EBF Ennis Inc

Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2024. Highlights include:

• Revenues were $103.1 million for the quarter compared to $111.3 million for the same quarter last year, a decrease of $8.2 million or 7.4%.
• Earnings per diluted share for the current quarter were $0.41 compared to $0.45 for the comparative quarter last year.
• Our gross profit margin for the quarter was 30.0% compared to 30.6% for the comparative quarter last year.

Financial Overview

The Company’s revenues for the first quarter ended May 31, 2024 were $103.1 million compared to $111.3 million for the same quarter last year, a decrease of $8.2 million, or 7.4%. Gross profits totaled $30.9 million for a gross profit margin of 30.0%, as compared to $34.0 million, or 30.6%, for the same quarter last year. Net earnings for the quarter were $10.7 million, or $0.41 per diluted share, as compared to $11.6 million, or $0.45 per diluted share for the same quarter last year.

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Our results for the quarter were within our expectations given softening demand amidst an uncertain economic environment. While we experienced a decline compared to the first quarter of our previous fiscal year, our gross profit margin showed a 160-basis point increase over the previous quarter as revenues, profits and earnings per share all increased this quarter. Our EBITDA increased from $18.1 million last quarter to $19.0 million this quarter. While revenues have decreased compared to the same quarter last year, our EBITDA as a percentage of sales has held steady at 18.4%.

"In the first quarter we completed the integration of our ERP system at two of our recent acquisitions and are beginning to see improved performance. This along with our disciplined cost management and pricing strategies contributed to our improved margins over the sequential quarter, despite continued pressure from soft market conditions with increasingly competitive pricing.

"We believe we have one of the strongest balance sheets in the industry, with no debt and significant cash. During the quarter, with cash on hand we repurchased 91,883 shares of our common stock in the open market at an average price of $19.79 per share and increased our investment in U.S. government treasury bills $2.6 million while we continue to pursue greater returns through additional acquisition opportunities. Our profitability and strong financial condition will allow us to continue operations and fund acquisitions without incurring debt. Given those strengths, we also anticipate timely access to credit should larger acquisition opportunities materialize. We continue to focus on delivering profitability and returns to our shareholders."

Reconciliation Non-GAAP Measure

To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, from time to time the Company reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings before interest expense, tax expense, depreciation, and amortization). The Company may also report adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure.

Management believes that these non-GAAP financial measures provide useful information to investors as a supplement to reported GAAP financial information. Management reviews these non-GAAP financial measures on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. Other companies may calculate non-GAAP financial measures differently than the Company, which limits the usefulness of the Company’s non-GAAP measures for comparison with these other companies. While management believes the Company’s non-GAAP financial measures are useful in evaluating the Company, when this information is reported it should be considered as supplemental in nature and not as a substitute or an alternative for, or superior to, the related financial information prepared in accordance with GAAP. These measures should be evaluated only in conjunction with the Company’s comparable GAAP financial measures.

The following table reconciles EBITDA, a non-GAAP financial measure, for the three-months ended May 31, 2024 and 2023 to the most comparable GAAP measure, net earnings (dollars in thousands).

 

 

Three months ended

 

 

May 31,

 

May 31,

 

 

 

2024

 

 

 

2023

 

Net earnings

 

$

10,687

 

 

$

11,635

 

Income tax expense

 

 

4,054

 

 

 

4,525

 

Interest expense

 

 

—

 

 

 

—

 

Depreciation and amortization

 

 

4,243

 

 

 

4,344

 

EBITDA (non-GAAP)

 

$

18,984

 

 

$

20,504

 

% of sales

 

 

18.4

%

 

 

18.4

%

In Other News

On June 14, 2024 the Board of Directors declared a quarterly cash dividend of 25.0 cents per share on the Company’s common stock. The dividend is payable on August 5, 2024 to shareholders of record on July 5, 2024.

About Ennis

Founded in 1909, the Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. Ennis manufactures and sells business forms, other printed business products, printed and electronic media, integrated forms and labels, presentation products, flex-o-graphic printing, advertising specialties, internal bank forms, plastic cards, secure and negotiable documents, specialty packaging, direct mail, envelopes, tags and labels and other custom products. For more information, visit www.ennis.com.

Safe Harbor under the Private Securities Litigation Reform Act of 1995

Certain statements that may be 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 erosion of demand for our printer business documents as the result of digital technologies, risk or uncertainties related to the completion and integration of acquisitions, and the limited number of available suppliers and variability in the prices of paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 29, 2024. The Company does not undertake, and hereby disclaims, any duty or obligation to update or otherwise revise any forward-looking statements to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, although its situation and circumstances may change in the future. You 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.

 

 

 

Three months ended

Condensed Consolidated Operating Results

 

May 31,

 

 

 

2024

 

 

 

2023

 

Net Sales

 

$

103,108

 

 

$

111,294

 

Cost of goods sold

 

 

72,204

 

 

 

77,253

 

Gross profit

 

 

30,904

 

 

 

34,041

 

Selling, general and administrative

 

 

17,170

 

 

 

18,343

 

Loss (gain) from disposal of assets

 

 

4

 

 

 

—

 

Income from operations

 

 

13,730

 

 

 

15,698

 

Other income

 

 

1,011

 

 

 

462

 

Earnings before income taxes

 

 

14,741

 

 

 

16,160

 

Income tax expense

 

 

4,054

 

 

 

4,525

 

Net earnings

 

$

10,687

 

 

$

11,635

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

Basic

 

 

26,156,928

 

 

 

25,839,651

 

Diluted

 

 

26,279,646

 

 

 

25,979,533

 

 

 

 

 

 

Earnings per share

 

 

 

 

Basic

 

$

0.41

 

 

$

0.45

 

Diluted

 

$

0.41

 

 

$

0.45

 

 

 

 

 

 

 

 

 

May 31,

 

February 29,

Condensed Consolidated Balance Sheet Information

 

 

2024

 

 

 

2024

 

Assets

 

 

 

 

Current Assets

 

 

 

 

Cash

 

$

91,363

 

 

$

81,597

 

Short-term investments

 

 

32,326

 

 

 

29,325

 

Accounts receivable, net

 

 

43,909

 

 

 

47,209

 

Inventories, net

 

 

41,003

 

 

 

40,037

 

Prepaid expenses

 

 

2,537

 

 

 

3,214

 

Total Current Assets

 

 

211,138

 

 

 

201,382

 

Property, plant & equipment, net

 

 

55,106

 

 

 

54,965

 

Operating lease right-of-use assets, net

 

 

8,836

 

 

 

9,827

 

Goodwill and intangible assets, net

 

 

130,747

 

 

 

132,676

 

Other assets

 

 

340

 

 

 

340

 

Total Assets

 

$

406,167

 

 

$

399,190

 

Liabilities and Shareholders’ Equity

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$

15,542

 

 

$

11,846

 

Accrued expenses

 

 

17,176

 

 

 

17,541

 

Current portion of operating lease liabilities

 

 

4,075

 

 

 

4,414

 

Total Current Liabilities

 

 

36,793

 

 

 

33,801

 

Other non-current liabilities

 

 

15,001

 

 

 

15,548

 

Total liabilities

 

 

51,794

 

 

 

49,349

 

Shareholders' Equity

 

 

354,373

 

 

 

349,841

 

Total Liabilities and Shareholders' Equity

 

$

406,167

 

 

$

399,190

 

 

 

 

 

 

 

 

 

Three months ended

 

 

May 31,

Condensed Consolidated Cash Flow Information

 

 

2024

 

 

 

2023

 

Cash provided by operating activities

 

$

23,105

 

 

$

21,726

 

Cash used in investing activities

 

 

(5,052

)

 

 

(7,129

)

Cash used in financing activities

 

 

(8,287

)

 

 

(6,459

)

Change in cash

 

 

9,766

 

 

 

8,138

 

Cash at beginning of period

 

 

81,597

 

 

 

93,968

 

Cash at end of period

 

$

91,363

 

 

$

102,106

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240617232741/en/

Mr. Keith S. Walters, Chairman, Chief Executive Officer and President Ms. Vera Burnett, Chief Financial Officer Mr. Dan Gus, General Counsel and Secretary

Ennis, Inc. Phone: (972) 775-9801 Fax: (972) 775-9820 www.ennis.com