SOURCE: Nashua Corporation

April 30, 2008 16:15 ET

Nashua Reports First Quarter 2008 Results

NASHUA, NH--(Marketwire - 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 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. 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.



NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS



Periods ended March 28, 2008 and March 30, 2007,
 respectively
Dollars in thousands, except per share amounts           Three Months
 (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.




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
                                                  ===========  ===========




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
                                                          =======  =======




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
                                                    ----------  ----------

Contact Information

  • Contact:
    Nashua Corporation
    Tom Brooker
    847-318-1797
    John Patenaude
    603-880-2145

    Rich Coyle
    Sard Verbinnen
    212-687-8080