Appleton’s first quarter 2010 net sales of $232.2 million increased 9.2 percent compared to first quarter 2009 net sales of $212.6 million. Appleton’s first quarter 2010 net loss of $7.4 million compared to net income of $1.2 million in first quarter 2009.
First quarter 2010 results include an $8.2 million environmental expense recovery as a result of an insurance settlement, a $5.5 million increase in interest expense and a $5.5 million debt extinguishment expense resulting from the voluntary refinancing of the Company’s debt. First quarter 2009 results included $5.4 million of debt extinguishment gain as a result of making market purchases of senior subordinated notes at a price significantly less than face value.
"Our strong sales resulted from improved market demand for our products and increased market share, especially in the carbonless and thermal paper segments," said Mark Richards, Appleton’s chairman, president and chief executive officer. "The excellent response to the launch of our new Superior carbonless sheet product, as well as increased international demand, helped drive up carbonless sales over 3 percent. Sales of our thermal paper grew by 23 percent on shipment volume that increased 36 percent. Those results reflect significant share gains for both our point-of-sale and high value-added grades." He added that sales for the Performance Packaging Division, when adjusted for the December sale of C&H Packaging, increased $3.6 million compared to first quarter 2009.
Richards said the Encapsys
The positive impact that the Company’s strong sales and shipment volumes had on earnings was offset by unfavorable product pricing and mix, as well as higher than expected raw material costs, especially for pulp and energy. Expenses associated with the Company’s debt refinancing, also reduced earnings for the quarter. "We are being very aggressive in our efforts to control costs and spending and improve operating efficiencies to soften the impact of raw material inflation," Richards stated.
® business unit, which is now reported as a separate segment, continues to grow. Encapsys applies Appleton’s extensive knowledge of the microencapsulation process in creative and collaborative ways to develop and deliver better products to customers. "We are excited about the opportunities to explore new markets and develop relationships beyond the paper industry where we can leverage this core competency. Our goal is to be the partner of choice for technology collaborations related to microencapsulation," Richards said.
