Neenah Paper, Inc.
) third-quarter 2012 adjusted earnings of 56 cents per share
improved 33% from the year-ago quarter's earnings of 42 cents.
Earnings surpassed the Zacks Consensus Estimate of 54 cents.
In the reported quarter, adjusted earnings excluded integration
costs of 1 cent per share. Including the cost, earnings were 55
cents per share versus 42 cents in the year-ago quarter.
Total revenue improved 18% year over year to $206.3 million,
missing the Zacks Consensus Estimate of $211 million. The
improvement was primarily driven by double digit growth in the
Fine Paper segment.
Cost and Margins
Cost of goods sold soared 15.7% to $170.6 million. Gross profit
inflated 30.3% to $35.7 million. Consequently, gross margin rose
160 basis-points (bps) to 17.3% in the quarter.
Selling, general and administrative expenses increased 22.5% to
$18.5 million. Adjusted operating income boosted 32.8% to $16.6
million. Adjusted operating margin also increased 90 bps to 8%.
segment's total revenues dropped 8% to $98.7 million. Revenues
were flat year over year on a constant currency basis as benefits
from an improved mix were offset by a reduced volume by 2%,
reflecting weaker economic conditions abroad.
Operating income increased 14% year over year to $6.4 million in
the quarter. Operating income was benefited by a mix of products
sold and lower raw material costs. Operating margin increased 130
bps to 6.5%.
segment's total revenues jumped 46% to $99.1 million, driven by
higher volumes emanating from Wausau brands and growth in luxury
packaging, labels and international markets.
Adjusted operating income rose 38% to $13.1 million in the
quarter. Improvement came from higher sales as well as production
cost efficiencies, along with lower pulp price, offsetting the
negative impacts of higher expenses related to advertising and
selling. Adjusted operating margin contracted 80 bps to 13.2%.
Cash and cash equivalents amounted to $6.6 million as of
September 30, 2012, compared to $12.8 million as of December 31,
2011. Long-term debt was $181.5 million as of September 30, 2012,
versus $164.5 million as of December 31, 2011.
Cash used in operating activities were $21.9 million in the nine
months ended September 30, 2012, compared with $39.5 million in
the year-ago comparable period. Debt-to-capitalization ratio
improved to 47% as of September 30, 2012, from 51.9% as of June
30, 2012, and 52.8% as of December 31, 2011.
The company aims at focusing on high value, performance oriented
Technical Products along with finding growth opportunities for
Fine Paper business. However, Neenah Paper faces tough
P.H. Glatfelter Company
KapStone Paper and Packaging Corporation
Neenah Paper retains a short-term Zacks #4 Rank (Sell). Based in
Alpharetta, Georgia, Neenah Paper is a leader in premium image
and performance-based products, including filtration, specialized
substrates used for tapes, labels and other products, and
high-end printing papers.
GLATFELTER (GLT): Free Stock Analysis Report
KAPSTONE PAPER (KS): Free Stock Analysis
NEENAH PAPER (NP): Free Stock Analysis Report
To read this article on Zacks.com click here.