NASHUA, NH , a manufacturer and marketer of labels and thermal
specialty papers, today announced financial results for the first
quarter ended March 28, 2008.
Net sales for the first quarter of 2008 were $63.9 million,
compared to $65.2 million for the first quarter of 2007. Gross
margin for the first quarter of 2008 was $9.9 million, or 15.4%,
compared to $11.5 million, or 17.6%, for the first quarter of 2007.
Nashua reported a loss from continuing operations before taxes of
$0.6 million in the first quarter of 2008 compared to income from
continuing operations before taxes of $1.1 million in the first
quarter of 2007. Net loss was $0.4 million, or $0.07 per share, for
the first quarter of 2008, compared to net income of $0.9 million,
or $0.15 per share, for the first quarter of 2007. Earnings from
continuing operations before interest, taxes, depreciation and
amortization (EBITDA) was $0.9 million for the first quarter of
2008, compared to $2.4 million for the first quarter of 2007.
The first quarter of 2007 included income from discontinued
operations of $0.3 million related to the recovery of legal fees
associated with the favorable conclusion of the Cerion
litigation.
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
$26.0 million and gross margin of $3.8 million, or 14.6%, for the
first quarter of 2008. For the first quarter of 2007, net sales
were $28.2 million and gross margin was $5.0 million, or 17.9%.
Sales in the Label Products segment declined $2.2 million, or
7.8%, primarily as a result of lower sales in the automatic
identification product line. The sales shortfall is attributable to
an inventory build up by a major customer in the fourth quarter of
2007. Margins were negatively impacted primarily as a result of the
lower volume.
Nashua's Specialty Paper Products segment, which includes the
paper coating and converting businesses, reported net sales of
$38.6 million and gross margin of $5.9 million, or 15.3%, for the
first quarter of 2008. For the first quarter of 2007, net sales
were $38.0 million and gross margin was $6.3 million, or 16.6%.
Sales in the Specialty Paper Products segment increased 1.6%
mainly due to incremental volume in our thermal product line.
Margins declined primarily due to competitive pricing in the
marketplace.
Thomas Brooker, President and Chief Executive Officer, stated,
"We continue to focus our efforts on increasing sales and
profitability. We are aggressively working on productivity
improvement, waste reduction and cost containment."
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 "should," "will,"
"expects," "anticipates," 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.
NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS
Periods ended March 28, 2008 and March 30, 2007,
respectively
Dollars in thousands, except per share amounts Three Months
(Unaudited) 2008 2007
---------- ----------
Net sales $ 63,926 $ 65,169
Cost of products sold 54,068 53,718
---------- ----------
Gross margin $ 9,858 $ 11,451
Gross margin % 15.4% 17.6%
Selling, distribution and administrative expenses 10,013 10,183
Research and development expenses 186 274
Loss from equity investment 37 71
Interest expense 163 84
Interest income (48) (8)
Change in fair value of interest rate swap 360 36
Other income (1) (264) (285)
---------- ----------
Income (loss) from continuing operations
before income taxes (benefit) (589) 1,096
Income tax provision (benefit) (236) 459
---------- ----------
Income (loss) from continuing operations (353) 637
Income from discontinued operations, net of
Taxes (2) - 289
---------- ----------
Net income (loss) $ (353) $ 926
========== ==========
Earnings per share:
Income (loss) from continuing operations $ (0.07) $ 0.10
Income from discontinued operations - 0.05
---------- ----------
Net income (loss) per common share $ (0.07) $ 0.15
========== ==========
Average common shares 5,396 6,140
========== ==========
Income (loss) per common share from continuing
operations assuming dilution $ (0.07) $ 0.10
Income per common share from discontinued
operations assuming dilution - 0.05
---------- ----------
Net income (loss) per common share assuming
dilution $ (0.07) $ 0.15
========== ==========
Average common and potential common shares 5,396 6,199
========== ==========
(1) Other income for the three months ended March 28, 2008 and March 30,
2007 represents income from the deferred gain from the sale of real
estate and royalty income from the sale of toner formulations.
(2) Income from discontinued operations for the three months ended
March 30, 2007 represents reimbursement of our deductible related to
the Cerion litigation which was dismissed by the courts.
NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 28 December 31
Dollars in thousands 2008 2007
----------- -----------
Assets
Cash and cash equivalents $ 3,740 $ 7,388
Accounts receivable 28,593 29,375
Inventories 22,874 19,998
Other current assets 2,977 2,828
----------- -----------
Total current assets 58,184 59,589
Plant and equipment, net 22,790 23,291
Goodwill, net of amortization 31,516 31,516
Intangibles, net of amortization 306 331
Other assets 13,204 12,975
----------- -----------
Total assets $ 126,000 $ 127,702
=========== ===========
Liabilities and Shareholders' Equity
Accounts payable $ 14,852 $ 14,432
Accrued expenses 6,824 9,185
Current maturities of long-term debt 1,875 1,875
Current maturities of notes payable 31 31
----------- -----------
Total current liabilities 23,582 25,523
Long-term debt 10,925 10,925
Notes payable 13 18
Other long-term liabilities 30,196 29,728
----------- -----------
Total long-term liabilities 41,134 40,671
Common stock and additional capital 20,332 20,203
Retained earnings 59,295 59,648
Accumulated other comprehensive loss:
Minimum pension liability adjustment(a) (18,343) (18,343)
----------- -----------
Total shareholders' equity 61,284 61,508
----------- -----------
Total liabilities and shareholders' equity $ 126,000 $ 127,702
=========== ===========
NASHUA CORPORATION
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
Periods ended March 28, 2008 and March 30, 2007,
respectively Three Months
In thousands (Unaudited) 2008 2007
------- -------
Net income (loss) from continuing operations $ (353) $ 637
Add back:
Interest expense 163 84
Interest income (48) (8)
Change in fair value of interest rate swap 360 36
Income tax provision (benefit) (236) 459
Depreciation and amortization 1,051 1,219
------- -------
Earnings from continuing operations before interest,
taxes, depreciation and amortization $ 937 $ 2,427
======= =======
NASHUA CORPORATION SELECTED FINANCIAL DATA
Periods ended March 28, 2008 and March 30, 2007,
respectively Three Months
Dollars in thousands (Unaudited) 2008 2007
---------- ----------
NET SALES
Label Products $ 26,026 $ 28,219
Specialty Paper Products 38,588 38,037
All Other 1,093 908
Reconciling Items:
Eliminations (1,781) (1,995)
---------- ----------
Net sales $ 63,926 $ 65,169
---------- ----------
Gross Margin
Label Products $ 3,805 $ 5,053
Specialty Paper Products 5,893 6,326
All Other 166 110
Reconciling Items:
Eliminations (6) (38)
Total gross margin from continuing operations 9,858 11,451
---------- ----------
DEPRECIATION AND AMORTIZATION
Label Products $ 467 $ 539
Specialty Paper Products 502 512
Reconciling Item:
Selling, Administrative and Research and
Development 82 168
---------- ----------
Total depreciation and amortization $ 1,051 $ 1,219
---------- ----------
INVESTMENT IN PLANT AND EQUIPMENT
Label Products $ 103 $ 48
Specialty Paper Products 137 192
Reconciling Item:
Selling, Administrative and Research and
Development 285 38
---------- ----------
Total Investment in plant and equipment $ 525 $ 278
---------- ----------
PENSION AND POSTRETIREMENT EXPENSE
Label Products $ 67 $ 100
Specialty Paper Products 48 37
Reconciling Item:
Selling, Administrative and Research and
Development 168 225
---------- ----------
Total pension and postretirement expense $ 283 $ 362
---------- ----------
Contact: Nashua Corporation Tom Brooker 847-318-1797 John
Patenaude 603-880-2145 Rich Coyle Sard Verbinnen 212-687-8080
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