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8-K - FORM 8-K - ENNIS, INC. | d84831e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
ENNIS, INC. REPORTS RESULTS
FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2011
FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2011
Midlothian, September 26, 2011 Ennis, Inc. (the Company), (NYSE: EBF), today reported
financial results for the three and six months ended August 31, 2011.
Financial Overview
For the quarter, consolidated net sales decreased by $12.6 million, or 8.8%, from $143.0
million for the quarter ended August 31, 2010 to $130.4 million for the quarter ended August 31,
2011. Print sales for the quarter were stable at $69.2 million, compared to $69.1 million for the
same quarter last year. Due to unexpected softness in the market apparel sales for the quarter ended August 31, 2011 were $61.2 million,
compared to $73.9 million for the same quarter last year, or a decrease of 17.2%. Overall gross
profit margins (margins) decreased from 27.8% to 26.1% for the quarters ended August 31, 2010 and
August 31, 2011, respectively. Print margins increased during the period from 28.2% to 28.6%,
while Apparel margins due to higher input costs decreased from 27.4%
to 23.4%. Net
earnings for the quarter decreased from $12.1 million, or 8.5% of sales, for the quarter ended
August 31, 2010 to $9.7 million, or 7.4% of sales, for the quarter ended August 31, 2011. Diluted
EPS decreased from $0.47 per share to $0.37 per share for the quarters ended August 31, 2010 and
August 31, 2011, respectively.
For the six month period, net sales decreased from $283.8 million for the six months ended
August 31, 2010 to $273.6 million for the six months ended August 31, 2011, or 3.6%. Print sales
for the period again remained relatively stable at $136.3 million, compared to $136.9 million for
the same period last year. Apparel sales for the period were $137.3 million, compared to $146.8
million for the same period last year, or a decrease of 6.5%. Overall margins decreased from 28.9%
to 27.0% for the six months ended August 31, 2010 and 2011, respectively. Print margins decreased
slightly during the period from 29.2% to 28.7%, while Apparel margins decreased from 28.5% to
25.3%, again due to higher raw material costs. Net earnings for the period, decreased from $25.2
million, or 8.9% of sales, for the six months ended August 31, 2010 to $21.1 million, or 7.7% of
sales, for the six months ended August 31, 2011. Diluted earnings decreased from $0.97 per share
to $0.81 per share for the six months ended August 31, 2010 and 2011, respectively.
The Company, during the quarter, generated $19.0 million in EBITDA (earnings before interest,
taxes, depreciation, and amortization) compared to $22.2 million for the comparable quarter last
year. For the six month period ended August 31, 2011, the Company generated $40.9 million of
EBITDA during the period, compared to $46.0 million for the comparable period last year.
Three months ended | Six months ended | |||||||||||||||
August 31, | August 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Earnings before income taxes |
$ | 15,279 | $ | 19,100 | $ | 33,129 | $ | 39,636 | ||||||||
Interest expense |
664 | 321 | 1,482 | 758 | ||||||||||||
Depreciation/amortization |
3,061 | 2,793 | 6,260 | 5,569 | ||||||||||||
EBITDA (non-GAAP) |
$ | 19,004 | $ | 22,214 | $ | 40,871 | $ | 45,963 | ||||||||
Keith Walters, Chairman, Chief Executive Officer and President, commented by saying,
Overall the operational results for the quarter were as expected. Print continued to deliver
steady revenue levels and operational results, while margins in our Apparel division were
compressed some, due to higher raw material costs. Our Apparel raw material cost, on a comparable
basis, was up approximately 50%, with continued increases expected over the next six months as the
impact of the higher priced cotton makes its way through inventory. What wasnt expected was the
softness in the market during the last quarter. Whether this is just a temporary situation or one
we will have to manage for an extended period of time is unknown. As we indicated previously,
manufacturers ability to navigate through this period of higher cotton costs was dependent upon
many factors, one being the continued economic recovery. The current softness in the marketplace
will make this an even more challenging task for all concerned. The new manufacturing facility in
Agua Prieta, MX is fully operational and all production has now been transitioned from our Anaheim,
CA facility to this facility. So while many challenges have been negotiated to date, many
challenges and uncertainties continue to mark the short term landscape. However, as always, we
will remain vigilant to the task at hand.
About Ennis
Ennis, Inc. (www.ennis.com) is primarily engaged in the production of and sale of business forms,
apparel and other business products. The Company is one of the largest private-label printed
business product suppliers in the United States. Headquartered in Midlothian, Texas, the Company
has production and distribution facilities strategically located throughout the United States of
America, Mexico and Canada, to serve the Companys national network of distributors. The Company,
together with its subsidiaries, operates in two business segments: the Print Segment (Print) and
Apparel Segment (Apparel). The Print Segment is primarily engaged in the business of
manufacturing and selling business forms, other printed business products, printed and electronic
media, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes,
internal bank forms, plastic cards, secure and negotiable documents, envelopes and other custom products. The
Apparel Segment manufactures T-Shirts and distributes T-Shirts and other active-wear apparel
through nine distribution centers located throughout North America.
Safe Harbor Under The Private Securities Litigation Reform Act of 1995
Certain statements contained in this press release that are not historical facts are
forward-looking statements that involve a number of known and unknown risks, uncertainties and
other factors that could cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievement expressed or implied by
such forward-looking statements.
The words anticipate, preliminary, expect, believe, intend and similar expressions
identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides
a safe harbor for such forward-looking statements. In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause actual results and experience to
differ materially from the anticipated results or other expectations expressed in such
forward-looking statements. These statements
are subject to numerous uncertainties, which include,
but are not limited to, the Companys ability to effectively manage its business functions while
growing its business in a rapidly changing environment, the Companys ability to adapt and expand
its services in such an environment, the variability in the prices of paper and other raw
materials. Other important information regarding factors that may affect the Companys future
performance is included in the public reports that the Company files with the Securities and
Exchange Commission. The Company undertakes no obligation to revise any forward-looking statements
or to update them to reflect events or circumstances occurring after the date of this release, or
to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion
of any statement in this release does not constitute an admission by the Company or any other
person that the events or circumstances described in such statement are material.
For Further Information Contact:
Mr. Keith Walters, Chairman, Chief Executive Officer and President
Mr. Richard L. Travis, Jr., Chief Financial Officer
Mr. Michael Magill, Executive Vice President
Mr. Richard L. Travis, Jr., Chief Financial Officer
Mr. Michael Magill, Executive Vice President
Ennis, Inc.
2441 Presidential Parkway
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820
www.ennis.com
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820
www.ennis.com
Ennis, Inc.
Condensed Financial Information
(In thousands, except per share amounts)
Condensed Financial Information
(In thousands, except per share amounts)
Condensed Operating Results
Three months ended | Six months ended | |||||||||||||||
August 31, | August 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
$ | 130,384 | $ | 143,034 | $ | 273,642 | $ | 283,775 | ||||||||
Cost of goods sold |
96,290 | 103,326 | 199,847 | 201,887 | ||||||||||||
Gross profit margin |
34,094 | 39,708 | 73,795 | 81,888 | ||||||||||||
Operating expenses |
18,322 | 20,276 | 39,179 | 41,523 | ||||||||||||
Operating income |
15,772 | 19,432 | 34,616 | 40,365 | ||||||||||||
Other expense |
493 | 332 | 1,487 | 729 | ||||||||||||
Earnings before income taxes |
15,279 | 19,100 | 33,129 | 39,636 | ||||||||||||
Income tax expense |
5,567 | 6,971 | 11,993 | 14,467 | ||||||||||||
Net earnings |
$ | 9,712 | $ | 12,129 | $ | 21,136 | $ | 25,169 | ||||||||
Earnings per share |
||||||||||||||||
Basic |
$ | 0.37 | $ | 0.47 | $ | 0.82 | $ | 0.97 | ||||||||
Diluted |
$ | 0.37 | $ | 0.47 | $ | 0.81 | $ | 0.97 | ||||||||
Condensed Balance Sheet Information
August 31, | February 28, | |||||||
2011 | 2011 | |||||||
Assets |
||||||||
Current assets |
||||||||
Cash |
$ | 14,307 | $ | 12,305 | ||||
Accounts receivable, net |
52,513 | 58,359 | ||||||
Inventories, net |
120,789 | 100,363 | ||||||
Other |
11,843 | 11,371 | ||||||
199,452 | 182,398 | |||||||
Property, plant & equipment |
92,285 | 93,661 | ||||||
Other |
196,355 | 197,669 | ||||||
$ | 488,092 | $ | 473,728 | |||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 23,877 | $ | 18,868 | ||||
Accrued expenses |
22,679 | 27,644 | ||||||
Current portion of long-term debt |
50,000 | 586 | ||||||
96,556 | 47,098 | |||||||
Long-term debt |
| 50,000 | ||||||
Deferred credits |
29,575 | 28,947 | ||||||
Total liabilities |
126,131 | 126,045 | ||||||
Shareholders equity |
361,961 | 347,683 | ||||||
$ | 488,092 | $ | 473,728 | |||||
Condensed Cash Flow Information
Six months ended | ||||||||
August 31, | ||||||||
2011 | 2010 | |||||||
Cash provided by operating activities |
$ | 12,744 | $ | 27,507 | ||||
Cash used in investing activities |
(3,965 | ) | (23,238 | ) | ||||
Cash used in financing activities |
(7,860 | ) | (8,024 | ) | ||||
Effect of exchange rates on cash |
1,083 | (315 | ) | |||||
Change in cash |
2,002 | (4,070 | ) | |||||
Cash at beginning of period |
12,305 | 21,063 | ||||||
Cash at end of period |
$ | 14,307 | $ | 16,993 | ||||