The Standard Register Company says layoffs will not hurt positive indicators
Executives of the print products maker The Standard Register Company (NYSE: SR) said during a morning conference call that the company’s $40 million cost cutting plan will not significantly damage positive indicators reported in the first quarter. During the first three months of the year ended April 1, the company’s print-on-demand business was up 7.6% over last year, document systems was up 16.7% and other operating segments rose 11.4%.
“These restructuring and cost plans sometimes lead to all kinds of speculation and we wanted to clear that up before we got to the [earnings] call later this week,” CEO Dennis Rediker said during the call.
On Friday, the Dayton, Ohio company announced it is firing 250 employees, which will represent $22 million annually in expenses. Standard Register said the eliminated employees were primarily in management and overhead positions, with 70 jobs in the Dayton area.
Standard Register employs approximately 3,500 workers at 24 warehouses and 32 plants nationwide. Earlier in the year, the company announced it is consolidating its manufacturing and warehousing operations. The consolidation is expected to save the company $5 million annually, according to a statement.
Rediker said the cost cutting – and subsequent lower debt - does not mean there will be a significant buyback of shares.
“We still have the same philosophy as we had before. This is about getting our operations earnings up and getting our cash flow where it needs to be,” he said.
He also agreed with an analyst who said that the layoffs “should not compromise the things that have been going well for Standard Register.”
Standard Register releases its second quarter results this Friday.
In today’s trading, shares of the small-cap company are up $1.26, or 10.48%, at $13.28. Over the last 52 weeks, shares have ranged between $11.01 and $16.
