Nashua Corporation announces plan to exit toner and developer business

Nashua Corporation, a manufacturer and marketer of labels, thermal and specialty papers, and imaging products has announced a plan to exit its toner and developer business by March 31, 2006. The toner and developer business is included in Nashua’s Imaging Supplies segment, the smallest of the company’s three business segments. The toner and developer business had net sales in 2004 of $20.5 million, accounting for approximately seven percent of Nashua’s net sales for the year.  Nashua will retain its resin business, also part of the Imaging Supplies segment, which had net sales of $1.6 million in 2004.  The Imaging Supplies segment had a pre-tax loss of $180,000 in the year ended December 31, 2004.

The toner and developer business currently employs approximately 71 people located primarily at the company’s Nashua and Merrimack, New Hampshire facilities. The company expects to complete an orderly phase out of operations by March 31, 2006 in order to fulfil customer commitments.  The number of employees in the Toner and Developer unit will be reduced throughout the closing period as business needs and requirements dictate.

 Andrew Albert, Chairman, President and Chief Executive Officer of Nashua Corporation, said, “Within our toner and developer business, the high cost of operating in multiple Northeast locations and of protecting intellectual property offset an excellent product base and hard working team.  After carefully evaluating the business’s strategic fit with the rest of Nashua we decided to actively seek buyers of our toner and developer assets and to exit the business in a manner that will allow us to continue to meet our customer obligations through the end of the first quarter of 2006. As we exit this business, we will also separately seek buyers for the company’s real estate located in Merrimack, New Hampshire.”

Albert also said, “While the decision to leave this business is a difficult one, it is consistent with our continuing strategy to exit non-strategic businesses, and to direct our energy and investments towards new opportunities where we can leverage our infrastructure and core capabilities to build shareholder value.”

Nashua currently employs approximately 230 people in New Hampshire, including those in the Company’s corporate headquarters, which will remain in Nashua.