Consolidated gross margin as a percent of revenue was 30.3 percent in the first half of 2012 compared to 31.7 percent for the same period in 2011. Decreases in sales of legacy forms was the major component of the margin decline. SG&A expense declined 8% in the first half of 2012, to $95.6 million from $104.3 million in the prior year. SG&A expense in 2011 includes a credit of $2.1 million from amortization of prior credits related to the termination of the postretirement healthcare benefits plan.
Capital Expenditures, Restructuring Plan and Pension Contribution
Capital expenditures for the full year of 2012 are expected to be $9 million to $11 million. Through the first half of 2012, capital expenditures were $1.2 million. During the second half of 2012, the Company expects investment to be focused on supporting core solutions growth and increasing efficiencies with management reporting systems and customer service and support.
In January 2012, the Company announced a strategic restructuring plan expected to result in an estimated $45 million in annual savings. The Company has identified additional savings initiatives and currently expects savings of approximately $60 million by the end of 2013. Costs associated with the restructuring program are expected to be approximately $11.5 million by the end of 2013.
Standard Register originally expected to make contributions to the Company’s qualified pension plan of approximately $27 million in 2012 and in the first half of the year has contributed $13.5 million. Based on provisions of the highway reauthorization legislation signed into law in July, the Company has updated pension funding expectations for 2012 through 2014. Previously, pension plan contributions for 2012 through 2014 were expected to total $112 million. With relief provided by the Moving Ahead for Progress in the 21st Century Act (MAPS-21), commonly called the highway bill, the total contribution for the same period is expected to be lowered by $17 million to $95 million. Currently, the Company expects contributions to total $23 million in 2012, $30 million in 2013 and $42 million in 2014.