Second, the value of finished goods was reduced by $21.4 million as a result of the accumulation of many individually
small transactional errors that were traced as far back as January 1998 when a new cost system was installed. Third,
the Company changed an accounting procedure to provide for the proper matching of cost to revenue for warehousing
services. Previously, cost was reported up front, as incurred, instead of being matched to revenue as the stored product
was shipped from the warehouse and invoiced. The effects of these three items are summarized below. The net effect
of these three adjustments is shown as a non-operating item in the preceding quarterly and annual exhibits.

 
          Revenue    Cose of Sales    Gross Margin     
  Revenue Cutoff   $8.8       $8.8  
  Finished Goods Inventory       $21.4   (21.4)  
  Costing Policy Change       (8.1)   8.1  
  Total   $8.8   $13.3   $(4.5)  
 

SEGMENT REPORTING
An important element in the Renewal Plan was the 2001 change from a functional organizational structure to one with a small Corporate Center and four Strategic Business Units (SBU). In order to promote focus, accountability, and growth, each SBU was equipped with its own marketing, sales, manufacturing, and line support functions. The Company recruited experienced executives to head up each Strategic Business Unit.
    The segment discussions that follow include quarterly, as well as annual, operating results in order to indicate the pre and post restructuring performance. The segment results exclude expenses for restructuring, impairment, and other write-offs and adjustments, LIFO inventory adjustments and goodwill amortization, all of which are not allocated to the segment.

Document Management
This SBU provides custom printed documents, workflow consulting, integrated system solutions, and storage and dis- tribution services. It primarily serves Fortune 2000 companies in the healthcare, financial, and manufacturing markets.

 
     DOCUMENT MANAGEMENT
SUMMARY OF OPERATIONS

     
    Quarters   Annual
     4Q00    1Q01    2Q01    3Q01    4Q01        2001    2000    1999
Revenue   $278   $250   $235   $218   $225   $928   $1,062   $1,121
% Change (12.6)% (5.3)%
                                 
Operating EBIT   $ 20   $ 14   $ 13   $ 6   $ 24   $ 57   $ 71   $ 99
% Revenue 7.1% 5.7% 5.5% 2.9% 70.6% 6.2% 6.7% 8.8%
                                 
Identifiable Assets                   $374            
% Annual ized Return on Assets (1) 24.6%
                                 
(1) Fourth quarter Earnings Before interest &Tax (EBIT) times 4, converted to after tax basis, divided by assets.
 


Standard Register                          
2001 Annual Report