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8-K - FORM 8-K - ENNIS, INC. | d83035e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
ENNIS, INC. REPORTS RESULTS
FOR THE FIRST QUARTER ENDED MAY 31, 2011
FOR THE FIRST QUARTER ENDED MAY 31, 2011
Midlothian, June 20, 2011 Ennis, Inc. (the Company), (NYSE: EBF), today reported
financial results for the first quarter ended May 31, 2011.
Highlights
| Consolidated revenues for the quarter increased $2.6 million, or 1.8% over the comparable quarter last year. | ||
| Apparel sales increased $3.1 million, or 4.2% over the comparable quarter last year. | ||
| Diluted earnings per share decreased from $.50 per share for the same quarter last year to $.44 for the current quarter. |
Financial Overview
For the quarter, consolidated net sales increased by $2.6 million, or 1.8%, from $140.7
million for the quarter ended May 31, 2010 to $143.3 million for the quarter ended May 31, 2011.
Print sales for the quarter were $67.1 million, compared to $67.8 million for the same quarter last
year, or a decrease of 1.0%. Apparel sales for the quarter were $76.1 million, compared to $73.0
million for the same quarter last year, or an increase of 4.2%. Overall gross profit margins
(margins) decreased from 30.0% to 27.7% for the quarters ended May 31, 2010 and May 31, 2011,
respectively. Print margins decreased from 30.3% to 28.8%, and Apparel margins decreased from
29.7% to 26.8%, for the quarters ended May 31, 2010 and May 31, 2011, respectively. Net earnings
for the quarter decreased from $13.0 million, or 9.3% of sales, for the quarter ended May 31, 2010
to $11.4 million, or 8.0% of sales, for the quarter ended May 31, 2011. Diluted EPS decreased from
$0.50 per share to $0.44 per share for the quarters ended May 31, 2010 and May 31, 2011,
respectively.
The Company, during the quarter, generated $21.9 million in EBITDA (earnings before interest,
taxes, depreciation, and amortization) compared to $23.7 million for the comparable quarter last
year.
Three months ended | ||||||||
May 31, | ||||||||
2011 | 2010 | |||||||
Earnings before income taxes |
$ | 17,850 | $ | 20,536 | ||||
Interest expense |
818 | 437 | ||||||
Depreciation/amortization |
3,199 | 2,776 | ||||||
EBITDA (non-GAAP) |
$ | 21,867 | $ | 23,749 | ||||
Keith Walters, Chairman, Chief Executive Officer and President, commented by saying,
Overall we are pleased with the operational results this quarter, even though our reported margins
for both sectors decreased over their comparables due to higher raw material costs. In our Apparel
sector alone, our raw material costs flowing through our operating results increased approximately
35% over the comparable quarter last year. In addition, our Apparel sector had manufacturing
inefficiencies associated with the start-up and transition to our new manufacturing facility in
Agua Prieta, Mexico of approximately $2.2 million, or 289 basis points, which were not incurred
during the same quarter last year. Our major concern for the current fiscal year still remains the
high cost of cotton. Even with the significant increase in our cotton cost flowing through our
operating results this quarter, the current cost of cotton going into our inventory is still much
higher. Our ability to pass these cost increases on to the market continues to be unknown and is
dependent upon the continuing economic recovery and the actions of our competitors. Sales for the
Print sector appear to have stabilized, but still remain challenged. Apparel sales during the
quarter were restricted some, to help facilitate the transition to our new manufacturing facility.
The new apparel manufacturing facility continues to progress and we are in the final stages of
transitioning production from our Anaheim, CA facility to the new facility. We continue to expect
this transition to be completed by the end of our second fiscal quarter. So while many challenges
were negotiated during the quarter, many challenges remain for fiscal year 2012. As always, we
will continue to remain vigilant to the task at hand.
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
2441 Presidential Parkway
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 | ||||||||
May 31, | ||||||||
Condensed Operating Results | 2011 | 2010 | ||||||
Revenues |
$ | 143,258 | $ | 140,741 | ||||
Cost of goods sold |
103,557 | 98,561 | ||||||
Gross profit margin |
39,701 | 42,180 | ||||||
Operating expenses |
20,857 | 21,247 | ||||||
Operating income |
18,844 | 20,933 | ||||||
Other expense |
994 | 397 | ||||||
Earnings before income taxes |
17,850 | 20,536 | ||||||
Income tax expense |
6,426 | 7,496 | ||||||
Net earnings |
$ | 11,424 | $ | 13,040 | ||||
Earnings per share |
||||||||
Basic |
$ | 0.44 | $ | 0.51 | ||||
Diluted |
$ | 0.44 | $ | 0.50 | ||||
May 31, | February 28, | |||||||
Condensed Balance Sheet Information | 2011 | 2011 | ||||||
Assets |
||||||||
Current assets |
||||||||
Cash |
$ | 17,853 | $ | 12,305 | ||||
Accounts receivable, net |
53,818 | 58,359 | ||||||
Inventories, net |
115,274 | 100,363 | ||||||
Other |
11,483 | 11,371 | ||||||
198,428 | 182,398 | |||||||
Property, plant & equipment |
94,670 | 93,661 | ||||||
Other |
197,065 | 197,669 | ||||||
$ | 490,163 | $ | 473,728 | |||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 24,970 | $ | 18,868 | ||||
Accrued expenses |
28,444 | 27,644 | ||||||
Current portion of long-term debt |
240 | 586 | ||||||
53,654 | 47,098 | |||||||
Long-term debt |
50,000 | 50,000 | ||||||
Deferred credits |
29,863 | 28,947 | ||||||
Total liabilities |
133,517 | 126,045 | ||||||
Shareholders equity |
356,646 | 347,683 | ||||||
$ | 490,163 | $ | 473,728 | |||||
Three months ended | ||||||||
May 31, | ||||||||
Condensed Cash Flow Information | 2011 | 2010 | ||||||
Cash provided by operating activities |
$ | 11,271 | $ | 9,651 | ||||
Cash used in investing activities |
(2,117 | ) | (13,158 | ) | ||||
Cash used in financing activities |
(3,869 | ) | (4,008 | ) | ||||
Effect of exchange rates on cash |
263 | (50 | ) | |||||
Change in cash |
5,548 | (7,565 | ) | |||||
Cash at beginning of period |
12,305 | 21,063 | ||||||
Cash at end of period |
$ | 17,853 | $ | 13,498 | ||||