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
-------- --------
Contact: Tom Brooker/John Patenaude Nashua Corporation
847-318-1797/603-880-2145 Rich Coyle Sard Verbinnen
212-687-8080
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