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Apparel Sales Lift Ennis as Printing Sales Sag

September 20, 2010
MIDLOTHIAN, TX—Sep 20, 2010—Ennis, Inc. today reported financial results for the three and six months ended August 31, 2010.

For the quarter, consolidated net sales increased by $5.2 million, or 3.8%, from $137.8 million for the quarter ended August 31, 2009 to $143.0 million for the quarter ended August 31, 2010.

Print sales for the quarter were $69.1 million, compared to $73.9 million for the same quarter last year, or a decrease of 6.5%.

Apparel sales for the quarter were $73.9 million, compared to $63.9 million for the same quarter last year, or an increase of 15.6%.

Overall gross profit margins ("margins") increased from 26.0% to 27.8% for the quarters ended August 31, 2009 and August 31, 2010, respectively. Print margins decreased from 28.7% to 28.2%, and Apparel margins increased from 22.9% to 27.4%, for the quarters ended August 31, 2009 and August 31, 2010, respectively.

Net earnings, for the quarter, increased from $9.5 million, or 6.9% of sales, for the quarter ended August 31, 2009 to $12.1 million, or 8.5% of sales, for the quarter ended August 31, 2010. Diluted EPS increased from $0.37 per share to $0.47 per share for the quarters ended August 31, 2009 and August 31, 2010, respectively.

For the six month period, net sales increased from $268.6 million for the six months ended August 31, 2009 to $283.8 million for the six months ended August 31, 2010, or 5.7%, .

Print sales for the period were $136.9 million, compared to $145.6 million for the same period last year, or a decrease of 6.0%. Print margins increased from 27.5% to 29.2%.

Apparel sales for the period were $146.8 million, compared to $123.0 million for the same period last year, or an increase of 19.4%. Apparel margins increased from 21.7% to 28.5%.

Net earnings, for the period, increased from $16.2 million, or 6.0% of sales, for the six months ended August 31, 2009 to $25.2 million, or 8.9% of sales, for the six months ended August 31, 2010. Diluted earnings increased from $0.63 per share to $0.97 per share for the six months ended August 31, 2009 and 2010, respectively.

The company, during the quarter, generated $22.2 million of EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $18.8 million for the comparable quarter last year. For the six month period ended August 31, 2010, the Company generated $46.0 million of EBITDA during the period, compared to $33.1 million for the comparable period last year.

Keith Walters, Chairman, CEO and President, commented by saying, "We continued to be pleased with the operational results this year. Operationally, both sectors continue to be able to increase or hold their margins when compared to prior comparable periods. Print margins continue to run ahead of last year and our Apparel margins are up 680 bps over the prior year, even while fighting the negative head winds of higher paper and cotton prices.

"Our Apparel sector continued to show strong sales growth during the quarter as well, with sales being up 15.6% for the quarter. We continue to be concerned with current cotton pricing which continues to be extremely high. Also, paper pricing continues to be volatile. Our ability to continue to manage these costs increases continues to be unknown and is dependent upon the economic recovery, outside market factors and the actions of our competitors.

"The construction of our new apparel manufacturing facility in Agua Prieta, Mexico continues to progress and we expect operations to begin at this facility over the next couple of quarters. We continue to look forward to the start-up of this new facility and the potential cost savings, once fully operational. So while much has been accomplished so far this fiscal year, many challenges remain for fiscal year 2011. As always, we will continue to 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 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(R) 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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