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Ennis, Inc. Reports Results For The First Quarter Ended May 31, 2012

Stocks in this article: EBF

Ennis, Inc. (the “Company"), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2012.

Financial Overview

Our consolidated net sales were $142.5 million for the quarter ended May 31, 2012 compared to $143.3 million for the quarter ended May 31, 2011. Print sales for the current quarter were $87.3 million, compared to $67.1 million for the same quarter last year, or an increase of 30.1%. Apparel sales for the current quarter were $55.2 million, compared to $76.1 million for the same quarter last year, or a decrease of 27.5%. Overall our gross profit margins ("margins") decreased from 27.7% to 19.8% for the quarters ended May 31, 2011 and May 31, 2012, respectively. Our print margin decreased slightly from 28.8% to 27.9%, due to the lower margins of our recent acquisitions. Our apparel margin, which continues to be impacted by the higher yarn costs flowing through its cost of sales, decreased from 26.8% to 7.0% for the quarter. As a result, our net earnings decreased from $11.4 million, or 8.0% of sales, for the quarter ended May 31, 2011 to $3.9 million, or 2.7% of sales, for the quarter ended May 31, 2012. Diluted EPS decreased from $0.44 per share to $0.15 per share for the quarters ended May 31, 2011 and May 31, 2012, respectively.

During the quarter, the Company generated $10.0 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $21.9 million for the comparable quarter last year.

Reconciliation of Non-GAAP to GAAP measure ( dollars in thousands):

      Three months ended
May 31,
2012   2011
 
Earnings before income taxes $ 6,108 $ 17,850
Interest expense 469 818
Depreciation/amortization   3,441   3,199
EBITDA (non-GAAP) $ 10,018 $ 21,867
 

Keith Walters, Chairman, Chief Executive Officer and President, commented by saying, “Our print operations continued to deliver revenue and operational results as expected. The two new acquisitions (Printegra and PrintXcel) delivered sales of $19.6 million for the quarter, which was slightly higher than expected, and operational profits of $.8 million, which was less than expected due to some duplicate transitional costs and some operational inefficiency, which we expect to have corrected over the next several quarters. Our apparel results, as expected, continue to be negatively impacted by higher raw material costs flowing into cost of sales. This negative impact will gradually abate over the next quarter or two as the higher cost items, which have been in our finished goods inventory and flowing into our cost of sales, are replaced with items manufactured with significantly lower raw material costs. The apparel market continues to be somewhat constrained, from a volume perspective, and pricing in the marketplace continues to be highly competitive. While the apparel sector continues to be somewhat challenged, we feel good about the long-term prospects of both sectors. As always, no matter what direction this fiscal year takes, you can be assured we will remain vigilant to the task at hand.”

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