Attached files

file filename
8-K - FORM 8-K - ENNIS, INC.d415506d8k.htm

Exhibit 99.1






Midlothian, September 25, 2012 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2012.

Financial Overview

Our consolidated net sales were $138.3 million for the second quarter ended August 31, 2012 compared to $130.4 million for the second quarter ended August 31, 2011, or an increase of 6.1%. Print sales increased 24.3% for the quarter, from $69.2 million to $86.0 million. Apparel sales for the quarter declined by 14.5% (down 4.5% on units and down 10% on price) from $61.2 million to $52.3 million. Our consolidated gross profit margin (“margin”) decreased from 26.1% to 24.5% for the quarters ended August 31, 2011 and August 31, 2012, respectively. Our print segment margin increased from 28.6% to 30.7%, while our apparel segment margin, which continues to be impacted by higher cotton costs, decreased from 23.4% to 14.4% for the quarter. As a result, our net earnings decreased from $9.7 million, or 7.4% of net sales, for the quarter ended August 31, 2011 to $7.6 million, or 5.5% of net sales, for the quarter ended August 31, 2012. Diluted earnings per share decreased from $0.37 to $0.29 for the quarters ended August 31, 2011 and August 31, 2012, respectively.

For the six month period, net sales increased from $273.6 million to $280.9 million, or 2.7%. Print sales for the six month period were $173.4 million, compared to $136.3 million for the same period last year, an increase of $37.1 million, or 27.2%. Apparel sales for the six month period were $107.5 million, compared to $137.3 million for the same period last year, or a decrease of 21.7% (down 14.7% on units and down 7% on price). Overall our margin decreased from 27.0% to 22.1% for the six months ended August 31, 2011 and 2012, respectively. Our print margin increased during the period from 28.7% to 29.3%, while our apparel margin decreased from 25.3% to 10.6%, again due to higher cotton costs. Net earnings for the period decreased from $21.1 million, or 7.7% of net sales, for the six months ended August 31, 2011 to $11.5 million, or 4.1% of net sales, for the six months ended August 31, 2012. Diluted earnings per share decreased from $0.81 to $0.44 for the six months ended August 31, 2011 and 2012, respectively.

During the second quarter, the Company generated $15.7 million in EBITDA (a non-GAAP financial measure calculated as net earnings before interest, taxes, depreciation, and amortization) compared to $19.0 million for the comparable quarter last year. For the six month period ended August 31, 2012, the Company generated $25.7 million of EBITDA compared to $40.9 million for the comparable period last year.

The following table reconciles EBITDA, a non-GAAP financial measure, to the most comparable GAAP measure, net earnings (dollars in thousands):


     Three months ended      Six months ended  
     August 31,      August 31,  
     2012      2011      2012      2011  

Net earnings

   $ 7,592       $ 9,712       $ 11,471       $ 21,136   

Income taxes

     4,364         5,567         6,593         11,993   

Interest expense

     402         664         871         1,482   


     3,342         3,061         6,783         6,260   














   $ 15,700       $ 19,004       $ 25,718       $ 40,871   













The Company believes the non-GAAP financial measure of EBITDA provides important supplemental information to both management and investors regarding financial and business trends used in assessing its’ results of operations. The Company believes adding back the specified items to net earnings provides a more meaningful comparison to the corresponding reported periods and internal budgets and forecasts, provides management with a more relevant measurement of operating performance and is more useful in assessing management performance. In addition, EBITDA is a component of financial covenants and an interest rate metric in the Company’s credit facility.

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Our print operations continue to deliver revenue and operational results as expected. Our two recent acquisitions, Printegra and PrintXcel, delivered sales and profits for the second quarter better than expected. While our apparel results continue to be negatively impacted by higher raw material costs increasing the cost of finished goods and cost of sales, we are beginning to see improvement in this segment’s margin. Apparel’s margin during the second quarter improved 740 basis points over the preceding quarter; and we expect its’ margin to continue to improve during the current quarter as higher cost raw materials are being replaced with raw materials with significantly lower costs. The apparel market continues to be constrained from a volume perspective, and pricing in the marketplace continues to be highly competitive. While challenges continue in the apparel sector, we are confident about the long-term prospects of both sectors. As always, no matter what direction this fiscal year takes, you can be assured we will remain vigilant to the task at hand.”

About Ennis

Ennis, Inc. ( is primarily engaged in the production 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: print and apparel. The print segment 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 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, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 29, 2012, and its subsequent quarterly reports on Form 10-Q for its 2013 fiscal year. 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., Chief Financial Officer

Mr. Michael D. Magill, Executive Vice President

Ennis, Inc.

2441 Presidential Parkway

Midlothian, Texas 76065

Phone: (972) 775-9801

Fax: (972) 775-9820

Ennis, Inc.

Condensed Financial Information

(In thousands, except per share amounts)


     Three months ended      Six months ended  
     August 31,      August 31,  

Condensed Operating Results

   2012      2011      2012     2011  


   $ 138,344       $ 130,384       $ 280,872      $ 273,642   

Cost of goods sold

     104,395         96,290         218,674        199,847   













Gross profit margin

     33,949         34,094         62,198        73,795   

Operating expenses

     21,326         18,322         43,348        39,179   













Operating income

     12,623         15,772         18,850        34,616   

Other expense

     667         493         786        1,487   













Earnings before income taxes

     11,956         15,279         18,064        33,129   

Income tax expense

     4,364         5,567         6,593        11,993   













Net earnings

   $ 7,592       $ 9,712       $ 11,471      $ 21,136   













Earnings per share



   $ 0.29       $ 0.37       $ 0.44      $ 0.82   














   $ 0.29       $ 0.37       $ 0.44      $ 0.81   












                   August 31,     February 29,  

Condensed Balance Sheet Information

            2012     2012  

Current assets



         $ 13,205      $ 10,410   

Accounts receivable, net

           63,591        58,790   

Inventories, net

           108,247        132,572   


           14,695        17,438   






           199,738        219,210   







Property, plant & equipment

           94,241        99,516   


           211,558        213,236   






         $ 505,537      $ 531,962   






Liabilities and Shareholders’ Equity   

Current liabilities


Accounts payable

         $ 21,679      $ 27,924   

Accrued expenses

           19,846        22,317   






           41,525        50,241   







Long-term debt

           70,000        90,000   

Other non-current liabilities

           31,930        31,846   







Total liabilities

           143,455        172,087   







Shareholders’ equity

           362,082        359,875   






         $ 505,537      $ 531,962   






                   Six months ended  
                   August 31,  

Condensed Cash Flow Information

                 2012     2011  

Cash provided by operating activities

         $ 29,360      $ 12,744   

Cash provided by (used in) investing activities


        2,889        (3,965

Cash used in financing activities

           (29,111     (7,860

Effect of exchange rates on cash

           (343     1,083   







Change in cash

           2,795        2,002   

Cash at beginning of period

           10,410        12,305   







Cash at end of period

         $ 13,205      $ 14,307