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Thursday, January 7, 2010

Nashua Corp. closes Omaha plant

The Nashua Corp. plant in Omaha, Neb., is closing at the end of this week, putting 120 people out of work, the Omaha World-Herald has reported. The plant makes up about 15 percent of the company’s nationwide work force.

The city’s namesake company, which makes specialty labels and paper products, was sold in September to Connecticut-based Cenveo Inc., a graphic communications giant that makes one out of every four envelopes used in the world.

Cenveo plans to keep the Nashua brand name, but the future of Nashua Corp.’s four remaining plants is unclear. Cenveo, amid financial losses, closed six of its own plants in the first half of 2009, according to financial statements filed with the U.S. Securities and Exchange Commission. The company lost $21.5 million in the first nine months of the year, the latest financial statements show.

Cenveo announced plans to buy 162-year-old Nashua Corp. this past spring in a $44 million cash and stock deal that included assuming all of the company’s debt. Shareholders cried foul, filing suit over what they called an “unconscionable” and “grossly inadequate” price.

The shareholders and Nashua Corp. settled the suit in July in exchange for disclosures about the merger and $175,000 in legal fees.

The disclosures provided were unaudited financial projections and a report by Nashua’s financial adviser, Lincoln International LLC.

Nashua Corp. makes products as recognizable as movie theater tickets, receipt paper and deli labels. The company also makes radio frequency identity labels – a technology that is replacing product bar coding. Using Nashua Corp’s labels, a store employee can locate an item using radio waves, without having to physically scan it.

The company has two local facilities – the corporate headquarters in Nashua and a coated paper products plant in Merrimack. The other remaining U.S. facilities are located in Park Ridge, Ill., Jefferson City, Tenn., and Los Angeles, Calif.

The Omaha plant isn’t the first Nashua Corp. facility to shutter in recent years. In 2008, when the company lost a total of $19.8 million, it shut down facilities in Cranbury, N.J., and Jacksonville, Fla. Some of those operations were consolidated into the Omaha plant.

In August 2009, the company cut 28 jobs nationwide, including a handful in Nashua, to offset a decline in sales and increasing fuel, materials and distribution costs. Chief Financial Officer John Patenaude said in a statement then that the company, like most other businesses, had been impacted by the economy.

Stamford, Conn.-based Cenveo is the third largest graphics communication company in North America.

The company implemented a cost savings and restructuring plan in 2009 that led to the closure of three envelope plants, a journal printing plant, a commercial printing plant, and a forms plant in Jaffrey. The company cut a total of 1,400 jobs nationwide in 2009, but expected the bulk of the cuts to be completed by year’s end.

Since then, Cenveo has also announced plans to close a 61-person plant in Charlottesville, Va.

A publication called Graphic Arts Monthly reported earlier this week that the company notified the state of Virginia about the closure plans.

Ashley Smith can be reached at 594-6446 or asmith@nashuatelegraph.com.