Midlothian, TX, September 26, 2011 – Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2011.
For the quarter, consolidated net sales decreased by $12.6 million, or 8.8%, from $143.0 million for the quarter ended August 31, 2010 to $130.4 million for the quarter ended August 31, 2011. Print sales for the quarter were stable at $69.2 million, compared to $69.1 million for the same quarter last year. Due to unexpected softness in the market, Apparel sales for the quarter ended August 31, 2011 were $61.2 million, compared to $73.9 million for the same quarter last year, or a decrease of 17.2%. Overall gross profit margins (“margins”) decreased from 27.8% to 26.1% for the quarters ended August 31, 2010 and August 31, 2011, respectively. Print margins increased during the period from 28.2% to 28.6%, while Apparel margins due to higher input costs decreased from 27.4% to 23.4%. Net earnings for the quarter decreased from $12.1 million, or 8.5% of sales, for the quarter ended August 31, 2010 to $9.7 million, or 7.4% of sales, for the quarter ended August 31, 2011. Diluted EPS decreased from $0.47 per share to $0.37 per share for the quarters ended August 31, 2010 and August 31, 2011, respectively.
For the six month period, net sales decreased from $283.8 million for the six months ended August 31, 2010 to $273.6 million for the six months ended August 31, 2011, or 3.6%. Print sales for the period again remained relatively stable at $136.3 million, compared to $136.9 million for the same period last year. Apparel sales for the period were $137.3 million, compared to $146.8 million for the same period last year, or a decrease of 6.5%. Overall margins decreased from 28.9% to 27.0% for the six months ended August 31, 2010 and 2011, respectively. Print margins decreased slightly during the period from 29.2% to 28.7%, while Apparel margins decreased from 28.5% to 25.3%, again due to higher raw material costs. Net earnings for the period, decreased from $25.2 million, or 8.9% of sales, for the six months ended August 31, 2010 to $21.1 million, or 7.7% of sales, for the six months ended August 31, 2011. Diluted earnings decreased from $0.97 per share to $0.81 per share for the six months ended August 31, 2010 and 2011, respectively.
The Company, during the quarter, generated $19.0 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $22.2 million for the comparable quarter last year. For the six month period ended August 31, 2011, the Company generated $40.9 million of EBITDA during the period, compared to $46.0 million for the comparable period last year.
Keith Walters, Chairman, Chief Executive Officer and President, commented by saying, “Overall the operational results for the quarter were as expected. Print continued to deliver steady revenue levels and operational results, while margins in our Apparel division were compressed some, due to higher raw material costs. Our Apparel raw material cost, on a comparable basis, was up approximately 50%, with continued increases expected over the next six months as the impact of the higher priced cotton makes its way through inventory. What wasn’t expected was the softness in the market during the last quarter. Whether this is just a temporary situation or one we will have to manage for an extended period of time is unknown. As we indicated previously, manufacturers’ ability to navigate through this period of higher cotton costs was dependent upon many factors, one being the continued economic recovery. The current softness in the marketplace will make this an even more challenging task for all concerned. The new manufacturing facility in Agua Prieta, MX is fully operational and all production has now been transitioned from our Anaheim, CA facility to this facility. So while many challenges have been negotiated to date, many challenges and uncertainties continue to mark the short term landscape. However, as always, we will remain vigilant to the task at hand.”
Ennis, Inc. (www.ennis.com) 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 production and distribution facilities strategically located throughout the United States of America, Mexico and Canada, to serve the Company’s national network of distributors. The Company, together with its subsidiaries, operates in two business segments: the Print Segment (“Print”) and Apparel Segment (“Apparel”). The Print Segment is primarily engaged in the business of manufacturing and selling 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, secure and negotiable documents, envelopes and other custom products. The Apparel Segment manufactures T-Shirts and distributes T-Shirts and other active-wear apparel through six distribution centers located throughout North America.
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 rapidly changing environment, the Company’s ability to adapt and expand its services in such an environment, 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. The Company undertakes no obligation to revise any forward-looking statements or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. Readers 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., Chief Financial Officer
Mr. Michael D. Magill, Executive Vice President
2441 Presidential Parkway
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820