Q3 2003 Standard Register Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Hello and welcome to today's Standard Register second-quarter results teleconference. As a reminder, the presentation slides for today's conference are available by accessing the Investor Information section of the Standard Register website at www.standardregister.com/investorrelations. At the company's request, this conference is being recorded for instant replay purposes. Before we begin today's conference, a spokesperson for Standard Register will read a brief statement.

BOB SISTELLI, ASSOCIATE VICE PRESIDENT OF INVESTOR RELATIONS, STANDARD REGISTER COMPANY: This conference includes forward-looking statements covered by the Private Securities Litigation Reform Act of 1995. Because such statements deal with future events, they're subject to various risks and uncertainties, and actual results for Fiscal Year 2003 and beyond could differ materially from the company's current expectations. Forward-looking statements are identified by words such as anticipates, projects, expects, plans, intends, believes, estimates, targets, and other similar expressions that indicate trends and future events. Factors that could cause the company's results to differ materially from those expressed in forward-looking statements include, without limitation, variation in demand and acceptance of the company's products and services, the frequency, magnitude, and timing of paper and other raw material price changes, general business and economic conditions beyond the company's control, timing of the completion and integration of acquisitions, the consequences of competitive factors in the marketplace, cost-containment strategies, and the company's success in attracting and retaining key personnel. Additional information concerning factors that could cause actual results to differ materially from those projections is contained in the Company's filing with the Securities and Exchange Commission, including its report on Form 10-K for the year ended December 29th, 2002. 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.

OPERATOR: At this time, I'd like to turn the conference over to Mr. Dennis Rediker, CEO of Standard Register. Sir, you may begin.

DENNIS REDIKER, PRESIDENT, CEO, STANDARD REGISTER COMPANY: Thank you and welcome to the third-quarter conference call. With me here are Peter Dorsman, Chief Operating Officer, Craig Brown, Chief Financial Officer, Laurie Spiegelberg, Vice President of Corporate Communications, and Bob Sistelli (ph), Associate Vice President of Investor Relations. I will comment briefly on the quarter, and then Peter and Craig will share more details on the performance and our outlook. Then we will take a few questions.

Our third-quarter revenues would was 222 million. The net was a loss of 5 cents per share in the quarter, after increased pension costs equivalent to 8 cents per share and instruction and impairment charges equivalent to 9 cents per share. We delivered positive operating cash flow and continue to have a strong financial position. Throughout the quarter, we continue to build our pipeline of sales opportunities, and we have racked up a number of significant wins. Peter will comment a little more on this in his comments.

We reduced our cost structure through plant consolidation and other restructuring actions to align with the market conditions and also to help fund continued investment in growth opportunities. And our six Sigma and other operational excellence initiatives are delivering gains in productivity, quality and customer satisfaction. We have also continued to invest in new capabilities that support our transformation. We have added significant new capabilities, including innovative digital solutions, outsourcing services that differentiate Standard Register and position the company as a strategic part (indiscernible) partner with customers in business process improvements. As we begin the fourth quarter, our backlogs are up, incoming orders are strong, and we look to benefit from sales wins made earlier in the year. So we look for revenue to pick up in this quarter. Also, some of the cost savings from the restructuring actions we took earlier in the year will show up in this quarter. Now here is Pete to you a little bit more about operations and initiatives. Pete?

PETER DORSMAN, COO, STANDARD REGISTER COMPANY: Thank you, Dennis. My remarks today will address the current business environment, and actions we're taking to drive growth, including both sales initiatives and innovation. In the quarter, we continued to experience weak demand for our core products. This was a result of a few factors -- the continued effects of a weak economy, with customers utilizing fewer forms and labels in their operations or continuing to work through their current supply of them. Technology also played a role with companies doing more electronically, and we also faced pricing pressure due to strategic sourcing efforts. As was the case in the last few quarters, customers also delayed capital spending or added additional steps in their review and approval process. In spite of these conditions, we clearly beginning to see signs of strengthening market conditions. Our plant backlogs are up -- primarily the result of new contracts. The number of large-order wins closed in the quarter surpassed the number in both the second and the first quarters. As a result of these positive indicators, our fourth-quarter revenue will improve over the third quarter. However, much of the benefit associated with our selling efforts will take longer to translate into …