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MOD-PAC CORP. Reports First Quarter 2011 Net Income Increases To $357,000 On 15.8% Sales Growth

Stocks in this article: MPAC

MOD-PAC CORP. (NASDAQ: MPAC), (the “Company”) a manufacturer of custom paper board packaging and provider of personalized print products, today reported revenue of $13.9 million for the first quarter of 2011, which ended April 2, 2011, an increase of 15.8%, compared with revenue of $12.0 million in the first quarter of 2010, which ended April 3, 2010.

Net income for the first quarter of 2011 was $357,000, or $0.10 per diluted share, compared with net income of $20,000, or $0.01 per diluted share, in the first quarter of 2010. The improvement in net income reflects increased product sales leveraged against a lower cost structure and ongoing productivity enhancements and efficiency gains.

Mr. Daniel G. Keane, President and CEO of MOD-PAC CORP, commented, “Led by our market-share gains in custom folding cartons and continued improvement in our stock packaging business line, we delivered a solidly profitable quarter. Our sustained profitability is clear evidence that our many initiatives to restructure and refocus our business platform, together with an improving economy, firmly puts us on the path to achieve our long-term growth and profitability goals.”

First Quarter Sales Review: Strong Custom Folding Carton Sales,

Stock Packaging Sales Continue Strengthening

  • Sales of folding cartons, which include custom folding cartons and stock packaging, were $13.1 million in the first quarter of 2011, up 17.2% from $11.2 million in the first quarter of 2010.
  • Custom folding carton sales in the first quarter of 2011 reached a record $10.5 million, up 20.9% from $8.7 million in the first quarter of 2010, as the Company experienced increased activity levels with several large existing customers, while also winning business from one new large account.
  • Stock packaging sales of $2.6 million in the first quarter of 2011 were up 4.5% from $2.5 million in the first quarter of 2010. Improved market conditions had a favorable impact on the stock packaging line.
  • Personalized print sales were $697,000 in the first quarter of 2011, essentially flat with $703,000 in the first quarter of 2010, mainly due to continued weakness in general business conditions.

David B. Lupp, Chief Operating Officer and Chief Financial Officer, noted, “We continue to focus resources on growing our custom folding carton product line, and our sales and marketing efforts have begun to gain traction, momentum that we believe is sustainable as we move through the balance of the year. Leveraged against higher sales, our lower cost structure allowed us to generate significant margin improvements in the quarter.”

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