EX-99.1 2 b69992ncexv99w1.htm EX-99.1 - PRESS RELEASE DATED APRIL 30, 2008 exv99w1
 

 

Exhibit 99.1
(NASHUA LOGO)
         
Contact:
  Tom Brooker/John Patenaude   Rich Coyle
 
  Nashua Corporation   Sard Verbinnen
 
  847-318-1797/603-880-2145   212-687-8080
NASHUA REPORTS FIRST QUARTER 2008 RESULTS
     NASHUA, N.H., April 30, 2008 — Nashua Corporation (NASDAQ: NSHA), 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

 

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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.

 

 

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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.
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First Quarter 2008 Earnings Results
NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS
                 
Periods ended March 28, 2008 and March 30, 2007, respectively   Three Months  
Dollars in thousands, except per share amounts (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.

 

 

First Quarter 2008 Earnings Results
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  
 
            

 

 

First Quarter 2008 Earnings Results
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  
 
            

 

 

First Quarter 2008 Earnings Results
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