Appvion reported 2Q 2014 operating income of $10.7 million compared to $20.4 million during 2Q 2013. The positive impact of increased revenue, resulting from higher shipment volumes, was offset by unfavorable product pricing and mix, increased manufacturing costs and higher selling, general and administrative (SG&A) expenses, including increased compensation and benefit costs, as well as increased legal expenses.
Appvion's net sales for the first six months of 2014 were $411.7 million compared to $412.3 million during the first half of 2013. Appvion reported operating income of $25.2 million for the first six months of 2014 compared to operating income of $38.3 million for the same period last year. The business challenges experienced during the current quarter, as discussed above, were also present throughout the first half of the year. Prior year results included $2 million of Domtar base paper transition costs and $0.3 million of start-up costs for thermal assets.
Mark Richards, Appvion's chairman, president and CEO, said: “Encapsys sales to external customers grew almost 12%, compared to 2Q 2013, while volume was approximately 5% lower. Those results reflect the ongoing shift to production of more complex products offset by the impact of expected lower order volume from Encapsys' largest customer at the end of its fiscal year.”
Appvion produces thermal, carbonless and security papers and Encapsys products.
