[October 24, 2014]

Standard Register Reports Third Quarter 2014 Financial Results

Standard Register (NYSE: SR) today announced its financial results for the third quarter of 2014.

The Company reported revenue of $219.4 million and a net loss of $5.6 million or $0.65 per share. The results compare to third quarter 2013 revenue of $199.4 million and a net loss of $23.2 million or $3.92 per share.

Adjusted EBITDA, which excludes certain items as detailed in the attached reconciliation, was $15.5 million compared to $8.5 million for the third quarter of 2013.

Results for the third quarter of 2013 include two months of operations from WorkflowOne, which Standard Register acquired on August 1, 2013.

"We are continuing to see the results from our efforts to increase sales of our entire portfolio of products and solutions, improve margins through consolidation of operations and contain all other costs. The net effect for the quarter was continued improvement in gross margin and Adjusted EBITDA," said Joseph P. Morgan, Jr., President and Chief Executive Officer. "The focused, purposeful investments we have made in growth areas are also producing results, including penetration of our customer base for promotional products, sales of multi-year software subscription solutions in healthcare technology, and double-digit growth in our label production and promotional products storage and distribution operations in Mexico.

"Our expertise in integrating electronic and written communications is adding value across our customer base. Recent business wins are coming on line and contributing to revenue. Today, we are in a stronger position, with improved sales performance, a robust pipeline, and a degree of stabilization in the declining demand for traditional printed forms," Morgan said.

Third Quarter Results
Total revenue increased 10.0 percent to $219.4 million from $199.4 million in the 2013 third quarter. On a pro forma basis, including a full third quarter of WorkflowOne in 2013, revenue declined 5.3 percent from $231.7 million.

Gross margin as a percentage of revenue improved to 28.3 percent in the third quarter of 2014 from 26.9 percent in the prior year. This improvement in gross margin reflects our integration efforts and the reduction of 19 facilities that have been exited since the acquisition of WorkflowOne (including third party logistics sites).

Selling, General and Administrative (SG&A) expenses were $55.5 million for the third quarter of 2014 compared to $54.4 million for the third quarter last year, which included only two months of expenses of WorkflowOne.

As anticipated because of $15.5 million of qualified pension plan contributions and $8.3 million of spending on restructuring and integration, the Company used cash of $10.1 million in the third quarter of 2014 on a net debt basis.

Standard Register operates two business units: Business Solutions and Healthcare.

Business Solutions revenue was $153.7 million for the third quarter of 2014, an increase of 12.6 percent over revenue of $136.5 million in the 2013 third quarter. The additional month in the third quarter of 2014 of business from WorkflowOne and growth in promotional products sales contributed to the increase. Operating income was $1.1 million compared to an operating loss of $1.5 million last year.

Healthcare revenue was $65.7 million, an increase of 4.5 percent over revenue of $62.9 million in the third quarter of 2013. Continued growth in sales of multi-year software subscriptions and the additional month of business from WorkflowOne in the third quarter of 2014 contributed to the increase. Operating income was $5.3 million for the quarter compared to $2.1 million last year.

Third Quarter Highlights

• Improvement in gross margin and Adjusted EBITDA reflects the progress to date in the integration of the WorkflowOne acquisition, including workforce reduction and consolidation of production and warehousing facilities.
• Pension contributions were lowered in 2014 - 16 by $33 million as a result of the Highway and Transportation Funding Act of 2014.
• Signed three-year, multi-million dollar contract with CareSource, one of the nation's largest Managed Medicaid plans in the country, for the management of communication workflows and production of external information.
• The Company obtained approval of its business plan to demonstrate how it will return to compliance with New York Stock exchange listing standards. Standard Register will be required to achieve the minimum continued listing standards at the completion of the prescribed plan period ending on July 9, 2015, unless the listing is reassessed prior to that date.

First Three Quarters Results
Total revenue increased 40.9 percent to $673.2 million and the Company incurred a net loss of $18.5 million or $2.15 per share, compared to revenue of $477.8 million and a net loss of $16.5 million or $2.79 per share for the first three quarters of 2013. On a pro forma basis, including WorkflowOne, revenue for the first three quarters of 2013 was $733.2 million.

Adjusted EBITDA was $44.1 million for the first three quarters of 2014 compared to $29.5 million for the same period last year.

Business Solutions revenue increased 50.8 percent to $478.3 million and compares to $317.2 million for the prior year first three quarters. Healthcare revenue increased 21.4 percent to $194.9 million from $160.6 million for the first three quarters of 2013. Business added from the acquisition contributed to the increase.

Operating profit in both business units increased significantly with Business Solutions at $5.1 million for the first three quarters of 2014 compared to $2.4 million last year and Healthcare reporting $10.1 million in 2014 compared to $6.0 million last year.

Gross margin as a percentage of revenue was 27.9 percent for the first three quarters of 2014 compared to 28.2 percent last year. SG&A expenses were $171.3 million for the first three quarters of 2014 compared to $124.5 million last year. The increase is primarily attributable to the inclusion of WorkflowOne.

Savings achieved in the first three quarters from the restructuring and integration of WorkflowOne are approximately $24.0 million. We expect to realize approximately $40.0 million in annual savings when the integration of the two companies is complete at the end of 2015. We spent $21.3 million on restructuring and integration in the first three quarters of 2014.

The Company used cash of $24.0 million through the first three quarters of 2014 on a net debt basis compared to $6.6 million used last year. Spending in 2014 was primarily for restructuring and integration, capital expenditures and pension contributions.

Capital expenditures, including capital leases, for the first three quarters of 2014 were $19.9 million compared $9.2 million in the same period in 2013. The Company continues to invest in the areas with growth potential, including digital printing, label operations in Mexico, product marking and decorative technology, software development and its SMARTworks® workflow platform.

Standard Register contributed $29.6 million to its qualified pension plan in the first three quarters of 2014 compared to $18.8 million in the first three quarters of 2013. Total pension contributions are expected to be $36.0 million in 2014, $19.2 million in 2015 and $8.7 million in 2016, as announced earlier in this quarter after the passage of the Highway and Transportation Funding Act of 2014.

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, October 24, 2014, to review the third quarter results. The call can be accessed via an audio webcast at http://www.standardregister.com.

About Standard Register
Standard Register (NYSE:SR), is trusted by the world's leading companies to advance their reputations and add value to their operations by aligning communications with corporate brand standards. Providing market-specific insights and a compelling portfolio of workflow, content and analytics solutions to address the changing business landscape in healthcare, financial services, manufacturing, transportation and retail 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 ability to successfully integrate the acquired assets or achieve the expected synergies of the WorkflowOne acquisition, future pension funding requirements and recognition of actuarial gains and losses, access to capital for expanding in our solutions, the pace at which digital technologies and electronic health records (EHR) adoption erode the demand for certain products and services, 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 Measures 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 of operating performance, including Adjusted EBITDA 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 uses Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization and excludes pension benefit cost, restructuring and impairment charges, acquisition and integration expense and certain acquisition fair value and other miscellaneous adjustments, to evaluate the Company's results. 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. The Company's debt covenants are also based on the Adjusted EBITDA calculation.

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 $125 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 equivalents).

A reconciliation of non-GAAP measures to their most comparable measure calculated in accordance with GAAP is included in the tables below.

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