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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nashua (MM) | NASDAQ:NSHA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.93 | 0 | 01:00:00 |
Net sales for the second quarter of 2009 were $61.2 million, compared to $67.0 million for the second quarter of 2008. Gross margin for the second quarter of 2009 was $8.9 million, or 14.5%, compared to $11.3 million, or 16.9%, for the second quarter of 2008. Loss before income taxes was $0.3 million in the second quarter of 2009 compared to income before income taxes of $0.5 million in the second quarter of 2008. Net loss was $0.3 million in the second quarter of 2009, or $0.06 per share, compared to net income of $0.3 million, or $0.06 per share, in the second quarter of 2008. Earnings before interest, taxes, depreciation and amortization and special charges (adjusted EBITDA) were $1.9 million for the second quarter of 2009 compared to $1.4 million for the second quarter of 2008. The results for the second quarter of 2008 include severance expense of $0.6 million related to a reduction in workforce and $0.2 million of environmental-related expense. The results for the second quarter of 2009 include special charges of $1.2 million related to the proposed merger of the company with Cenveo, Inc., severance expense of $0.2 million related to workforce reductions, and environmental expenses of $0.1 million.
Net sales for the six months ended July 3, 2009 were $123.7 million, compared to $130.9 million for the first six months of 2008. Gross margin for the first six months of 2009 was $17.8 million, or 14.4%, compared to $21.2 million, or 16.2%, for the first six months of 2008. Loss before income taxes for the first six months of 2009 was $0.6 million compared to a loss before income taxes of $0.1 million in the first six months of 2008. Net loss was $0.6 million for the first six months of 2009, or $0.12 per share, compared to net loss of $0.1 million, or $0.01 per share, for the first six months of 2008. Adjusted EBITDA was $2.9 million for the first six months of 2009 compared to $2.4 million for the first six months of 2008.
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 second quarter of 2009 of $27.6 million and gross margin of $2.9 million, or 10.4%. Net sales for the second quarter of 2008 were $25.1 million and gross margin was $4.0 million, or 15.8%.
Label Products segment sales increased 9.8 percent mainly due to increased sales in automatic identification and pharmacy product lines. Gross margins were lower due to an inventory adjustment and competitive pricing pressures in the marketplace.
Nashua's Specialty Paper Products segment, which includes the paper coating and converting businesses, produces a wide range of applications for labeling, packaging, ticketing and point of sale transactions, thermal, dry gum and heat-seal products for use in the transportation, retail, gaming, shipping and delivery, entertainment, medical and distribution industries. The Specialty Paper Products segment reported net sales for the second quarter of 2009 of $34.6 million and gross margin of $5.8 million, or 16.7%. Net sales for the second quarter of 2008 were $42.6 million and gross margin was $7.2 million, or 16.8%.
Sales in the Specialty Paper Products segment decreased approximately 19 percent. The decline was mainly attributable to lower sales in the wide format product line as a result of softness in the construction industry; decline in the thermal point of sale product line due to softness in retail sectors; and decline in the thermal facesheet product line due to softness in the overall label market. Gross margins declined as a result of the lower volumes and severance cost.
Thomas Brooker, President and Chief Executive Officer, stated, "Given the status of the economy and the markets we serve, the company has performed well."
On May 6, 2009, the company entered into an Agreement and Plan of Merger with Cenveo, Inc. and NM Acquisition Corp., a wholly owned subsidiary of Cenveo. Consummation of the merger is subject to the approval of the Merger Agreement by our shareholders at a special shareholder meeting to be held at the company's Park Ridge, Illinois office on September 15, 2009.
Use of Non-GAAP Measures
Adjusted EBITDA is presented as supplemental information that the 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. Adjusted EBITDA is used by management in the computation of ratios utilized for financing purposes and for planning and forecasting in future periods. Adjusted EBITDA is calculated by adding net interest expense, income tax expense, depreciation and amortization back into net income. Adjusted 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 Adjusted 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, colored copier papers, bond, point of sale, ATM and wide format papers, entertainment tickets, as well as 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 "plan," "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.
Second Quarter 2009 Earnings Results NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS Periods ended July 3 and June 27, respectively Dollars in thousands, except per share amounts Three Months Six Months (Unaudited) 2009 2008 2009 2008 --------- --------- --------- --------- Net sales $ 61,196 $ 67,003 $ 123,674 $ 130,929 Cost of products sold 52,334 55,676 105,922 109,744 --------- --------- --------- --------- Gross margin $ 8,862 $ 11,327 $ 17,752 $ 21,185 Gross margin % 14.5% 16.9% 14.4% 16.2% Selling and distribution expenses 4,957 6,823 10,348 13,075 Administrative expenses 3,168 4,093 6,763 7,854 Research and development expenses 144 178 291 364 Special charges (1) 1,235 - 1,235 - Loss from equity investment 14 92 12 129 Interest expense 23 128 188 291 Interest income - (24) (1) (72) Change in fair value of interest rate swap 22 (241) 143 119 Other income (2) (370) (223) (579) (487) --------- --------- --------- --------- Income (loss) from continuing operations before income taxes (331) 501 (648) (88) Income tax provision - 201 - (35) --------- --------- --------- --------- Net income (loss) $ (331) $ 300 $ (648) $ (53) ========= ========= ========= ========= Earnings per share: Net income (loss) per common share $ (0.06) $ 0.06 $ (0.12) $ (0.01) ========= ========= ========= ========= Average common shares 5,317 5,412 5,316 5,404 ========= ========= ========= ========= Net income (loss) per common share assuming dilution $ (0.06) $ 0.06 $ (0.12) $ (0.01) ========= ========= ========= ========= Average common and potential common shares 5,317 5,518 5,316 5,404 ========= ========= ========= ========= (1) Special charges for the three and six months ended July 3, 2009 represents expenses related to the proposed merger with Cenveo. (2) Other income for the three and six months ended July 3, 2009 and June 27, 2008 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. NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) July 3, December 31, Dollars in thousands 2009 2008 -------------- -------------- Assets Cash and cash equivalents $ - $ 1,592 Accounts receivable 25,586 27,469 Inventories 20,075 21,785 Other current assets 7,050 5,599 -------------- -------------- Total current assets 52,711 56,445 Plant and equipment, net 18,628 20,154 Goodwill, net of amortization 17,374 17,374 Intangibles, net of amortization 236 260 Other assets 4,512 5,970 -------------- -------------- Total assets $ 93,461 $ 100,203 ============== ============== Liabilities and Shareholders' Equity Accounts payable $ 14,906 $ 11,968 Accrued expenses 7,755 8,900 Current maturities of long-term debt 3,000 8,125 Current maturities of notes payable 5 18 -------------- -------------- Total current liabilities 25,666 29,011 Long-term debt - 2,800 Other long-term liabilities 46,527 46,879 -------------- -------------- Total long-term liabilities 46,527 49,679 Common stock and additional capital 21,087 20,684 Retained earnings 39,057 39,705 Accumulated other comprehensive loss: Minimum pension liability adjustment(a) (38,876) (38,876) -------------- -------------- Total shareholders' equity 21,268 21,513 -------------- -------------- Total liabilities and shareholders' equity $ 93,461 $ 100,203 ============== ============== (a) Our minimum pension liability adjustment represents an increase in our minimum pension liability. NASHUA CORPORATION RECONCILIATION OF ADJUSTED NET INCOME FROM CONTINUING OPERATIONS TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AMORTIZATION AND SPECIAL CHARGES Periods ended July 3 and June 27, respectively Three Months Six Months In thousands (Unaudited) 2009 2008 2009 2008 ------- ------- ------- ------- Net income (loss) from continuing operations $ (331) $ 300 $ (648) $ (53) Add back: Interest expense 23 128 188 291 Interest income - (24) (1) (72) Change in fair value of interest rate swap 22 (241) 143 119 Special charges 1,235 - 1,235 - Income tax provision - 201 - (35) Depreciation and amortization 992 1,052 1,977 2,103 ------- ------- ------- ------- Earnings from continuing operations before interest, taxes, depreciation, amortization and special charges $ 1,941 $ 1,416 $ 2,894 $ 2,353 ======= ======= ======= ======= NASHUA CORPORATION SELECTED FINANCIAL DATA Periods ended July 3 and June 27, respectively Dollars in thousands Three Months Six Months (Unaudited) 2009 2008 2009 2008 --------- --------- --------- --------- NET SALES Label Products $ 27,615 $ 25,144 $ 54,802 $ 51,170 Specialty Paper Products 34,623 42,646 70,375 81,234 All Other 890 920 2,484 2,013 Reconciling Items: Eliminations (1,932) (1,707) (3,987) (3,488) --------- --------- --------- --------- Net sales $ 61,196 $ 67,003 $ 123,674 $ 130,929 --------- --------- --------- --------- GROSS MARGIN Label Products $ 2,881 $ 3,980 $ 5,764 $ 7,785 Specialty Paper Products 5,766 7,174 11,166 13,067 All Other 258 188 865 354 Reconciling Items: Eliminations (43) (15) (43) (21) --------- --------- --------- --------- Total gross margin from continuing operations $ 8,862 $ 11,327 $ 17,752 $ 21,185 --------- --------- --------- --------- DEPRECIATION AND AMORTIZATION Label Products $ 402 $ 457 $ 798 $ 924 Specialty Paper Products 489 501 983 1,003 Reconciling Item: Corporate 101 94 196 176 --------- --------- --------- --------- Total depreciation and amortization $ 992 $ 1,052 $ 1,977 $ 2,103 --------- --------- --------- --------- INVESTMENT IN PLANT AND EQUIPMENT Label Products $ 121 $ 52 $ 228 $ 155 Specialty Paper Products 64 34 196 171 Reconciling Item: Corporate 3 45 3 330 --------- --------- --------- --------- Total investment in plant and equipment $ 188 $ 131 $ 427 $ 656 --------- --------- --------- --------- PENSION AND POSTRETIREMENT EXPENSE Label Products $ 70 $ 67 $ 141 $ 134 Specialty Paper Products 50 48 100 96 Reconciling Item: Corporate 403 169 806 337 --------- --------- --------- --------- Total pension and postretirement expense $ 523 $ 284 $ 1,047 $ 567 --------- --------- --------- ---------
Contact: Tom Brooker/John Patenaude Nashua Corporation 847-318-1797/603-880-2145 Rich Coyle Sard Verbinnen & Co 212-687-8080
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