Neenah Paper, Inc. (NYSE:NP) today reported adjusted earnings from continuing operations of $0.80 per diluted common share in the second quarter of 2013 compared with $0.85 per share in the second quarter of 2012. Excluding adjustments, GAAP earnings in the second quarter were $0.77 per diluted common share in both periods. Adjusted earnings excluded costs of $0.03 per share in 2013 primarily for refinancing the Company’s senior notes. In 2012, adjusted earnings excluded costs of $0.08 per share to integrate acquired brands. Adjusted earnings are reconciled to comparable GAAP figures later in this release.
For the second quarter, net sales of $212.3 million in 2013 were up slightly compared to 2012 as increased Fine Paper sales offset lower sales of Other products. Operating income of $22.6 million in 2013 compared to $22.0 million in the prior year as increases in Fine Paper similarly offset lower operating income from Other products. Net income of $12.8 million in 2013 compared to $12.7 million in the prior year and reflected higher operating income and lower interest expense partly offset by a higher effective tax rate.
"We are pleased with results in the quarter as we continue to see meaningful benefits from optimization of our expanded Fine Paper business and solid performance in Technical Products, anchored by filtration, our largest category,” said John O’Donnell, Chief Executive Officer. “Our earnings, coupled with improved working capital efficiencies, translated into $28 million of cash from operations in the quarter. This cash flow generation and an even stronger balance sheet following our recent debt refinancing have allowed us to increase our cash returns to shareholders while continuing to pursue opportunities that deliver added value.”
Quarterly Segment and Other Financial ResultsTechnical Products net sales were $105.8 million in the second quarter of 2013 compared with $106.9 million in the prior year period. While sales increased for filtration, tape and labels, declines in industrial and other products offset these gains and reflected weaker economic conditions outside the US. The net decline in volume offset benefits in 2013 from a higher value mix and currency translation. Operating income for Technical Products of $11.9 million in the second quarter of 2013 compared with $12.3 million in the second quarter of 2012. The change in income reflected increased manufacturing costs and lower sales volumes in 2013 that were largely offset by a higher value mix of products sold and decreased selling, administrative and other expenses.