600 Albany Street
Dayton, Ohio 45401
Telephone: (513) 443-1000
Fax: (513) 443-1263
Sales: $767.42 million (1994)
Stock Exchanges: NASDAQ
SICs: 2761 Manifold Business Forms; 2672 Coated & Laminated Paper, Not Elsewhere Classified; 3579 Office Machines, Not Elsewhere Classified
With about ten percent of the $7.3 billion domestic market, the Standard Register Co. is America's second-largest manufacturer of business forms and form-handling devices. The company's emphasis on service has enabled it to carve out a profitable niche in an industry fraught with change, and the company has become as much a service business as a manufacturer. Throughout its more than 80 years in operation, Standard Register's strategy of adopting, adapting, and originating information management processes and products has enabled it to grow and prosper in the face of such challenging technological innovations as automation, computerization, and electronic communication. By the mid-1990s, forms management services generated more than one-third of Standard Register's annual revenues--nearly as much as its traditional lines, including custom continuous forms, unit sets (multi-copy sets of individual forms with or without carbon) and stock forms. The segment upon which the company was founded, document processing equipment, chipped in just over 11 percent.
The Standard Register Co. was founded upon an invention dreamt up by Theodore Schirmer. It was a fairly simple, yet revolutionary adaptation of the autographic register, which had been devised in 1883 by James C. Shoup. Shoup's machine featured two separate rolls of paper--one printed with lines, the other blank--interlayered with carbon paper. When a user wrote on the top document, for example a sales receipt, the machine made a copy for record-keeping. The user turned a crank, thereby propelling the finished set of handwritten records out of the machine and advancing a fresh set to the frame. Although a significant advance over the alternative--writing out copies in longhand--the autographic register's primary drawback was that the layers of carbon and forms often slipped, becoming misaligned.
Schirmer applied the concept of the chain and sprocket to the autographic register. His "standard register" featured a wooden cylinder with sprocket wheels at either end. The pins corresponded to holes punched down the margins of a continuous roll of paper. His idea earned a patent, but Schirmer could not attract enough start-up capital to begin production. In a last-ditch effort to get his idea off the ground, he contacted John Q. Sherman's real estate brokerage in the hopes that Sherman would lend him the necessary funds.
After initially rejecting the idea, Sherman asked Schirmer to build a prototype. Together they refined the machine so that it would produce up to eight copies of a document at a single writing. Keeping the multiple documents aligned allowed all the layers of paper to be pre-printed with lines, check blocks and other organizational formats, thereby vastly increasing their utility.
Convinced that the idea was feasible, John Sherman liquidated his real estate firm and called on business associates, including his brother William C. ("W. C.") Sherman, to contribute the necessary start-up capital. The Standard Register Company was incorporated in 1912 with Thomas Schirmer as president and John Sherman as a director. They founded the business in rented space with some machining equipment and two printing presses bought on credit. Sherman traveled to the west coast to set up sales operations there.
Although the fledgling company's second floor office saved it from the Great Dayton Flood of 1913, the firm nearly went under in a flood of debt and backlogged orders. With Standard Register slipping into receivership, W. C. Sherman began to take an active role in its management. He summoned John back from California, and together they devised a plan to save the business. They borrowed against their own life insurance policies in order to raise enough money to buy out Standard Register's primary investors, including Thomas Schirmer. John assumed the duties of the office of president, and William became vice-president and treasurer. In order to fill past-due orders and revive cash flow, the brothers borrowed to create their own power source, doubled production, and freed the company from receivership within seven months.
Standard Register had entered a market dominated by Moore Corporation, the Canadian company that had founded the business forms industry in the 1880s. Moore and other well-entrenched competitors derided Standard Register's documents as "mutilated," "ventilated," and even "smallpox" forms. Nevertheless, Standard Register's innovative machines and documents gained a following. By 1916, the company had generated enough capital to erect a purpose-built factory.
In the early 1930s, it occurred to John Sherman to apply the pin-feed concept to machine-written documents in order to speed up the process with continuous forms. He designed a cylindrical rubber platen equipped with sprockets at either end that could replace the friction feeder in virtually any business machine. Called a "registrator platen," the invention helped broaden the potential market for Standard Register's specialized forms.
In spite of the Great Depression, Standard Register's annual sales reached about $1 million in 1933 and quintupled to over $5 million by 1938. This rapid growth was fueled in part by international licensing agreements. The company authorized R. L. Crain Limited, a Canadian firm, to produce its patented forms in 1934, and affiliated with W.H. Smith & Son (Alacra) Ltd. in England a year later. William Sherman succeeded his brother John as president upon the latter's death in 1939.
At the outset of America's entry into World War II, Standard Register was stunned to learn that it had been pronounced "nonessential" by the federal government and was slated to be shut down for the duration of the war. However, the government and the military soon discovered that the business forms that Standard Register provided were vital to many operations. In fact, an arsenal actually shut down because of a lack of forms and documents. Standard Register wound up winning awards for its efforts on the home front.
William Sherman served as Standard Register's president until his death in 1944. At that time Milferd A. Spayd, who had joined the company in 1933, advanced to Standard Register's presidency. His ascension coincided with a period of rapid growth for the business forms industry overall and Standard Register in particular. Sales volume nearly quadrupled, from $11.4 million in 1946 to over $43 million in 1956. Postwar growth was fueled by the company's "Paperwork Simplification Program." Developed during World War II, the program emphasized the creation of more efficient record-keeping systems. Paperwork Simplification was a harbinger of the evolution of the business forms industry from strictly manufacturing and marketing forms to selling custom-made information gathering and retrieval systems. It became vital to Standard Register's continued success in the computer age as threats to paper business forms compelled the transformation of the industry.
Standard Register grew rapidly during the 1950s, adding factories in Pennsylvania, California and Arkansas; licensing new overseas affiliates in Cuba, Venezuela and Sweden; and creating distributorships in Peru, Nicaragua, Guatemala and Haiti during this period. The company went public in 1956, but the Sherman family (and by marriage, the Clarks) continued to hold a controlling stake in the company through the early 1990s.
Automation drove the business forms industry's growth in the 1960s. The boom in computers and optical scanners helped make business forms one of America's fastest-growing industries, expanding at twice the rate of the gross national product, from $530 million in 1962 to $1.4 billion in 1972. Standard Register's sales more than quadrupled, from $24.4 million to $107.9 million, during that same period. By 1966, the company had added international affiliates in Australia, Brazil, Finland, France, Ireland, Japan and South Africa. On the domestic front, new factories in Pennsylvania and Vermont added production capacity and increased distribution flexibility. Under the direction of President Kenneth P. Morse beginning in 1966, the Paperwork Simplification Program evolved into a forms management program that not only helped clients slim their record keeping systems, but also helped manage clients' inventory of forms. David Henwood of Prescott, Ball & Turben (Cleveland) would later call Standard's forms management program "the Cadillac of the industry."
The business forms business started to show signs of maturity in the 1970s, when its annual growth rate slowed from double-digit percentages to nine percent and down to four percent by the early 1980s. After having solidly held the number-two spot in the industry for decades, Standard Register slipped to number three in 1973, when rival UARCO Inc. slid past it. Under the leadership of D. F. Whitehead during the 1970s, Standard Register refocused its customer base from the large, but cyclical companies it had traditionally targeted--automotive, steel, and tire companies, for example&mdashø more stable markets like financial, health care, direct mail and service industries. Revenues from health care clients increased from $5 million in 1970 to more than $60 million by 1982. Printing personalized letters and contest forms for the rapidly-growing direct mail segment multiplied from $1 million in 1970 to $32 million by 1982. Serving these new target markets helped Standard Register regain the number-two standing in the business forms industry, as its annual sales nearly tripled from $107 million in 1972 to $319.6 million in 1981.
Its emphasis on service enabled Standard Register to maintain profit margins in spite of an early 1980s recession that shaved competitors' profits. In fact, from 1981 to 1985, the company's profits doubled from $15.4 million to $31.8 million, while revenues only increased by about 27.5 percent, from $319.6 million to $441.05 million. That trend reversed in the latter years of the decade, however, as Standard Register's sales increased by over 60 percent to $708.9 million, while its net income grew at less than half that rate to $40.4 million by 1989. The recessionary period of the late 1980s and early 1990s took its toll on the forms industry, which found itself burdened with over capacity, rising paper prices, weakening demand and intensifying competition. When its profits were nearly halved from 1989 to $21.8 million in 1990, Standard Register was forced to close plants and furlough five percent of its work force.
Notwithstanding the economic slowdown, the company continued to adapt to new technologies, both within its own operations and in its customer-oriented services and products. Internally, Standard Register adopted automated manufacturing resource planning (MRP) software that helped it decrease waste, manage its inventory of over 13,000 items, and generally become more productive. Externally, Standard Register surprised some analysts by adopting electronic data interchange (EDI), an electronic ordering system that was proclaimed an important factor in the long-heralded "paperless office." The company subscribed to an outside EDI network in addition to its own proprietary service, AccuServ. It was a classic example of the firm's adoptive strategy: Brent Rawlins, a specialist at Standard Register, pointed out that the EDI terminals installed at client sites served as "constant reminder[s] to do business with Standard Register." Instead of allowing the new technology to reduce its markets, the company used innovation to its advantage.
Standard Register furthered its efforts in this area through strategic alliances with electronic forms imaging and software firms, combining their longstanding customer relationships with the software companies' document management applications. Partners included Computer Sciences Corp., Saros Corp., and F3 Software Corp. in systems that coordinated ordering, pricing, and design of business forms.
The company also boosted its direct mail operations through the acquisition of rival UARCO Inc.'s 22-year-old direct mail division, Promotional Graphics. Combined with Standard Register's own COMMUNICOLOR Division, the Kansas-based entity expanded the firm's geographic reach westward, added $20 million in annual revenue, and broadened its product offerings.
These various activities helped increase Standard Register's revenues by an aggregate of about seven percent from $716.4 million in 1990 to $767.4 million in 1994. Net income more than doubled from its recession-battered low of $21.8 million to $43.9 million during that same period. While this result established a new record for earnings, it was only eight percent more than 1987's net, when annual revenues stood at only $666.7 million.
John Darragh retired as president and chief executive officer after just over a decade of leading Standard Register and was succeeded by Peter S. Redding. Paul H. Granzow, who had served as chairman since 1984, continued in that capacity through the mid-1990s.
Principal Divisions: Forms Division; Business Equipment and Systems Division; COMMUNICOLOR Division; Advanced Medical Systems (AMS) Division.
Breakey, James, "New Directions for the Forms Industry," The Office, January 1979, p. 169.
"Business-Form Makers Return to Form," Financial World, November 12, 1975, p. 14.
"Business Forms: Riding Computer Boom," Financial World, November 26, 1969, p. 20.
"Electronics: Threat to Paper?" Pulp & Paper, August 1976, p. 17.
Flax, Steven, "Win on Price, Lose on Price," Forbes, November 8, 1982, p. 108.
"Forms Meeting Functions," InformationWeek, 7 August 1995, p. 28.
Gubser, Jay, "Paper Will Not Be the Way of the Future," The Office, January 1979, p. 162.
"Mounting Demand Puts Operations of Standard Register in Top Form," Barron's, November 7, 1966, p. 28.
Olson, Thomas, "Families Fight While Standard Hopes," Cincinnati Business Courier, February 25, 1991, p. 1.
Robbins, Susan, "Business Form Makers Grow at Record Pace," The Commercial and Financial Chronicle, March 10, 1975, p. 1.
Schied, John P., "A Brief History of the Forms Industry," The Office, May 1973, p. 57.
Skolnik, Rayna, "Standard Register Sells in Top Form," Sales & Marketing Management, October 11, 1982, p. 49.
Spayd, M. A., A Business Built on Holes! The Standard Register Company. New York: Newcomen Society in North America, 1957.
------, "A Business Built on Holes in Paper," Industrial Development and Manufacturing Record, April 1960, p. 12.
"Standard Register Acquires UARCO Direct Mail Division," Printing-Impressions, August 1994, p. 5.
Tanzillo, Kevin. "EDI Becomes Standard," Communications News, November 1990, p. 22.
"Watch Out for Big Brother," Forbes, May 1, 1967, p. 44.
Source: International Directory of Company Histories, Vol. 15. St. James Press, 1996.