The following discussion and analysis presents the factors that had a material effect on our financial position as ofMarch 31, 2022 and our results of operations for the three months endedMarch 31, 2022 and 2021. You should read this discussion in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included in our most recent Annual Report on Form 10-K. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.
Executive Summary
For the three months endedMarch 31, 2022 , consolidated net sales of$284.8 million increased$57.8 million (25%) from$227.0 million in the same prior year period. The increase included incremental net sales from the Itasa acquisition, selling price actions to recover input costs and higher volume in both segments. These increases were partially offset by adverse effects of currency movements and a lower value sales mix in the Technical Products business. Consolidated operating income decreased$1.4 million (10%) from the prior year period to$12.2 million for the three months endedMarch 31, 2022 . The reduction was primarily due to the impacts of availability of labor and raw materials, which drove higher labor costs, reduced efficiency and higher waste. In addition, distribution costs increased significantly as a result of market inflation. Cash used in operating activities of$(2.0) million for the three months endedMarch 31, 2022 compared to$20.7 million provided in the prior year period. The decrease resulted from the increase in working capital needs resulting from the growth in net sales, lower cash earnings and higher tax payments in 2022.
Results of Operations and Related Information
In this section, we discuss and analyze our net sales, earnings before interest and taxes (which we refer to as "operating income") and other information relevant to an understanding of our results of operations for the three months endedMarch 31, 2022 and 2021.
Analysis of
The following table presents net sales by segment, expressed as a percentage of total net sales: Three Months Ended March 31, 2022 2021 Net sales Technical Products$ 185.6 65 %$ 145.2 64 % Fine Paper and Packaging 99.2 35 % 81.8 36 % Consolidated$ 284.8 100 %$ 227.0 100 % F-18
-------------------------------------------------------------------------------- Table of Contents The following table presents our net sales by segment for the three months endedMarch 31, 2022 and 2021: Change in Net Sales Compared to Prior Period Three Months Ended March 31, Change Due To 2022 2021 Total Change Volume Net Price (a) Currency Technical Products$ 185.6 $ 145.2 $ 40.4 $ 32.7 $ 14.0$ (6.3) Fine Paper and Packaging 99.2 81.8 17.4 6.0 11.4 - Consolidated$ 284.8 $ 227.0 $ 57.8 $ 38.7 $ 25.4$ (6.3)
(a) Includes changes in selling prices and product mix.
Consolidated net sales of$284.8 million for the three months endedMarch 31, 2022 increased$57.8 million (25%) from the prior year period. The increase included incremental net sales from the Itasa acquisition, selling price actions to recover input costs and higher volume in both segments. These increases were offset by adverse effects of currency movements and a lower value sales mix in the Technical Products business. Excluding the effects of theApril 2021 Itasa acquisition and a facility closure, consolidated net sales increased 12% from the prior year period. •Net sales in our Technical Products segment increased$40.4 million (28%) from the prior year period. The increase was attributable to net sales from the acquisition of Itasa and from selling price actions to recover ongoing input cost impacts. These increases were partly offset by lost sales from the facility closure, a lower value product mix and adverse currency effects. Excluding the effects of the Itasa acquisition and the facility closure, net sales increased 6%. •Net sales in ourFine Paper and Packaging segment increased$17.4 million (21%) from the prior year period. The improvement reflected selling price actions to offset ongoing input cost increases and continued organic growth in volumes in all product categories.
Analysis of Operating Income - Three Months Ended
The following table sets forth line items from our Condensed Consolidated Statements of Operations as a percentage of net sales for the periods indicated and is intended to provide a perspective of trends in our historical results: Three Months Ended March 31, 2022 2021 Net sales 100.0 % 100.0 % Cost of products sold 83.0 78.1 Gross profit 17.0 21.9 Selling, general and administrative expenses 10.6 10.7 Acquisition-related costs (Note 4) 1.9 5.3 Asset restructuring costs (Note 10) 0.2 - COVID-19 costs (Note 1) 0.2 0.2 Other income, net (0.2) (0.4) Operating income 4.3 6.1 Interest expense, net 1.8 1.4 Income before income taxes 2.5 4.7 Provision for income taxes 0.5 1.0 Net income 2.0 % 3.7 % F-19
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Table of Contents
The following table presents our operating income by segment for the three
months ended
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