ANNUAL OPERATING RESULTS
    The table below presents an analysis of operations for years 2001, 2000, and 1999 with operating and non-operating
results segregated in the same manner as described above. Quarterly results for 2001 are also shown for reference.

 

STANDARD REGISTER COMPANY
SUMMARY OF OPERATIONS

 
    Quarters       Annual  
          1Q01    2Q01    3Q01    4Q01    2001    2000    1999     
  OPERATIONS                              
  Revenue   $318   $306   $278   $286   $1,188   $1,354   $1,394  
  % Change                   (12.3)%   (2.9)%   (1.8)%  
  Gross Margin   114   105   90   112   420   484   506  
  % Revenue   35.8%   34.3%   32.2%   39.0%   35.3%   35.8%   36.3%  
  SG&A Expense   88   80   75   76   319   360   353  
  EBITDA   26   25   14   36   101   124   152  
  % Revenue   8.2%   8.1%   5.1%   12.4%   8.5%   9.2%   10.9%  
  Depreciation & Amortization   14   13   11   9   45   55   51  
  EBIT   12   12   4   27   55   69   102  
  Interest Expense   3   3   3   3   13   13   14  
  Investment Income   (1)   (1)   (1)   (1)   (3)   (3)   (2)  
  Pretax Income   10   10   1   25   46   59   90  
  Net Income Before Non-Operating Items   6   6   2   14   28   36   56  
  Earnings Per Diluted Share   0.22   0.22   0.06   0.51   1.02   1.33   7.99  
                                 
  NON-OPERATING ITEMS                              
  Restructuring   (71)   (2)   (5)   (5)   (84)   (25)   0  
  Asset Impairment   (42)   0   0   0   (42)   (74)   0  
  Write-Offs/Adjustments   0   (5)   0   0   (5)   (8)   0  
  Discontinued Operations   0   0   0   0   0   0   26  
  Pretax Effect   (113)   (7)   (5)   (5)   (130)   (106)   26  
  Net Income Effect   (67)   (4)   (3)   (3)   (77)   (65)   15  
  TOTAL NET INCOME (LOSS)   $(61)   $ 2   $ (1)   $ 11   $ (49)   $ (29)   $ 71  
  Earnings Per Diluted Share (Loss)   (2.22)   0.07   (0.05)   0.41   (1.79)   (1.06)   2.52  
 

    Revenue declined from $1.4 billion in 1999 to $1.2 billion in 2001, dropping $40 million or 2.9% in 2000, and an additional $166 million or 12.3% in 2001. The decline in 2000 was primarily a function of lower industry demand for traditional business forms and the loss of approximately $20 million in annual business from some member hospitals of the Novation group purchasing organization. The more precipitous drop in 2001 revenue primarily reflected the planned elimination of low-margin business in the restructuring. Applying seasonality to the fourth quarter 2001 revenue yields a post-restructuring annual run-rate of approximately $1.115 billion.
    The percentage gross margin dropped by 0.5 percentage points in each of 2000 and 2001. The decline in 2000 reflected the effect of lower production volumes, mitigated by cost reductions from plant closings early in the year. The decrease in 2001 was the result of the elimination of low-margin business, the required lag in cost reductions, and higher training and other production costs during the first three quarters' restructuring period. The 39.0% post-restructuring performance in the fourth quarter of 2001 compares favorably to all preceding periods above, reflecting an improved mix of business and the benefit of the cost reductions.
    SG&A expense increased in 2000 by $7 million and then declined in 2001 by $41 million. The increase in 2000 primarily reflected an increase in expenditures for internal use software and additional SMARTworks development costs. Expenses came down steadily during the 2001 restructuring period as a result of the facility and personnel actions described earlier.


Standard Register                          
2001 Annual Report