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8-K - FORM 8-K - ENNIS, INC.d84831e8vk.htm
Exhibit 99.1
(ENNIS LOGO)
FOR IMMEDIATE RELEASE
ENNIS, INC. REPORTS RESULTS
FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2011
     Midlothian, September 26, 2011 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2011.
Financial Overview
          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.

 


 

                                 
    Three months ended     Six months ended  
    August 31,     August 31,  
    2011     2010     2011     2010  
Earnings before income taxes
  $ 15,279     $ 19,100     $ 33,129     $ 39,636  
Interest expense
    664       321       1,482       758  
Depreciation/amortization
    3,061       2,793       6,260       5,569  
 
                       
EBITDA (non-GAAP)
  $ 19,004     $ 22,214     $ 40,871     $ 45,963  
 
                       
          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.”
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 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, plastic cards, 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 nine 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 Walters, Chairman, Chief Executive Officer and 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

 


 

Ennis, Inc.
Condensed Financial Information
(In thousands, except per share amounts)
Condensed Operating Results
                                 
    Three months ended     Six months ended  
    August 31,     August 31,  
    2011     2010     2011     2010  
Revenues
  $ 130,384     $ 143,034     $ 273,642     $ 283,775  
Cost of goods sold
    96,290       103,326       199,847       201,887  
 
                       
Gross profit margin
    34,094       39,708       73,795       81,888  
Operating expenses
    18,322       20,276       39,179       41,523  
 
                       
Operating income
    15,772       19,432       34,616       40,365  
Other expense
    493       332       1,487       729  
 
                       
Earnings before income taxes
    15,279       19,100       33,129       39,636  
Income tax expense
    5,567       6,971       11,993       14,467  
 
                       
Net earnings
  $ 9,712     $ 12,129     $ 21,136     $ 25,169  
 
                       
 
                               
Earnings per share
                               
Basic
  $ 0.37     $ 0.47     $ 0.82     $ 0.97  
 
                       
Diluted
  $ 0.37     $ 0.47     $ 0.81     $ 0.97  
 
                       
Condensed Balance Sheet Information
                 
    August 31,     February 28,  
    2011     2011  
Assets
Current assets
               
Cash
  $ 14,307     $ 12,305  
Accounts receivable, net
    52,513       58,359  
Inventories, net
    120,789       100,363  
Other
    11,843       11,371  
 
           
 
    199,452       182,398  
 
           
Property, plant & equipment
    92,285       93,661  
Other
    196,355       197,669  
 
           
 
  $ 488,092     $ 473,728  
 
           
Liabilities and Shareholders’ Equity
Current liabilities
               
Accounts payable
  $ 23,877     $ 18,868  
Accrued expenses
    22,679       27,644  
Current portion of long-term debt
    50,000       586  
 
           
 
    96,556       47,098  
 
           
Long-term debt
          50,000  
Deferred credits
    29,575       28,947  
 
           
Total liabilities
    126,131       126,045  
 
           
 
               
Shareholders’ equity
    361,961       347,683  
 
           
 
  $ 488,092     $ 473,728  
 
           
Condensed Cash Flow Information
                 
    Six months ended  
    August 31,  
    2011     2010  
Cash provided by operating activities
  $ 12,744     $ 27,507  
Cash used in investing activities
    (3,965 )     (23,238 )
Cash used in financing activities
    (7,860 )     (8,024 )
Effect of exchange rates on cash
    1,083       (315 )
 
           
Change in cash
    2,002       (4,070 )
Cash at beginning of period
    12,305       21,063  
 
           
Cash at end of period
  $ 14,307     $ 16,993