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): November 1, 2007

NASHUA CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	1-05492	02-0170100
(State or other jurisdiction of incorporation)	(Commission File Number)	(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))

Item 2.02 — Results of Operations and Financial Condition

     On November 1, 2007, Nashua Corporation announced its financial results for the third quarter ended September 28, 2007. 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 Third Quarter 2007 Results” dated November 1, 2007

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: November 2, 2007	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 Third Quarter 2007 Results” dated November 1, 2007

EX-99.1

Exhibit 99.1

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

NASHUA REPORTS THIRD QUARTER 2007 RESULTS

     NASHUA, N.H., November 1, 2007 — Nashua Corporation (NASDAQ: NSHA), a manufacturer and marketer of labels, thermal specialty papers and imaging products, today announced financial results for the third quarter ended September 28, 2007.

     Net sales for the third quarter of 2007 were $67.6 million, compared to $69.5 million for the third quarter of 2006. Gross margin for the third quarter of 2007 was $11.6 million, or 17.1%, compared to $10.7 million, or 15.4%, for the third quarter of 2006. Income from continuing operations before income taxes for the third quarter of 2007 was $1.3 million compared to a loss from continuing operations before taxes of $1.8 million for the third quarter of 2006. Income from continuing operations for the third quarter of 2007 was $0.9 million, or $0.16 per share, compared to a loss from continuing operations of $1.2 million, or $0.20 per share, in the third quarter of 2006. Net income for the third quarter of 2007 was $0.9 million, or $0.16 per share, compared to net loss of $1.2 million, or $0.19 per share, in the third quarter of 2006. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were $2.8 million for the third quarter of 2007, compared to $0.3 million for the third quarter of 2006.

     The results for the third quarter of 2006 included a curtailment loss of $939,000 related to the freezing of pension benefits for certain hourly employees which was partially offset by a curtailment gain of $206,000 associated with the cessation of postretirement benefits for the same active hourly employees. The results for the third quarter of 2006 also included severance charges of $740,000. Nashua did not record any curtailment losses or gains or severance charges during the third quarter of 2007

     Net sales for the nine months ended September 28, 2007 were $200.5 million, compared to $199.8 million for the nine months ended September 29, 2006. Gross margin for the nine months ended September 28, 2007 was $35.3 million, or 17.6%, compared to $30.0 million, or 15.0%, for the nine months ended September 29, 2006. Income from continuing operations before income taxes for the nine months ended September 28, 2007 was $4.5 million, compared to a loss from continuing operations before income taxes of $4.4 million for the nine months ended September 29, 2006. Income from continuing operations for the first nine months of 2007 was $2.7 million, or $0.47 per share, compared to loss from continuing operations of $2.8 million, or $0.45 per share, in the first nine months of 2006. Net income for the nine months ended September 28, 2007 was $3.0 million, or $0.52 per share, compared to a net loss of $1.7 million, or $0.28 per share, for the nine months ended September 29, 2006. EBITDA from continuing operations was $8.5 million for the nine months ended September 28, 2007, compared to $1.4 million for the same period in 2006.

     Commenting on the results for the quarter, Tom Brooker, President and Chief Executive Officer, stated, “While sales decreased slightly in the third quarter, we were successful in increasing gross margin dollars and percentages, largely through decreases in manufacturing cost. Net income improved as a result of our increased margins and continued focus on expense control. Sales on a year-to-date basis increased slightly while margins and net income increased substantially due to cost improvements and continued expense control. We will focus both on increasing sales revenue and expense control as we work to improve performance.”

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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 for the third quarter of 2007 of $27.8 million and gross margin of $5.0 million, or 17.9%. Net sales for the third quarter of 2006 were $28.2 million and gross margin was $4.7 million, or 16.5%.

     Sales in the Label segment decreased slightly on a quarter-to-quarter basis as declines in the retail shelf and supermarket scale product lines were partially offset by increases in our automatic identification and pharmacy product lines. Margins increased in the quarter due to lower manufacturing cost and the pass-through of price increases to customers.

     The Company’s Specialty Paper Products segment, which includes the paper coating and converting businesses, reported net sales in the third quarter of 2007 of $40.4 million and gross margin of $6.4 million, or 15.9%. Net sales in the third quarter of 2006 were $41.5 million and gross margin was $6.1 million, or 14.6%.

     Sales in the Specialty Paper segment decreased 2.9% primarily due to lower sales in our ribbons, laser, financial and IBM-branded product lines which were partially offset by increases in our thermal point of sale, thermal facesheet, and ticket and tag product lines. While margin dollars decreased due to the lower volume, margin percentage increased due to lower manufacturing costs and costs for certain raw materials together with a stronger mix of higher-margin products.

Use of Non-GAAP Measures

     EBITDA is presented as supplemental information that management of Nashua Corporation 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 net interest expense, income tax expense, depreciation and amortization back into 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 all companies may not calculate EBITDA in exactly the same manner, 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, bond, point of sale, ATM and wide format papers, entertainment tickets, 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,” “expects” “will,” “plans,” 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

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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 resolution of certain litigation matters 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.

Third Quarter 2007 Earnings Results

NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS

Periods ended September 28 and September 29, respectively	Three Months						Nine Months
Dollars in thousands, except per share amounts (Unaudited)	2007			2006			2007			2006
Net sales	$	67,610		$	69,487		$	200,467		$	199,756
Cost of products sold		56,046			58,772			165,156			169,795
Gross margin	$	11,564		$	10,715		$	35,311		$	29,961
Gross margin %		17.1	%		15.4	%		17.6	%		15.0	%
Selling, distribution and administrative expenses		9,959			11,281			30,397			32,597
Research and development expenses		174			128			619			522
Loss from equity investment		29			71			169			190
Interest expense, net		372			620			520			1,221
Net loss on curtailment of postretirement plans		—			733			—			733
Other income (1)		(297	)		(286	)		(912	)		(944	)
Income (loss) from cont ops before income taxes (benefit)		1,327			(1,832	)		4,518			(4,358	)
Income tax provision (benefit)		475			(619	)		1,777			(1,600	)
Income (loss) from continuing operations		852			(1,213	)		2,741			(2,758	)
Income from discontinued operations, net of taxes(2)		—			54			289			1,058
Net income (loss)	$	852		$	(1,159	)	$	3,030		$	(1,700	)
Earnings per share:
Income (loss) from continuing operations	$	0.16		$	(0.20	)	$	0.47		$	(0.45	)
Income from discontinued operations		—			0.01			0.05			0.17
Net income (loss) per common share	$	0.16		$	(0.19	)	$	0.52		$	(0.28	)
Average common shares		5,386			6,146			5,864			6,133
Income (loss) per common share from continuing operations assuming dilution	$	0.16		$	(0.20	)	$	0.46		$	(0.45	)
Income per common share from discontinued operations assuming dilution		—			0.01			0.05			0.17
Net income (loss) per common share assuming dilution	$	0.16		$	(0.19	)	$	0.51		$	(0.28	)
Average common and potential common shares		5,465			6,146			5,934			6,133

(1)

Other income for the three and nine months ended September 28, 2007 represents income from the deferred gain from the sale of real estate and royalty income related to the 2006 sale of toner formulations. Other income for the three and nine months ended September 29, 2006 represents income from the rental of unused warehouse space at our New Hampshire facilities.

(2)

Income from discontinued operations for the nine months ended September 28, 2007 represents the reimbursement of our deductible related to the Cerion litigation which was dismissed by the courts. Income from discontinued operations for the nine months ended September 29, 2006 includes the results of our Toner and Developer business which we exited effective March 31, 2006 and income from the liquidation of an inactive foreign subsidiary.

Third Quarter 2007 Earnings Results

NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	September 28			December 31
Dollars in thousands	2007			2006
Assets
Cash and cash equivalents	$	4,612		$	289
Accounts receivable		29,564			29,568
Inventories		22,498			23,764
Other current assets		2,958			2,670
Total current assets		59,632			56,291
Plant and equipment, net		23,958			26,399
Goodwill, net of amortization		31,516			31,516
Intangibles, net of amortization		375			606
Other assets		11,443			12,803
Total assets	$	126,924		$	127,615
Liabilities and Shareholders’ Equity
Accounts payable	$	17,533		$	16,620
Accrued expenses		8,612			8,639
Current maturities of long-term debt		625			—
Current maturities of notes payable		83			83
Total current liabilities		26,853			25,342
Long-term debt		12,175			4,750
Notes payable		229			285
Other long-term liabilities		23,711			28,211
Total long-term liabilities		36,115			33,246
Common stock and additional capital		20,080			22,342
Retained earnings		58,549			61,358
Accumulated other comprehensive loss:
Minimum pension liability adjustment(a)		(14,673	)		(14,673	)
Total shareholders’ equity		63,956			69,027
Total liabilities and shareholders’ equity	$	126,924		$	127,615

^(a) Our minimum pension liability adjustment represents an decrease in our minimum pension liability resulting from changes to our pension plans in 2006.

Third Quarter 2007 Earnings Results

NASHUA CORPORATION

RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION

Periods ended September 28 and September 29, respectively	Three Months					Nine Months
In thousands (Unaudited)	2007		2006			2007		2006
Net income (loss) from continuing operations	$	852	$	(1,213	)	$	2,741	$	(2,758	)
Add back:
Interest expense, net		372		620			520		1,221
Income tax provision (benefit)		475		(619	)		1,777		(1,600	)
Depreciation on fixed assets		1,080		1,338			3,311		4,077
Amortization of intangible assets		43		163			180		491
Earnings from continuing operations before interest, taxes, depreciation and amortization	$	2,822	$	289		$	8,529	$	1,431

Third Quarter 2007 Earnings Results

NASHUA CORPORATION SELECTED FINANCIAL DATA

Periods ended September 28 and September 29, respectively	Three Months						Nine Months
Dollars in thousands (Unaudited)	2007			2006			2007			2006
NET SALES
Label Products	$	27,848		$	28,196		$	84,515		$	81,178
Specialty Paper Products		40,357			41,549			118,424			120,503
All Other		993			663			2,998			2,151
Reconciling Items:
Eliminations		(1,588	)		(921	)		(5,470	)		(4,076	)
Net sales	$	67,610		$	69,487		$	200,467		$	199,756
GROSS MARGIN
Label Products	$	4,986		$	4,655		$	15,312		$	11,840
Specialty Paper Products		6,398			6,063			19,548			17,858
All Other		180			(11	)		489			255
Reconciling Items:
Eliminations		—			8			(38	)		8
Total gross margin from continuing operations	$	11,564		$	10,715		$	35,311		$	29,961
DEPRECIATION AND AMORTIZATION
Label Products	$	504		$	534		$	1,559		$	1,589
Specialty Paper Products		500			676			1,518			1,943
Reconciling Item:
Corporate		119			291			414			1,036
Total depreciation and amortization	$	1,123		$	1,501		$	3,491		$	4,568
INVESTMENT IN PLANT AND EQUIPMENT
Label Products	$	132		$	322		$	239		$	674
Specialty Paper Products		261			342			603			1,514
Reconciling Item:
Corporate		14			55			68			207
Total Investment in plant and equipment	$	407		$	719		$	910		$	2,395
PENSION AND POSTRETIREMENT EXPENSE
Label Products	$	80		$	207		$	237		$	598
Specialty Paper Products		60			171			177			513
Reconciling Item:
Corporate		274			409			724			1,280
Total pension and postretirement expense	$	414		$	787		$	1,138		$	2,391