Ennis Inc. Reports Results for the Three and Nine Months Ended Nov. 30, 2015, Declares Quarterly Dividend
Ennis Inc., Midlothian, Texas, recently reported financial results for the three and nine months ended Nov. 30, 2015. Highlights include:
- Apparel margin increased 1,170 basis points over the comparable quarter, 750 basis points over the sequential quarter and 420 basis points for the three-month period.
- Adjusted EBITDA, a non-GAAP measure, increased 15.2 percent over the comparable nine-month period.
- Cash provided by operating activities increased by 70.6 percent over the comparable nine-month period.
- Diluted earnings per share increased over the comparable quarter last year from a loss of $2.76 to $0.41 and increased over the comparable nine-month period from a loss of $2.05 to $1.20.
The company’s consolidated net sales for the quarter ended Nov. 30, 2015 were $139.5 million compared to $147.0 million for the same quarter last year, a decrease of 5.1 percent. Print sales decreased 0.2 percent from $97.7 million to $97.5 million and apparel sales decreased 15.0 percent from $49.3 million to $41.9 million.
Consolidated gross profit margin (“margin”) was $40.6 million for the quarter, or 29.1 percent, compared to $36.5 million, or 24.8 percent for the same quarter last year. Print margin was 30.5 percent for the quarter compared to 30.2 percent for the same quarter last year, while apparel margin increased 1,170 basis points from 14.2 percent for the comparable quarter last year to 25.9 percent for the current quarter. Apparel margin improvement resulted from lower input costs, improved manufacturing efficiencies and stability in selling prices.
Net earnings for the quarter were $10.7 million, or $0.41 per diluted share, as compared to a GAAP loss of $71.2 million and a loss of $2.76 per diluted share. Consolidated net earnings for the three months ended Nov. 30, 2014 prior to the impairment charge of $93.3 million were $7.9 million, or $.31 per diluted share.
The company’s consolidated net sales for the nine-month period increased slightly from $440.0 million to $440.8 million. Print sales were $294.7 million, compared to $283.9 million for the same period last year, an increase of $10.8 million, or 3.8 percent. Apparel sales were $146.0 million, compared to $156.1 million for the same period last year, a decrease of $10.1 million or 6.5 percent.
Consolidated margin increased on a dollar basis from $110.1 million to $118.7 million and increased on a percentage basis from 25.0 percent to 26.9 percent for the nine months ended Nov. 30, 2014 and 2015, respectively. Print margin increased from 30.6 percent to 30.9 percent due to continued realization of synergies with acquired businesses by the elimination of duplicative costs. Apparel margin increased 420 basis points from 14.8 percent to 19.0 percent due to lower input costs, stability in selling prices and improved manufacturing efficiencies during the most recent period.
As a result, consolidated net earnings increased from a loss of $53.1 million, or 12.1 percent of net sales, for the nine months ended Nov. 30, 2014 to $30.9 million, or 7.0 percent of net sales, for the nine months ended Nov. 30, 2015. Diluted earnings per share increased from a loss of $2.05 to $1.20 for the nine months ended Nov. 30, 2014 and 2015, respectively. Consolidated net earnings for the nine-month period last year prior to the impairment charge of $93.3 million were $26.0 million, or $1.00 per diluted share.
Keith Walters, chairman, CEO and president of Ennis Inc. released the following statement:
Our print group’s performance continued to be solid during the quarter. Even though our apparel group’s sales continued to be impacted by the soft retail environment, its operational performance improved significantly during the quarter consistent with our expectations. Lower input costs, improving manufacturing efficiencies and stable selling prices resulted in the apparel group’s margin improving 1,170 basis points over the comparable quarter last year, 750 basis points over the sequential quarter and 420 basis points over the previous year’s nine month results. With respect to our print business, we continue to be pleased with the integration of recent acquisitions and the margins of our print group as a whole. The print group’s recent acquisitions have been accretive to earnings and continue to meet our performance projections. Also, during the quarter we continued to reduce our debt by 28.6 percent, or $18.0 million, due to effective management of our receivables and inventories and the strong performance of recently acquired operations, bringing the aggregate debt reduction for the year to $61.5 million and an outstanding balance as of Nov. 30, 2015 of $45.0 million. Overall, we believe the remainder of fiscal year 2016 will be challenging due to the retail and global economic environment, but we remain optimistic about our continued ability to navigate it.
In other news, the company announced that the board of directors, on Dec. 18, 2015, approved the payment of a quarterly cash dividend of 17.5 cents a share on its common stock. The dividend is payable Feb. 5, 2016 to shareholders of record on Jan. 8, 2016.
To view the complete report, visit www.ennis.com.