-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SGBJSJX/LOKNkYJo6Qiw/j1UYEu6SphFAHmjuapxZW2oH204jE1vtKISGxN0MqjQ NFpnst4jNigtd465elijCw== 0000950135-97-003324.txt : 19970812 0000950135-97-003324.hdr.sgml : 19970812 ACCESSION NUMBER: 0000950135-97-003324 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970627 FILED AS OF DATE: 19970811 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: 97655288 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 FORM 10-Q ----------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 27, 1997 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 No.) 44 FRANKLIN STREET 03061-2002 NASHUA, NEW HAMPSHIRE (Zip Code) (Address of principal executive offices) 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, 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. AS OF AUGUST 1, 1997, THE COMPANY HAD 6,630,945 SHARES OF COMMON STOCK, EXCLUDING 24,050 SHARES IN TREASURY, PAR VALUE $1 PER SHARE, OUTSTANDING. -1- 2 NASHUA CORPORATION AND SUBSIDIARIES INDEX
Part I. Financial Information Page No. -------- Item 1. Financial Statements Consolidated Statements of Operations and Retained Earnings Three Months Ended June 27, 1997 and June 28, 1996 3 Consolidated Statements of Operations and Retained Earnings Six Months Ended June 27, 1997 and June 28, 1996 4 Consolidated Balance Sheets June 27, 1997 and December 31, 1996 5 Consolidated Statements of Cash Flows Six Months Ended June 27, 1997 and June 28, 1996 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. Other Information Item 1. Legal Proceedings 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13
-2- 3 PART I. FINANCIAL INFORMATION ITEM 1. NASHUA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (Unaudited) (Dollars in thousands, except per share data)
Three months Three months ended June 27, ended June 28, 1997 1996 -------------- -------------- Net sales $80,487 $103,601 Cost of products sold 58,902 72,964 ------- -------- Gross margin 21,585 30,637 Research, selling, distribution and administrative expenses 22,839 29,992 Restructuring and unusual charges 3,004 7,000 Equity in net income of Cerion Technologies (3) (385) Gain on disposition of Cerion Technologies stock - (31,962) Gain on Cerion Technologies public stock offering - (7,353) Net interest expense (income) (122) 861 ------- -------- 25,718 (1,847) Income (loss) from continuing operations before income taxes (4,133) 32,484 Provision for income taxes (benefit) (2,192) 13,826 ------- -------- Income (loss) from continuing operations (1,941) 18,658 Income from discontinued operation, net of taxes - 318 Gain on disposal of discontinued operation, net of taxes - 8,434 ------- -------- Income (loss) before extraordinary loss (1,941) 27,410 Extraordinary loss on extinguishment of debt, net of tax benefit - (1,257) ------- -------- Net income (loss) (1,941) 26,153 Retained earnings, beginning of period 84,364 59,529 ------- -------- Retained earnings, end of period $82,423 $ 85,682 ======= ======== Earnings (loss) per common and common equivalent share: Income (loss) from continuing operations $ (.30) $ 2.91 Income from discontinued operation: Income from discontinued operation - .05 Gain on disposal of discontinued operation - 1.32 ------- -------- - 1.37 Income (loss) before extraordinary loss (.30) 4.28 Extraordinary loss on extinguishment of debt - (.20) ------- -------- Net income (loss) $ (.30) $ 4.08 ======= ======== Average common and common equivalent shares 6,386 6,411 ======= ========
The accompanying notes are an integral part of these financial statements. -3- 4 NASHUA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (Unaudited) (Dollars in thousands, except per share data)
For the six For the six months ended months ended June 27, 1997 June 28, 1996 ------------- ------------- Net sales $155,663 $205,098 Cost of products sold 115,513 148,261 -------- -------- Gross margin 40,150 56,837 Research, selling, distribution and administrative expenses 43,985 58,756 Restructuring and unusual charges 3,004 7,000 Equity in net income of Cerion Technologies (28) (385) Gain on disposition of Cerion Technologies stock - (31,962) Gain on Cerion Technologies public stock offering - (7,353) Net interest expense (income) (276) 2,278 -------- -------- 46,685 28,334 Income (loss) from continuing operations before income taxes (6,535) 28,503 Provision for income taxes (benefit) (3,201) 12,085 -------- -------- Income (loss) from continuing operations (3,334) 16,418 Income from discontinued operation, net of taxes - 524 Gain on disposal of discontinued operation, net of taxes - 8,434 -------- -------- Income (loss) before extraordinary loss (3,334) 25,376 Extraordinary loss on extinguishment of debt, net of tax benefit - (1,257) -------- -------- Net income (loss) (3,334) 24,119 Retained earnings, beginning of period 85,757 61,563 -------- -------- Retained earnings, end of period $ 82,423 $ 85,682 ======== ======== Earnings (loss) per common and common equivalent share: Income (loss) from continuing operations $ (.52) $ 2.57 Income from discontinued operation: Income from discontinued operation - .08 Gain on disposal of discontinued operation - 1.32 -------- -------- - 1.40 Income (loss) before extraordinary loss (.52) 3.97 Extraordinary loss on extinguishment of debt - (.20) -------- -------- Net income (loss) $ (.52) $ 3.77 ======== ======== Average common and common equivalent shares 6,384 6,397 ======== ========
The accompanying notes are an integral part of these financial statements. -4- 5 NASHUA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
ASSETS June 27, December 31, Current assets: 1997 1996 (Unaudited) ---------- ------------ Cash and cash equivalents $ 10,758 $ 20,018 Accounts receivable 20,022 20,112 Inventories: Materials and supplies 5,385 6,676 Work in process 3,203 2,498 Finished goods 9,368 7,494 -------- -------- Total inventories 17,956 16,668 Other current assets 20,967 15,367 -------- -------- Total current assets 69,703 72,165 -------- -------- Property, plant and equipment, at cost 117,231 118,577 Accumulated depreciation (58,633) (58,459) -------- -------- Net property, plant and equipment 58,598 60,118 -------- -------- Other assets: Intangible assets, net of amortization ($11,332 in 1997 and $10,483 in 1996) 23,384 25,123 Investment in unconsolidated affiliate 7,246 7,218 Other assets 11,785 12,065 -------- -------- Total other assets 42,415 44,406 -------- -------- Total assets $170,716 $176,689 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 662 $ 811 Accounts payable 26,403 22,678 Accrued expenses 23,284 24,880 Income taxes payable 428 2,623 -------- -------- Total current liabilities 50,777 50,992 -------- -------- Long-term debt 1,788 2,044 Other long-term liabilities 20,126 21,736 -------- -------- Total long-term liabilities 21,914 23,780 -------- -------- Stockholders' Equity: Common stock and additional paid-in capital 18,845 18,754 Retained earnings 82,423 85,757 Cumulative translation adjustment (2,486) (1,837) Treasury stock, at cost (757) (757) -------- -------- Total stockholders' equity 98,025 101,917 -------- -------- Commitments and contingencies Total liabilities and stockholders' equity $170,716 $176,689 ======== ========
The accompanying notes are an integral part of these financial statements. -5- 6 NASHUA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
Six months ended Six months ended June 27, 1997 June 28, 1996 ---------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $(3,334) $24,119 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 6,652 9,130 Income from discontinued operation - (524) Extraordinary loss on extinguishment of debt - 1,257 Gain on disposal of discontinued operation - (8,434) Equity in net income of Cerion Technologies (28) (385) Gain on disposition of Cerion Technologies stock - (31,962) Gain on Cerion Technologies public stock offering - (7,353) Restructuring and unusual charges 3,004 7,000 Change in working capital and other, net (10,247) 18,740 ------- ------- Cash provided by (used in) operating activities (3,953) 11,588 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in plant, property and equipment (5,363) (6,723) Retirement of fixed assets 427 - Proceeds from repayment of Cerion Technologies note - 11,142 Proceeds from sale of Cerion Technologies stock, net - 33,080 ------- ------- Cash provided by (used in) investing activities (4,936) 37,499 ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings - 877 Repayment of borrowings (405) (62,984) Proceeds and tax benefits from shares issued under stock option plans 91 12 Purchase and reissuance of treasury stock - (4) Extinguishment of debt - (952) ------- ------- Cash used in financing activities (314) (63,051) ------- ------- Proceeds from the sale of discontinued operation - 28,000 Cash provided by activities of discontinued operations - 554 Effects of exchange rate changes on cash (57) (2) ------- ------- Increase (decrease) in cash and cash equivalents (9,260) 14,588 Cash and cash equivalents at beginning of period 20,018 8,390 ------- ------- Cash and cash equivalents at end of period $10,758 $22,978 ======= ======= Cash paid for interest $ 127 $ 2,405 ======= ======= Cash paid for income taxes $ 2,408 $ 85 ======= =======
The accompanying notes are an integral part of these financial statements. -6- 7 NASHUA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required by Form 10-K. Additional information may be obtained by referring to the Company's Form 10-K for the year ended December 31, 1996. The financial information as of and for the periods ended June 27, 1997 and June 28, 1996 is unaudited and reflects all adjustments which are, in the opinion of management, necessary for fair presentation. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results to be expected for the fiscal year. Earnings Per 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. The average common and common equivalent shares for the quarter ended June 27, 1997 and June 28, 1996 were 6,386,000 and 6,411,000 shares, respectively and the six months ended June 27, 1997 and June 28, 1996 were 6,384,000 and 6,397,000 shares, respectively. In February 1997, the Financial Accounting Standards Board issued "Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128)." This Statement will be effective for both interim and annual periods ending after December 15, 1997. SFAS 128 replaces APB Opinion 15 and related interpretations (APB 15). SFAS 128 simplifies the computation of earnings per share (EPS) by replacing the presentation of primary earnings per share with a presentation of basic EPS. Basic EPS includes no dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings of an entity, similar to fully diluted EPS under APB 15. The Company has recorded net losses for the three and six month periods ended June 27, 1997, therefore, any common stock equivalents would be antidilutive; therefore, earnings per common and common equivalent share as presented on the consolidated statements of operations and retained earnings is equivalent to Basic Earnings per Share and Diluted Earnings per Share under SFAS 128. In June of 1997, the Financial Accounting Standards Board issued "Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130) and No. 131, Disclosures about Segments of an Enterprise and Related Information (SFAS 131)." In accordance with these statements, the Company plans to implement SFAS 130 which requires presentation of certain information related to comprehensive income and SFAS 131 which requires that certain additional information related to operating segments be reported during fiscal year 1998. -7- 8 NASHUA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Stock Options At June 27, 1997, options for 759,780 shares of common stock were outstanding. Stock options for an additional 277,575 shares may be awarded under the Company's 1996 Stock Incentive Plan. Restructuring Charges In the second quarter of 1997, the Company recorded a restructuring and unusual charge of $3 million. Included in this amount are charges of $2.2 million relating to salary and benefit continuation costs recorded in connection with a workforce reduction affecting the Company's Commercial Products Group and the restructuring of certain distribution channels. The remaining $.8 million relates to assets to be sold or discarded and other costs associated with this restructuring effort. Reclassification Beginning in the fourth quarter of 1996, postage expenses relating to prepaid photo mailers, which were treated as selling expenses, have been reclassified to cost of products sold. The costs of products sold and selling expenses for the second quarter of 1996 have been adjusted by $2.5 million and for the first six months of 1996 have been adjusted by $4.6 million to reflect the change. Commitments and Contingencies In respect to patent litigation brought by Ricoh Company, Ltd., the Federal District Court for New Hampshire decided on March 31, 1997 to enjoin the Company from manufacturing, using or selling its NT-50 and NT-6750 toner cartridges in the United States. Sales of these products in 1996 amounted to less than one percent of the Company's total sales. The Court left the subject of damages, if any, to subsequent proceedings. The Company disagrees with the Court's decision to enjoin the Company and has filed a notice of appeal. -8- 9 NASHUA CORPORATION AND SUBSIDIARIES ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations I. RESULTS OF OPERATIONS Sales and operating income (loss) by industry segment are shown in the accompanying table on page 12. THREE MONTHS ENDED JUNE 27, 1997 VERSUS THREE MONTHS ENDED JUNE 28, 1996 In the second quarter of 1997, the Company reported a net loss of $1.9 million ($.30 per share), including a restructuring and unusual charge of $3.0 million, compared to net income of $26.1 million ($4.08 per share) for the second quarter of 1996. Net sales reported decreased 22% to $80.5 million from $103.6 million in the same period a year ago. Excluding sales related to the mainland European photo business and Cerion Technologies Inc. ("Cerion"), the comparable sales decrease was 9% from $88.1 million in the same period a year ago. The pretax loss from continuing operations reported for the second quarter of 1997 was $4.1 million compared to pretax income from continuing operations of $32.5 million a year ago. In the second quarter of 1997 the pretax loss from continuing operations was $1.1 million, excluding the restructuring and unusual charge of $3.0 million, whereas, the pretax loss from continuing operations in second quarter of 1996 was $.2 million, excluding Cerion gains and equity income and restructuring and unusual charges. Results in 1996 included an unusual charge of $7.0 million for the write-down of goodwill related to the Company's mainland European photo business, $39.3 million in gains on the initial public offering of Cerion stock, an $8.4 million after-tax gain on the sale of the Tape Products Division and an extraordinary after-tax charge of $1.3 million associated with prepayment of debt. During the second quarter of 1997, the Company recorded a restructuring and unusual charge of $3.0 million associated with restructuring certain distribution channels and aligning the workforce to current levels of demand principally within the Commercial Products Group. Below are details of the charges related to continuing operations and the activity recorded during the second quarter of 1997.
Balance Current Current Balance March 28, Period Period June 27, (In thousands) 1997 Provision Charges 1997 --------- --------- ------- -------- Provisions for severance related to workforce reductions $ 600 $ 2,208 $ (350) $2,458 Provisions for assets to be sold or discarded 3,210 159 (1,707) 1,662 Other 2,075 637 (930) 1,782 ------ ------- -------- ------ Total $5,885 $ 3,004 $ (2,987) $5,902 ====== ======= ======== ======
The current period provision for workforce reductions includes amounts for salary and benefit continuation for certain employees as part of the Commercial Products Group restructuring. Management anticipates that such actions will be completed within a year and that total estimated savings in personnel and operating costs resulting from the restructuring and unusual charge of $3.0 million will be approximately $5.0 million annually. -9- 10 NASHUA CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) THREE MONTHS ENDED JUNE 27, 1997 VERSUS THREE MONTHS ENDED JUNE 28, 1996 (CONTINUED) The Commercial Products Group's second quarter sales decreased 19% to $43.2 million from $53.1 million during the same quarter a year ago. The sales decrease was primarily related to the Imaging Supplies Division which experienced lower volumes related to lower demand for dry toner, laser printer cartridges and copier paper. The pretax impact of lower sales volumes were partially offset by improvements in productivity and lower manufacturing costs during the quarter. The Photo Group's second quarter sales decreased 13% to $37.3 million from $43.0 million during the same quarter a year ago. Excluding sales from the mainland European photo business which was sold in the fourth quarter of 1996, the Photo Group's sales slightly improved from the same period a year ago. Higher prices in the U.S. and favorable currency effects were partially offset by lower unit volumes. Additionally, higher marketing expenses driven by new product development and marketing initiatives resulted in lower operating income for the second quarter of 1997 compared to the same quarter of 1996, excluding the unusual charge of $7.0 million related to the write-down of goodwill of the mainland European photo business. SIX MONTHS ENDED JUNE 27, 1997 VERSUS SIX MONTHS ENDED JUNE 28, 1996 During the first six months of 1997, the Company reported a net loss of $3.3 million ($.52 per share), including a restructuring and unusual charge of $3.0 million, compared to net income of $24.1 million ($3.77 per share) a year ago. Net sales reported decreased 24% to $155.7 million from $205.1 million in the same period a year ago. Excluding sales related to the mainland European photo business and Cerion, the comparable sales decrease was 9% from $170.7 million in the same period a year ago. The pretax loss from continuing operations reported for the six months was $6.5 million compared to pretax income from continuing operations of $28.5 million in the same period a year ago. In the first six months of 1997 the pretax loss from continuing operations was $3.5 million, excluding the restructuring and unusual charge of $3.0 million, whereas, the pretax loss from continuing operations in the first six months of 1996 was $4.2 million, excluding Cerion gains and equity income and restructuring and unusual charges. Results in 1996 included an unusual charge of $7.0 million for the write-down of goodwill related to the Company's mainland European photo business, $39.3 million in gains on the initial public offering of Cerion stock, an $8.4 million after-tax gain on the sale of the Tape Products Division and an extraordinary after-tax charge of $1.3 million associated with prepayment of debt. During the first six months, the Commercial Products Group's year-to-date sales decreased 17% to $87.7 million from $105.8 million for the same period a year ago. The sales decrease was primarily related to the Imaging Supplies Division which experienced lower volumes which was related to lower demand for dry toner, laser printer cartridges and copier paper. The Commercial Product Group's operating profit, excluding restructuring and unusual charge, increased from an operating loss of $2.8 million in the first six months of 1996 to an operating profit of $1.4 million. The increase was due to improved productivity and lower manufacturing costs. During the first six months, the Photo Group's sales decreased 15% to $68.0 million from $80.0 million for the same period a year ago. On a comparable basis, excluding sales from the mainland European photo business which was sold in the fourth quarter of 1996, sales were slightly higher versus the same period a year ago which was primarily the result of favorable currency effects. The Photo Group's operating loss, excluding restructuring and unusual charge, for the first six months of 1997 decreased to an operating loss of $1 million compared to an operating loss of $0.5 million in the first six months of 1996. The increased operating loss was primarily due to lower volumes and pricing in the U.K. business and higher marketing expenses. The Company's estimated annual effective tax rate for the first six months of 1997 was 49% compared to 42% for the same period a year ago. The estimated annual effective income tax benefit is higher than the U.S. statutory rate primarily due to the unfavorable impact of non-deductible goodwill and state income taxes. -10- 11 NASHUA CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) II. CASH FLOWS AND LIQUIDITY During the first six months of the year, the Company's operations used $4 million of cash compared to cash provided from operations of $11.6 million last year. The change year-to-year is primarily related to a decrease in depreciation and amortization and a use of cash from changes in working capital. Working capital changes are attributed to an increase in inventory of $1.3 million and other current assets of $5.6 million which relates to an income tax benefit and seasonal increases in deferred marketing expenses within the Photo Group. Additionally, income taxes payable decreased $2.2 million which was offset by an increase in accounts payable of $3.7 million. -11- 12 NASHUA CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) (Dollars in millions, except per share amounts) UNAUDITED
Three Months Ended Six Months Ended ------------------ ---------------- 6/27/97 6/28/96 6/27/97 6/28/96 ------- ------- ------- ------- Industry Segment Data - --------------------- Net sales: Commercial Products Group $ 43.2 $ 53.1 $ 87.7 $105.8 Photo Group 37.3 43.0 68.0 80.0 Cerion Technologies - 7.5 - 19.3 ------ ------ ------ ------ Net sales $ 80.5 $103.6 $155.7 $205.1 ====== ====== ====== ====== Operating income (loss): Commercial Products Group (a) $ (2.0) $ (0.1) $ (1.4) $ (2.8) Photo Group (a)(b) 0.1 (6.4) (1.2) (7.5) Cerion Technologies (c) - 41.7 - 44.9 Corporate expense, including interest (2.2) (2.7) (3.9) (6.1) ------ ------ ----- ------ Total operating income (loss) (4.1) 32.5 (6.5) 28.5 Provision for income taxes (benefit) (2.2) 13.8 (3.2) 12.1 ------ ------ ----- ------ Income (loss) from continuing operations (1.9) 18.7 (3.3) 16.4 Income from discontinued operation - 0.3 - 0.6 Gain on disposal of discontinued operation - 8.4 - 8.4 ------ ------ ------ ------ Income (loss) before extraordinary loss (1.9) 27.4 (3.3) 25.4 Extraordinary loss on extinguishment of debt - (1.3) - (1.3) ------ ------ ------ ------ Net income (loss) $ (1.9) $ 26.1 $ (3.3) $ 24.1 ====== ====== ====== ====== Net income (loss) per share $(0.30) $ 4.08 $(0.52) $ 3.77 ====== ====== ====== ======
(a) Operating income for the three and six months ended June 27, 1997 includes restructuring and unusual charges of $2.8 million and $.2 million for Commercial Products Group and Photo Group, respectively. (b) Operating loss for the three and six months ended June 28, 1996 included an unusual charge of $7 million. (c) Operating income for the three and six months ended June 28, 1996 included gains of $32 million from the sale of Cerion Technologies stock and $7.3 million from Nashua's interest in the shares sold by Cerion and income of $.4 million recorded under the equity method of accounting. -12- 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In respect to patent litigation brought by Ricoh Company, Ltd., the Federal District Court for New Hampshire decided on March 31, 1997 to enjoin the Company from manufacturing, using or selling its NT-50 and NT-6750 toner cartridges in the United States. Sales of these products in 1996 amounted to less than one percent of the Company's total sales. The Court left the subject of damages, if any, to subsequent proceedings. The Company disagrees with the Court's decision to enjoin the Company and has filed a notice of appeal. The Company references its first quarter Form 10-Q in respect to a shareholder consolidated amended complaint filed against Cerion, the Company and other named defendants on March 24, 1997 in the Circuit Court in Cook County, Illinois relating to the initial public stock offering of Cerion in May 1996 ("Cerion Litigation"). There were no material developments in the second quarter. ITEM 5. OTHER INFORMATION Factors Which May Affect Future Results This report may contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. When used in this report, the words "believe", "expects", "to be", "anticipates", "should" and similar expressions are intended to identify such forward-looking statements. Any such forward-looking statements and the Company's future results of operations and financial condition are subject to risks and uncertainties which could cause actual results to differ materially from those anticipated and from past results. Such risks and uncertainties include, but are not limited to, fluctuations in customer demand, intensity of competition from other vendors, timing and acceptance of new product introductions, general economic and industry conditions, delays or difficulties in programs designed to increase sales and return the Company to profitability, the possibility of a final award of material damages in the patent litigation brought against the Company by Ricoh Company, Ltd. and the Cerion Litigation and other risks detailed in the Company's filings with the Securities and Exchange Commission. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (b) REPORTS ON FORM 8-K On April 9, 1997, the Company filed a Form 8-K concerning a ruling in the patent litigation suit brought by Ricoh Company, Ltd. -13- 14 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 Date: August 11, 1997 /s/ Daniel M. Junius ---------------------------------------- Daniel M. Junius Vice President-Finance, Chief Financial Officer and Treasurer (principal financial and duly authorized officer) -14- EX-27 2 FINANCIAL DATA SCHEDULE
5 1 US DOLLAR 6-MOS DEC-31-1997 DEC-31-1996 JUN-27-1997 1 10,758 0 20,022 0 17,956 69,703 117,231 58,633 170,716 50,777 0 0 0 18,845 79,180 170,716 155,663 155,663 115,513 162,198 0 0 141 (6,535) (3,201) (3,334) 0 0 0 (3,334) (.52) 0
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