Neenah Paper, Inc. (NYSE:NP) today reported 2017 third quarter results.
Third Quarter Highlights
•Revenue of $245.1 million increased 5 percent, or $12.2 million, from $232.9 million in the prior year.
•Operating income of $29.0 million increased 8 percent, or $2.1 million, from $26.9 million in the prior year.
•Earnings per diluted share (E.P.S.) of $1.10 increased 16 percent from $0.95 per share in 2016.
•On an adjusted basis, E.P.S. of $1.02 in 2017 increased 3 percent from $0.99 in 2016. Adjusted E.P.S. excluded $0.12 per share in 2017 for net proceeds from an insurance settlement, and acquisition, integration, and restructuring costs of $0.04 per share in both years.
•Cash generated from operations of $36.2 million decreased from $40.6 million in 2016 while capital spending of $8.0 million in the quarter decreased from $20.8 million in the third quarter of 2016.
•A binding agreement was signed to acquire Coldenhove, a Netherlands-based performance materials company and leader in digital transfer media, with annual sales of $45 million. Closing occurred on November 1, with a payment of $45 million.
•Quarterly cash dividends of $0.37 per share were paid, a 12% increase compared to the prior year period.
“Adjusted earnings” is a non-GAAP measure used to improve understanding and comparability of year-on-year results. Adjusted figures are reconciled to GAAP later in this release.
“It continues to be an eventful year at Neenah. Our team delivered solid financial results in the quarter, led by volume-driven organic gains in Technical Products. With an eye towards future growth, we recently acquired Coldenhove, further expanding the growth rate and size of our performance materials portfolio, and also added to our capabilities with the purchase of a laminator, uniquely positioned to support our double-digit growth rate in premium packaging,” said John O’Donnell, Chief Executive Officer. “Finally, development of our new North American filtration capacity continues to progress, as our focus moves from asset start-up to market acceptance, and working with customers to get their grades qualified. As we approach the end of the year, our market and financial positions are in great shape, our growth strategies extremely active, and our commitment towards delivering the value our shareholders expect remains unwavering.”
Quarterly Consolidated Results
Income Statement
Consolidated net sales increased 5 percent to $245.1 million in the third quarter of 2017 compared with $232.9 million in the third quarter of 2016. Higher revenues were primarily due to volume-driven increases in Technical Products, as well as favorable currency effects and modest growth in Fine Paper and Packaging due to higher average selling prices. On a constant currency basis, consolidated net sales grew 4 percent.
Selling, general and administrative (SG&A) expense of $21.4 million in the third quarter of 2017 increased slightly from $21.0 million in the prior year.
Operating income of $29.0 million in 2017 increased 8 percent from $26.9 million in 2016. The increase was primarily due to volume growth and improved operational efficiencies in Technical Products, as well as proceeds from an insurance settlement and benefits from currency effects. These favorable variances were partially offset by expected start-up losses in the US filtration business and higher input and transportation costs. Excluding acquisition, integration, and restructuring costs of $0.9 million in both 2017 and 2016, and net proceeds from an insurance settlement of $3.2 million in 2017, adjusted operating income of $26.7 million decreased from $28.1 million in 2016, as increased Technical Products operating income was offset by higher costs for the US filtration business and in Fine Paper & Packaging.
Net interest expense of $3.2 million in the third quarter of 2017 increased from $2.7 million in the third quarter of 2016 as a result of interest expense capitalized in 2016 for the U.S. filtration project, as well as higher rates and additional short term borrowings in 2017.
The effective income tax rate of 27 percent in the third quarter of 2017 decreased from 32 percent in the third quarter of 2016. The 2017 rate was reduced following the Company’s assertion as of June 30, 2017 that it will not repatriate foreign earnings.
Income from continuing operations of $18.8 million increased 15 percent compared with $16.4 million in the third quarter of 2016. Higher income resulted from increased operating income and benefits from the lower tax rate.
more detail at: http://ir.neenah.com/investors/press-releases/press-release-details/2017/Neenah-Reports-Third-Quarter-2017-Results/default.aspx