N@N

Nashua Corporation: Nashua Reports First Quarter 2009 Results

^{Published on 2009-05-07 13:36:07, Last Modified on 2009-05-07 13:38:55 - Market Wire}
 

NASHUA, NH--(Marketwire - May 7, 2009) - Nashua Corporation (NASDAQ: [ NSHA ]), a manufacturer and marketer of labels and thermal specialty papers, today announced financial results for the first quarter ended April 3, 2009.

Net sales for the first quarter of 2009 were $62.5 million, compared to $63.9 million for the first quarter of 2008. Gross margin for the first quarter of 2009 was $8.9 million, or 14.2%, compared to $9.9 million, or 15.4%, for the first quarter of 2008. Nashua reported a loss before income taxes of $0.3 million in the first quarter of 2009 compared to a loss before income taxes of $0.6 million in the first quarter of 2008. Net loss was $0.3 million, or $0.06 per share, for the first quarter of 2009, compared to a net loss of $0.4 million, or $0.07 per share, for the first quarter of 2008. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.0 million for the first quarter of 2009, compared to $0.9 million for the first quarter of 2008.

Business Segment Highlights

Nashua's Label Products segment, which prints and converts product for the grocery, food service, retail, transportation, entertainment and general industrial markets, reported net sales of $27.2 million and gross margin of $2.9 million, or 10.6%, for the first quarter of 2009. For the first quarter of 2008, net sales were $26.0 million and gross margin was $3.8 million, or 14.6%.

Sales in the Label Products segment increased 4.5% from the first quarter in 2008. The increase is mainly attributable to increased sales in the automatic identification and pharmacy product lines. Gross margins in the Label Products segment were negatively impacted by employee training, repair and maintenance, and other start-up costs as a result of the consolidation of the Jacksonville, Florida manufacturing operations into the Jefferson City, Tennessee and Omaha, Nebraska plants.

Nashua's Specialty Paper Products segment, which includes the paper coating and converting businesses, reported net sales of $35.8 million and gross margin of $5.4 million, or 15.1%, for the first quarter of 2009. For the first quarter of 2008, net sales were $38.6 million and gross margin was $5.9 million, or 15.3%.

Specialty Paper Products segment sales declined 7.4% from the first quarter of 2008. The decline in the Specialty Paper Products segment sales is primarily attributable to lower sales in the wide format product line, which is mainly used in architectural applications, as a result of softness in the construction industry. Margins in the segment declined as a result of lower volumes.

Thomas Brooker, President and Chief Executive Officer, stated, "We are pleased with the gain in market share and new account development in the Label group. Overall business conditions remain very challenging especially in the retail and construction industries which have led to a decline in our specialty paper group. We have continued to reduce cost in both SG & A and the operational areas of our business. The consolidation in manufacturing and distribution initiated in 2008 should provide more favorable bottom line results during 2009. Our focus remains on increasing profitable sales in both new and existing accounts and productivity improvement throughout the organization."

Use of Non-GAAP Measures

EBITDA is presented as supplemental information that management of Nashua believes may be useful to some investors in evaluating the Company because it is widely used as a measure of evaluating a company's operating performance, as well as to evaluate its operating cash flow. EBITDA is used by management in the computation of ratios utilized for financing purposes and for planning and forecasting in future periods. EBITDA is calculated by adding back net interest expense, income tax expense, depreciation and amortization to net income. EBITDA should not be considered a substitute either for net income, as an indicator of Nashua's operating performance, or for cash flow, as a measure of Nashua's liquidity. In addition, because EBITDA may not be calculated in the same manner by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

About Nashua

Nashua Corporation manufactures and markets a wide variety of specialty imaging products and services to industrial and commercial customers to meet various print application needs. The Company's products include thermal coated papers, pressure-sensitive labels, colored copier papers, bond, point of sale, ATM and wide-format papers, entertainment tickets, as well as toners, developers, and ribbons for use in imaging devices. Additional information about Nashua Corporation can be found at [ www.nashua.com ].

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "will," "expects," and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the Company's future capital needs and resources, fluctuations in customer demand, intensity of competition from other vendors, timing and acceptance of new product introductions, delays or difficulties in programs designed to increase sales and profitability, general economic and industry conditions, and other risks set forth in the Company's filings with the Securities and Exchange Commission, and the information set forth herein should be read in light of such risks. In addition, any forward-looking statements represent the Company's estimates only as of the date of this press release and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if its estimates change.

 First Quarter 2009 Earnings Results NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS Periods ended April 3, 2009 and March 28, 2008, respectively Dollars in thousands, except per share amounts Three Months (Unaudited) 2009 2008 -------- -------- Net sales $ 62,478 $ 63,926 Cost of products sold 53,588 54,068 -------- -------- Gross margin $ 8,890 $ 9,858 Gross margin % 14.2% 15.4% Selling, distribution and administrative expenses 8,986 10,013 Research and development expenses 147 186 (Income) loss from equity investment (2) 37 Interest expense 165 163 Interest income (1) (48) Change in fair value of interest rate swap 121 360 Other income (1) (209) (264) -------- -------- Loss before income tax benefit (317) (589) Income tax benefit - (236) -------- -------- Net loss $ (317) $ (353) ======== ======== Earnings per share: Net loss per common share $ (0.06) $ (0.07) ======== ======== Average common shares 5,314 5,396 ======== ======== (1) Other income for the three months ended April 3, 2009 and March 28, 2008 represents income from the deferred gain from the sale of real estate and royalty income from the sale of toner formulations. NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) April 3 December 31 Dollars in thousands 2009 2008 ----------- ----------- Assets Cash and cash equivalents $ - $ 1,592 Accounts receivable 25,513 27,469 Inventories 21,079 21,785 Other current assets 7,089 5,599 ----------- ----------- Total current assets 53,681 56,445 Plant and equipment, net 19,420 20,154 Goodwill, net of amortization 17,374 17,374 Intangibles, net of amortization 248 260 Other assets 4,444 5,970 ----------- ----------- Total assets $ 95,167 $ 100,203 =========== =========== Liabilities and Shareholders' Equity Accounts payable $ 13,556 $ 11,968 Accrued expenses 7,794 8,900 Borrowings under revolving line of credit 2,575 - Current maturities of long-term debt - 8,125 Current maturities of notes payable 13 18 ----------- ----------- Total current liabilities 23,938 29,011 Long-term debt 2,800 2,800 Other long-term liabilities 46,966 46,879 ----------- ----------- Total long-term liabilities 49,766 49,679 Common stock and additional capital 20,951 20,684 Retained earnings 39,388 39,705 Accumulated other comprehensive loss: Minimum pension liability adjustment (38,876) (38,876) ----------- ----------- Total shareholders’ equity 21,463 21,513 ----------- ----------- Total liabilities and shareholders' equity $ 95,167 $ 100,203 =========== =========== NASHUA CORPORATION RECONCILIATION OF NET INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION Periods ended April 3, 2009 and March 28, 2008, respectively Three Months In thousands (Unaudited) 2009 2008 ------ ------ Net loss $ (317) $ (353) Add back: Interest expense 165 163 Interest income (1) (48) Change in fair value of interest rate swap 121 360 Income tax benefit - (236) Depreciation and amortization 985 1,051 ------ ------ Earnings before interest, taxes, depreciation and amortization $ 953 $ 937 ====== ====== NASHUA CORPORATION SELECTED FINANCIAL DATA Periods ended April 3, 2009 and March 28, 2008, respectively Three Months Dollars in thousands (Unaudited) 2009 2008 -------- -------- NET SALES Label Products $ 27,187 $ 26,026 Specialty Paper Products 35,752 38,588 All Other 1,594 1,093 Reconciling Items: Eliminations (2,055) (1,781) -------- -------- Net sales $ 62,478 $ 63,926 -------- -------- Gross Margin Label Products $ 2,883 $ 3,805 Specialty Paper Products 5,400 5,893 All Other 607 166 Reconciling Items: Eliminations - (6) -------- -------- Total gross margin 8,890 9,858 -------- -------- DEPRECIATION AND AMORTIZATION Label Products $ 396 $ 467 Specialty Paper Products 494 502 Reconciling Item: Selling, Administrative and Research and Development 95 82 -------- -------- Total depreciation and amortization $ 985 $ 1,051 -------- -------- INVESTMENT IN PLANT AND EQUIPMENT Label Products $ 107 $ 103 Specialty Paper Products 132 137 Reconciling Item: Selling, Administrative and Research and Development - 285 -------- -------- Total Investment in plant and equipment $ 239 $ 525 -------- -------- PENSION AND POSTRETIREMENT EXPENSE Label Products $ 58 $ 67 Specialty Paper Products 62 48 Reconciling Item: Selling, Administrative and Research and Development 403 168 -------- -------- Total pension and postretirement expense $ 523 $ 283 -------- --------