Ennis Sees 7.3% Rise In Q2 Revenues
-- Graphic Arts Online, 9/23/2008 8:13:00 PM
MIDLOTHIAN, Texas--(BUSINESS WIRE)--Ennis, Inc. (the “Company"), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2008.Highlights
Consolidated revenues increased 7.3% over the same quarter last year, from approximately $150.1 million to $161.1 million and 7.1% for the six month period, from approximately $302.9 million to $324.3 million.
Apparel Segment revenues increased 13.8% over the same quarter last year, from approximately $66.5 million to $75.7 million and 14.5% for the six month period, from approximately $134.2 million to $153.6 million.
Financial Overview
For the quarter, our consolidated net sales increased by $11.0 million, or 7.3%, from $150.1 million for the quarter ended August 31, 2007 to $161.1 million for the quarter ended August 31, 2008. Our Print sales for the quarter were $85.4 million, compared to $83.6 million for the same quarter last year, or an increase of 2.2%. Apparel sales for the quarter were $75.7 million, compared to $66.5 million for the same quarter last year, or an increase of 13.8%. Our overall gross profit margins ("margins") decreased from 27.5% to 24.4% for the quarters ended August 31, 2007 and August 31, 2008, respectively. Our Print margins decreased from 27.8% to 26.1%, while the Apparel margins decreased from 27.2% to 22.4%, for the quarters ended August 31, 2007 and August 31, 2008, respectively. Our earnings for the quarter decreased from $11.1 million for the quarter ended August 31, 2007 to $9.3 million for the quarter ended August 31, 2008. Our diluted EPS decreased from $.43 per share to $.36 per share for the quarters ended August 31, 2007 and August 31, 2008, respectively. During the quarter, our earnings and EPS were impacted by a charge-off of a large apparel customer account due to that customer’s bankruptcy, as reported in our Form 8-K filing dated July 11, 2008. Without the impact associated with this charge-off, our earnings for the quarter would have been $10.6 million and our diluted EPS would have been $.41 per share.
For the six month period, net sales increased from $302.9 million for the six months ended August 31, 2007 to $324.3 million for the six months ended August 31, 2008, or 7.1%. Our Print sales for the period were $170.7 million, compared to $168.7 million for the same period last year. Apparel sales for the period were $153.6 million, compared to $134.2 million for the same period last year. Our Print margins remained relatively stable at 27.1% and 27.0%, while our Apparel margins decreased from 27.5% to 21.9%, for the six months ended August 31, 2007 and 2008, respectively. Net earnings for the period decreased from $21.9 million for the six months ended August 31, 2007 to $20.3 million for the six months ended August 31, 2008 ($21.6 million without the impact of the aforementioned charge-off). Diluted earnings decreased from $.85 per share to $.79 per share ($.84 without the impact of the aforementioned charge-off) for the six months ended August 31, 2007 and 2008, respectively.
The Company, during the quarter, generated $18.8 million in EBITDA (earnings before interest, taxes, depreciation and amortization) compared to $22.8 million for the comparable quarter last year. For the period, the Company generated $40.5 million in EBITDA during the period, compared to $45.3 million for the comparable period last year. Operational cash flows increased from $17.5 million for the six months ended August 31, 2007 to $31.0 million for the same period this year.
Reconciliation of Non-GAAP to GAAP measure (dollars in thousands):
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Keith Walters, Chairman, President & CEO, commented by saying, “Fiscal year 2009 continues to be challenging given the general economic climate and continued pressures on commodity prices. Even with our past price increases, our Apparel Segment results continue to lag behind prior years’ results and as such we have recently instituted an additional price increase effective September 15, 2008 which should offset the commodity price increases being experienced by this segment. In addition, our Apparel Segment’s operational results were negatively impacted by the charge-off we had to take during the quarter associated with the bankruptcy filing of one of our customers. Our Print Segment’s top-line is continuing to be impacted by the general economic climate; however, our operational results continue to benefit from the cost control initiatives started last fiscal year. Overall, given the trying times all businesses are experiencing, the continued commodity price pressures and the impact of the bankruptcy filing, I am proud of what we accomplished this quarter and look forward to the remainder of the year.”
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 Company’s 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, 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 six distribution centers located throughout North America.
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