NASHUA, N.H. July 9, 2001 -- Nashua Corporation (NYSE: NSH), a premier manufacturer and marketer of labels, thermal specialty papers and imaging products, today announced that it has entered into supply agreements on laminated and coated products with Avery Dennison, a global leader in pressure-sensitive technology and innovative self-adhesive solutions for consumer products and label materials. Under the terms of the long-term agreement, Nashua will supply coated products manufactured at its Merrimack, N.H. facility to Fasson Roll North America, a division of Avery Dennison.  Separately, Nashua will purchase laminated materials for certain finished products from Avery Dennison. Nashua also announced it will cease lamination operations at its Omaha, NE facility, where it will reduce its workforce by approximately 80 employees.  After the workforce reduction, Nashua’s Omaha-based employee population will be approximately 210. The Company plans to close down the lamination operation and complete the workforce reductions by September 1, 2001. The Company expects a third quarter unusual and restructuring charge of $3.3 million relating to the closure of its lamination operations of which $2.7 million represents a non-cash write off of the equipment utilized in the lamination business. “These agreements are another significant step forward in our initiative to enhance shareholder value by focusing on core businesses where we have a competitive advantage,” said Andrew Albert, Nashua’s Chairman and Chief Executive Officer. “Purchasing our lamination needs from Avery Dennison, a world leader in pressure- sensitive technology, enables us to avoid significant investments in new lamination equipment and ensures our coating materials facilities in New Hampshire are more fully and profitably utilized. Incremental sales of coated thermal products to Avery Dennison will result in increased sales for the Specialty Paper Product segment.” Albert concluded, “Entering mutually advantageous, long-term agreements with Avery Dennison gives us an excellent platform to explore new opportunities with a company that has been both an excellent supplier and customer for Nashua.  We now have two state-of-the-art printing and converting facilities for label products which provide us significant operating leverage for future growth.”