DAYTON, Ohio (AP) — Standard Register Co., which prints and manages business documents, said Monday it is suspending its quarterly dividend and has started a strategic restructuring that will lead to job cuts and an earnings reduction in the fourth quarter and for 2012.
Shares of the Dayton, Ohio, company tumbled more than 12 percent, or 32 cents, to $2.21, while broader indexes fell slightly. Earlier in trading the stock set a 52-week low of $2.18. The stock traded at a year high of $3.58 last April.
The company said its restructuring will lead to the elimination of between 12 percent and 15 percent of its workforce over the next six to nine months. Standard Register said last year in its annual report it had about 2,600 employees.
Costs tied to the restructuring will reduce fourth-quarter earnings by about $5.5 million, or 11 cents per share. Remaining costs will reduce net income in 2012 by about $1.5 million, or 3 cents per share.
Fourth-quarter earnings per share also will take a hit from a noncash accounting charge to tax expense of $70 million to $90 million to establish a valuation allowance against certain deferred tax assets. That will reduce earnings by $2.40 to $3.10 per share, the company said. The allowance has to be recorded when it is more likely than not that a portion of the asset won't be realized.
Based on preliminary estimates, it expects fourth-quarter revenue of $160 million to $162 million, compared with $172.7 million in the 2010 quarter.
"The actions we've announced today will more appropriately align our resources with our revenue expectations and in support of our core solutions business," CEO Joseph P. Morgan Jr. said in a statement.
Standard Register expects the restructuring will save the company $45 million annually.
It will also save $6 million a year by suspending its quarterly dividend of 5 cents. The suspension is required under Ohio law because the company's pension plan no longer has a statutory surplus. Standard Register is posting a noncash actuarial loss of about $80 million because the pension has underperformed assumptions, but the loss will have no effect on 2011 earnings.
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