Ennis Releases Q1 Results: Apparel Segment Continues Positive Movement
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 the financial covenants and an interest rate metric in the company's credit facility.
Keith Walters, chairman, CEO and president, commented by stating, "Overall we are pleased with our results for the quarter. Our apparel results continued to improve on both a sequential and comparative basis, as lower priced cotton, which has been flowing into our finished goods inventory, is starting to impact our operational results. We realized a 240 basis point sequential margin improvement last quarter and a 270 basis point sequential margin improvement this quarter. We would expect our apparel margin to continue to improve as the average carrying value of our finished goods inventory declines and as our operational efficiencies improve as production levels increase. While the overall apparel market continues to be challenged, both from a pricing and volume perspective, we have seen some pricing stability. Our print margin remained healthy improving 180 basis points over last years' comparable quarter, as we continue to eliminate duplicate costs associated with our recent acquisitions. Overall we feel positive about the quarter and the remainder of the year."
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