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): February 24, 2009

NASHUA CORPORATION

(Exact name of registrant as specified in its charter)

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

EX-99.1 Press Release dated February 24, 2009

Item 2.02 — Results of Operations and Financial Condition

          On February 24, 2009, Nashua Corporation announced its financial results for the fourth quarter and year ended December 31, 2008. 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 Fourth Quarter and 2008 Year End Results” dated February 24, 2009.

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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: February 25, 2009	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 Fourth Quarter and 2008 Year End Results” dated February 24, 2009.

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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 FOURTH QUARTER AND 2008 YEAR END RESULTS

     NASHUA, N.H., February 24, 2009 — Nashua Corporation (NASDAQ: NSHA), a manufacturer and marketer of labels, thermal and specialty papers, and imaging products, today announced financial results for the fourth quarter and year ended December 31, 2008.

     Net sales for the fourth quarter of 2008 were $67.7 million, compared to $72.3 million for the fourth quarter of 2007. Gross margin for the fourth quarter of 2008 was $7.7 million, or 11.3%, compared to $12.9 million, or 17.9%, for the fourth quarter of 2007. Loss from continuing operations before income taxes for the fourth quarter of 2008 was $2.9 million, compared to income from continuing operations before income taxes of $2.0 million for the fourth quarter of 2007. Net loss for the fourth quarter of 2008 was $6.0 million, or $1.11 per share, compared to net income from continuing operations of $1.1 million, or $0.21 per share, for the fourth quarter of 2007. Loss before interest, taxes, depreciation and amortization from continuing operations was $1.2 million for the fourth quarter of 2008, compared to earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations of $3.4 million for the fourth quarter of 2007.

     Excluding the net after tax effect of the items discussed below and a non-cash tax charge, the net loss for the fourth quarter is $0.6 million. The fourth quarter 2008 loss from continuing operations before income taxes includes severance expense of $0.4 million, a change in the fair value of the rate swap of $0.3 million and expense of $1.3 million associated with the closure of the label converting facility located in Jacksonville, Florida. Excluding these items, the fourth quarter loss from continuing operations before income taxes is $0.9 million. The net loss for the fourth quarter of 2008 includes a non-cash tax charge of $4.3 million related to the valuation reserve on deferred tax assets.

     Net sales for the year ended December 31, 2008 were $264.9 million, compared to $272.8 million for the year ended December 31, 2007. Gross margin for the year ended December 31, 2008 was $39.4 million, or 14.9%, compared to $48.3 million, or 17.7%, for the year ended December 31, 2007. Loss from continuing operations for the year ended December 31, 2008 was $19.8 million, or $3.65 per share, compared to income from continuing operations of $3.9 million, or $0.67 per share, for the year ended December 31, 2007. Net loss for the year ended December 31, 2008 was $19.8 million, or $3.65 per share, compared to net income of $4.1 million, or $0.72 per share, for the year ended December 31, 2007. EBITDA from continuing operations, excluding the goodwill impairment charge, was $3.2 million for the year ended December 31, 2008, compared to EBITDA for continuing operations of $12.0 million for the year ended December 31, 2007.

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     Excluding the net after tax effect of the items discussed below and a non-cash tax charge, the net income for the year is $0.4 million. The 2008 loss from continuing operations before income taxes includes a non-cash goodwill impairment charge of $14.1 million, severance expense of $1.1 million, a change in the fair market value in the interest rate swap of $0.5 million, and expense of $1.3 million associated with the closure of the label converting facility located in Jacksonville, Florida. Excluding these items, the 2008 income from continuing operations before income taxes is $0.6 million. The 2008 net loss includes the non-cash tax charge of $4.3 million related to the valuation reserve on deferred tax assets.

Business Segment Highlights

Label Products:

     Nashua’s Label Products segment, which prints and converts product for grocery, food service, retail, transportation, entertainment and general industrial markets, reported net sales for the fourth quarter of 2008 of $28.0 million and gross margin of $1.6 million, or 5.9%. Net sales for the fourth quarter of 2007 were $31.0 million and gross margin was $5.7 million, or 18.4%. For fiscal year 2008, net sales were $105.1 million and gross margin was $13.3 million, or 12.7%. For 2007, net sales were $115.5 million and gross margin was $21.0 million, or 18.2%.

     Label Products segment sales declined $3.0 million in the fourth quarter of 2008 as compared to the fourth quarter of 2007 due to the decline in automatic identification label sales mainly attributable to the loss of a major customer earlier in the year. Gross margins for the quarter were negatively impacted by the lower volume and the cost associated with the closure of the Jacksonville, Florida manufacturing facility. The segment incurred unabsorbed fixed cost during the transfer of manufacturing from our Florida plant to our Nebraska and Tennessee manufacturing facilities.

Specialty Paper Products:

     Nashua’s Specialty Paper Products segment reported net sales for the fourth quarter of 2008 of $39.9 million and gross margin of $5.7 million, or 14.3%. Net sales for the fourth quarter of 2007 were $41.9 million and gross margin was $7.0 million, or 16.7%. Net sales for fiscal year 2008 were $162.2 million and gross margin was $25.3 million, or 15.6%. Net sales for fiscal year 2007 were $160.3 million and gross margin was $26.6 million, or 16.6%.

     Specialty Paper Products segment sales declined $2.0 million in the fourth quarter of 2008 as compared to the fourth quarter of 2007 due to the decline in the sales in wide format and thermal facesheet product lines. Margins were negatively impacted by the shortfall in sales and competitive pricing pressures in the marketplace.

     Thomas Brooker, Nashua’s President and Chief Executive Officer, stated “Adjusted net income from operations for 2008 is $0.4 million after excluding the expenses related to the items noted in the press release. Although this result is below the expectation we had at the beginning of 2008, this has been a challenging year. We consolidated label manufacturing facilities, closed wide format distribution centers and reduced our workforce by approximately ten percent. While these were difficult decisions which had a

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significant negative impact on our 2008 results, they were required to allow us to enter 2009 with a lower cost structure. We continue to focus our sales efforts in targeted key markets, control expenses and improve productivity throughout our business which should allow us to grow our business profitability. Our balance sheet is financially sound and we believe that our strong financial posture will allow us to weather the recessionary storm.”

Use of Non-GAAP

     EBITDA is presented as supplemental information, which the management of Nashua believes, may be useful to some investors in evaluating Nashua 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. Nashua’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. When used in this press release, the words “should,” “believe” 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, Nashua’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 Nashua’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 Nashua’s estimates only as of the date of this press release and should not be relied upon as representing Nashua estimates as of any subsequent date. While Nashua may elect to update forward-looking statements at some point in the future, Nashua specifically disclaims any obligation to do so, even if its estimates change.

Fourth Quarter 2008 Earnings Results

NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS

Periods ended December 31, respectively	Three Months						Twelve Months
Dollars in thousands, except per share amounts (Unaudited)	2008			2007			2008			2007
Net sales	$	67,735		$	72,332		$	264,903		$	272,799
Cost of products sold		60,073			59,389			225,498			224,545
Gross margin	$	7,662		$	12,943		$	39,405		$	48,254
Gross margin %		11.3	%		17.9	%		14.9	%		17.7	%
Selling and distribution expenses		6,390			6,219			25,937			24,088
Administrative expenses		3,830			4,463			14,857			16,991
Research and development expenses		150			187			666			806
Loss from equity investment		1			31			192			200
Interest expense		119			215			535			765
Interest income		(4	)		(68	)		(98	)		(179	)
Change in fair value of interest rate swap		344			214			538			295
Goodwill impairment charge (1)		—			—			14,142			—
Other income (2)		(232	)		(284	)		(958	)		(1,196	)
Income (loss) from continuing operations before income taxes		(2,936	)		1,966			(16,406	)		6,484
Income tax provision (3)		3,086			856			3,358			2,633
Income (loss) from continuing operations		(6,022	)		1,110			(19,764	)		3,851
Income from discontinued operations, net of taxes (4)		—			—			—			289
Net income (loss)	$	(6,022	)	$	1,110		$	(19,764	)	$	4,140
Earnings per share:
Income (loss) from continuing operations	$	(1.11	)	$	0.21		$	(3.65	)	$	0.67
Income from discontinued operations		—			—			—			0.05
Net income (loss) per common share	$	(1.11	)	$	0.21		$	(3.65	)	$	0.72
Average common shares		5,422			5,394			5,414			5,743
Income (loss) per common share from continuing operations assuming dilution	$	(1.11	)	$	0.20		$	(3.65	)	$	0.66
Income per common share from discontinued operations assuming dilution		—			—			—			0.05
Net income (loss) per common share assuming dilution	$	(1.11	)	$	0.20		$	(3.65	)	$	0.71
Average common and potential common shares		5,422			5,479			5,414			5,817

(1)	Goodwill impairment charge for the twelve months ended December 31, 2008 relates to our Specialty Paper Products business.
(2)	Other income for the three and twelve months ended December 31, 2008 and 2007 represents royalty income related to the 2006 sale of toner formulations and recognition of the deferred gain on the 2006 sale of New Hampshire real estate.
(3)	Income tax provision for the three and twelve months ended December 31, 2008 includes a $4.3 million valuation reserve charge related to our derferred tax assets.
(4)	Income from discontinued operations for the twelve months ended December 31, 2007 represents the reimbursement of our deductible related to the Cerion litigation which was dismissed by the courts.

Fourth Quarter 2008 Earnings Results
 
NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
 

	(Unaudited)
	December 31			December 31
Dollars in thousands	2008			2007
Assets
Cash and cash equivalents	$	1,592		$	7,388
Accounts receivable		27,469			29,375
Inventories		21,785			19,998
Other current assets		5,599			2,828
Total current assets		56,445			59,589
Plant and equipment, net		20,154			23,291
Goodwill, net of amortization		17,374			31,516
Intangibles, net of amortization		260			331
Other assets		5,970			12,975
Total assets	$	100,203		$	127,702
Liabilities and Shareholders’ Equity
Accounts payable	$	11,968		$	14,432
Accrued expenses		8,900			9,185
Current maturities of long-term debt		8,125			1,875
Current maturities of notes payable		18			31
Total current liabilities		29,011			25,523
Long-term debt		2,800			10,925
Other long-term liabilities		46,879			29,746
Total long-term liabilities		49,679			40,671
Common stock and additional capital		20,684			20,203
Retained earnings		39,705			59,648
Accumulated other comprehensive loss:
Minimum pension liability adjustment(a)		(38,876	)		(18,343	)
Total shareholders’ equity		21,513			61,508
Total liabilities and shareholders’ equity	$	100,203		$	127,702

^(a) Our minimum pension liability adjustment represents an increase in our minimum pension liability.

Fourth Quarter 2008 Earnings Results

NASHUA CORPORATION
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION, AMORTIZATION AND GOODWILL IMPAIRMENT CHARGES

Periods ended December 31, respectively	Three Months						Twelve Months
In thousands (Unaudited)	2008			2007			2008			2007
Net income (loss) from continuing operations	$	(6,022	)	$	1,110		$	(19,764	)	$	3,851
Add back:
Interest expense		119			215			535			765
Interest income		(4	)		(68	)		(98	)		(179	)
Change in fair value of interest rate swap		344			214			538			295
Income tax provision		3,086			856			3,358			2,633
Goodwill Impairment		—			—			14,142			—
Depreciation and amortization		1,306			1,117			4,442			4,608
Earnings (loss) from continuing operations before interest, taxes, depreciation, amortization and goodwill impairment charges	$	(1,171	)	$	3,444		$	3,153		$	11,973

Fourth Quarter 2008 Earnings Results

NASHUA CORPORATION SELECTED FINANCIAL DATA

Periods ended December 31, respectively	Three Months						Twelve Months
Dollars in thousands (Unaudited)	2008			2007			2008			2007
NET SALES
Label Products	$	28,030		$	31,020		$	105,143		$	115,535
Specialty Paper Products		39,898			41,855			162,244			160,279
All Other		1,392			1,069			4,378			4,067
Reconciling Items:
Eliminations		(1,585	)		(1,612	)		(6,862	)		(7,082	)
Net sales	$	67,735		$	72,332		$	264,903		$	272,799
GROSS MARGIN
Label Products	$	1,642		$	5,715		$	13,332		$	21,027
Specialty Paper Products		5,718			7,006			25,332			26,554
All Other		291			209			736			698
Reconciling Items:
Eliminations		11			13			5			(25	)
Total gross margin from continuing operations	$	7,662		$	12,943		$	39,405		$	48,254
DEPRECIATION AND AMORTIZATION
Label Products	$	713		$	474		$	2,082		$	2,033
Specialty Paper Products		499			533			1,996			2,051
Reconciling Item:
Corporate		94			110			364			524
Total depreciation and amortization	$	1,306		$	1,117		$	4,442		$	4,608
INVESTMENT IN PLANT AND EQUIPMENT
Label Products	$	134		$	161		$	609		$	400
Specialty Paper Products		304			160			587			763
Reconciling Item:
Corporate		122			115			452			183
Total investment in plant and equipment	$	560		$	436		$	1,648		$	1,346
PENSION AND POSTRETIREMENT EXPENSE
Label Products	$	81		$	79		$	291		$	316
Specialty Paper Products		59			59			210			236
Reconciling Item:
Corporate		219			242			755			966
Total pension and postretirement expense	$	359		$	380		$	1,256		$	1,518