Ennis Reports Stable Print Sales as Overall Sales Decline
MIDLOTHIAN, TX—Sept. 27, 2011—Ennis Inc. reported financial results for the three and six months ended Aug. 31, 2011.
For the quarter, consolidated net sales decreased by $12.6 million, or 8.8 percent, to $130.4 million compared to $143.0 million for the quarter ended Aug. 31, 2010.
Print sales for the quarter were stable at $69.2 million, compared to $69.1 million for the same period of last year.
Due to unexpected softness in the market, Apparel sales were $61.2 million, compared to $73.9 million for the same quarter of 2010, or a decrease of 17.2 percent.
Overall gross profit margins decreased from 27.8 percent to 26.1 percent for the quarter. Print margins increased during the period from 28.2 percent to 28.6 percent, while Apparel margins decreased from 27.4 percent to 23.4 percent.
Net earnings for the quarter decreased from $12.1 million, or 8.5 percent of sales, in 2010 to $9.7 million, or 7.4 percent of sales, for the quarter ended Aug. 31, 2011.
For the six month period, net sales decreased from $283.8 million in 2010 to $273.6 million for the six months ended Aug. 31, 2011, or 3.6 percent.
Print sales for the period again remained relatively stable at $136.3 million, compared to $136.9 million for the same period last year.
Apparel sales for the quarter were $137.3 million, compared to $146.8 million for the same period last year, or a decrease of 6.5 percent.
Overall margins decreased from 28.9 percent to 27.0 percent for the six-month period in 2011. Print margins decreased slightly from 29.2 percent to 28.7 percent, while Apparel margins decreased from 28.5 percent to 25.3 percent, again due to higher raw material costs.
Net earnings decreased from $25.2 million, or 8.9 percent of sales, for the six months ended Aug. 31, 2010, to $21.1 million, or 7.7 percent of sales, for the six months ended Aug. 31, 2011.
The company, during the quarter, generated $19.0 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $22.2 million for the comparable quarter last year. For the six month period ended Aug. 31, 2011, it generated $40.9 million of EBITDA during the period, compared to $46.0 million for the comparable period last year.
Keith Walters, chairman, CEO and president, commented, “Overall, the operational results for the quarter were as expected. Print continued to deliver steady revenue levels and operational results, while margins in our Apparel division were compressed some, due to higher raw material costs.
“What wasn’t expected was the softness in the market during the last quarter. Whether this is just a temporary situation or one we will have to manage for an extended period of time is unknown. As we indicated previously, manufacturers’ ability to navigate through this period of higher cotton costs was dependent upon many factors, one being the continued economic recovery. The current softness in the marketplace will make this an even more challenging task for all concerned,” Walters concluded.
Ennis Inc. 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”).