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Neenah Paper manufactures and distributes a wide range of premium and specialty paper grades, with well-known brands such as CLASSIC, ENVIRONMENT, KIMDURA and MUNISING LP. The company also produces and sells bleached pulp, primarily for use in the manufacture of tissue and writing papers. Neenah Paper is based in Alpharetta, Georgia, and has manufacturing operations in Wisconsin, Michigan and in the Canadian provinces of Ontario and Nova Scotia. Neenah Paper Inc. has a market cap of $178.2 million; its shares were traded at around $12.16 with and P/S ratio of 0.24. The dividend yield of Neenah Paper Inc. stocks is 3.29%. Highlight of Business Operations: For the three months ended September 30, 2009, consolidated net sales decreased approximately $35 million from the prior year period to $150.1 million. The decrease was primarily due to substantially lower volume as a result of reduced market demand related to continued global economic weakness.
Consolidated operating income of $10.7 million for the three months ended September 30, 2009 was $1.6 million unfavorable to the prior year period. Excluding a gain of approximately $3.6 million in the third quarter of 2008 primarily from the sale of fixed assets acquired in the acquisition of Fox River, consolidated operating income increased $2.0 million from the prior year primarily due to lower manufacturing input costs and reduced spending as a result of initiatives implemented to control operating costs. These favorable factors were only partially offset by lower volume and average net selling prices.
For the three months ended September 30, 2009, timber sales to Northern Pulp pursuant to the Stumpage Agreement resulted in net sales from discontinued operations of $1.2 million compared to net sales of $2.0 million in the prior year period. For the three months ended September 30, 2009, pre-tax income from discontinued operations was $1.0 million compared to earnings from discontinued operations of $2.4 million in the prior year period.
Consolidated operating income of $10.7 million for the three months ended September 30, 2009 decreased $1.6 million compared to 2008. Excluding the gain of approximately $3.6 million in the third quarter of 2008 primarily from the sale of fixed assets acquired in the acquisition of Fox River, consolidated operating income increased $2.0 million from the prior year primarily due to lower manufacturing input costs and initiatives implemented to reduce spending partially offset by lower volume and unfavorable average net selling prices.
· Operating income for our fine paper business decreased $1.5 million from the prior year period. Excluding the gain of approximately $3.6 million in the third quarter of 2008 from the sale of certain Fox River assets, operating income for Fine Paper increased $2.1 million compared to the prior year primarily due to lower manufacturing input costs, principally for hardwood pulp and energy, lower operating and administrative spending due to cost reduction initiatives and higher average net selling prices due to the realization of price increases implemented in 2008. These favorable effects were partially offset by lower volume as a result of weaker economic conditions.
Read the The complete ReportNP is in the portfolios of John Keeley of Keeley Fund Management.
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