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MOD-PAC CORP. Reports First Quarter 2012 Financial Results

MOD-PAC CORP. (NASDAQ: MPAC), a manufacturer of custom and stock paperboard packaging and provider of personalized print products, reported total revenue of $13.8 million for the first quarter of 2012, which ended March 31, 2012, compared with $13.9 million for the first quarter of 2011. The change in revenue reflects a 1.0% decline in custom folding carton sales.

Net loss for the first quarter of 2012 was $123 thousand, or ($0.04) per diluted share, compared with net income of $357 thousand, or $0.10 per diluted share, in the first quarter of 2011. Despite relatively flat sales, a change in product mix and higher paperboard costs had a negative effect on margins.

Daniel G. Keane, President and CEO, commented, “Our sales remained solid in the quarter. We added sales from a nice new custom folding carton customer, but experienced mixed levels of sales from many of our current accounts. Last year’s first quarter also benefited from a major rebranding campaign of one of our large customers.”

First Quarter 2012 Sales Solid

  • Sales of custom folding cartons were down 1.0% to $10.4 million in the 2012 first quarter from $10.5 million in the prior year first quarter, primarily related to lower volume from one large customer and decreased graphic design charges partially offset by business from one new customer and increased sales from several large customers.
  • Stock packaging sales increased 3.2%, or $83 thousand, to $2.7 million in the first quarter.
  • Personalized print sales were $611,000 in the first quarter of 2012.

Higher Cost Paperboard Combined with Product and Customer Mix Measurably Impacted Margins

Gross profit for the 2012 first quarter was $1.8 million, or 12.9% of total revenue, compared with gross profit of $2.2 million, or 16.2% of total revenue, in the prior year period. Gross margin was negatively affected by product and customer mix, increased paperboard costs, and employee benefits.

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