ALPHARETTA, Ga., May 11 /PRNewswire-FirstCall/ -- Neenah Paper, Inc.
(NYSE: NP) today reported a loss from continuing operations for the first
quarter of 2009 of $0.7 million, or $0.05 per diluted common share, compared
with income from continuing operations of $8.5 million, or $0.57 per diluted
common share, in the first quarter of 2008.
Consolidated net sales of $134.1 million in the first quarter 2009
compared with sales of $205.6 million in the first quarter of 2008 and $146.6
million in the fourth quarter of 2008. Operating income of $4.9 million in the
current period compared with income of $17.9 million in the first quarter of
2008 and a loss of $9.2 million in the fourth quarter of 2008, excluding a
charge for goodwill impairment.
Cash flow from operations in the first quarter of 2009 totaled $29.4
million, including a tax refund of $10.9 million. This compared to cash used
by operations of $10.4 million in the first quarter of 2008 and cash from
operations of $12.9 million in the fourth quarter of 2008.
Commenting on results, Sean Erwin, Chairman and Chief Executive Officer,
said "Operating results improved by almost $15 million from the fourth quarter
of 2008 as we benefited from actions we have taken to reduce costs and from
lower input prices. Our liquidity position improved as each of our businesses
continues to generate positive cash flows, and we paid down debt for the
second consecutive quarter. These results show that our teams have been
successful in taking difficult but necessary actions to manage through the
current environment, including the recently announced shutdown of the Ripon
fine paper mill to further improve our cost position. In addition, we continue
to invest in our brands and products and work closely with customers to
support our long-term competitive position. The combination of all of these
actions will position us as a stronger, more profitable company as global
economies recover."
Quarterly Segment and Other Financial Results
Fine Paper first quarter 2009 net sales of $64.8 million declined from
$97.0 million in 2008. Decreased sales in 2009 were due to lower volumes as a
result of weaker market demand for premium writing, text and cover papers, as
well as inventory destocking at customers. Operating income was $8.6 million
in the first quarter of 2009 and $10.0 million in the first quarter of 2008.
The reduction in income in 2009 was due both to lower volumes and
approximately $4 million of additional costs for reduced mill operating
schedules to match market conditions. These items were partly offset by
benefits from lower input costs of approximately $3 million, as well as cost
savings initiatives and an improved selling price and mix.
Technical Products net sales of $69.3 million in the first quarter of 2009
decreased from $108.6 million in the first quarter of 2008. The decline
resulted primarily from lower volumes due to weaker market demand and
reductions in customer inventory levels, as well as currency translation
resulting from a weaker Euro in 2009. The first quarter 2009 operating loss of
$0.6 million compared to operating income of $8.1 million in 2008. The
decline in 2009 resulted from lower volumes and approximately $8 million of
additional costs for reduced mill operating schedules to match market
conditions. These items were partly offset by benefits from improved selling
prices, cost savings initiatives and lower input prices. Benefits from reduced
input prices were $0.4 million, as reductions in pulp and latex were partly
offset by fixed price contracts for energy and specialty fibers.
Unallocated corporate expense was $3.1 million in the first quarter of
2009 and $0.2 million in the first quarter of 2008. Unallocated expense in
2008 included a non-cash gain of $4.3 million for the curtailment and
settlement of employee benefit plans for Terrace Bay retirees.
Consolidated selling, general and administrative (SG&A) expense of $16.3
million in the first quarter 2009 was below the prior year level of $21.2
million due to reductions in spending. Net interest expense of $5.7 million
in the first quarter of 2009 was below $6.2 million in the prior year,
primarily as a result of lower interest rates and reduced debt levels in 2009.
Cash provided by operating activities was $29.4 million in the first
quarter of 2009 and included a $10.9 million refund of prior year taxes paid.
Capital spending was $2.8 million in the quarter and $7.1 million in the first
quarter of 2008. Debt declined from $365 million on December 31, 2008, to $341
million as of March 31, 2009, as available free cash flow was used to pay down
debt.
Discontinued Operations
Discontinued operations include results from the Company's divested pulp
mills and its remaining timberlands operation. Net income of $0.1 million in
the first quarter of 2009 compared to a loss of $81.4 million in the first
quarter of 2008. Results in 2008 included after-tax charges of $80.3 million
related to the impairment of assets and estimated loss on the sale of the
Pictou mill.
Conference Call
Neenah Paper will hold a webcast to discuss first quarter earnings and
other matters of interest at 11 a.m. Eastern daylight time on Tuesday, May 12.
Stockholders and other interested parties are invited to either listen live or
participate directly in the call by following the instructions noted in the
company's web site (www.neenah.com). A taped audio replay of the call will be
available on the site beginning approximately two hours after the call and
lasting through May 31, 2009.
About Neenah Paper, Inc.
Neenah Paper is a leading global manufacturer of premium,
performance-based papers and specialty products used in a variety of
applications including filtration, printing and writing, and as backing and
component materials for many specialized industrial and consumer applications.
Products are marketed under well-known brands such as CLASSIC(R),
ENVIRONMENT(R), STARWHITE(R), Gessner(R), JET-PRO(R) SofStretch(TM) and
varitess(R). Based in Alpharetta, Georgia, the company has paper manufacturing
operations in the United States and Germany and approximately 500,000 acres of
timberlands in Nova Scotia, Canada. Additional information about Neenah Paper
can be found at the company's web site, www.neenah.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking"
statements as defined in Section 27A of the Securities Act of 1933 (the
"Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"), or in releases made by the Securities and Exchange Commission, all
as may be amended from time to time. Statements contained in this press
release that are not historical facts may be forward-looking statements within
the meaning of the PSLRA. Any such forward-looking statements reflect our
beliefs and assumptions and are based on information currently available to us
and are subject to risks and uncertainties that could cause actual results to
differ materially including, but not limited to: (i) worldwide economic
conditions, which have deteriorated significantly in the U.S., Germany and
many other countries and regions, (ii) significant capital and credit market
volatility and deterioration, (iii) U.S. dollar/Euro and other exchange rates,
(iv) changes in prices for pulp, energy, latex and other raw materials, (v)
the cost or availability of raw materials, (vi) unanticipated expenditures
related to the cost of compliance with environmental and other governmental
regulations and (vii) the ability of the company to realize anticipated cost
savings. These and other factors that could cause or contribute to actual
results differing materially from any forward-looking statements are discussed
in more detail in our other filings with the Securities and Exchange
Commission. Forward-looking statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise. These cautionary statements are
being made pursuant to the Securities Act, the Exchange Act and the PSLRA with
the intention of obtaining the benefits of the "safe harbor" provisions of
such laws. Neenah Paper, Inc. cautions investors that any forward-looking
statements we make are not guarantees or indicative of future performance.
NEENAH PAPER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
Three Months Ended
March 31,
2009 2008
Net Sales $134.1 $205.6
Cost of products sold 113.6 171.4
Gross Profit 20.5 34.2
Selling, general and administrative expenses 16.3 21.2
Other income - net (0.7) (4.9)
Operating Income 4.9 17.9
Interest expense-net 5.7 6.2
Income (loss) From Continuing Operations (0.8) 11.7
Before Income Taxes
Provision (benefit) for income taxes (0.1) 3.2
Income (loss) From Continuing Operations (0.7) 8.5
Income (loss) From Discontinued 0.1 (81.4)
Operations, net of income taxes
Net Loss $(0.6) $(72.9)
Earnings (Loss) Per Common Share:
Basic
Continuing Operations $(0.05) $0.57
Discontinued Operations 0.01 (5.50)
$(0.04) $(4.93)
Diluted
Continuing Operations $(0.05) $0.57
Discontinued Operations 0.01 (5.45)
$(0.04) $(4.88)
Weighted Average Common
Shares Outstanding (000s)
Basic 14,672 14,798
Diluted 14,672 14,932
NEENAH PAPER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT DATA
(In millions)
(Unaudited)
Three Months Ended
March 31,
2009 2008
Net Sales:
Fine Paper $64.8 $97.0
Technical Products 69.3 108.6
Consolidated $134.1 $205.6
Operating Income (Loss):
Fine Paper $8.6 $10.0
Technical Products (0.6) 8.1
Corporate and other (3.1) (0.2)
Consolidated $4.9 $17.9
NEENAH PAPER, INC. AND SUBSIDIARIES
SELECTED BALANCE SHEET DATA
(In millions)
(Unaudited)
March 31, 2009 December 31, 2008
-------------- -----------------
ASSETS
Cash and cash equivalents $6.1 $3.3
Accounts receivable - net 60.9 63.2
Inventories 79.5 88.6
Deferred income taxes 53.2 53.3
Prepaid and other current assets 15.3 30.2
Assets held for sale -
discontinued operations 3.2 3.3
--- ---
Total current assets 218.2 241.9
Property, plant and equipment -
net 299.9 316.2
Deferred income taxes 41.3 42.0
Goodwill and other intangibles -
net 68.4 72.5
Other non-current assets 11.6 12.0
---- ----
Total assets $639.4 $684.6
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Debt payable within one year $18.0 $24.1
Accounts payable 34.2 40.6
Accrued expenses 34.0 32.3
---- ----
Total current liabilities 86.2 97.0
Long-term debt 322.6 340.5
Deferred income taxes 23.2 25.4
Non-current employee benefits 104.9 107.8
Other noncurrent obligations 3.3 3.5
--- ---
Total liabilities 540.2 574.2
Stockholders' equity 99.2 110.4
---- -----
Total liabilities and
stockholders' equity $639.4 $684.6
====== ======
NEENAH PAPER, INC. AND SUBSIDIARIES
SELECTED CASH FLOW DATA
(In millions)
(Unaudited)
Three Months Ended March 31,
----------------------------
2009 2008
---- ----
Operating Activities
Net loss $(0.6) $(72.9)
Depreciation and amortization 8.4 11.6
Stock-based compensation 1.0 1.3
Deferred income tax benefit (0.4) (29.9)
Asset impairment loss - 90.5
Estimated loss on disposal - transfer
of Pictou Mill - 39.5
(Gain) loss on asset dispositions 0.3 (0.1)
Decrease (increase) in working capital 21.3 (37.5)
Net cash used for postretirement benefit
related activities (0.3) (12.1)
Other (0.3) (0.8)
---- ----
Cash provided by (used in) operating
activities 29.4 (10.4)
---- -----
Investing Activities
Capital expenditures (2.8) (7.1)
Other (0.2) 1.0
---- ----
Cash used in investing activities (3.0) (6.1)
---- ----
Financing Activities
Short and long-term borrowings 0.6 26.7
Repayment of debt (22.7) -
Share purchases - (9.6)
Cash dividends paid (1.5) (1.5)
Cash provided by (used in) financing
activities (23.6) 15.6
----- ----
Increase (decrease) in cash and cash
equivalents $2.8 $(0.9)
==== =====
SOURCE Neenah Paper, Inc
-0- 05/11/2009
/CONTACT: Bill McCarthy, Vice President - Financial Analysis and Investor
Relations of Neenah Paper, Inc., +1-678-518-3278/
/Web Site: http://www.neenah.com /
(NP)
CO: Neenah Paper, Inc
ST: Georgia
IN: PAP
SU: ERN CCA
PR
-- CL14985 --
0885 05/11/2009 17:30 EDT http://www.prnewswire.com
