Neenah Reports Strong First Quarter 2021 Results Led by Record Performance in Filtration
Neenah, Inc. (NYSE:NP) reported first quarter 2021 net sales of $227 million, a 10% increase from Q4 2020, driven by Technical Products. However, sales declined 3% year-over-year due to a 19% drop in Fine Paper and Packaging. Operating income fell to $13.6 million from $23.6 million a year ago, primarily impacted by acquisition costs related to ITASA. Adjusted EPS decreased to $1.04 from $1.12. Cash generated from operations rose to $20.7 million, with liquidity strengthening to $197 million. The company also refined its Term Loan B, reducing interest rates by 150 basis points.
- Net sales increased 10% from Q4 2020.
- Technical Products saw a 10% increase in revenue year-over-year.
- Strong cash generation with $20.7 million from operations.
- Liquidity improved to $197 million.
- Acquisition of ITASA aligns with growth strategy.
- Consolidated net sales decreased 3% year-over-year.
- Operating income dropped from $23.6 million to $13.6 million.
- 19% reduction in Fine Paper and Packaging sales due to COVID-19.
Neenah, Inc. (NYSE:NP) today reported first quarter 2021 results.
First Quarter Highlights
-
Net sales of
$227.0 million were up 10 percent from the fourth quarter of 2020, continuing the sequential growth since the second quarter of 2020, with strong rebounds in each segment. - Net sales in Technical Products were up 10 percent from prior year; with record quarterly sales and profits in filtration.
- Adjusted operating margins for both segments returned to the mid-teens.
-
Cash generated from operations of
$20.7 million increased from$14.2 million in the prior year. -
Liquidity of
$197 million as of March 31, 2021 increased from$176 million as of December 31, 2020. - On April 6, 2021, completed the acquisition of ITASA, which is highly aligned with Neenah's growth strategy and expands Neenah's presence in specialty coatings.
-
In connection with the acquisition of ITASA, refinanced our Term Loan B from
$200 million to$450 million with more favorable terms, including a reduction in interest rate of approximately 150 basis points.
Adjusted earnings is a non-GAAP measure used to enhance understanding and comparability of year-on-year results. Details on adjusting items and a reconciliation to comparable GAAP measures are included later in this release.
“Neenah's strong momentum continued through the first quarter, with Technical Products sales up
Quarterly Consolidated Results
Income Statement
Consolidated net sales of
Selling, general and administrative (SG&A) expense of
Operating income of
Net interest expense of
The effective income tax rate was 21 percent in both the first quarter of 2021 and 2020.
GAAP E.P.S. of
Cash Flow and Balance Sheet Items
Cash provided from operations of
Capital spending of
Cash dividends of
Cash and cash equivalents as of March 31, 2021 were
In connection with the acquisition of ITASA, on April 6, 2021 we upsized our Term Loan B from
Quarterly Segment Results
Technical Products quarterly net sales of
Operating income increased
Fine Paper and Packaging quarterly net sales of
Operating income decreased
Unallocated Corporate costs in the first quarter of 2021 of
Reconciliation to GAAP Measures
The Company will report adjustments to GAAP figures when they are believed to improve the comparability and understanding of results. In assessing COVID-19 impacts, only costs which were unusual, incremental and directly attributable to mitigating the effects COVID-19 on operations were excluded.
A reconciliation of adjusted income measures to comparable GAAP measures is provided below:
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|
First Quarter |
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($ Millions, except share and per share data) |
|
2021 |
|
2020 |
||||
GAAP Operating Income |
|
$ |
13.6 |
|
|
$ |
23.6 |
|
Acquisition costs |
|
12.0 |
|
|
1.0 |
|
||
COVID-19 costs |
|
0.5 |
|
|
1.1 |
|
||
Other restructuring and non-routine costs |
|
— |
|
|
1.4 |
|
||
Adjusted Operating Income |
|
$ |
26.1 |
|
|
$ |
27.1 |
|
|
|
|
|
|
||||
GAAP Net Income |
|
$ |
8.3 |
|
|
$ |
16.4 |
|
Acquisition costs |
|
9.0 |
|
|
0.8 |
|
||
COVID-19 costs |
|
0.4 |
|
|
0.8 |
|
||
Other restructuring and non-routine costs |
|
— |
|
|
1.0 |
|
||
Adjusted Net Income |
|
$ |
17.7 |
|
|
$ |
19.0 |
|
|
|
|
|
|
||||
GAAP Earnings per Diluted Common Share |
|
$ |
0.49 |
|
|
$ |
0.97 |
|
Acquisition costs |
|
0.53 |
|
|
0.04 |
|
||
COVID-19 costs |
|
0.02 |
|
|
0.05 |
|
||
Other restructuring and non-routine costs |
|
— |
|
|
0.06 |
|
||
Adjusted Earnings per Share |
|
$ |
1.04 |
|
|
$ |
1.12 |
|
|
|
|
|
|
||||
Diluted Shares (in thousands) |
|
16,873 |
|
|
16,850 |
|
||
Conference Call
A conference call and webcast to discuss first quarter earnings and other matters of interest will be held as noted below. Investors and participants who wish to actively participate in the call should register for the earnings call in advance by visiting http://www.directeventreg.com/registration/event/4939659. After registering, instructions will be shared on how to join the call. The webcast will be available on Neenah’s website under Presentations & Events.
Supplemental Information can be found on the Company’s web site under the Investor Relations - Presentations & Events section.
A replay of the call will be available until May 13, 2021 and can be accessed as follows: |
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Encore Dial In #: |
(800) 585-8367 or (416) 621-4642 |
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Replay Access Code: |
4939659 |
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About Neenah
Neenah is committed to manufacturing growth for its customers, end-users, shareholders, and employees. With manufacturing facilities across North America, Europe and Asia, we are a leading global manufacturer of specialty materials serving customers across six continents, with headquarters in Alpharetta, Georgia. We are focused on growing in filtration media, specialty coatings, custom-engineered materials, and premium packaging. Our materials are found in a variety of products used every day, such as transportation and water filters, premium packaging of spirits, technology and beauty products, industrial labels, tapes and abrasives, and digital printing for high-end apparel. To learn more, please visit www.neenah.com
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking” statements as defined under the federal securities laws. Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of the federal securities laws and caution is given to investors that any forward-looking statements are not guarantees or indicative of future performance. These forward-looking statements rely on a number of assumptions concerning future events and are subject to risks, uncertainties and other factors, many of which are outside the Company's control and could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not necessarily limited to, those set forth under the captions “Cautionary Note Regarding Forward-Looking Statements” and/or “Risk Factors” of the latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Qs (these securities filings can be located at www.neenah.com). Unless specifically required by law, the Company assumes no obligation to update or revise these forward-looking statements to reflect new events or circumstances. These cautionary statements are being made with the intention of obtaining the benefits of the “safe harbor” provisions for forward-looking statements under the federal securities laws.
NEENAH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share and per share data) (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2021 |
|
2020 |
||||
Net sales |
|
$ |
227.0 |
|
|
$ |
233.6 |
|
Cost of products sold |
|
177.4 |
|
|
179.6 |
|
||
Gross profit |
|
49.6 |
|
|
54.0 |
|
||
Selling, general and administrative expenses |
|
24.3 |
|
|
26.6 |
|
||
Acquisition costs |
|
12.0 |
|
|
1.0 |
|
||
COVID-19 costs |
|
0.5 |
|
|
1.1 |
|
||
Other restructuring and non-routine costs |
|
— |
|
|
1.4 |
|
||
Other (income) expense - net |
|
(0.8) |
|
|
0.3 |
|
||
Operating income |
|
13.6 |
|
|
23.6 |
|
||
Interest expense - net |
|
3.1 |
|
|
2.9 |
|
||
Income before income taxes |
|
10.5 |
|
|
20.7 |
|
||
Provision for income taxes |
|
2.2 |
|
|
4.3 |
|
||
Net income |
|
$ |
8.3 |
|
|
$ |
16.4 |
|
|
|
|
|
|
||||
Earnings Per Common Share |
|
|
|
|
||||
Basic |
|
$ |
0.49 |
|
|
$ |
0.97 |
|
Diluted |
|
$ |
0.49 |
|
|
$ |
0.97 |
|
|
|
|
|
|
||||
Weighted Average Common Shares Outstanding (in thousands) |
|
|
|
|
||||
Basic |
|
16,835 |
|
|
16,817 |
|
||
Diluted |
|
16,873 |
|
|
16,850 |
|
||
NEENAH, INC. AND SUBSIDIARIES BUSINESS SEGMENT DATA (In millions) (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2021 |
|
2020 |
||||
Net Sales: |
|
|
|
|
||||
Technical Products |
|
$ |
145.2 |
|
|
$ |
132.3 |
|
Fine Paper and Packaging |
|
81.8 |
|
|
101.3 |
|
||
Consolidated |
|
$ |
227.0 |
|
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FAQ
What were Neenah's first quarter 2021 net sales?
Neenah reported net sales of $227 million for the first quarter of 2021.
How did Neenah's earnings per share change in Q1 2021?
Adjusted EPS for Q1 2021 decreased to $1.04 from $1.12 in the previous year.
What impact did the ITASA acquisition have on Neenah's financials?
The ITASA acquisition incurred costs of $12 million, affecting operating income.
How did Neenah's liquidity change in the first quarter of 2021?
Liquidity increased to $197 million as of March 31, 2021.
What was the performance of Neenah's Technical Products segment in Q1 2021?
Technical Products segment net sales increased by 10% year-over-year.
NP
NYSE:NPNP RankingsNP Latest NewsNP Stock Data
537.22M
16.68M
0.63%
96.02%
3.25%
Paper & Paper Products
Basic Materials
United States
Alpharetta
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