Nashua Reports Second Quarter 2009 Results

NASHUA, NH--(Marketwire - August 13, 2009) - Nashua Corporation (NASDAQ: NSHA), a
manufacturer and marketer of labels, thermal specialty papers and imaging
products, today announced financial results for the second quarter ended
July 3, 2009.

Net sales for the second quarter of 2009 were $61.2 million, compared to
$67.0 million for the second quarter of 2008. Gross margin for the second
quarter of 2009 was $8.9 million, or 14.5%, compared to $11.3 million, or
16.9%, for the second quarter of 2008. Loss before income taxes was $0.3
million in the second quarter of 2009 compared to income before income
taxes of $0.5 million in the second quarter of 2008. Net loss was $0.3
million in the second quarter of 2009, or $0.06 per share, compared to net
income of $0.3 million, or $0.06 per share, in the second quarter of 2008.
Earnings before interest, taxes, depreciation and amortization and special
charges (adjusted EBITDA) were $1.9 million for the second quarter of 2009
compared to $1.4 million for the second quarter of 2008. The results for
the second quarter of 2008 include severance expense of $0.6 million
related to a reduction in workforce and $0.2 million of
environmental-related expense. The results for the second quarter of 2009
include special charges of $1.2 million related to the proposed merger of
the company with Cenveo, Inc., severance expense of $0.2 million related to
workforce reductions, and environmental expenses of $0.1 million.

Net sales for the six months ended July 3, 2009 were $123.7 million,
compared to $130.9 million for the first six months of 2008. Gross margin
for the first six months of 2009 was $17.8 million, or 14.4%, compared to
$21.2 million, or 16.2%, for the first six months of 2008. Loss before
income taxes for the first six months of 2009 was $0.6 million compared to
a loss before income taxes of $0.1 million in the first six months of 2008.
Net loss was $0.6 million for the first six months of 2009, or $0.12 per
share, compared to net loss of $0.1 million, or $0.01 per share, for the
first six months of 2008. Adjusted EBITDA was $2.9 million for the first
six months of 2009 compared to $2.4 million for the first six months of
2008.

Business Segment Highlights

Nashua's Label Products segment, which prints and converts product for the
grocery, food service, retail, transportation, entertainment and general
industrial markets, reported net sales for the second quarter of 2009 of
$27.6 million and gross margin of $2.9 million, or 10.4%. Net sales for
the second quarter of 2008 were $25.1 million and gross margin was $4.0
million, or 15.8%.

Label Products segment sales increased 9.8 percent mainly due to increased
sales in automatic identification and pharmacy product lines. Gross margins
were lower due to an inventory adjustment and competitive pricing pressures
in the marketplace.

Nashua's Specialty Paper Products segment, which includes the paper coating
and converting businesses, produces a wide range of applications for
labeling, packaging, ticketing and point of sale transactions, thermal, dry
gum and heat-seal products for use in the transportation, retail, gaming,
shipping and delivery, entertainment, medical and distribution industries.
The Specialty Paper Products segment reported net sales for the second
quarter of 2009 of $34.6 million and gross margin of $5.8 million, or
16.7%. Net sales for the second quarter of 2008 were $42.6 million and
gross margin was $7.2 million, or 16.8%.

Sales in the Specialty Paper Products segment decreased approximately 19
percent. The decline was mainly attributable to lower sales in the wide
format product line as a result of softness in the construction industry;
decline in the thermal point of sale product line due to softness in retail
sectors; and decline in the thermal facesheet product line due to softness
in the overall label market. Gross margins declined as a result of the
lower volumes and severance cost.

Thomas Brooker, President and Chief Executive Officer, stated, "Given the
status of the economy and the markets we serve, the company has performed
well."

On May 6, 2009, the company entered into an Agreement and Plan of Merger
with Cenveo, Inc. and NM Acquisition Corp., a wholly owned subsidiary of
Cenveo. Consummation of the merger is subject to the approval of the Merger
Agreement by our shareholders at a special shareholder meeting to be held
at the company's Park Ridge, Illinois office on September 15, 2009.

Use of Non-GAAP Measures

Adjusted EBITDA is presented as supplemental information that the
management of Nashua believes may be useful to some investors in evaluating
the Company because it is widely used as a measure of evaluating a
company's operating performance, as well as to evaluate its operating cash
flow. Adjusted EBITDA is used by management in the computation of ratios
utilized for financing purposes and for planning and forecasting in future
periods. Adjusted EBITDA is calculated by adding net interest expense,
income tax expense, depreciation and amortization back into net income.
Adjusted EBITDA should not be considered a substitute either for net
income, as an indicator of Nashua's operating performance, or for cash
flow, as a measure of Nashua's liquidity. In addition, because all
companies may not calculate Adjusted EBITDA in exactly the same manner, the
presentation here may not be comparable to other similarly titled measures
of other companies.

About Nashua

Nashua Corporation manufactures and markets a wide variety of specialty
imaging products and services to industrial and commercial customers to
meet various print application needs. The Company's products include
thermal coated papers, pressure-sensitive labels, colored copier papers,
bond, point of sale, ATM and wide format papers, entertainment tickets, as
well as ribbons for use in imaging devices. Additional information about
Nashua Corporation can be found at www.nashua.com.

Forward-looking Statements

This press release contains forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. When used
in this press release, the words "plan," "should," "will," "expects,"
"anticipates" and similar expressions are intended to identify such
forward-looking statements. Such forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ
materially from those anticipated. Such risks and uncertainties include,
but are not limited to, the Company's future capital needs and resources,
fluctuations in customer demand, intensity of competition from other
vendors, timing and acceptance of new product introductions, delays or
difficulties in programs designed to increase sales and profitability,
general economic and industry conditions, and other risks set forth in the
Company's filings with the Securities and Exchange Commission, and the
information set forth herein should be read in light of such risks. In
addition, any forward-looking statements represent the Company's estimates
only as of the date of this press release and should not be relied upon as
representing the Company's estimates as of any subsequent date. While the
Company may elect to update forward-looking statements at some point in the
future, the Company specifically disclaims any obligation to do so, even if
its estimates change.

Second Quarter 2009 Earnings Results

NASHUA CORPORATION SUMMARY RESULTS OF OPERATIONS

Periods ended July 3 and June
27, respectively
Dollars in thousands, except
per share amounts Three Months Six Months
(Unaudited) 2009 2008 2009 2008
--------- --------- --------- ---------

Net sales $ 61,196 $ 67,003 $ 123,674 $ 130,929
Cost of products sold 52,334 55,676 105,922 109,744
--------- --------- --------- ---------
Gross margin $ 8,862 $ 11,327 $ 17,752 $ 21,185
Gross margin % 14.5% 16.9% 14.4% 16.2%

Selling and distribution
expenses 4,957 6,823 10,348 13,075
Administrative expenses 3,168 4,093 6,763 7,854
Research and development
expenses 144 178 291 364
Special charges (1) 1,235 - 1,235 -
Loss from equity investment 14 92 12 129
Interest expense 23 128 188 291
Interest income - (24) (1) (72)
Change in fair value of
interest rate swap 22 (241) 143 119
Other income (2) (370) (223) (579) (487)
--------- --------- --------- ---------
Income (loss) from
continuing operations
before income taxes (331) 501 (648) (88)

Income tax provision - 201 - (35)
--------- --------- --------- ---------

Net income (loss) $ (331) $ 300 $ (648) $ (53)
========= ========= ========= =========

Earnings per share:

Net income (loss) per common
share $ (0.06) $ 0.06 $ (0.12) $ (0.01)
========= ========= ========= =========
Average common shares 5,317 5,412 5,316 5,404
========= ========= ========= =========

Net income (loss) per common
share assuming dilution $ (0.06) $ 0.06 $ (0.12) $ (0.01)
========= ========= ========= =========
Average common and potential
common shares 5,317 5,518 5,316 5,404
========= ========= ========= =========

(1) Special charges for the three and six months ended July 3, 2009
represents expenses related to the proposed merger with Cenveo.
(2) Other income for the three and six months ended July 3, 2009 and
June 27, 2008 represents royalty income related to the 2006 sale
of toner formulations and recognition of the deferred gain on the
2006 sale of New Hampshire real estate.

NASHUA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
July 3, December 31,
Dollars in thousands 2009 2008
-------------- --------------

Assets
Cash and cash equivalents $ - $ 1,592
Accounts receivable 25,586 27,469
Inventories 20,075 21,785
Other current assets 7,050 5,599
-------------- --------------
Total current assets 52,711 56,445

Plant and equipment, net 18,628 20,154
Goodwill, net of amortization 17,374 17,374
Intangibles, net of amortization 236 260
Other assets 4,512 5,970
-------------- --------------
Total assets $ 93,461 $ 100,203
============== ==============

Liabilities and Shareholders' Equity
Accounts payable $ 14,906 $ 11,968
Accrued expenses 7,755 8,900
Current maturities of long-term debt 3,000 8,125
Current maturities of notes payable 5 18
-------------- --------------
Total current liabilities 25,666 29,011

Long-term debt - 2,800
Other long-term liabilities 46,527 46,879
-------------- --------------
Total long-term liabilities 46,527 49,679

Common stock and additional capital 21,087 20,684
Retained earnings 39,057 39,705
Accumulated other comprehensive loss:
Minimum pension liability
adjustment(a) (38,876) (38,876)
-------------- --------------
Total shareholders' equity 21,268 21,513
-------------- --------------

Total liabilities and shareholders'
equity $ 93,461 $ 100,203
============== ==============

(a) Our minimum pension liability adjustment represents an increase in our
minimum pension liability.

NASHUA CORPORATION
RECONCILIATION OF ADJUSTED NET INCOME FROM CONTINUING OPERATIONS TO
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AMORTIZATION AND SPECIAL
CHARGES

Periods ended July 3 and June 27,
respectively Three Months Six Months
In thousands (Unaudited) 2009 2008 2009 2008
------- ------- ------- -------

Net income (loss) from continuing
operations $ (331) $ 300 $ (648) $ (53)
Add back:
Interest expense 23 128 188 291
Interest income - (24) (1) (72)
Change in fair value of interest rate
swap 22 (241) 143 119
Special charges 1,235 - 1,235 -
Income tax provision - 201 - (35)
Depreciation and amortization 992 1,052 1,977 2,103
------- ------- ------- -------

Earnings from continuing operations
before interest, taxes, depreciation,
amortization and special charges $ 1,941 $ 1,416 $ 2,894 $ 2,353
======= ======= ======= =======

NASHUA CORPORATION SELECTED FINANCIAL DATA

Periods ended July 3 and June
27, respectively
Dollars in thousands Three Months Six Months
(Unaudited) 2009 2008 2009 2008
--------- --------- --------- ---------

NET SALES

Label Products $ 27,615 $ 25,144 $ 54,802 $ 51,170
Specialty Paper Products 34,623 42,646 70,375 81,234
All Other 890 920 2,484 2,013

Reconciling Items:
Eliminations (1,932) (1,707) (3,987) (3,488)
--------- --------- --------- ---------
Net sales $ 61,196 $ 67,003 $ 123,674 $ 130,929
--------- --------- --------- ---------

GROSS MARGIN

Label Products $ 2,881 $ 3,980 $ 5,764 $ 7,785
Specialty Paper Products 5,766 7,174 11,166 13,067
All Other 258 188 865 354

Reconciling Items:
Eliminations (43) (15) (43) (21)
--------- --------- --------- ---------
Total gross margin from
continuing operations $ 8,862 $ 11,327 $ 17,752 $ 21,185
--------- --------- --------- ---------

DEPRECIATION AND AMORTIZATION

Label Products $ 402 $ 457 $ 798 $ 924
Specialty Paper Products 489 501 983 1,003
Reconciling Item:
Corporate 101 94 196 176
--------- --------- --------- ---------
Total depreciation and
amortization $ 992 $ 1,052 $ 1,977 $ 2,103
--------- --------- --------- ---------

INVESTMENT IN PLANT AND
EQUIPMENT

Label Products $ 121 $ 52 $ 228 $ 155
Specialty Paper Products 64 34 196 171
Reconciling Item:
Corporate 3 45 3 330
--------- --------- --------- ---------
Total investment in plant
and equipment $ 188 $ 131 $ 427 $ 656
--------- --------- --------- ---------

PENSION AND POSTRETIREMENT
EXPENSE

Label Products $ 70 $ 67 $ 141 $ 134
Specialty Paper Products 50 48 100 96
Reconciling Item:
Corporate 403 169 806 337
--------- --------- --------- ---------
Total pension and
postretirement expense $ 523 $ 284 $ 1,047 $ 567
--------- --------- --------- ---------