Neenah, Inc. (NYSE:NP) Q3 2019 Earnings Conference Call Transcript
Nov 06, 2019 • 11:00 am ET
Good day, and welcome to the Neenah Q3 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Bill McCarthy. Please go ahead.
Okay. Thank you, and good morning, everyone.
On the call with me today are John O'Donnell, Chief Executive Officer, and Bonnie Lind, Chief Financial Officer. John and Bonnie will provide comments on business and financial results for the most recent quarter, along with thoughts on the remainder of the year. After these prepared remarks, we'll open up the call for questions.
I'll start with a few headlines. Excluding impacts from currency and the divestiture of our operation in Vermont last December, quarterly sales of $232 million were down 6% compared to last year. Adjusted earnings per share were $0.95, up 25% from $0.76 last year. GAAP earnings were $0.84 per share and also up from $0.75 a year ago. Details on adjusting items and a reconciliation to comparable GAAP figures are included in the press release.
Finally, I'll note that our comments today may include forward-looking statements. Actual results could differ from these statements due to uncertainties and risks outlined both on our website and in our SEC filings.
And with that, I'll turn things over to John.
Thank you, and good morning, everyone.
As a result of the many actions our teams have underway Q3 results versus prior year, again, demonstrates significant progress in a number of areas. Operating margins increased by over 250 basis points and are returning to more normalized levels, earnings grew 25% and operating cash flow was a very solid $33 million, up $10 million as we were relentlessly focused on capital efficiencies.
While our bottom line increased significantly as we closely manage costs and pricing initiatives, revenues reflected weaker market conditions in both segments. In addition, short-term results were negatively impacted by two strategic actions we've taken. As you should expect from our teams, we are working aggressively across the businesses to address short-term issues and position us for long-term success.
In Fine Paper and Packaging, commercial print volumes remain under secular pressure and higher value products like ours are even more pressured when prices are elevated. In addition, short-term results were negatively impacted by two significant strategic actions taken to strengthen our long-term position. First was the 2018 divestiture of our Vermont mill, reducing sales but improving our bottom line. And second was a more recent change to our market representation, which I'll talk about next.
Our strategy has been to selectively maintain the very best distribution in each market we serve. Neenah is the market leader and we believe limited distribution of our well-known brands help support the value of these products and rewards the loyalty of our customers. However, one of our historically larger distributors radically changed their strategic focus, choosing to no longer actively promote