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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FEBRUARY 2, 1994
Date of Report (Date of earliest event reported)
NASHUA CORPORATION
(Exact name of registrant as specified in its charter)
1-5492-1
(Commission File Number)
<TABLE>
<S> <C>
DELAWARE 02-0170100
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.)
44 FRANKLIN STREET, NASHUA, NEW HAMPSHIRE 03060
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(603) 880-2323
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEMS OF INFORMATION
ITEM 5. OTHER EVENTS
On February 2, 1994, Nashua Corporation issued the following press release:
NASHUA CORPORATION REPORTS FOURTH QUARTER
AND YEAR END RESULTS
COMPANY ANNOUNCES RESTRUCTURING TO REPOSITION NASHUA FOR GROWTH
NASHUA, N.H., February 2, 1994 -- Nashua Corporation (NYSE:NSH) today
announced a net loss from continuing operations for the fourth quarter
ended December 31, 1993, of $28.7 million, or $4.52 per share,
compared with net income of $2.2 million, or $.35 per share, for the
same period in 1992. Results of the fourth quarter of 1993 include
pretax restructuring charges totalling $42.5 million ($28.2 million
after-tax), or $4.44 per share. These charges principally reflect the
Company's decision to channel resources from its Computer Products
business to Nashua's other operations to accelerate the Company's
growth. Sales for the fourth quarter were $125 million, compared with
$145 million in the fourth quarter of 1992. The fourth quarter of
1993 had six fewer days than the comparable 1992 period.
Additionally, the Company recognized in the fourth quarter of 1993 a
previously announced $2.5 million, or $.40 per share, after-tax gain
from discontinued operations from the sale of the office systems
business to Gestetner PLC.
In 1992's fourth quarter, Nashua recorded a $900,000 pretax gain
relating to the settlement of litigation against the auditors and
certain managers and advisors of MiniScribe Corporation, and an
$875,000 charge for estimated environmental remediation costs.
For the year ended December 31, 1993, Nashua reported a net loss from
continuing operations of $17.8 million, or $2.80 per share, compared
with a loss of $4.8 million or $.76 per share, for the same period in
1992. Results for 1992 reflect the adoption of two new accounting
standards which reduced after-tax income by $10.1 million, or $1.60
per share. Also included in 1992 results is a $1.2 million pretax
gain on the sale of Maxtor Corporation common shares acquired by
Nashua in partial settlement of claims against the bankrupt MiniScribe
Corporation. Sales for 1993 were $556 million, compared with $552
million in 1992.
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"Over the past five months, we have conducted an extensive evaluation
of all our businesses which has allowed us to identify the areas of
greatest opportunity for the Company," stated Charles E. Clough,
chairman and chief executive officer. "This analysis has led us to
the conclusion that we have areas of potential that can only be
realized through changes in how we structure our businesses. The
actions we are taking are focused on improving our ability to bring
high-quality products to market quickly and efficiently. We plan to
increase our investment in Nashua's Coated Products and Office
Supplies businesses to take advantage of our core competencies while
seeking out further opportunities for our Photofinishing business."
"The evaluation of our businesses included a strategic review of the
competitive positions of our Computer Products operations, as well as
an analysis of how the risks and opportunities associated with these
units affect the Company as a whole," Clough continued. "We have
concluded that, while these operations have strengths that would allow
them to compete in their respective markets, the resources required to
succeed would limit our ability to invest in our other businesses. We
have made a strategic decision, therefore, to sell the oxide, diskette
and thin-film operations. We have taken a charge against earnings in
the fourth quarter to bring the asset values in line with the market
as we exit these businesses. Nashua Precision Technologies in
Champaign, Illinois, our precision metal-finishing operation, will
remain a part of the Company as we seek additional markets for its
leading-edge capabilities and technologies."
In addition to the actions involving Nashua's Computer Products
operations, the restructuring plan includes combining of the Coated
Products and Office Supplies Groups into a single business unit, and
consolidating certain New Hampshire-based functions, including
Nashua's corporate headquarters, into existing space in Merrimack, New
Hampshire to make better use of the Company's facilities.
In addition to the charges incurred in the fourth quarter of 1993,
Nashua expects to recognize approximately $3.5 million in additional
expense in the first half of 1994 in conjunction with an early
retirement plan being offered to eligible employees at certain
locations. The Company indicated that, upon full implementation of
its plans, it expects to realize an annualized benefit in excess of $8
million from these restructuring actions.
The consolidation of Office Supplies with Coated Products into a new
division, the Nashua Commercial Products Group, will better align the
Company with its distribution channels and generate significant cost
advantages. Nashua also will be increasing its investment in research
and development and its capital spending in this new division by 15
percent and 35 percent, respectively, over the combined 1993 totals
for the two segments. This higher commitment level will expand
Nashua's new product capabilities and increase its quality, efficiency
and customer service.
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William E. Mitchell, president and chief operating officer, stated,
"The new Nashua Commercial Products Group will have a unified sales
and marketing force capable of selling Nashua's full family of
products to its customers. The combined operations will be better
positioned to take advantage of the synergies present in the markets
currently served by the Office Supplies and Coated Products Groups.
"As part of the redeployment of our resources, we also will be seeking
to invest in our Photofinishing Group, which has been a strong
performer, to expand its capabilities around the globe," Mitchell
further stated. "Nashua has the largest mail-order photofinishing
operations in the United States, the United Kingdom, and Canada, and
any increased investment will leverage the expertise we have developed
in this area."
Under the announced plan, which includes the Computer Products
divestitures, Nashua's work force will be reduced by approximately 850
employees, or 21 percent. Of this total, 675 are employed in Nashua's
oxide, diskette and thin-film operations. Nashua will offer early
retirement to eligible employees in various locations. Reductions
required beyond those relating to the planned exit from the Computer
Products businesses are expected to be accomplished through attrition
and reductions-in-force.
The Company discussed its operating results before restructuring and
other unusual charges.
In the Coated Products Group, the Company reported that fourth quarter
revenues were flat versus last year's levels, while operating income
increased. Operating income rose primarily because of stronger volume
in thermal and dry-gummed papers.
Revenues for the Office Supplies Group declined in the fourth quarter
from the prior year period with the segment recording a loss in the
1993 quarter. Lower paper sales to large wholesalers and weak demand
from dealers, accounted for the revenue decline. Reduced shipments of
remanufactured laser printer cartridges, coupled with disappointing
results from Nashua's mail-order office supplies channel, resulted in
the loss for the quarter. Management indicated that it expects the
current level of performance to continue in these product areas at
least through the first quarter of 1994.
The Company reported higher operating income in the Photofinishing
Group in the fourth quarter compared with the same period a year ago,
despite a decline in revenues. Lower processing costs, particularly
in the U.K., accounted for the income improvement, offsetting the
effect of lower volume and a reduced selling price versus last year.
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As the Company previously announced, the Computer Products Group
recorded sharply lower revenue in the fourth quarter compared with the
prior year. Weak demand for Nashua's thin-film disks and a sharp
decline in diskette shipments led to a substantial operating loss in
the quarter. In addition, results for 1993's fourth quarter include a
charge of approximately $1.1 million for the write-down of thin-film
disk inventory.
Commenting on the Company's fourth quarter performance, Mitchell
stated, "Although we were particularly disappointed in the results of
the Office Supplies Group in the fourth quarter, we are encouraged by
our progress in new product development. We are confident that we
will see improvement in this area through 1994 as these products are
introduced and gain acceptance in the market.
"While our 1993 performance in the Coated Products and Photofinishing
Groups improved over last year, we have not maximized Nashua's full
potential. As we enter 1994, we must capitalize on the opportunities
available to us by building on our core strengths: manufacturing
expertise, commitment to continuous improvement, emphasis on quality,
and excellent financial control. We will bring Nashua to a higher
level of performance by developing new strengths that will make us
more market-oriented and new product-focused," concluded Mitchell.
Nashua Corporation provides a diverse mix of products and services
including facsimile and thermal papers, pressure-sensitive labels,
specialty papers and tapes, copier and laser-printer supplies and
mail-order photofinishing services.
A condensed consolidated statement of income and balance sheet and
selected financial information for the Company and subsidiaries are
attached.
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<TABLE>
Condensed Consolidated Statement of Operations
and Retained Earnings
<CAPTION>
(Unaudited)
For three months ended Year Ended
----------------------- -------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1993 1992 1993 1992
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $125,051 $145,162 $555,666 $552,479
Cost of products sold 99,671 110,549 419,211 421,440
Research, selling, distribution and
administrative expenses 26,005 29,485 117,583 118,850
Restructuring and other unusual charges 42,500 - 42,500 -
Interest expense 365 717 2,088 2,690
Interest income (85) (127) (314) (953)
-------- -------- -------- -------
Income (loss) from continuing operations before
income taxes and cumulative effect of accounting
principle changes (43,405) 4,538 (25,402) 10,452
Income taxes (benefit) (14,733) 2,313 (7,622) 5,144
--------- -------- -------- --------
Income (loss) from continuing operations before
cumulative effect of accounting principle changes (28,672) 2,225 (17,780) 5,308
Cumulative effect on prior years of changes
in accounting principles for:
Postretirement health care and other benefits, net - - - (9,367)
Income taxes - - - (764)
-------- -------- -------- --------
Income (loss) from continuing operations (28,672) 2,225 (17,780) (4,823)
Income from discontinued operations 2,512 - 2,512 -
-------- -------- -------- --------
Net income (loss) (26,160) 2,225 (15,268) (4,823)
Retained earnings, beginning of period 113,364 118,606 105,880 129,055
Dividends (1,137) (1,136) (4,545) (4,537)
Retirement of treasury shares - (13,815) - (13,815)
-------- -------- -------- --------
Retained earnings, end of period $ 86,067 $105,880 $ 86,067 $105,880
======== ======== ======== ========
Earnings (loss) per common and common equivalent share:
Income (loss) from continuing operations before
cumulative effect of accounting principle changes $ (4.52) $ .35 $ (2.80) $ .84
Cumulative effect on prior years of changes
in accounting principles for:
Postretirement health care and other benefits, net - - - (1.48)
Income taxes - - - (.12)
Discontinued operations .40 - .40 -
-------- -------- -------- --------
Net income (loss) $ (4.12) $ .35 $ (2.40) $ (.76)
======== ======== ======== ========
Dividends per common share $ .18 $ .18 $ .72 $ .72
======== ======== ======== ========
Average shares outstanding plus common share equivalents 6,345 6,327 6,343 6,325
======== ======== ======== ========
</TABLE>
All figures are in thousands, except per share data.
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<TABLE>
Condensed Consolidated Balance Sheet
<CAPTION>
Dec. 31, Dec. 31,
1993 1992
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<S> <C> <C>
Assets
Cash and cash equivalents $ 5,883 $ 12,212
Accounts receivable 47,657 48,730
Inventories 33,668 31,059
Other current assets 22,573 19,471
-------- --------
Total current assets 109,781 111,472
Plant and equipment 77,233 88,781
Other assets 35,952 36,446
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Total assets $222,966 $236,699
======== ========
Liabilities and Shareholders' Equity
Notes and loans payable $ 2,900 $ 700
Current maturities of long-term debt 2,500 2,500
Accounts payable 29,951 35,019
Accrued expenses 48,669 30,329
Income taxes payable 2,033 2,294
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Total current liabilities 86,053 70,842
Long-term debt 20,342 27,865
Other long-term liabilities 19,547 20,840
Common stock and additional capital 17,586 17,464
Retained earnings 86,067 105,880
Cumulative translation adjustment (5,844) (5,393)
Treasury stock, at cost (785) (799)
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Total liabilities and shareholders' equity $222,966 $236,699
======== ========
</TABLE>
<TABLE>
Selected Other Financial Information
<CAPTION>
(Unaudited)
For three months ended Year Ended
------------------------ -------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1993 1992 1993 1992
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales:
Coated Products Group $ 46,489 $ 46,814 $184,539 $175,383
Computer Products Group 21,902 34,776 111,607 107,211
Office Supplies Group 26,703 28,756 110,789 107,975
Photofinishing Group 29,957 34,816 148,731 161,910
-------- -------- -------- --------
$125,051 $145,162 $555,666 $552,479
======== ======== ======== ========
Operating Income (Loss):
Coated Products Group (a) $ (324) $ 825 $ 3,423 $ 4,390
Computer Products Group (a) (34,669) 2,498 (30,609) (7,523)
Office Supplies Group (a) (1,832) 582 3 4,836
Photofinishing Group (a) 2,820 3,387 16,184 15,793
Corporate expenses, including interest (a) (9,400) (2,754) (14,403) (7,044)
-------- -------- -------- --------
$(43,405) $ 4,538 $(25,402) $ 10,452
======== ======== ======== ========
Depreciation and amortization $ 6,008 $ 5,919 $ 24,864 $ 23,552
======== ======== ======== ========
Investment in plant and equipment $ 8,223 $ 5,009 $ 26,620 $ 23,602
======== ======== ======== ========
<FN>
(a) December 31, 1993 Operating Income (Loss) includes restructuring and
other unusual charges of $2.1 million, $30.7 million, $1.4 million, $.8
million and $7.5 million, for Coated Products, Computer Products, Office
Supplies, Photofinishing and Corporate, respectively.
</TABLE>
All figures are in thousands.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NASHUA CORPORATION
February 3, l994 By /s/ William Luke
-------------------------------
William Luke
Vice President-Finance
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