Financial News
ENNIS, INC. REPORTS ADDITIONAL INFORMATION ON YEAR-END RESULTS
4/28/2005
Midlothian, Texas -- Ennis, Inc. (NYSE: EBF) today is supplementing the information contained in yesterday's report on year-end results with the following information and inclusion of the year-end summary financial statements.
To clarify the information regarding the costs incurred for compliance with the Sarbanes-Oxley Act of 2002, the $1,500,000 (pre-tax) occurred over the last three quarters of the fiscal year in relatively equal amounts, and was not entirely absorbed into the fourth quarter.
To assist investors in their understanding of the results of the Alstyle Apparel operation, it is important to know that not only was the fourth quarter the low point in their annual operating cycle, but also that Alstyle Apparel's operating margins were lower than normal as a result of higher costs of goods sold than otherwise would have been expected. Alstyle Apparel was required to account for its finished goods inventory at acquisition date at the expected selling price less costs to dispose and a reasonable selling profit as required by Financial Accounting Standard No. 141. The adjustment totaled $1,225,000 and proportionally effected cost of sales as finished goods inventories were sold during the fourth quarter. The increase in cost of sales for the quarter on a pre-tax basis was $1,063,000 or $.03 per fully diluted share after income taxes.
Further, to the statement in the April 27 press release related to the Company's position that the Alstyle Apparel transaction would be accretive to earnings in the first full years' financials, the Company continues to believe that the information provided to shareholders in the June 25, 2004 announcement of the Alstyle Apparel merger are accurate. Additionally, the Company believes the process of integration of Alstyle Apparel is not only moving forward at a satisfactory rate, but is ahead of schedule, and that the financial benefits of integration are significant.
Ennis, Inc. (www.ennis.com) (formerly Ennis Business Forms, Inc.) is primarily engaged in the production of and sale of business forms, apparel and other business products. The Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, the Company has 41 production and distribution facilities located throughout 16 states, Mexico and Canada, strategically located to serve the Company's national network of distributors. The Company, together with its subsidiaries, operates in four business segments: the Forms Solutions Group, Promotional Solutions Group, Financial Solutions Group and Apparel Solutions Group. The Forms Solutions Group is primarily engaged in the business of manufacturing and selling business forms and other printed business products. The Promotional Solutions Group is primarily engaged in the business of design, production and distribution of printed and electronic media, presentation products, flexographic printing, advertising specialties and Post-it Notes. The Financial Solutions Group designs, manufactures and markets printed forms and specializes in internal bank forms, secure and negotiable documents and custom products. The Apparel Solutions Group manufactures T-Shirts and distributes T-Shirts and other activewear apparel through six distribution centers located throughout North America.