-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, pul70Qik7XbTsoApNCbZvFHlu0rBqv6xNoZpTIG3QmSZXnNeE5Hcui2rarqMFSgr xpuQwHazOxbDZ6Vh147xyQ== 0000950135-95-001174.txt : 19950516 0000950135-95-001174.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950135-95-001174 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NASHUA CORP CENTRAL INDEX KEY: 0000069680 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 020170100 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05492 FILM NUMBER: 95538650 BUSINESS ADDRESS: STREET 1: 44 FRANKLIN ST STREET 2: PO BOX 2002 CITY: NASHUA STATE: NH ZIP: 03061-2002 BUSINESS PHONE: 6038802323 MAIL ADDRESS: STREET 1: 44 FRANKLIN STREET STREET 2: P O BOX 2002 CITY: NASHUA STATE: NH ZIP: 03061-2002 10-Q 1 NASHUA CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1984 For the transition period from __________________ to ___________________ Commission file number 1-5492-1 NASHUA CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 02-0170100 (State of incorporation) (I.R.S. Employer Identification Number) 44 Franklin Street P.O. Box 2002 Nashua, New Hampshire 03061-2002 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (603) 880-2323 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding at May 3, 1995 - ----------------------------- ---------------------------------- Common Stock, par value $1.00 6,373,630 shares (excluding 23,940 shares held in treasury)
2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NASHUA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands)
March 31, 1995 December 31, (Unaudited) 1994 -------------- ------------ ASSETS: Cash and cash equivalents $ 7,625 $ 10,219 Accounts receivable 45,883 40,811 Inventories Materials and supplies 17,243 15,713 Work in process 4,355 4,942 Finished goods 14,455 13,506 -------- -------- 36,053 34,161 Other current assets 24,125 22,971 -------- -------- Total current assets 113,686 108,162 -------- -------- Plant and equipment 139,549 129,590 Accumulated depreciation (61,617) (58,733) -------- -------- 77,932 70,857 Intangible assets 45,231 23,654 Accumulated amortization (6,803) (6,129) -------- -------- 38,428 17,525 Other assets 31,477 31,281 -------- -------- Total assets $261,523 $227,825 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY: Notes and loans payable $ 150 $ 200 Current maturities of long-term debt 475 450 Accounts payable 35,569 27,374 Accrued expenses 23,894 22,107 Income taxes payable 3,727 11,242 -------- -------- Total current liabilities 63,815 61,373 Long-term debt 80,035 49,166 Other long-term liabilities 24,590 24,590 Common stock and additional capital 18,681 18,667 Retained earnings 78,662 79,744 Cumulative translation adjustment (3,499) (4,928) Treasury stock, at cost (761) (787) Commitments and contingencies -------- -------- Total liabilities and shareholders' equity $261,523 $227,825 ======== ========
The accompanying notes are an integral part of the condensed consolidated financial statements. -2- 3 NASHUA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (Unaudited)
Three Months Ended -------------------- March 31, April 1, (In thousands, except per share data) 1995 1994 --------- -------- Net sales $124,325 $112,823 Cost of products sold 95,280 86,672 Research, selling, distribution and administrative expenses 27,699 24,983 Restructuring charges -- 2,600 Interest expense 1,451 478 Interest income (221) (43) -------- -------- Income from continuing operations before income taxes 116 (1,867) Income taxes (benefit) 46 (709) -------- -------- Income (loss) from continuing operations 70 (1,158) Income (loss) from discontinued operations -- (2,295) -------- -------- Net income (loss) 70 (3,453) Retained earnings, beginning of period 79,744 82,166 Dividends (1,152) (1,138) -------- -------- Retained earnings, end of period $ 78,662 $ 77,575 ======== ======== Earnings (loss) per common and common equivalent share: Income (loss) from continuing operations $ .01 $ (.18) Income (loss) from discontinued operations -- (.36) -------- -------- Net income $ .01 $ (.54) ======== ======== Dividends per common share $ .18 $ .18 ======== ========
The accompanying notes are an integral part of the condensed consolidated financial statements. -3- 4 NASHUA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Three Months Ended -------------------- March 31, April 1, 1995 1994 -------- ------- Cash flows from operating activities of continuing operations: Net income (loss) $ 70 $(3,453) Adjustments to reconcile net income (loss) to cash provided by continuing operating activites: Depreciation and amortization 4,300 3,477 Loss from discontinued operations - 2,295 Net change in working capital 1,117 (1,371) -------- ------- Cash provided by continuing operating activities 5,487 948 -------- ------- Cash flows from investing activities of continuing operations: Investment in plant and equipment (4,218) (3,311) Acquisition of business (25,739) - -------- ------- Cash used in investing activities (29,957) (3,311) -------- ------- Cash flows from financing activities of continuing operations: Proceeds from borrowings 32,200 9,900 Repayment of borrowings (1,356) (1,458) Dividends paid (1,152) (1,138) Proceeds and tax benefits from shares issued under stock option plans 14 178 Purchase and reissuance of treasury stock 26 - -------- ------- Cash provided by financing activities 29,732 7,482 -------- ------- Cash applied to activities of discontinued operations (7,944) (4,400) Effect of exchange rate changes on cash 88 (17) -------- ------- Increase (decrease) in cash and cash equivalents (2,594) 702 Cash and cash equivalents at beginning of period 10,219 5,883 -------- ------- Cash and cash equivalents at end of period $ 7,625 $ 6,585 ======== ======= Interest paid $ 3,680 $ 872 ======== ======= Income taxes paid $ 6,053 $ 25 ======== =======
The accompanying notes are an integral part of the condensed consolidated financial statements. -4- 5 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Earnings Per Common and Common Equivalent Share Earnings per common and common equivalent share is computed based on the total of the weighted average number of common shares and, as applicable, the weighted average number of common equivalent shares outstanding during the period.
Common shares outstanding 6,372,953 6,322,513 Common share equivalents 434 30,414
Stock Options At March 31, 1995, options for 403,054 shares of common stock were outstanding. Stock options for an additional 248,740 shares may be awarded under the Company's 1987 Stock Option Plan and stock options for an additional 224,000 shares may be awarded under the Company's 1993 Stock Incentive Plan. Acquisition On January 13, 1995, the Company acquired certain photofinishing operations from Nexus Photo Ltd. The acquisition includes mail-order photofinishing operations in France, Belgium, The Netherlands and Spain, and a wholesale film processing business in Northern Ireland. The following unaudited pro forma data summarize the consolidated results of operations for the periods indicated as if the operations had been combined at the beginning of the periods presented, after giving effect to certain pro forma ajustments. The pro forma data do not purport to be indicative of the results which would actually have been attained if the combination had been in effect for the periods indicated or which may be attained in the future.
Three Months Ended ----------------------- (In thousands, except per share data) March 31, April 1, 1995 1994 --------- --------- Net sales $126,219 $122,149 Income (loss) from continuing operations 253 (1,176) Net income (loss) 253 (3,471) Earnings per common and common equivalent share: Income (loss) from continuing operations $ .04 $ (.19) Net income (loss) $ .04 $ (.55)
Other These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. -5- 6 In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position as of March 31, 1995, the results of operations for the three-month periods ended March 31, 1995 and April 1, 1994, and cash flows for the three-month periods ended March 31, 1995 and April 1, 1994. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales of $124.3 million for the first quarter of 1995 were up 10 percent, with increased revenue in all three groups. The Company generated an after-tax profit of $70,000 from continuing operations during the period compared with a net loss from continuing operations of $1.2 million in the first quarter of 1994. Included in the results of continuing operations for the first quarter of 1994 were pretax charges of $.9 million related to a potential acquisition of a non-U.S. photofinishing business and a restructuring charge of $2.6 million associated with the Company's early retirement program. The Commercial Products Group's first quarter sales increased 6 percent to $83.1 million compared to the first quarter of 1994. Higher sales of labels, toner, copier paper and remanufactured laser printer cartridges were partially offset by lower carbonless and facsimile paper sales. Additionally, price increases were implemented in a number of product areas to offset higher raw materials costs. The group's operating profit increased from $.2 million before restructuring charges in 1994 to $1.1 million in 1995 due primarily to the volume improvements and, to a lesser extent, selected price increases. Net sales increased 16 percent in the Photofinishing Group to $36.4 million compared to the first quarter last year, reflecting the January 1995 acquisition of a mail-order photofinishing business in Europe and a wholesale processing operation in Northern Ireland, as well as weakness in the U.S. dollar versus the British pound. Volume decreased from last year's level in the U.S. and U.K. mail-order businesses, which was only partially offset by higher average prices. Business in both countries was hurt by unfavorable weather, and volume in the U.S. was further affected by aggressive discounting by a mail-order competitor and delayed delivery of promotional mailings due to the large mail volume immediately preceding this year's postage increase. The operating profit for the first quarter of 1995 of $.7 million compared unfavorably to last year by $1.9 million as a result of the lower U.S. and U.K. sales volume, the impact of the U.S. postage increase and the timing of the completion of the European acquisition which occurred after the peak holiday volume period. Precision Technologies recorded net sales of $4.8 million in the first quarter of 1995, a 47 percent increase over 1994, and generated operating income of $.6 million compared to a small operating loss in 1994. The improved sales and operating income reflect increases in both price and volume attributable to Precision Technologies' expanded product offering and the general strength of the disk drive industry. Administrative expenses for the first quarter remained flat compared to the first quarter of 1994, as the inclusion of the European photofinishing businesses offset cost savings in the remaining operations. Selling expenses as a percentage of sales increased due to the inclusion of the acquired photofinishing businesses, which generally have higher selling expenses than the Company's other businesses. Research and development spending in 1995 was consistent with the first quarter of 1994, as the Company continues the increased focus on new product development it began last year. -6- 7 In the fourth quarter of 1993, the Company recorded a restructuring charge of $11.8 million related to the integration and streamlining of the operations of the Commercial Products Group, including workforce reductions, as well as consolidation of facilities and the write-down of certain assets. As part of the restructuring plan, the Company offered certain of its employees an early retirement program and recorded an additional restructuring charge of $2.6 million in the first quarter of 1994. The details of the Company's restructuring reserve remaining at December 31, 1994 and the activity recorded in the first quarter of 1995 are as follows:
Balance Balance Dec. 31, 1995 1995 Mar. 31, (In thousands) 1994 Provision Charges 1995 -------- --------- ------- -------- Provisions related to severance costs $1,550 $ -- $ 685 $ 865 Provisions related to employees not terminated 150 -- 55 95 Provision for assets to be sold or discarded 1,250 -- 480 770 ------ ---- ----- ----- $2,950 $ -- $1,220 $1,730 ====== ==== ====== ======
As of March 31, 1995 substantially all planned employee reductions have taken place, and the remaining accrual represents payments to be made in 1995 to these former employees. The provision for assets to be sold or discarded represents costs associated with holding vacated portions of certain corporate and manufacturing facilities during the period until the property can be sold or otherwise disposed of. There were no material changes during the quarter to the Company's original estimate of the costs associated with the restructuring actions. The estimated annual effective income tax rate of 40.0 percent for the first quarter of 1995 is higher than the U.S. statutory rate primarily due to the unfavorable impact of non-deductible goodwill and state income taxes. Working capital increased $3.1 million to $49.9 million from December 31, 1994. Increases in accounts receivable, inventories and accounts payable from December 31, 1994 are primarily attributable to the acquisition of the European photofinishing business. The Company borrowed $31 million of its $75 million revolving credit facility during the first quarter of 1995, with approximately $25.7 million being used to acquire the European photofinishing businesses, and the remainder to fund tax payments associated with discontinued operations. At March 31, 1995, borrowings under the $75 million revolving credit facility were $64 million. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None. -7- 8 (b) Reports on Form 8-K On January 26, 1995, the Company filed a report on Form 8-K regarding the acquisition of the Continental European and Northern Ireland-based film processing operations of Nexus Photo Limited. On March 28, 1995, the Company filed a report on Form 8-Ka amending its Form 8-K filed January 26, 1995 to include audited financial statements of the businesses acquired and pro forma financial information. -8- 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NASHUA CORPORATION ---------------------------------------- (Registrant) Date: May 12, 1995 By: /s/ W. Luke ---------------------------------------- W. Luke Vice President-Finance (principal financial and duly authorized officer) -9- EX-27 2 FIANCIAL DATA SCHEDULE
5 1,000 U. S. DOLLARS 3-MOS DEC-31-1995 JAN-01-1994 MAR-31-1995 1 7,625 0 45,883 0 36,053 113,686 139,549 61,617 261,523 63,815 80,035 6,398 0 0 86,685 261,523 124,325 124,325 95,280 122,979 0 0 1,451 116 46 70 0 0 0 70 .01 .01
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