The Port Townsend Paper Corporation aims to increase its intake of recycled cardboard, while also reducing its consumption of fresh water by close to a million gallons per day. Both improvements are tied to the planned replacement of the company’s Old Corrugated Container pulper, which is 22 years old, scheduled for this fall, but not before the public comment period expires June 28. Kevin Scott, General Manager of the paper mill just outside of Port Townsend, recently took The Leader on a tour of the facilities, during which he outlined the goals for the replacement pulper. According to Scott, the new machine should allow the paper mill to go from producing 400 tons of cardboard pulp a day to a maximum average capacity of 800 tons a day, without requiring significant changes to the plant’s footprint or its material processing equipment. “We’re currently running on about 40% recycled fiber,” Scott said. “This lets us go up to about 60%.” Click Read More below for additional information.
Fourth Quarter Highlights
•Revenues of $220.5 million decreased 4 percent compared with the prior year.
•Operating income of $21.9 million increased 5 percent compared with the prior year.
•Earnings per diluted share of $0.95 increased 12 percent compared with $0.85 in the fourth quarter of 2015.
•Adjusted earnings per share of $1.10 in 2016 increased 21 percent compared with $0.91 with the prior year. Adjusted earnings per share in 2016 exclude $0.15 of costs for integration, restructuring and pension settlement charges and in 2015 exclude $0.07 for tax credits related to prior periods and $0.13 of costs for integration, restructuring and other items.
•FiberMark integration activities were completed with the closure and consolidation of a leased facility in Reading, Pennsylvania and implementation of the Company’s ERP system at new sites.
•A seventh double-digit increase in dividends was announced beginning with dividends paid in March 2017.
Full Year Highlights
•Record net sales, operating income, earnings per share and cash provided by operations.
•Net sales of $941.5 million increased 6 percent compared with $887.7 million in the prior year.
•Operating income of $114.1 million increased 13 percent compared with $101.4 million in the prior year.
•Earnings per diluted share of $4.26 increased 21 percent compared with $3.53 in 2015.
•Adjusted earnings per share of $4.54 increased 23 percent compared with $3.70 per share in the prior year. Adjusted earnings per share in 2016 exclude costs of $0.28 for integration, restructuring and pension settlement charges and adjusted earnings per share in 2015 exclude $0.07 for tax credits related to prior periods and $0.24 of costs for integration, restructuring and other items.
•Cash provided by operations of $115.8 million, increased 4 percent compared with $111.2 million in 2015.
•Key strategic initiatives were completed, including a capital project to add transportation filtration capacity in the U.S. and the integration of FiberMark (acquired on August 1, 2015).
•Cash returns to shareholders of $38.8 million through dividends and share repurchases, increased $10.1 million compared with $28.7 million in 2015.
•Total returns to shareholders, through stock price appreciation and dividends, was 39 percent.
“Adjusted earnings” is a non-GAAP measure and is used to improve comparability of year-on-year results. Adjusted figures are reconciled to GAAP later in this release.
“In 2016 our teams again delivered impressive financial results and returns for our shareholders. With record operating cash flows and balanced capital deployment, we invested capital efficiently to add filtration capacity in the U.S., completed the integration of FiberMark with its added capabilities, increased direct cash returns to shareholders by over 30 percent, and used remaining funds to pay down debt,” said John O’Donnell, Chief Executive Officer.
“Our businesses enter 2017 with strong market positions and catalysts for continued growth. Coupled with our substantial cash flow generation and strong balance sheet, we’re well-positioned to create further value for our shareholders as Neenah continues to develop into a faster growing, diversified specialty materials company.”
Quarterly Consolidated Results
Consolidated net sales of $220.5 million in the fourth quarter of 2016 declined 4 percent compared with $230.4 million in the prior year. Approximately half of the decline resulted from unusually high sales of Other segment products in 2015 in advance of the December 2015 closure of the Fitchburg mill. The remaining decrease in sales reflected lower shipments and unfavorable currency translation impacts in Technical Products and a lower-priced mix in Fine Paper and Packaging.
Selling, general and administrative (SG&A) expense of $20.4 million in the fourth quarter of 2016 decreased $4.5 million as a result of reductions in combined costs following the FiberMark acquisition and timing of certain spending in 2016.
Operating income of $21.9 million in 2016 increased 5 percent compared with $20.9 million in the fourth quarter of 2015. Higher income in 2016 resulted from reductions in SG&A and lower input costs that were partly offset by a less favorable mix, lower volumes and unfavorable currency impacts. Adjusted operating income in 2016 of $26.0 million increased 6 percent compared with $24.5 million in the fourth quarter of 2015. Adjusted operating income in 2016 excluded restructuring and integration costs of $3.3 million, primarily for the Reading facility closure and trial costs for the new U.S. transportation filtration machine, as well as $0.8 million for a pension settlement charge. In 2015, excluded costs for integration and restructuring were $3.6 million.
Net interest expense of $2.8 million in the fourth quarter of 2016 was equal to the prior year.
The income tax rate in the fourth quarter of 2016 was 14 percent compared to a rate of 20 percent in the fourth quarter of 2015. The tax rate in the fourth quarter of 2016 was 10 percentage points lower as a result of adoption of ASU 2016-09 in 2016, which requires excess tax benefits from stock compensation to be recorded as a reduction to income tax expense in the quarter they are incurred, and also due to adjustments to deferred taxes and reserves for uncertain tax positions. The rate in the fourth quarter of 2015 was favorably impacted by recognition of a full year of Research and Development (R&D) tax credits following approval by Congress in December 2015.
more detail at: http://ir.neenah.com/2017-02-15-Neenah-Paper-Reports-2016-Fourth-Quarter-and-Full-Year-Results