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Ennis, Inc. (the “Company"), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2014.
The Company’s consolidated net sales for the quarter were $141.2 million, an increase of $2.7 million or 1.9%, from $138.5 million for the same quarter last year. At the segment level, print sales were up $7.0 million, or 8.6%, while apparel sales declined $4.2 million or 7.4% in comparison to the same quarter last year. Consolidated gross profit margin ("margin") decreased from 25.9% for the same quarter last year to 25.1% for this year’s quarter. At the segment level, print margin increased 80 basis points, from 29.7% to 30.5%, due to improved operational efficiencies, while apparel margin decreased 430 basis points, from 20.3% to 16.0%, due to lower selling prices and slightly higher input costs. As a result, net earnings decreased slightly from $8.5 million, or 6.1% of net sales, for the previous year’s quarter to $8.0 million, or 5.7% of net sales, for this year’s quarter. Diluted earnings per share decreased from $0.33 for the 2013 quarter to $0.31 for the 2014 quarter.
The Company believes the non-GAAP financial measure EBITDA (EBITDA is calculated as net earnings before interest, taxes, depreciation, and amortization) 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. While management believes this non-GAAP financial measure is useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute for, or superior to, the related financial information prepared in accordance with GAAP.