Nashua narrows Q1 loss to US$300,000; sales in label products increase 4.5%, but specialty paper products sales fall 7.4%
May 7, 2009
– Nashua Corporation (NasdaqGM:NSHA - News), a manufacturer and marketer of labels and thermal specialty papers, today announced financial results for the first quarter ended April 3, 2009.
Net sales for the first quarter of 2009 were $62.5 million, compared to $63.9 million for the first quarter of 2008. Gross margin for the first quarter of 2009 was $8.9 million, or 14.2%, compared to $9.9 million, or 15.4%, for the first quarter of 2008. Nashua reported a loss before income taxes of $0.3 million in the first quarter of 2009 compared to a loss before income taxes of $0.6 million in the first quarter of 2008. Net loss was $0.3 million, or $0.06 per share, for the first quarter of 2009, compared to a net loss of $0.4 million, or $0.07 per share, for the first quarter of 2008. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.0 million for the first quarter of 2009, compared to $0.9 million for the first quarter 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 of $27.2 million and gross margin of $2.9 million, or 10.6%, for the first quarter of 2009. For the first quarter of 2008, net sales were $26.0 million and gross margin was $3.8 million, or 14.6%.
Sales in the Label Products segment increased 4.5% from the first quarter in 2008. The increase is mainly attributable to increased sales in the automatic identification and pharmacy product lines. Gross margins in the Label Products segment were negatively impacted by employee training, repair and maintenance, and other start-up costs as a result of the consolidation of the Jacksonville, Florida manufacturing operations into the Jefferson City, Tennessee and Omaha, Nebraska plants.
Nashua's Specialty Paper Products segment, which includes the paper coating and converting businesses, reported net sales of $35.8 million and gross margin of $5.4 million, or 15.1%, for the first quarter of 2009. For the first quarter of 2008, net sales were $38.6 million and gross margin was $5.9 million, or 15.3%.
Specialty Paper Products segment sales declined 7.4% from the first quarter of 2008. The decline in the Specialty Paper Products segment sales is primarily attributable to lower sales in the wide format product line, which is mainly used in architectural applications, as a result of softness in the construction industry. Margins in the segment declined as a result of lower volumes.
Thomas Brooker, President and Chief Executive Officer, stated, "We are pleased with the gain in market share and new account development in the Label group. Overall business conditions remain very challenging especially in the retail and construction industries which have led to a decline in our specialty paper group. We have continued to reduce cost in both SG & A and the operational areas of our business. The consolidation in manufacturing and distribution initiated in 2008 should provide more favorable bottom line results during 2009. Our focus remains on increasing profitable sales in both new and existing accounts and productivity improvement throughout the organization."
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.
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 http://www.nashua.com.