Nashua 8K Reports Second Quarter 2008 Results | NSHA 30 Jul 08

Exhibit 99.1


Contact:	Tom Brooker/John Patenaude	Rich Coyle
	Nashua Corporation	Sard Verbinnen & Co
	847-318-1797/603-880-2145	212-687-8080

NASHUA REPORTS SECOND QUARTER 2008 RESULTS

NASHUA, N.H., July 29, 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

Nashua’s 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 Nashua’s 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.

Nashua’s 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 Nashua’s operating performance, or for cash flow, as a measure of Nashua’s 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.

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 2008 Earnings Results

NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS


Periods ended June 27 and June 29, respectively	Three Months						Six Months
Dollars in thousands, except per share amounts(Unaudited)	2008			2007			2008			2007
Net sales	$	67,003		$	67,688		$	130,929		$	132,857
Cost of products sold		55,676			55,390			109,744			109,110


Gross margin	$	11,327		$	12,298		$	21,185		$	23,747
Gross margin %		16.9	%		18.2	%		16.2	%		17.9	%

Selling, distribution and administrative expenses		10,916			10,258			20,929			20,438
Research and development expenses		178			171			364			445
Loss from equity investment		92			69			129			140
Interest expense		128			256			291			340
Interest income		(24	)		(61	)		(72	)		(69	)
Change in fair value of interest rate swap		(241	)		(159	)		119			(123	)
Other income⁽¹⁾		(223	)		(331	)		(487	)		(615	)


Income (loss) from continuing operations before income taxes		501			2,095			(88	)		3,191

Income tax provision (benefit)		201			843			(35	)		1,302


Income (loss) from continuing operations		300			1,252			(53	)		1,889

Income from discontinued operations, net of taxes⁽²⁾		—			—			—			289


Net income (loss)	$	300		$	1,252		$	(53	)	$	2,178


Earnings per share:
Income (loss) from continuing operations	$	0.06		$	0.21		$	(0.01	)	$	0.31

Income from discontinued operations		—			—			—			0.05


Net income (loss) per common share	$	0.06		$	0.21		$	(0.01	)	$	0.36

Average common shares		5,412			6,069			5,404			6,105


Income (loss) per common share from continuing operations assuming dilution	$	0.05		$	0.20		$	(0.01	)	$	0.30
Income per common share from discontinued operations assuming dilution		—			—			—			0.05


Net income (loss) per common share assuming dilution	$	0.05		$	0.20		$	(0.01	)	$	0.35

Average common and potential common shares		5,518			6,139			5,404			6,171


⁽¹⁾		Other income for the three and six months ended June 27 2008 and June 29, 2007 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.

⁽²⁾		Income from discontinued operations for the six months ended June 29, 2007 represents the reimbursement of our deductible related to the Cerion litigation which was dismissed by the courts.

Second Quarter 2008 Earnings Results

NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS


	(Unaudited)
	June 27			December 31
Dollars in thousands	2008			2007
*Assets*
Cash and cash equivalents	$	7,390		$	7,388
Accounts receivable		29,132			29,375
Inventories		21,853			19,998
Other current assets		2,603			2,828

Total current assets		60,978			59,589

Plant and equipment, net		21,885			23,291
Goodwill, net of amortization		31,516			31,516
Intangibles, net of amortization		291			331
Other assets		12,734			12,975

Total assets	$	127,404		$	127,702


*Liabilities and Shareholders’ Equity*
Accounts payable	$	15,838		$	14,432
Accrued expenses		8,493			9,185
Current maturities of long-term debt		2,500			1,875
Current maturities of notes payable		31			31

Total current liabilities		26,862			25,523

Long-term debt		10,300			10,925
Notes payable		3			18
Other long-term liabilities		28,362			29,728

Total long-term liabilities		38,665			40,671

Common stock and additional capital		20,625			20,203
Retained earnings		59,595			59,648
Accumulated other comprehensive loss:
Minimum pension liability adjustment(a)		(18,343	)		(18,343	)

Total shareholders’ equity		61,877			61,508


Total liabilities and shareholders’ equity	$	127,404		$	127,702


^(a)		Our minimum pension liability adjustment represents an increase in our minimum pension liability resulting from changes to our pension plans in 2007.

Second Quarter 2008 Earnings Results

NASHUA CORPORATION
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION


Periods ended June 27 and June 29, respectively	Three Months						Six Months
In thousands (Unaudited)	2008			2007			2008			2007

Net income (loss) from continuing operations	$	300		$	1,252		$	(53	)	$	1,889
Add back:
Interest expense		128			256			291			340
Interest income		(24	)		(61	)		(72	)		(69	)
Change in fair value of interest rate swap		(241	)		(159	)		119			(123	)
Income tax provision (benefit)		201			843			(35	)		1,302
Depreciation and amortization		1,052			1,149			2,103			2,368


Earnings from continuing operations before interest, taxes, depreciation and amortization	$	1,416		$	3,280		$	2,353		$	5,707

Second Quarter 2008 Earnings Results

NASHUA CORPORATION SELECTED FINANCIAL DATA


Periods ended June 27 and June 29, respectively	Three Months						Six Months
Dollars in thousands(Unaudited)	2008			2007			2008			2007
NET SALES

Label Products	$	25,144		$	28,448		$	51,170		$	56,667
Specialty Paper Products		42,646			40,030			81,234			78,067
All Other		920			1,097			2,013			2,005

Reconciling Items:
Eliminations		(1,707	)		(1,887	)		(3,488	)		(3,882	)

Net sales	$	67,003		$	67,688		$	130,929		$	132,857


GROSS MARGIN

Label Products	$	3,980		$	5,273		$	7,785		$	10,326
Specialty Paper Products		7,174			6,826			13,067			13,150
All Other		188			199			354			309

Reconciling Items:
Eliminations		(15	)		—			(21	)		(38	)


Total gross margin from continuing operations	$	11,327		$	12,298		$	21,185		$	23,747


DEPRECIATION AND AMORTIZATION

Label Products	$	457		$	516		$	924		$	1,055
Specialty Paper Products		501			506			1,003			1,018
Reconciling Item:
Corporate		94			127			176			295

Total depreciation and amortization	$	1,052		$	1,149		$	2,103		$	2,368


INVESTMENT IN PLANT AND EQUIPMENT

Label Products	$	52		$	59		$	155		$	107
Specialty Paper Products		34			150			171			342
Reconciling Item:
Corporate		45			16			330			54

Total Investment in plant and equipment	$	131		$	225		$	656		$	503


PENSION AND POSTRETIREMENT EXPENSE

Label Products	$	67		$	79		$	134		$	157
Specialty Paper Products		48			58			96			117
Reconciling Item:
Corporate		169			225			337			450

Total pension and postretirement expense	$	284		$	362		$	567		$	724

Nashua (NSHA) Inactive 8-KNashua Reports Second Quarter 2008 Results