Ennis Inc. Reports Financial Results
Ennis Inc., Midlothian, Texas, reported financial results for the three and six months ended Aug. 31, 2019. Highlights include:
- Revenues increased $10.2 million, or 10.3 percent and $24.8 million, or 12.9 percent for the three and six months ended Aug. 31, 2019, respectively, as compared to the same periods last year.
- Earnings per diluted share for the three and six months ended Aug. 31, 2019 were $0.37 and $0.74 per diluted share, respectively, which were the same for the comparable periods last year.
The company’s revenues for the second quarter ended Aug. 31, 2019 were $108.8 million compared to $98.6 million for the same quarter last year, an increase of 10.3 percent. Gross profit margin was $32.5 million for the quarter, or 29.8 percent, as compared to $30.3 million, or 30.8 percent for the second quarter last year. Net earnings for the quarter were $9.5 million, or $0.37 per diluted share compared, to $9.6 million, or $0.37 per diluted share, for the second quarter last year.
The company’s revenues for the six-month period ended Aug. 31, 2019 were $216.8 million compared to $192.0 million for the same period last year, an increase of 12.9 percent. Margin was $65.2 million, or 30.0 percent, as compared to $60.5 million, or 31.5 percent for the six-month periods ended Aug. 31, 2019 and Aug. 31, 2018, respectively. Net earnings from operations for the six month period ended Aug. 31, 2019 were $19.2 million, or $0.74 per diluted share compared to $18.8 million, or $0.74 per diluted share for the same period last year.
Keith Walters, chairman, CEO and president of Ennis Inc., released the following statement:
Overall, we are pleased with our performance for the quarter. While our gross profit margin showed a slight decline from the sequential quarter, decreasing from 30.3 percent to 29.8 percent, our EBITDA margin was consistent in the low- to mid-16 percent range. Our gross profit margin percentage continues to be impacted by our past four acquisitions, which all had gross profit margins considerably lower than our historical gross profit margin. While their margins are improving, until these acquisitions are fully integrated into our systems we would expect to continue to see a comparable negative impact on our consolidated gross profit margin percentage. With that being said, these same acquisitions added $35.4 million in sales and $0.08 in diluted earnings per share for the six-month period. During the quarter, we completed the acquisition of The Flesh Company and its wholly owned subsidiary, Impression Direct Inc. The Flesh Company is truly regarded as one of the outstanding companies in the print industry with a heritage that dates back over 100 years. These companies provide business forms, checks, direct mail services, integrated products and labels. This transaction will be accretive to earnings. We continue to strategically repurchase our shares and acquired over 22,000 shares during the quarter. We have repurchased almost 294,000 shares since the acquisition of Wright Business Graphics, which represents about 35.4 percent of the shares issued as consideration for that acquisition. Given our strong financial position, we will continue to explore strategic opportunities as a way to profitably utilize our cash and leverage our balance sheet, and when advantageous, repurchase our shares in the marketplace.
To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, the company reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from operations before interest expense, tax expense, depreciation and amortization). From time to time, the company may also report adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure.
Management believes that these non-GAAP financial measures provide useful information to investors as a supplement to reported GAAP financial information. Management reviews these non-GAAP financial measures on a regular basis and uses them to evaluate and manage the performance of the company’s operations. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the company’s credit agreement.
Reconciliations of non-GAAP financial measures reported for the quarter and fiscal year-to-date to the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following table. Other companies may calculate non-GAAP adjusted financial measures differently than Ennis, which limits the usefulness of the non-GAAP measures for comparison with these other companies. While management believes the company’s non-GAAP financial measures are useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute or an alternative for, or superior to, the related financial information prepared in accordance with GAAP. These measures should be evaluated only in conjunction with the Company’s comparable GAAP financial measures.
The following table reconciles EBITDA, a non-GAAP financial measure, for the three and six months ended Aug. 31, 2019 and Aug. 31, 2018 to the most comparable GAAP measure, net earnings (dollars in thousands).In other news, on Sept. 20, 2019, the board of directors declared a quarterly cash dividend of 22.5 cents a share on the company’s common stock. The dividend is payable on Nov. 8, 2019 to shareholders of record on Oct. 11, 2019.
For more information, visit www.ennis.com.
The preceding press release was provided by a company unaffiliated with Print+Promo. The views expressed within do not directly reflect the thoughts or opinions of Print+Promo.