Ennis Releases Q1 Results: Apparel Segment Continues Positive Movement
Midlothian, Texas-based Ennis Inc. has reported financial results for the first quarter ended May 31, 2013. The company's consolidated net sales for the quarter were $138.5 million compared to $142.5 million for the same quarter last year and $123.6 million for the sequential quarter. Print sales were down 6.8 percent on a comparable quarter basis, from $87.3 million to $81.4 million, but were up 2.0 percent on a sequential quarter basis from $79.8 million. Apparel sales increased 3.3 percent for the comparable quarter, from $55.2 million to $57.0 million, with a 10.6 percent increase in volume offset by a pricing decline of 7.3 percent, and increased 29.8 percent on a sequential quarter basis from $43.9 million. Consolidated gross profit margin ("margin") for the quarter increased 610 basis points from 19.8 percent, for the same quarter last year, to 25.9 percent.
For a quarter comparison basis, print margin increased from 27.9 percent to 29.7 percent, and apparel margin increased from 7.0 percent to 20.3 percent. The company’s apparel margin continues to increase on both a comparable and sequential quarter basis, as lower priced cotton is starting to favorably impact apparel's margin. Ennis expects its margins will continue to improve as average finished goods costs continue to decline and sales volume increases. Print margins improved from the continued elimination of duplicative costs by the further integration of recent acquisitions. As a result, net earnings increased from $3.9 million, or 2.7 percent of net sales, for the quarter ended May 31, 2012 to $8.5 million, or 6.1 percent of net sales, for the quarter ended May 31, 2013. Diluted earnings per share increased from $0.15 for the same quarter last year to $0.33 for the quarter.
During the quarter, the company generated $17.0 million in EBITDA (a non-GAAP financial measure calculated as net earnings before interest, taxes, depreciation, and amortization) compared to $10.0 million for the comparable quarter last year.