Ennis Inc. Reports Results for the Year and Quarter Ended Feb. 28, 2014April 22, 2014
Ennis Inc., Midlothian, Texas, recently reported financial results for the quarter and fiscal year ended Feb. 28, 2014.
The company's consolidated net sales for the quarter were $132.1 million compared to $123.6 million for the same quarter last year. Print sales increased 12.7 percent on a comparable quarter basis, from $79.8 million to $89.9 million. Apparel sales decreased 3.6 percent for the comparable quarter, from $43.9 million to $42.3 million. Consolidated gross profit margin during the quarter remained level at 25.4 percent in comparison to last year's quarter. On a quarter comparison basis, print margin decreased 120 basis points, from 29.6 percent to 28.4 percent, while apparel margin increased 140 basis points, from 17.6 percent to 19.0 percent. Apparel margin continued to improve due to lower input costs and higher production levels. Net earnings for the quarter decreased from $7.1 million, or 5.7 percent of net sales, for the quarter ended Feb. 28, 2013 to $14.5 million for the quarter ended Feb. 28, 2014, due to a goodwill and trademark impairment charge of $24.2 million relating to the apparel division. Diluted earnings per share decreased from $0.27 for the quarter ended Feb. 28, 2013 to $0.55 for the quarter ended Feb. 28, 2014. Excluding the impairment charge, non-GAAP earnings for the quarter would have been approximately $7.7 million, or approximately $0.30 per share.
For the fiscal year, consolidated net sales increased from $533.5 million for the year ended Feb. 28, 2013 to $542.4 million for the year ended Feb. 28, 2014, or an increase of 1.7 percent. Print sales for the year increased $5.2 million or 1.6 percent, from $334.7 million to $339.9 million, while apparel sales for the year increased $3.7 million or 1.9 percent, from $198.8 million to $202.5 million. Consolidated margin increased from 23.3 percent to 26.5 percent for the fiscal years ended 2013 and 2014, respectively. For the fiscal year by segment, print margin increased from 29.2 percent to 29.7 percent, and apparel margin increased from 13.2 percent to 21.1 percent due to lower input costs and increased production levels.
Net earnings for the period decreased from $24.7 million, or 4.6 percent of net sales for the fiscal year ended Feb. 28, 2013, to $13.2 million, or 2.4 percent of net sales for the fiscal year ended Feb. 28, 2014, due to the goodwill and trademark impairment charge of $24.2 million in the fourth quarter. Diluted earnings per share decreased from $0.95 to $0.50 for each year, respectively. Excluding the impairment charge, non-GAAP net earnings for the year would have been approximately $35.3 million, or approximately $1.35 per diluted share.
The company believes the non-GAAP financial measures of net earnings and diluted earnings per share on a proforma basis, excluding impairment, and EBITDA (EBITDA is calculated as net earnings before interest, taxes, depreciation, amortization, and impairment charge) provide 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 the financial covenants and an interest rate metric in the Company's credit facility. While management believes this non-GAAP financial measure is useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute for, or superior to, the related financial information prepared in accordance with GAAP.