FOR IMMEDIATE RELEASE
ENNIS, INC. REPORTS RESULTS FOR THE THREE AND NINE
MONTHS ENDED NOVEMBER 30, 2018 AND DECLARES QUARTERLY DIVIDEND
Midlothian, TX. December 21, 2018 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the three and nine months ended November 30, 2018. Highlights include:
- Revenues increased $14.5 million, or 15.5% on a comparative quarter basis, and $17.0 million, or 6.0% for the nine month period.
- Diluted earnings per share increased from $0.33 to $0.40, or 21.2% on a comparative quarter basis and from $0.97 to $1.14, or 17.5% for the nine month period.
The Company’s revenues for the third quarter ended November 30, 2018 were $108.1 million compared to $93.6 million for the same quarter last year, an increase of 15.5%. Gross profit margin (“margin”) was $33.8 million for the quarter, or 31.2%, as compared to $30.0 million, or 32.0% for the third quarter last year. Net earnings for the quarter were $10.4 million, or $0.40 per diluted share compared, to $8.3 million, or $0.33 per diluted share, for the third quarter last year.
The Company’s revenues for the nine month period ended November 30, 2018 were $300.1 million compared to $283.1 million for the same period last year, an increase of 6.0%. Margin was $94.3 million, or 31.4%, as compared to $90.8 million, or 32.1% for the nine month periods ended November 30, 2018 and November 30, 2017, respectively. Net earnings from operations for the nine month period ended November 30, 2018 were $29.2 million, or $1.14 per diluted share compared to $24.6 million, or $0.97 per diluted share for the same period last year.
To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, from time to time the Company reports adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure. To provide additional information, the Company also reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from operations before interest expense, tax expense, depreciation, and amortization).
Management believes that these non-GAAP financial measures provide useful information to investors as a supplement to reported GAAP financial information. Management reviews these non-GAAP financial measures on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit agreement.
Reconciliations of non-GAAP financial measures for the quarter to the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following table. Other companies may calculate non-GAAP adjusted financial measures differently than Ennis, which limits the usefulness of the non-GAAP measures for comparison with these other companies. While management believes the Company’s non-GAAP financial measures are useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute or an alternative for, or superior to, the related financial information prepared in accordance with GAAP. These measures should be evaluated only in conjunction with the Company’s comparable GAAP financial measures.
The following table reconciles EBITDA, a non-GAAP financial measure, for the three and nine months ended November 30, 2018 and November 30, 2017 to the most comparable GAAP measure, net earnings (dollars in thousands).
Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “We are pleased with our performance for the quarter and the year given the continued challenges facing the industry stemming from raw material and freight cost increases. Tight supply conditions have allowed for multiple price increases for raw materials over the past year. These price increases will continue to place downward pressure on our margins until we are able to pass the increased costs through to the marketplace. Historically, less frequent market price increases have allowed for more orderly and timely pricing adjustments. We believe the size and number of pricing increases this year have impacted all manufacturers’ ability to timely pass through these increases to the marketplace. While we don’t foresee these challenges changing in the short-term, we do expect pricing and costs in the marketplace to normalize over the long term. Also, as mentioned last quarter, while our recent acquisitions’ margins are improving, the newly acquired operations continued to have a dilutive impact on our overall margin percentage and we expect this will continue until we have fully implemented our cost and management systems. Even so, these recent additions contributed sales of $18.4 million to the third quarter and net earnings of over 5 cents per diluted share. However, even with increased manufacturing costs, our net earnings for the quarter increased on a comparable quarter basis from 8.8% to 9.6% due to lower operating and corporate tax costs and improved operating performances of our recently acquired operations. We continue to believe we have one of the strongest balance sheets in the industry and our cash position remains significant. As such, we will continue to explore strategic opportunities as a way to profitably utilize our cash and leverage our balance sheet.”
In Other News
On December 20, 2018 the Ennis Board of Directors declared a quarterly cash dividend of 22.5 cents a share on the Company’s common stock. The dividend is payable on February 8, 2019 to shareholders of record on January 11, 2019.
Since 1909, Ennis has been primarily engaged in the production and sale of business forms 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, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. Ennis manufactures and sells business forms, other printed business products, printed and electronic media, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, plastic cards, secure and negotiable documents, envelopes, tags and labels and other custom products. For more information, visit www.ennis.com.
Safe Harbor under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These statements are subject to numerous uncertainties, which include, but are not limited to, the Company’s ability to effectively manage its business functions while growing its business in a competitive environment, the Company’s ability to adapt and expand its services in such an environment and the variability in the prices of paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 28, 2018 and its Quarterly Reports on Form 10-Q for the fiscal quarters ending May 31, 2018 and August 31, 2108. The Company does not undertake, and hereby disclaims, any duty or obligation to update or otherwise revise any forward-looking statements to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, although its situation and circumstances may change in the future. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.
For Further Information Contact:
Mr. Keith S. Walters, Chairman, Chief Executive Officer and President
Mr. Richard L. Travis, Jr., CFO, Treasurer and Principal Financial and Accounting Officer
Mr. Michael D. Magill, Executive Vice President and Secretary
2441 Presidential Parkway
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820