had an annual average earning growth of 3.6% over the past 5 years.
Highlight of Business Operations:
For the second quarter, net income was $3.2 million compared to $1.4 million in 2008. Combined with the net loss of $11.0 million in the first quarter 2009, the year-to-date net loss was $7.8 million, or ($0.27) per share compared to net income of $3.9 million, or $0.14 per share in the first half of 2008. On a per share basis, the pension settlement represented a loss of ($0.41) per share.Cash flow on a net debt basis was $0.4 million compared to $20.4 million in the first half of 2008. However, cash flow in the second quarter improved to a positive $7.8 million, up from a negative $7.4 million in the first quarter.
As shown in the table below, overall SG&A expense decreased by $21.0 million or 17% on a year-to-date basis in 2009 as compared with 2008. SG&A expense declined $13.3 million or 22% in the second quarter of 2009 compared with 2008.
As part of recording the settlement, we remeasured our pension obligations and plan assets under these plans as of March 1, 2009, the settlement date. The remeasurement resulted in an actuarial gain of $52.8 due to a change in the discount rate used to measure the benefit obligations from 5.75% at December 28, 2008 to 7.0% at March 1, 2009. The change in discount rate is primarily the result of increases in long-term interest rates during the period. Additionally, we updated the fair value of our plan assets and recognized a net actuarial loss of $28.1 due to the actual rate of investment return on our qualified plan being less than the expected rate of return. As a result, we realized a net actuarial gain of $24.7 million which will be amortized into income in future years. This gain reduced our pension liabilities by $24.7, decreased our deferred tax assets by $9.8 million, and reduced accumulated comprehensive losses by $14.9 million.
The Company has undertaken cost reduction initiatives and restructuring actions in 2008 as part of ongoing efforts to improve efficiencies, reduce cost, and maintain a strong financial condition. Restructuring and other exit costs of $0.2 million for the first half of 2009 primarily relate to $0.7 for costs associated with the planned closing of facilities that are required to be expensed as incurred and a reversal of $0.5 for lower than expected involuntary termination costs.
Also during 2008, we began implementing a plan to redesign our client support infrastructure to more of a centralized model. We have been transitioning customer transactional and administrative functions from our field sales offices to one of three client support centers. The overall benefit of the change is an optimized client support model along with significant annualized cost savings. As of the end of the quarter, we had transitioned all of our field sales offices; however, we still have some customer accounts that have not been completely transitioned. We expect to complete the transition on these accounts by the end of September 2009. We originally expected these actions to generate approximately $5.6 million annually in compensation and related cost savings to be reflected in selling, general, and administrative expenses. We now expect the annual savings rate to be approximately $4.6 million after re-investing a portion of the savings into our client satisfaction operations. As a result of the extended implementation time, we expect to realize the full effect of these savings by the end of 2009. We expected to have involuntary termination costs of $1.5 million; however, as a result of the changes to the plan, we reversed approximately $0.4 million of these costs in the second quarter of 2009.
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