Neenah Paper, which formerly operated a kraft pulp mill in Pictou, Nova Scotia, has reported a 5% drop in net sales…
Neenah Paper, which formerly operated a kraft pulp mill in Pictou, Nova Scotia, has reported a 5% drop in net sales from 2007 to 2008.
According to a press release issued by the company, net sales were down to $732 million last year, compared to $767 million in 2007.
In its fourth quarter, Neenah Paper reported a loss of $67 million, including after-tax charges of $54 million related to the impairment of German goodwill and $3.9 million to increase current tax expenses to reflect limitations on tax benefits associated with the acquisition of Fox River Paper in Appleton, Wisconsin.
Excluding these items, Neenah Paper generated an adjusted loss of $9.1 million, compared to income of $1.4 million in the fourth quarter of 2007. The company reported consolidated net sales of $147 million in the fourth quarter of 2008, compared to $193 million for the same period in 2007.
Neenah Paper chairman and CEO Sean Erwin attributed the drop to decline in demand, but said he expects 2009 will be more positive.
“With significant and rapid declines in market demand in the fourth quarter, we moved quickly and took actions to reduce spending and maximize cash flow. Consequently, despite the earnings loss and our $8 million semi-annual bond interest payment, we still generated free cash flow of more than $6 million and paid down debt by $9 million,” Erwin said. “Without our pulp business, Neenah Paper is clearly better positioned to handle the current economic turmoil. Although we did not see much benefit in the fourth quarter, input costs for pulp, latex and energy did begin to decline. We expect to realize much more significant benefits from this in 2009, along with additional savings from our spending reductions.”
In June 2008, Neenah Paper completed the sale of its Pictou mill to Northern Pulp Nova Scotia. Based in Alpharetta, Georgia, Neenah Paper currently has manufacturing operations in the United States and Germany.
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