Appvion Reports Third Quarter 2016 Results

Appvion’s third quarter 2016 net sales of $169.2 million were $11.4 million lower than third quarter 2015 primarily due to lower total shipment volume and unfavorable market pricing. Thermal papers net sales were $101.6 million which was $2.2 million higher than third quarter 2015. Carbonless papers net sales of $67.6 million declined $13.6 million compared to third quarter 2015.

Current quarter shipments of thermal papers decreased approximately 2% in third quarter 2016 compared to third quarter 2015. Shipments of tag, label and entertainment papers (TLE) were more than 14% higher than in third quarter 2015, while shipments of receipt paper declined approximately 20% compared to the same period last year. Sequentially, third quarter 2016 thermal papers volume grew over 4% compared to second quarter 2016, with volumes for both TLE and receipt papers improving from the previous quarter.

Carbonless papers shipment volume in third quarter 2016 was approximately 11% lower than third quarter 2015; however, within the carbonless segment, specialty papers continued its strong growth with a volume increase of nearly 28% compared to third quarter 2015.

Appvion recorded third quarter 2016 operating income of $3.4 million compared to operating income of $4.2 million for third quarter 2015. Current quarter operating income was negatively impacted by a $4.5 million mark-to-market unfavorable variance associated with the Company’s retiree benefit plans compared to the same period last year, lower shipment volumes across both paper segments and unfavorable pricing in the carbonless papers segment. The Company also paid $2.1 million for advisory services supporting its profit improvement efforts. The negative impact of those factors on earnings was offset by improved pricing for thermal receipt paper, lower raw material costs, improved operational performance, ongoing cost-savings initiatives, and lower selling, general and administrative (SG&A) expenses.

Appvion’s net sales for the first nine months of 2016 were $523.3 million; $7.3 million lower than the first nine months of 2015. Year-to-date shipment volume for thermal papers was approximately 6% higher than the same period last year with TLE volume increasing approximately 12% while receipt paper volume was relatively flat. Year-to-date shipment volume for carbonless papers declined approximately 12% compared to the same period in 2015. Despite volume declines in this segment, specialty papers volume growth gained traction and increased nearly 15% compared to the same period last year.

The Company reported operating income of $16.9 million for the first nine months of 2016 compared to operating income of $7.0 million for the same period last year. Increased volume, improved pricing and product mix in the thermal papers segment, lower spending associated with the annual maintenance downtime taken at the Roaring Spring, Pennsylvania mill, continued improvements in operating performance, execution of cost-savings initiatives, and lower SG&A expenses all contributed to the year-over-year improvement. The positive impact of those improvements was somewhat offset by lower volume and price in the carbonless papers segment, a $3.0 million mark-to-market unfavorable variance associated with the Company’s retiree benefit plans compared to the same period last year, and $3.4 million for advisory services supporting profit improvement efforts.
more at:  http://appvion.com/en-us/investors/Documents/Investors/Appvion_Q3_2016_Earnings_Announcement%2011_07_2016.pdf

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