Standard Register Reports Fourth Quarter 2012 Financial Results

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* Operating performance continues positive trend
* Restructuring had positive effect on performance in 2012
* Ended year with $8.2 million in positive cash flow

DAYTON, Ohio--(Business Wire)--
Standard Register (NYSE: SR), a leader in critical communications management
solutions, today announced its financial results for the fourth quarter and full
year 2012. The Company reported fourth quarter 2012 revenue of $143.6 million
and a net loss of $0.2 million or $0.01 per share. The results compare to 2011
fourth quarter revenue of $161.4 million and a net loss of $95.5 million or
$3.28 per share. The 2011 fourth quarter loss included a non-cash charge of
$89.5 million to establish a valuation allowance against certain deferred tax
assets.

Non-GAAP net income from operations after adjustments for pension loss
amortization, pension settlement, restructuring charges, postretirement plan
termination, tax effect of adjustments and deferred tax valuation allowances was
$4.0 million or $0.14 per share for the fourth quarter of 2012, compared to $0.9
million or $0.03 per share for the same period in 2011.

For the full 12 months of 2012, the Company reported revenue of $602.0 million
and a net loss of $9.1 million or $0.31 per share. The results compare to full
year 2011 revenue of $648.1 million and a net loss of $87.7 million or $3.02 per
share. Full year 2011 included the $89.5 million valuation allowance and a $20.2
million one-time gain from the termination of the postretirement health care
plan.

Non-GAAP adjusted net income from operations for the full year 2012 was $12.2
million or $0.42 per share compared to non-GAAP adjusted net income of $7.7
million or $0.26 per share for the prior year.

"Operational performance continues to improve, which is an indicator that
customers are seeing the value of our transition from a traditional printing
company to a provider of communications and marketing solutions across multiple
delivery channels," said Joseph P. Morgan, Jr., president and chief executive
officer. "The restructuring plan that we introduced in January 2012 has resulted
in improvements in efficiency as well as helping us align our cost structure
with our resources. We are building a sustainable enterprise based on our
recognized expertise in managing workflow and our platform of marketing,
communications and program management for business and healthcare."

Morgan continued, "Macro-trends are affecting our traditional printing business,
but Standard Register has maintained strong customer relationships. Our
qualified pension plan is still a challenge in this low interest rate
environment; however we exceeded our 2012 obligation by funding $22.7 million in
contributions to the plan during 2012. We are on track with our restructuring
plan and ended the year with $8.2 million in positive cash flow on a net debt
basis."

The Company previously announced reductions in volume and freight business with
a large financial services customer that reorganized its distribution channels
and restructured its operations. Revenue from this customer declined $24.2
million ($17.6 million in Legacy products and $6.6 million in Core solutions) in
2012 and is estimated to decline an additional $18 million to $20 million in
2013.

Fourth Quarter Results

Total revenue declined 11 percent to $143.6 million in the fourth quarter
compared to $161.4 million in the fourth quarter of 2011. Approximately half of
the decline was attributable to reduced volumes with the large financial
services customer. Core solutions, the Company`s priority growth products and
services, declined 4 percent. Legacy products, generally transactional documents
and printed materials, decreased 14 percent.

Healthcare revenue declined 11 percent for the quarter, to $52.5 million
compared to $59.3 million in the prior year quarter. Declines in volumes,
particularly in printed forms related to the mandated migration to Electronic
Healthcare Records, offset increases in Core solutions sales. Operating income
for the fourth quarter was $4.1 million compared to $2.1 million for the same
period in 2011.

Business Solutions revenue for the fourth quarter was $91.0 million, a decrease
of 11 percent compared to the fourth quarter of 2011 revenue of $102.1 million.
Core solutions and Legacy products declined, primarily related to the reduction
in volume from the large financial services customer. Operating income for the
fourth quarter was $2.4 million compared to an operating loss of $1.3 million in
the fourth quarter last year.

Consolidated gross margin as a percent of revenue was 30 percent, the same as
for the fourth quarter of 2011. Selling, general and administrative (SG&A)
expenses declined 18 percent in the quarter.

Full Year Results

Total revenue declined 7 percent to $602.0 million compared to $648.1 million
for the full year 2011. Over half of this decline was attributable to reduced
volume with the large financial services customer and the remainder was
primarily the result of Legacy product unit volumes declining more rapidly than
growth in Core solutions sales. For 2012, Core solutions declined 0.3 percent.
Legacy products declined 12 percent. At the end of 2012, Core solutions
comprised 43 percent of revenue, compared to 40 percent at the end of 2011.
Legacy products correspondingly declined to 57 percent from 60 percent for the
same periods.

Healthcare revenue declined 9 percent to $215.9 million from $236.8 million in
2011. Operating income for 2012 decreased 12 percent, to $12.7 million from
$14.5 million for the prior year.

Business Solutions revenue declined to $386.1 million from $411.3 million for
2011. Nearly all of the decline was from reduced volume with the large financial
services customer. Operating income for 2012 more than doubled to $8.1 million
from $3.5 million for 2011.

Consolidated gross margin as a percent of revenue was 30 percent for 2012,
compared to 31 percent for 2011. SG&A expense declined 13 percent to $180.7
million from $206.9 million in the prior year.

Cash flow on a net debt basis was positive by $8.2 million for 2012 compared to
negative cash flow of $11.6 million for 2011.

Capital Expenditures, Restructuring and Pension Contribution Updates

For 2012 capital expenditures were $6.0 million. The Company continues to invest
at a prudent level to support Core technology solutions growth and to increase
efficiencies with management reporting capabilities. Restructuring efforts have
more clearly defined investments that will produce the best return. The Company
expects capital expenditures for 2013 to be within the range of $15 million to
$18 million.

In January 2012, the Company announced a two-year strategic restructuring plan
to better align its resources in support of the growing Core solutions business
and reduce costs to offset the impact of declining revenues in Legacy products.
When fully implemented at the end of 2013, annual savings of $60 million are
expected to be realized. Through 2012, the Company achieved approximately $40
million of savings and incurred nearly all of the expected $10.0 million in
cumulative costs associated with the program.

Standard Register contributed $22.7 million to the Company`s qualified pension
plan in 2012, including $2.0 million more than required for the year. With
relief provided by the Moving Ahead for Progress in the 21st Century Act
(MAPS-21), commonly called the highway bill, and the additional $2.0 million of
funding in 2012, contributions for 2013 and 2014 are expected to be $24.8
million and $36.4 million, respectively.

Conference Call

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, February 22, 2013, to review the fourth quarter results. The
call can be accessed via an audio webcast accessible at
http://www.standardregister.com/investorcenter.

About Standard Register

Standard Register (NYSE:SR), celebrating 100 years of innovation, is trusted by
the world`s leading companies to advance their reputations by aligning
communications with corporate standards and priorities. Providing
market-specific insights and a compelling portfolio of solutions to address the
changing business landscape in healthcare, financial services, commercial and
industrial 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 access
to capital for expanding in Core solutions, the pace at which digital
technologies erode the demand for certain Legacy products, 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 Measure 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 operating performance including non-GAAP net income and earnings per
share 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 evaluates the Company`s results, excluding pension loss amortization,
pension settlements, restructuring charges, postretirement plan terminations and
deferred tax valuation allowances. 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.

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 $100 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
and 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Fourth Quarter Y-T-D
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended
Dec 30, 2012 Jan 1, 2012 Dec 30, 2012 Jan 1, 2012

$ 143,550 $ 161,392 TOTAL REVENUE $ 601,988 $ 648,109

99,975 113,589 COST OF SALES 421,586 449,940

43,575 47,803 GROSS MARGIN 180,402 198,169

OPERATING EXPENSES
42,026 51,386 Selling, general and administrative 180,674 206,859
355 67 Pension settlement and postretirement plan amendment 1,338 (19,719 )
933 5,263 Restructuring and other exit costs 4,278 5,198

43,314 56,716 TOTAL OPERATING EXPENSES 186,290 192,338

261 (8,913 ) INCOME (LOSS) FROM OPERATIONS (5,888 ) 5,831

OTHER INCOME (EXPENSE)
(630 ) (692 ) Interest expense (2,689 ) (2,466 )
(10 ) 74 Other income (expense) 39 632
(640 ) (618 ) Total other expense (2,650 ) (1,834 )

(379 ) (9,531 ) (LOSS) INCOME BEFORE INCOME TAXES (8,538 ) 3,997

(170 ) 85,953 Income tax (benefit) expense 534 91,695

$ (209 ) $ (95,484 ) NET LOSS $ (9,072 ) $ (87,698 )

29,232 29,094 Average Number of Shares Outstanding - Basic 29,194 29,049
29,232 29,094 Average Number of Shares Outstanding - Diluted 29,194 29,049

$ (0.01 ) $ (3.28 ) BASIC AND DILUTED LOSS PER SHARE $ (0.31 ) $ (3.02 )

$ - $ 0.05 Dividends per share declared for the period $ 0.05 $ 0.20

MEMO:
$ 5,141 $ 5,925 Depreciation and amortization $ 22,007 $ 21,809
$ 5,773 $ 6,070 Pension loss amortization $ 23,104 $ 24,281

SEGMENT OPERATING RESULTS
(In thousands)
(Unaudited)
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended
Dec 30, 2012 Jan 1, 2012 Dec 30, 2012 Jan 1, 2012
REVENUE
$ 52,535 $ 59,332 Healthcare $ 215,883 $ 236,772
91,015 102,060 Business Solutions 386,105 411,337
$ 143,550 $ 161,392 Total Revenue $ 601,988 $ 648,109

NET (LOSS) INCOME BEFORE TAXES
$ 4,140 $ 2,110 Healthcare $ 12,704 $ 14,475
2,427 (1,326 ) Business Solutions 8,077 3,483
(6,946 ) (10,315 ) Unallocated (29,319 ) (13,961 )
$ (379 ) $ (9,531 ) Total Net (Loss) Income Before Taxes $ (8,538 ) $ 3,997

CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Dec 30, 2012 Jan 1, 2012
ASSETS
Cash and cash equivalents $ 1,012 $ 1,569
Accounts receivable 104,513 113,403
Inventories 44,281 48,822
Other current assets 9,248 9,058
Total current assets 159,054 172,852

Plant and equipment 58,923 73,950
Goodwill and intangible assets 13,389 14,479
Deferred taxes 22,765 23,996
Other assets 5,773 8,584
Total assets $ 259,904 $ 293,861

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities $ 74,832 $ 83,443
Deferred compensation 3,498 5,777
Long-term debt 49,159 60,149
Pension benefit obligation 252,665 236,206
Other long-term liabilities 6,610 7,339
Shareholders' deficit (126,860 ) (99,053 )

Total liabilities and shareholders' deficit $ 259,904 $ 293,861

CONSOLIDATED STATEMENT OF CASHFLOWS
(In thousands)
(Unaudited)
Dec 30, 2012 Jan 1, 2012

Net loss plus non-cash items $ 42,694 $ 32,477
Working Capital 12,452 7,176
Restructuring Payments (8,567 ) (1,227 )
Contributions to qualified pension plan (22,729 ) (25,000 )
Other (5,334 ) (171 )
Net cash provided by operating activities 18,516 13,255

Capital expenditures, net (5,972 ) (14,186 )
Proceeds from sale of equipment 134 1,845
Acquisition, net of cash received - (4,905 )
Net cash used in investing activities (5,838 ) (17,246 )

Net change in borrowings under credit facility (8,760 ) 12,661
Principal payments on long-term debt (2,483 ) (1,721 )
Dividends paid (1,502 ) (5,836 )
Other (613 ) 105
Net cash (used in) provided by financing activities (13,358 ) 5,209

Effect of exchange rate 123 (180 )

Net change in cash $ (557 ) $ 1,038

RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended
Dec 30, 2012 Jan 1, 2012 Dec 30, 2012 Jan 1, 2012
$ (209 ) $ (95,484 ) GAAP Net Loss $ (9,072 ) (87,698 )
Adjustments:
5,773 6,070 Pension loss amortization 23,104 24,281
355 67 Pension settlement and postretirement plan amendment 1,338 (19,719 )
933 5,263 Restructuring charges 4,278 5,198
(2,783 ) (4,501 ) Tax effect of adjustments (at statutory tax rates) (11,319 ) (3,850 )
(75 ) 89,478 Deferred tax valuation allowance 3,910 89,478
$ 3,994 $ 893 Non-GAAP Net Income $ 12,239 $ 7,690

$ (0.01 ) $ (3.28 ) GAAP Loss Per Share $ (0.31 ) $ (3.02 )
Adjustments, net of tax:
0.12 0.12 Pension loss amortization 0.48 0.50
0.01 - Pension settlement and postretirement plan amendment 0.03 (0.41 )
0.02 0.11 Restructuring charges 0.09 0.11
- 3.08 Deferred tax valuation allowance 0.13 3.08
$ 0.14 $ 0.03 Non-GAAP Income Per Share $ 0.42 $ 0.26

GAAP Net Cash Flow $ (557 ) $ 1,038
Adjustments:
Credit facility paid (borrowed) 8,760 (12,661 )
Non-GAAP Net Cash Flow $ 8,203 $ (11,623 )

For Standard Register
Carol Merry, 614-383-1624
carol.merry@fahlgren.com

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