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8-K - FORM 8-K - ENNIS, INC. | d81582e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
ENNIS, INC. REPORTS RESULTS
FOR THE YEAR AND QUARTER ENDED FEBRUARY 28, 2011
FOR THE YEAR AND QUARTER ENDED FEBRUARY 28, 2011
Midlothian, Texas April 25, 2011 Ennis, Inc. (the Company), (NYSE: EBF), today reported
financial results for the quarter and the year ended February 28, 2011.
Highlights
| Revenues for the year increased by $32.3 million over the same period last year, or 6.2%. For the quarter revenues were up $10.0 million over the previous year, or 8.2%. | ||
| Gross profit margins increased 200 basis points (bps) over the prior year, from 26.1% to 28.1% for the fiscal year ended February 28, 2010 and 2011, respectively. | ||
| Diluted earnings per share increased by 26.5% for the fiscal year, from $1.36 per share for fiscal year 2010 to $1.72 per share for fiscal year 2011. |
Financial Overview
For the quarter, consolidated net sales increased by $10.0 million, or 8.2%, from $121.4
million for the quarter ended February 28, 2010 to $131.4 million for the quarter ended February
28, 2011. Print sales for the quarter were $66.2 million, compared to $66.1 million for the same
quarter last year, or an increase of 0.2%. Apparel sales for the quarter were $65.2 million,
compared to $55.3 million for the same quarter last year, or an increase of 17.9%. Overall gross
profit margins (margins) during the quarter decreased slightly from 28.2% for the three months
ended February 28, 2010 to 27.5% for the three months ended February 28, 2011. Print margins
increased from 26.6% to 26.9%, while our Apparel margins decreased from 30.1% to 28.0%, due to
higher cotton costs and the impact of the start-up of our Agua Prieta facility. While our Apparel
margins decreased slightly over the comparable quarter last year, they were in line with our nine
month numbers (27.8% for the nine months ended November 30, 2010 compared to 28.0% for the current
quarter). Net earnings were $9.8 million, or 8.1% of sales, for the three months ended February
28, 2010 and $9.8 million, or 7.5% of sales, for the quarter ended February 28, 2011. Diluted EPS
for the quarter remained at $0.38 per share, due to the impact of higher cotton costs and the
impact of the Agua Prieta startup. We estimate that the impact of the start-up of Agua Prieta
during the quarter was approximately $2.4 million or $1.6 million after tax.
Net sales increased from $517.7 million for the year ended February 28, 2010 to $550.0 million
for the year ended February 28, 2011, an increase of $32.3 million or 6.2%. Print sales for the
year were $272.7 million, compared to $282.3 million for the same period last year, or a decrease
of 3.4%. Apparel sales for the year were $277.3 million, compared to $235.4 million for the same
period last year, or an
increase of 17.8%. Overall, margins increased 200 bps, from 26.1% for fiscal year 2010 to
28.1% for fiscal year 2011. Print margins increased from 27.6% to 28.3%, while Apparel margins
increased from 24.4% to 27.9%, for the year ended February 28, 2010 and 2011, respectively. Net
earnings increased from $35.2 million, or 6.8% of sales, for the year ended February 28, 2010 to
$44.6 million, or 8.1% of sales, for the year ended February 28, 2011. Diluted earnings increased
from $1.36 per share to $1.72 per share for the year ended February 28, 2010 and 2011,
respectively, or 26.5%. We estimate that the start-up impact associated with the Agua Prieta
facility was approximately $4.6 million ($3.0 million after tax) for the period. We still estimate
the total negative impact associated with the start-up of the Agua Prieta facility to be within our
original guidance of around $9.0 million, with the majority of the remaining portion being incurred
during the first and second quarter of fiscal year 2012.
The Company, during the quarter, generated $17.5 million of EBITDA (earnings before interest,
taxes, depreciation, and amortization) compared to $18.8 million for the comparable quarter last
year. For the year ended February 28, 2011, the Company generated $81.5 million of EBITDA compared
to $70.1 million for the comparable period last year.
Three months ended | Year ended | |||||||||||||||
February 28, | February 28, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Earnings before income taxes |
$ | 14,595 | $ | 15,395 | $ | 69,417 | $ | 55,669 | ||||||||
Interest expense |
262 | 545 | 1,234 | 2,627 | ||||||||||||
Depreciation/amortization |
2,599 | 2,854 | 10,897 | 11,817 | ||||||||||||
EBITDA (non-GAAP) |
$ | 17,456 | $ | 18,794 | $ | 81,548 | $ | 70,113 | ||||||||
Keith Walters, Chairman, Chief Executive Officer and President, commented as follows, We
are pleased with the operational results for the year, especially considering all the challenges
and the start-up of our new manufacturing facility located in Agua Prieta, Mexico. Operationally,
both sectors showed positive margins improvements for the year. Our Print margins were up 70 bps,
while Apparel margins were up 350 bps for the year. The Apparel sector continued to show strong
sales growth, with an increase of 17.9% for the quarter. While we have been successful to date in
managing the increases in our raw material costs, we continue to be concerned with the potential
impact of cotton pricing on our operational results for fiscal year 2012. Our ability to continue
to manage this potential cost increase will be dependent upon many factors, a number of which are
outside our control. Examples are: the continued recent positive development in employment
numbers, the availability of cotton, the impact of current gasoline prices on consumers
discretionary spending and lastly, the pricing policies of our competitors. The construction of
our new apparel manufacturing facility in Agua Prieta, Mexico continues to progress and nears
completion. We continue to test processes, calibrate equipment and train employees, but expect to
be producing greater than 1.0 million pounds of fabric out of this facility during the upcoming
quarter. We continue to anticipate potential cost savings to be realized once this facility reaches
its full production capacity. Many challenges will present themselves for fiscal year 2012;
however, we feel confident in being able to meet them. We will continue to be vigilant to deliver
the planned results.
About Ennis
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 Companys 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 Companys ability to effectively
manage its business functions while growing its business in a rapidly changing environment, the
Companys 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 Companys 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 Walters, Chairman, Chief Executive Officer and President
Mr. Richard L. Travis, Jr., Chief Financial Officer
Mr. Michael Magill, Executive Vice President
Mr. Richard L. Travis, Jr., Chief Financial Officer
Mr. Michael Magill, Executive Vice President
Ennis, Inc.
2441 Presidential Parkway
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820
www.ennis.com
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820
www.ennis.com
Ennis, Inc.
Condensed Financial Information
(In thousands, except per share amounts)
Condensed Financial Information
(In thousands, except per share amounts)
Three months ended | Year ended | |||||||||||||||
Condensed Operating Results | February 28, | February 28, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
$ | 131,407 | $ | 121,385 | $ | 549,999 | $ | 517,738 | ||||||||
Cost of goods sold |
95,316 | 87,172 | 395,501 | 382,419 | ||||||||||||
Gross profit margin |
36,091 | 34,213 | 154,498 | 135,319 | ||||||||||||
Operating expenses |
21,183 | 18,321 | 83,677 | 76,737 | ||||||||||||
Operating income |
14,908 | 15,892 | 70,821 | 58,582 | ||||||||||||
Other expense |
313 | 497 | 1,404 | 2,913 | ||||||||||||
Earnings before income taxes |
14,595 | 15,395 | 69,417 | 55,669 | ||||||||||||
Income tax expense |
4,776 | 5,561 | 24,786 | 20,463 | ||||||||||||
Net earnings |
$ | 9,819 | $ | 9,834 | $ | 44,631 | $ | 35,206 | ||||||||
Earnings per share |
||||||||||||||||
Basic |
$ | 0.38 | $ | 0.38 | $ | 1.73 | $ | 1.37 | ||||||||
Diluted |
$ | 0.38 | $ | 0.38 | $ | 1.72 | $ | 1.36 | ||||||||
February 28, | February 28, | |||||||||||||||
Condensed Balance Sheet Information |
2011 | 2010 | ||||||||||||||
Assets | ||||||||||||||||
Current assets |
||||||||||||||||
Cash |
$ | 12,305 | $ | 21,063 | ||||||||||||
Accounts receivable, net |
58,359 | 57,249 | ||||||||||||||
Inventories, net |
100,363 | 75,137 | ||||||||||||||
Other |
11,371 | 12,990 | ||||||||||||||
182,398 | 166,439 | |||||||||||||||
Property, plant & equipment |
93,661 | 65,720 | ||||||||||||||
Other |
197,669 | 200,540 | ||||||||||||||
$ | 473,728 | $ | 432,699 | |||||||||||||
Liabilities and Shareholders Equity | ||||||||||||||||
Current liabilities |
||||||||||||||||
Accounts payable |
$ | 18,868 | $ | 27,463 | ||||||||||||
Accrued expenses |
27,644 | 22,338 | ||||||||||||||
46,512 | 49,801 | |||||||||||||||
Long-term debt |
50,586 | 41,817 | ||||||||||||||
Deferred credits |
28,947 | 27,821 | ||||||||||||||
Total liabilities |
126,045 | 119,439 | ||||||||||||||
Shareholders equity |
347,683 | 313,260 | ||||||||||||||
$ | 473,728 | $ | 432,699 | |||||||||||||
Year ended |
||||||||||||||||
February 28, |
||||||||||||||||
Condensed Cash Flow Information |
2011 | 2010 | ||||||||||||||
Cash provided by operating activities |
$ | 32,766 | $ | 82,567 | ||||||||||||
Cash used in investing activities |
(35,985 | ) | (20,244 | ) | ||||||||||||
Cash used in financing activities |
(6,005 | ) | (50,488 | ) | ||||||||||||
Effect of exchange rates on cash |
466 | (58 | ) | |||||||||||||
Change in cash |
(8,758 | ) | 11,777 | |||||||||||||
Cash at beginning of period |
21,063 | 9,286 | ||||||||||||||
Cash at end of period |
$ | 12,305 | $ | 21,063 | ||||||||||||