.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549



FORM 8-K



CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934




DATE OF REPORT: June 5, 2006

(Date of earliest event reported)




THE STANDARD REGISTER COMPANY

(Exact name of Registrant as specified in its charter)




OHIO

31-0455440

(State or other jurisdiction of

(I.R.S. Employer

Incorporation or organization)

Identification No.)

  
  

600 ALBANY STREET, DAYTON OHIO

45408

(Address of principal executive offices)

(Zip Code)

  
  

(937) 443-1000

(Registrant’s telephone number, including area code)


N/A

(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act





ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

ITEM 2.01  COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On June 5, 2006, The Standard Register Company (the “Company"), the Company’s wholly-owned subsidiary Standard Register Technologies Canada ULC, and Whitehill Technologies, Inc. signed a Share Purchase Agreement (the “Agreement”) and consummated the sale by Standard Register Technologies Canada ULC of 100% of the outstanding capital stock of InSystems Corporation to Whitehill Technologies, Inc. for approximately $8.5 million in cash, plus the return of certain cash deposits of approximately $0.4 million and a receivable of approximately $0.2 million.  The transaction is expected to result in a net loss of approximately $8.2 million that will be recorded in the second quarter of 2006 results of operations.

In conjunction with the sale the Company has undertaken certain lease obligations totaling approximately $1.8 million over three and one-half years.  A copy of the Agreement is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.

Neither the Company nor Standard Register Technologies Canada ULC have a material relationship with Whitehill Technologies, Inc. other than through the agreement set forth above.

ITEM 7.01 REGULATION FD DISCLOSURE

On June 5, 2006, Whitehill Technologies, Inc. and the Company issued a joint press release announcing the signing of the Agreement and the consummation of the sale by Standard Register Technologies Canada ULC of 100% of the outstanding capital stock of InSystems Corporation to Whitehill Technologies, Inc.  A copy of this press release is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS


(b)

Unaudited Pro Forma Financial Information


The following unaudited pro forma condensed consolidated financial statements give effect to the closing of the transactions contemplated by the Agreement.  The unaudited pro forma condensed consolidated balance sheet of the Company as of April 2, 2006 has been prepared as if the Company’s sale of InSystems Corporation had been consummated on April 2, 2006.  The unaudited pro forma condensed consolidated statements of income of the Company for the three months ended April 2, 2006 and for the year ended January 1, 2006 are presented as if the Company’s sale of InSystems Corporation pursuant to the Agreement occurred on January 3, 2005 and the effect was carried forward through the balance of the three-month period ended April 2, 2006.


The unaudited pro forma condensed consolidated financial statements presented below are based upon available information and certain assumptions considered reasonable by management.  The unaudited pro forma condensed consolidated financial statements may be subject to adjustment based on the actual carrying value of net assets sold at the date of closing, among other considerations.   The unaudited pro forma condensed consolidated financial statements do not represent what the Company’s financial position would have been assuming the completion of the Company’s sale of InSystems Corporation pursuant to the Agreement had occurred on April 2, 2006, or what the Company’s results of operations would have been assuming the completion of the Company’s sale of InSystems Corporation, nor do they project the Company’s financial position or results of operations at any future date or for any future period.  


These unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended January 1, 2006 and its quarterly report on Form 10-Q for the quarter ended April 2, 2006 as filed with the Securities and Exchange Commission.





 THE STANDARD REGISTER COMPANY

      

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

      

 AS OF APRIL 2, 2006

      

 (Dollars in thousands)

      
      
 

As

 

Adjustment

  

A S S E T S

Reported

 

for Disposition

 

Pro Forma

      

CURRENT ASSETS

     

  Cash and cash equivalents

 $                2,949

 

 $                 (223)

 (b)

 $              11,654

   

                   8,928

 (a)

 

  Accounts and notes receivable

               127,531

 

                 (2,010)

 (b)

               125,743

   

                      222

 (a)

 

  Inventories

                 46,266

 

                           -

 

                 46,266

  Deferred income taxes

                 15,944

 

                    (776)

 (b)

                 15,168

  Prepaid expense

                 15,338

 

                    (392)

 (b)

                 14,946

      Total current assets

               208,028

 

                   5,749

 

               213,777

      
      

PLANT AND EQUIPMENT

     

  Land

                   2,473

 

                           -

 

                   2,473

  Buildings and improvements

                 68,876

 

                 (1,405)

 (b)

                 67,471

  Machinery and equipment

               217,226

 

                    (967)

 (b)

               216,259

  Office equipment

               168,495

 

                 (1,850)

 (b)

               166,645

  Construction in progress

                   7,321

 

                           -

 

                   7,321

      Total

               464,391

 

                 (4,222)

 

               460,169

    Less accumulated depreciation

               338,733

 

                 (2,968)

 (b)

               335,765

Plant and equipment, net

               125,658

 

                 (1,254)

 

               124,404

      

OTHER ASSETS

     

  Goodwill

                   6,557

 

                           -

 

                   6,557

  Intangible assets, net

                   9,589

 

                 (8,126)

 (b)

                   1,463

  Deferred tax asset

                 83,556

 

                 (2,278)

 (b)

                 81,278

  Software development costs, net

                   7,856

 

                 (7,620)

 (b)

                      236

  Restricted cash

                      880

 

                    (610)

 (b)

                      270

  Other

                 22,213

 

                      (22)

 (b)

                 22,191

      Total other assets

               130,651

 

               (18,656)

 

               111,995

      

      Total assets

 $            464,337

 

 $            (14,161)

 

 $            450,176

      
      

See accompanying notes to unaudited pro forma condensed consolidated financial statements.






 THE STANDARD REGISTER COMPANY

      

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

      

 AS OF APRIL 2, 2006

      

(Dollars in thousands)

      
      
 

As

 

Adjustment

  

LIABILITIES AND SHAREHOLDERS' EQUITY

Reported

 

for Disposition

 

Pro Forma

      

CURRENT LIABILITIES

     

  Current portion of long-term debt

 $               615

 

 $                 -

 

 $          615

  Accounts payable

             33,714

 

             (216)

(b)

        33,498

  Accrued compensation

             19,612

 

             (281)

(b)

        19,331

  Deferred revenue

               3,633

 

          (2,369)

(b)

          1,264

  Accrued restructuring

               2,240

 

               685

(d)

          2,925

  Other current liabilities

             24,275

 

             (754)

(b)

        24,040

 

 

 

               519

(c)

 

      Total current liabilities

             84,089

 

          (2,416)

 

        81,673

      

LONG-TERM LIABILITIES

     

  Long-term debt

             34,232

 

                    -

 

        34,232

  Pension benefit obligation

           110,324

 

                    -

 

      110,324

  Retiree health care obligation

             42,940

 

                    -

 

        42,940

  Deferred compensation

             16,454

 

                    -

 

        16,454

  Other long-term liabilities

                  545

 

             (528)

(b)

               17

      Total long-term liabilities

           204,495

 

             (528)

 

      203,967

      

SHAREHOLDERS' EQUITY

     

  Common stock, $1.00 par value:

     

    Authorized 101,000,000 shares

     

    Issued 2005 - 26,032,701; 2004 - 25,693,001

             26,114

 

                    -

 

        26,114

  Class A stock, $1.00 par value:

     

    Authorized 9,450,000 shares

     

    Issued - 4,725,000

               4,725

 

                    -

 

          4,725

  Capital in excess of par value

             57,761

 

                    -

 

        57,761

  Accumulated other comprehensive losses

         (121,571)

 

          (2,276)

(b)

    (123,847)

  Retained earnings

           258,075

 

          (8,941)

(e)

      249,134

  Treasury stock at cost:

     

     1,923,762 shares

           (49,351)

 

                    -

 

      (49,351)

     Total shareholders' equity

           175,753

 

        (11,217)

 

      164,536

      

     Total liabilities and shareholders' equity

 $        464,337

 

 $     (14,161)

 

 $   450,176

      
      

See accompanying notes to unaudited pro forma condensed consolidated financial statements.






 THE STANDARD REGISTER COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 FOR THE FIRST QUARTER ENDED APRIL 2, 2006

(Dollars in thousands, except per share amounts)

 

As

 

Adjustment

  

 

Reported

 

for Disposition

 

Pro Forma

REVENUE

     

Products

 $     208,108

 

 $             (694)

(f)

 $    207,414

Services

          23,550

 

             (2,341)

(f)

         21,209

    Total revenue

        231,658

 

             (3,035)

 

       228,623

COST OF SALES

     

Products

        134,730

 

                  (26)

(f)

       134,704

Services

          12,914

 

                (865)

(f)

         12,049

Total cost of sales

        147,644

 

                (891)

 

       146,753

GROSS MARGIN

          84,014

 

             (2,144)

 

         81,870

OPERATING EXPENSES

     

Research and development

            3,123

 

                (788)

(f)

           2,335

Selling, general and administrative

          66,145

 

                (993)

(f)

         65,077

   

                  (75)

(g)

 

Depreciation and amortization

            8,812

 

             (1,320)

(f)

           7,492

Asset impairments

            1,694

 

                       -

 

           1,694

Restructuring charges (reversals)

            1,213

 

                (123)

(f)

           1,090

Total operating expenses

          80,987

 

             (3,299)

 

         77,688

INCOME FROM

     

CONTINUING OPERATIONS

            3,027

 

               1,155

 

           4,182

OTHER INCOME (EXPENSE)

     

Interest expense

             (515)

 

                      1

(f)

             (514)

Investment and other income (expense)

                 35

 

                  128

(f)

              163

Total other expense

             (480)

 

                  129

 

             (351)

INCOME FROM CONTINUING

     

OPERATIONS BEFORE INCOME TAXES

            2,547

 

               1,284

 

            3,831

INCOME TAX EXPENSE

            1,126

 

                  402

(f)

           1,528

NET INCOME FROM

     

CONTINUING OPERATIONS

 $         1,421

 

 $               882

 

 $        2,303

BASIC AND DILUTED INCOME FROM CONTINUING

     

OPERATIONS PER SHARE

 $           0.05

 

 $              0.03

 

 $          0.08

WEIGHTED AVERAGE SHARES OUTSTANDING

     

Basic

          28,877

 

             28,877

 

         28,877

Diluted

          28,985

 

             28,985

 

         28,985

      

See accompanying notes to unaudited pro forma condensed consolidated financial statements.






 THE STANDARD REGISTER COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 FOR THE YEAR ENDED JANUARY 1, 2006

 (Dollars in thousands, except per share amounts)

 

As

 

Adjustment

  

 

Reported

 

for Disposition

 

Pro Forma

REVENUE

     

Products

 $     813,940

 

 $          (2,202)

(f)

 $    811,738

Services

          87,975

 

             (8,973)

(f)

         79,002

    Total revenue

        901,915

 

           (11,175)

 

       890,740

COST OF SALES

     

Products

        531,404

 

                (398)

(f)

       531,006

Services

          51,899

 

             (4,246)

(f)

         47,653

Total cost of sales

        583,303

 

             (4,644)

 

       578,659

GROSS MARGIN

        318,612

 

             (6,531)

 

       312,081

OPERATING EXPENSES

     

Research and development

          11,041

 

             (2,548)

(f)

           8,493

Selling, general and administrative

        254,956

 

             (3,952)

(f)

       250,704

   

                (300)

(g)

 

Depreciation and amortization

          39,217

 

             (5,369)

(f)

         33,848

Asset impairments

               303

 

                       -

 

              303

Restructuring charges

            2,266

 

             (1,268)

(f)

              998

Total operating expenses

        307,783

 

           (13,437)

 

       294,346

INCOME FROM CONTINUING OPERATIONS

          10,829

 

               6,906

 

         17,735

OTHER INCOME (EXPENSE)

     

Interest expense

          (2,483)

 

                    18

(f)

          (2,465)

Investment and other income (expense)

               560

 

                  501

(f)

           1,061

Total other expense

          (1,923)

 

                  519

 

          (1,404)

INCOME FROM CONTINUING OPERATIONS

     

BEFORE INCOME TAXES

            8,906

 

               7,425

 

         16,331

INCOME TAX EXPENSE  

            8,057

 

               1,156

(f)

           9,213

NET INCOME FROM CONTINUING OPERATIONS

 $            849

 

 $            6,269

 

 $        7,118

BASIC AND DILUTED INCOME FROM CONTINUING

    

OPERATIONS PER SHARE

 $          0.03

 

 $              0.22

 

 $          0.25

WEIGHTED AVERAGE SHARES OUTSTANDING

     

Basic

         28,738

 

             28,738

 

         28,738

Diluted

         28,766

 

             28,766

 

         28,766

      

See accompanying notes to unaudited pro forma condensed consolidated financial statements.




NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

  

BALANCE SHEET

  

(a)

To reflect $8,500 in cash proceeds plus the return of certain cash deposits of approximately $428 and a receivable of approximately $222 received in consideration for the sale of InSystems Corporation.

  

(b)

To eliminate the assets and liabilities of the disposed business.

  

(c)

To reflect the accrual of estimated transaction costs.

  

(d)

To reflect the additional accrual of $685 for certain lease obligations undertaken in conjunction with the sale of InSystems Corporation.

  

(e)

To reflect the estimated after-tax loss on the sale of 100% of the outstanding capital stock of InSystems Corporation.

  
  

STATEMENT OF INCOME

  

(f)

To reflect the adjustment required to eliminate the results of operations of InSystems Corporation for the period indicated.

  

(g)

To remove InSystems' executive salaries recorded and paid by the parent company.

  

The unaudited pro forma condensed consolidated statements of income for the three months ended April 2, 2006 and for the year ended January 1, 2006 do not reflect the estimated loss of $8,235 on the sale of InSystems Corporation that will be recorded in the second quarter 2006 results of operations.



The following exhibits are filed with this Current Report on Form 8-K:


(d)

Exhibits.


Exhibit No.

 Description

99.1

Share Purchase Agreement dated June 5, 2006 between The Standard Register Company and Whitehill Technologies, Inc.

99.2

Press Release, dated June 5, 2006






SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



REGISTRANT

THE STANDARD REGISTER COMPANY



Date:  June 9, 2006

/s/ KATHRYN A. LAMME

By:       Kathryn A. Lamme

Senior Vice President, General Counsel &

Secretary