E.P.S. of $0.69 per share
ALPHARETTA, Ga., May 2, 2019 -- Neenah, Inc. (NYSE: NP) today reported first quarter 2019 results.
First Quarter Highlights
- Net sales of $239.7 million decreased 10 percent compared with $266.5 million in the prior year. On a constant currency basis, and excluding the impact of the December 2018 sale of the Brattleboro mill, net sales were down 5 percent.
- Earnings per diluted common share (E.P.S.) of $0.69 compared with earnings of $0.95 ($1.04 adjusted) per share in 2018.
- There were no adjustments to earnings in the first quarter of 2019. In 2018, adjusted earnings excluded a SERP settlement loss of $0.04 per share and a $0.05 per share adjustment due to changes in estimates related to the Tax Cuts and Jobs Act of 2017 ("TCJA").
- Cash generated from operations of $3.0 million decreased from $8.1 million in the first quarter of 2018.
- Quarterly cash dividends of $0.45 per share compared with $0.41 per share in the prior year period.
- Following the disposition of the Brattleboro mill in December 2018, remaining products in the Other business segment (with annual sales of approximately $16 million) began being managed and reported as part of the Technical Products business segment. Comparable 2018 results for this remaining business have been recast within the Technical Products segment.
"Adjusted E.P.S." is a non-GAAP measure used to enhance understanding and comparability of year-on-year results and is reconciled to GAAP figures later in this release.
"Expected higher year on year input costs and currency, as well as soft global market conditions, significantly impacted first quarter results. As promised, our teams have successfully implemented pricing actions that will overcome both unrecovered input cost increases from 2018 as well as higher costs expected this year. At the same time, we're working to carefully manage our costs and capacity in line with demand to improve operational efficiencies and margins," said John O'Donnell, Chief Executive Officer. "Our longer term growth catalysts remain in place and we continue to look for additional opportunities to add value as we invest in our strategies, maintain a responsible balance sheet and provide shareholders with an attractive dividend."
Quarterly Consolidated Results
Consolidated net sales of $239.7 million in the first quarter of 2019 decreased 10 percent compared with $266.5 million in the first quarter of 2018. Lower revenues resulted from the divestiture of the Brattleboro mill in December 2018, unfavorable foreign currency effects in Technical Products, and lower volumes in both segments reflecting weaker global market conditions. These items were partly offset by increased selling prices in both segments and a more favorable Technical Products mix.
Selling, general and administrative (SG&A) expense of $25.3 million in the first quarter of 2019 decreased from $26.8 million in the prior year due to reduced spending, timing of costs, and lower expense following the sale of the Brattleboro mill.
Operating income of $17.4 million in the first quarter of 2019 decreased $6.7 million compared to $24.1 million in 2018. After excluding a $0.8 million SERP settlement loss in 2018, adjusted operating income decreased $7.5 million. The decrease was due to $11.8 million of higher manufacturing costs, comprised of $7.7 million of higher input costs and $4.1 million of operational cost inefficiencies mostly related to lower sales and production volumes. These increased costs were partly offset by higher selling prices, lower selling, general, and administrative expenses and distribution costs, and a higher value sales mix.
Net interest expense of $3.2 million in the first quarter of 2019 was slightly below $3.3 million in the first quarter of 2018.