Neenah Paper (NP) Tops Q4 EPS by 7c, Revenues Miss

Neenah Paper (NYSE: NP) reported Q4 EPS of $0.87, $0.07 better than the analyst estimate of $0.80. Revenue for the quarter came in at $213.6 million versus the consensus estimate of $222.99 million.

Fourth Quarter Highlights

• Revenues of $213.6 million decreased 11 percent versus the fourth quarter of 2018 with a decline of approximately three percent due to the Company\'s sale of its Brattleboro mill in December 2018.
• Earnings per diluted share of $0.92 increased 21% compared with $0.76 in the fourth quarter of 2018.
• Adjusted earnings per share of $0.87 increased 64% compared with $0.53 in the prior year. Adjustments in 2019 were primarily to eliminate a pension plan curtailment gain, and in 2018 to remove favorable impacts related to the impairment loss and acquisition-related items. Details on all adjusting items are included later in this release.
• Operating margins increased 296 basis points (over 400 basis points on an adjusted basis) from the prior year.
• Quarterly cash dividends of $0.45 per share increased 10 percent compared with the prior year.

"I'm pleased with what our teams accomplished in 2019, as they pursued the most important, long-term, strategic decisions that were within our control - redoubling safety efforts, rationalizing an under-performing distributor and shuttering higher cost manufacturing assets, all while continually paying close attention to cost and price management. While many global markets remain challenged for growth, the success of our focused efforts was evidenced by our record cash flows and improved margins, allowing Neenah to exit the year in a significantly better position than we began", said John O'Donnell, Chief Executive Officer. "Our strong financial condition and investments in product innovation, coupled with existing organic growth catalysts already in place, position us well to recommence our strong track record of capital-efficient growth by investing in strategies that will increase our portfolio of growing, profitable businesses."

2020 Outlook

The following items are expected to impact 2020 results:

• A modest rise in input costs throughout the year.
• A slightly weaker euro versus the US dollar, compared with the 2019 average exchange rate of 1.12. A weaker euro unfavorably impacts results, with each five cent change reducing quarterly sales by approximately $2.5 million and earnings per share by approximately $0.025.
• Refinancing the Company\'s $175 million Senior Note with a potentially higher principal amount and interest rate.
• An effective income tax rate of approximately 22 percent.
• Capital spending in the middle of a range of 2 to 4 percent of net sales.
• Quarterly dividend payments of $0.47 per share, up 4 percent.

For earnings history and earnings-related data on Neenah Paper (NP) click here.

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