Stronger sales of its custom folding cartons helped Mod-Pac eke out a small profit during the second quarter as the Buffalo specialty printing company moved a step closer toward scheduling a vote on the proposed acquisition by its top executives.
Mod-Pac said it earned $19,000, or a penny per share, during the second quarter, a significant improvement from the loss of $120,000, or 4 cents per share, that it booked a year earlier.
Much of the improvement in earnings was due to a 6 percent rise in Mod-Pac’s sales, which hit their highest level for any second-quarter since 2005. That helped the company bolster its profits by spreading its operating costs over a larger revenue base.
The second-quarter earnings report could be the last one ever filed by Mod-Pac, which has agreed to be acquired by its two top executives for $8.40 per share in cash. Share were trading at $8.35, down 4 cents, Thursday morning.
While the proposed acquisition still must be approved by shareholders in a vote that has yet to be scheduled, the company took a step toward submitting the deal to its stockholders by filing a preliminary proxy statement with the Securities and Exchange Commission on Wednesday. The filing, however, did not set a date for the special shareholders meeting that must be held.
Daniel G. Keane, Mod-Pac’s president and chief executive officer, is offering to buy the company with his father, Kevin, the company’s chairman, in a deal worth $29.6 million. A special committee of Mod-Pac’s independent directors has recommended that the deal be approved, although some shareholders have objected because they think the price is too low, given the company’s improved financial performance since the beginning of last year.
During the second quarter, Mod-Pac’s sales strengthened to $14.2 million from $13.4 million.
Mod-Pac’s custom folding carton business grew by 6 percent, with revenues rising to $11.8 million from $11.1 million. Its stock packaging sales improved by 9 percent to $1.7 million from $1.5 million. Sales of personalized print products slipped by 1 percent to $727,000 from $734,000.