Business News
NASHUA REPORTS SECOND QUARTER 2008 RESULTS
Wednesday 30. July 2008 - Nashua Corporation (NASDAQ: NSHA), a manufacturer and marketer of labels, thermal specialty papers and imaging products, today announced financial results for the second quarter ended June 27, 2008.
Net sales for the second quarter of 2008 were $67.0 million, compared to $67.7 million for the second quarter of 2007. Gross margin for the second quarter of 2008 was $11.3 million, or 16.9%, compared to $12.3 million, or 18.2%, for the second quarter of 2007. Income from continuing operations before income taxes was $0.5 million in the second quarter of 2008 compared to income from continuing operations before income taxes of $2.1 million in the second quarter of 2007. Net income was $0.3 million in the second quarter of 2008, or $0.06 per share, compared to net income of $1.3 million, or $0.21 per share, in the second quarter of 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.4 million for the second quarter of 2008 compared to $3.3 million for the second quarter of 2007. 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.
Net sales for the six months ended June 27, 2008 were $130.9 million, compared to $132.9 million for the first six months of 2007. Gross margin for the first six months of 2008 was $21.2 million, or 16.2%, compared to $23.7 million, or 17.9%, for the first six months of 2007. Loss from continuing operations before income taxes for the first six months of 2008 was $0.1 million compared to income from continuing operations before income taxes of $3.2 million in the first six months of 2007. Net loss was $0.1 million for the first six months of 2008, or $0.01 per share, compared to net income of $2.2 million, or $0.36 per share, for the first six months of 2007. EBITDA was $2.4 million for the first six months of 2008 compared to $5.7 million for the first six months of 2007.
Business Segment Highlights
Nashuas Label 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 2008 of $25.1 million and gross margin of $4.0 million, or 15.8%. Net sales for the second quarter of 2007 were $28.4 million and gross margin was $5.3 million, or 18.5%.
The Label segment sales declined 11.6% from the second quarter of 2007. The decrease is primarily attributable to a decline in Nashuas automatic identification product line as a result of lower volume due to the slowing economy and the loss of a customer. Margins in the Label segment were negatively impacted by the lower volume and competitive pricing in the marketplace.
Nashuas Specialty Paper 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 segment reported net sales for the second quarter of 2008 of $42.6 million and gross margin of $7.2 million, or 16.8%. Net sales for the second quarter of 2007 were $40.0 million and gross margin was $6.8 million, or 17.1%.
The Specialty Paper segment sales increased 6.5% over the second quarter of 2007. The improvement was primarily a result of increased sales in the thermal point of sale and thermal facesheet product lines. Gross margin dollars increased as a result of the increased volume. The gross margins decreased as a percent of sales due to competitive pricing pressures.
Thomas Brooker, President and Chief Executive Officer, stated, “While sales have been negatively impacted by a slowing economy, we continue to focus our efforts to increase sales and improve production efficiencies to maintain profitability. During the second quarter, we reduced our workforce to further streamline our operation.”
Use of Non-GAAP Measures
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. 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 Nashuas operating performance, or for cash flow, as a measure of Nashuas 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.