8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 27, 2006

NASHUA CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction
of incorporation) 1-05492
(Commission File Number) 02-0170100
(IRS Employer
Identification No.)

11 Trafalgar Square, Suite 201
Nashua, New Hampshire 03063
(Address of principal executive offices and zip code)

(603)880-2323
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02 — Results of Operations and Financial Condition
	Item 9.01 — Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99.1 Press Release dated, 4/27/06

Item 2.02 — Results of Operations and Financial Condition

     On April 27, 2006, Nashua Corporation announced its financial results for the first quarter ended March 31, 2006. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

     The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 — Financial Statements and Exhibits

(d)	Exhibits
	The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

Exhibit
Number	Description
99.1	Press Release — “Nashua Reports First Quarter 2006 Results” dated April 27, 2006

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 hereunto duly authorized.

	NASHUA CORPORATION
Date: April 28, 2006	By:	/s/ John L. Patenaude
		John L. Patenaude
		Vice President-Finance, Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release — “Nashua Reports First Quarter 2006 Results” dated April 27, 2006

EX-99.1

Exhibit 99.1

Contact:	Andy Albert/John Patenaude	Rich Coyle
	Nashua Corporation	Citigate Sard Verbinnen
	847-318-1710/603-880-2145	212-687-8080

NASHUA REPORTS FIRST QUARTER 2006 RESULTS

NASHUA, N.H., April 27, 2006 — Nashua Corporation (NASDAQ: NSHA), a manufacturer and marketer of labels and thermal specialty papers, today announced financial results for the first quarter ended March 31, 2006.

Net sales for the first quarter of 2006 were $64.8 million, compared to $67.6 million for the first quarter of 2005. Gross margin for the first quarter of 2006 was $9.8 million, or 15.1%, compared to $10.4 million, or 15.5%, for the first quarter of 2005. Nashua reported a pre-tax loss from continuing operations of $0.9 million in the first quarter of 2006 compared to a pre-tax loss from continuing operations of $0.7 million in the first quarter of 2005. The net loss from continuing operations was $0.6 million, or $0.09 per share, for the first quarter of 2006, compared to a net loss of $0.4 million, or $0.07 per share, for the first quarter of 2005. Net income from discontinued operations was $1.0 million for the first quarter of 2006 compared to a net loss of $1.2 million for the first quarter of 2005. Net income for the first quarter of 2006 was $0.4 million, or $0.07 per share, compared to a net loss $1.6 million, or $0.27 per share, for the first quarter of 2005.

Pre-tax income from continuing operations in the first quarter of 2006 included severance cost of $0.7 million. The severance was comprised of personnel reductions due to the Label Products segment plant consolidation project, exit of the coated carbonless product line and a reduction in workforce in the dot matrix ribbon distribution product line in the Specialty Paper Products segment. In addition, the first quarter results reflect incremental pension cost of $0.5 million related to the application of a lower discount rate (5.5%) and updated mortality tables in the computation of pension expense as of December 31, 2005, as prescribed under accounting guidelines. Pre-tax income from continuing operations for the first quarter of 2005 included a $0.6 million charge for severance related to corporate and Specialty Paper Products segment headcount reductions.

Discontinued operations net income of $1.0 million in the first quarter of 2006 included $0.7 million of income from the toner and developer business operations and asset sale, and a gain of $0.3 million related to the liquidation of an inactive foreign subsidiary. Discontinued operations for the first quarter of 2005 included the loss of $1.2 million from operations of the toner and developer business, including severance and pension curtailment cost associated with the exit of the business.

Andrew Albert, Chairman, President and Chief Executive Officer of Nashua Corporation said, “While we continue to make good progress aligning our business with demand and with our program to generate cash, top line growth and margin improvement in the Label and Specialty Paper segments did not meet our expectations. Margins, while relatively flat on a percentage basis, were also negatively impacted by the severance and pension expenses. Management is focused on top line sales momentum and margin improvement as the critical operating objectives for the remainder of 2006.”

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Albert continued, “Nashua’s strategy to exit lower margin or mature businesses on a cash-generating basis is on target. We ceased the manufacture of toner and developer in March 2006, have sold certain intellectual property and fixed assets to Katun Corporation and expect to complete the sale of the remaining machinery and equipment in the second quarter. Excluding future royalties from intellectual property, the toner liquidation should net between $4 million and $5 million. The Nashua real estate is under contract for $2 million and is expected to close in 2006, and the 43-acre, two-building Merrimack campus and Omaha real estate are being actively marketed.”

Business Segment Highlights

Nashua’s Label segment, which prints and converts product for the grocery, food service, retail, transportation, entertainment and general industrial markets, reported net sales for the first quarter of 2006 of $26.3 million, gross margin of $3.4 million, or 12.8%, and pre-tax income of $0.5 million. Net sales for the first quarter of 2005 were $26.3 million, gross margin was $3.7 million, or 14.1%, and pre-tax income was $1.2 million.

Albert stated, “Sales in the Label Products segment were flat year over year. Margins were negatively impacted by severance, plant shut down costs related to the plant consolidation project and by incremental pension cost, which in the aggregate totaled more than $500,000.

“As part of our overall plan to streamline operations and enhance customer service, we announced a plan to close our St. Louis plant by mid-summer, and consolidate Label Products manufacturing in Tennessee, Nebraska and Florida. As part of this plan, we recently executed a five-year lease for a 42,000 square-foot facility in Jacksonville, Florida, which will replace our existing facility in St. Augustine, Florida. We believe our three-facility Label Product manufacturing operation will provide the flexibility and efficiency needed to respond to the growth opportunities we see for our label business. In addition, we expect that our plant consolidation project will achieve savings of more than $1 million in 2007.”

Nashua’s Specialty Paper segment, which includes the paper coating and converting businesses, is the Company’s largest business segment. The Specialty Paper Products segment reported net sales for the first quarter of 2006 of $39.3 million, gross margin of $6.3 million, or 16.0%, and pre-tax income of $0.5 million. Net sales in the first quarter of 2005 were $42.2 million, gross margin was $6.7 million or 15.8%, and pre-tax income was $0.2 million.

Albert stated, “Sales in the Specialty Paper segment declined due to lower thermal label face-sheet products and point of sale products. Sales and margins were also negatively impacted by the exit of the coated carbonless product line, as well as by incremental pension cost, which together totaled over $425,000. While sales were slightly lower than a year ago, margins in the converting portion of the Specialty Paper Products segment outperformed last year’s results on a percentage basis, and helped increase margins for the entire segment.

“We continue to deliver growth in the wide format product line in this segment, and expect to expand our manufacturing operations by the beginning of the third quarter,” said Albert. “In addition, we are introducing an expanded color graphics line during the second quarter that will enhance our value added offering in a growth segment of the wide format market.”

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Mr. Albert continued, “As we announced on March 15, Tom Brooker will join Nashua as CEO and President on May 4. Tom is an outstanding executive whose 25 years of direct experience enables him to know our industry extremely well. In particular, his expertise in sales and marketing will help Nashua leverage the significant progress that’s been made in recent years to make the Company leaner, more focused and better positioned to pursue higher-margin business opportunities. I’m looking forward to Tom joining the great Nashua team and to working with him in my capacity as Chairman.”

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 identically 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, including earnings, revenue and profitability projections. 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, the impairment of goodwill, the settlement of various tax issues, 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 2006 Earnings Results

NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS

	(Unaudited)
Periods ended March 31 and April 1, respectively	Three Months
In thousands, except per share amounts	2006			2005
Net sales	$	64,811		$	67,646
Cost of products sold		55,023			57,198
Gross margin	$	9,788		$	10,448
Gross margin %		15.1	%		15.5	%
Selling, distribution and administrative expenses		10,576			10,781
Research and development expenses		201			237
Loss from equity investment		14			—
Interest expense, net		307			409
Other income (2)		(362	)		(292	)
Loss from continuing operations before income taxes		(948	)		(687	)
Income tax benefit		385			265
Loss from continuing operations		(563	)		(422	)
Income (loss) from discontinued operations, net of taxes(1)		1,004			(1,198	)
Net income (loss)	$	441		$	(1,620	)
Earnings per share:
Loss from continuing operations	$	(0.09	)	$	(0.07	)
Income (loss) from discontinued operations		0.16			(0.20	)
Net income (loss) per common share	$	0.07		$	(0.27	)
Average common shares		6,123			6,079
Loss per common share from continuing operations assuming dilution	$	(0.09	)	$	(0.07	)
Income (loss) per common share from discontinued operations assuming dilution		0.16			(0.20	)
Net income (loss) per common share assuming dilution	$	0.07		$	(0.27	)
Average common and potential common shares		6,123			6,079

⁽¹⁾ Income from discontinued operations for the three months ended March 31, 2006 includes the results of our Toner and Developer business which we exited effective March 31, 2006 and income from the liquidation of our Photo UK entity, Loss from discontinued operations for the three months ended April 1, 2005 represents the results of our Toner & Developer business.

⁽²⁾ Other income for the three months ended March 31, 2006 and April 1, 2005 represents income from the rental of unused warehouse space at our New Hampshire facilities.

First Quarter 2006 Earnings Results

NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	March 31			December 31
Dollars in thousands	2006			2005
Assets
Cash and cash equivalents	$	720		$	653
Accounts receivable		32,118			33,922
Inventories		22,319			22,284
Other current assets		3,650			2,980
Total current assets		58,807			59,839
Plant and equipment, net		33,337			36,462
Assets held for sale		754			—
Goodwill, net of amortization		31,516			31,516
Intangibles, net of amortization		1,659			1,773
Other assets		16,415			15,329
Total assets	$	142,488		$	144,919
Liabilities and Shareholders’ Equity
Accounts payable	$	14,762		$	14,992
Accrued expenses		8,424			8,965
Current maturities of long-term debt		—			3,500
Current maturities of notes payable		83			333
Total current liabilities		23,269			27,790
Long-term debt		26,350			25,250
Notes payable		348			368
Other long-term liabilities		38,300			37,777
Total long-term liabilities		64,998			63,395
Common stock and additional capital		22,069			22,023
Retained earnings		58,301			57,860
Accumulated other comprehensive loss:
Minimum pension liability adjustment(a)		(26,149	)		(26,149	)
Total shareholders’ equity		54,221			53,734
Total liabilities and shareholders’ equity	$	142,488		$	144,919

^(a) Our minimum pension liability adjustment represents an increase in our minimum pension liability resulting from a decline in the fair market values of equities held by company-sponsored pension plans.

First Quarter 2006 Earnings Results

NASHUA CORPORATION
RECONCILIATION OF NET LOSS FROM CONTINUING OPERATIONS TO EARNINGS FROM CONTINUING OPERATIONS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION

	(Unaudited)
Periods ended March 31 and April 1, respectively	Three Months
In thousands	2006			2005
Loss from continuing operations	$	(563	)	$	(422	)
Add back:
Interest expense, net		307			409
Income tax benefit		(385	)		(265	)
Depreciation on fixed assets		1,407			1,594
Amortization of intangible assets		163			114
Earnings from continuing operations before interest, taxes, depreciation and amortization	$	929		$	1,430

First Quarter 2006 Earnings Results

NASHUA CORPORATION SELECTED FINANCIAL DATA FROM
CONTINUING OPERATIONS

Periods ended March 31 and April 1, respectively	Three Months
Dollars in thousands (Unaudited)	2006			2005
NET SALES
Label Products	$	26,282		$	26,328
Specialty Paper Products		39,287			42,226
All Other		661			343
Reconciling Items:
Eliminations		(1,419	)		(1,251	)
Net sales	$	64,811		$	67,646
PRETAX LOSS
Label Products	$	473		$	1,163
Specialty Paper Products		543			239
All Other		137			37
Reconciling Items:
Unallocated corporate expenses		(1,794	)		(1,717	)
Interest expense, net		(307	)		(409	)
Total pretax loss	$	(948	)	$	(687	)
DEPRECIATION AND AMORTIZATION
Label Products	$	717		$	659
Specialty Paper Products		757			934
Reconciling Item:
Corporate		96			115
Total depreciation and amortization	$	1,570		$	1,708
INVESTMENT IN PLANT AND EQUIPMENT
Label Products	$	180		$	485
Specialty Paper Products		474			971
Reconciling Item:
Corporate		12			17
Total investment in plant and equipment	$	666		$	1,473
PENSION EXPENSE
Label Products	$	352		$	161
Specialty Paper Products		243			138
Reconciling Item:
Corporate		222			45
Total pension expense	$	817		$	344