Mod-Pac Corp.’s profits improved during the first quarter in what could be the Buffalo specialty printing firm’s final earnings report as a publicly traded company.
Mod-Pac, which has agreed to be acquired by its two top executives for $8.40 per share in cash, said it earned $325,000, or 9 cents per share, during the winter quarter, a significant improvement from a loss of $123,000, or 4 cents per share, a year earlier.
And while Mod-Pac’s top executives held their traditional conference call Wednesday afternoon to discuss the company’s performance, they declined to take any questions from analysts and investors, as they typically do, because of the pending acquisition.
“I’m reluctant to respond to any questions about the company’s performance or the transaction,” said Daniel G. Keane, Mod-Pac’s president and chief executive officer, who is offering to buy the company with his father, Kevin, the company’s chairman. The proposed acquisition still must be approved by shareholders in a vote that has yet to be scheduled.
During the first quarter, Mod-Pac’s sales grew by more than 4 percent as the company’s efforts to expand its custom folding carton business paid off with increased revenues from private-label product manufacturers.
“We realized measurable growth in our core business – custom folding cartons – by capturing additional market share from existing customers,” Daniel Keane said.
All of Mod-Pac’s sales growth came from its custom folding carton business, which increased its revenues by nearly 8 percent to $11.2 million, or almost 78 percent of the company’s total revenues.
“We have focused our sales efforts on the private-label segment,” Keane said during the 10-minute conference call.
Sales of Mod-Pac’s stock packaging products slipped by 3 percent to $2.6 million, while revenues from its personalized print products dipped by 7 percent to $566,000.
At the same time, the company’s business became more profitable because of efforts in recent years to reduce costs, allowing Mod-Pac to earn more on each sale as its revenues increase, said David B. Lupp, the company’s chief operating officer and chief financial officer.
The company’s earnings would have been even higher if not for a $143,000 pretax charge related to the potential sale of a building that Mod-Pac uses as office rental space.
The shares fell 6 cents Wednesday to close at $8.29.