Ennis Inc. Reports Financial Results for Its Fourth Quarter and Fiscal Year
MIDLOTHIAN, Texas - April 26, 2018 - Ennis, Inc. reported financial results for the quarter and fiscal year ended February 28, 2018. Highlights include:
- Revenues increased $13.3 million, or 3.7% for the comparative fiscal year.
- Gross profit margin increased from 28.8% to 30.2% on a comparative quarter basis, and increased from 29.1% to 31.6% for the comparative fiscal year.
- Diluted earnings per share from continuing operations increased from $0.28 to $0.32 on a comparative quarter basis, and increased from $1.03 to $1.29 for the comparative fiscal year, an increase of 14.3% for the quarter and 25.2% for the fiscal year.
The financial overview includes only the Company’s continuing print operations. The Company sold Alstyle Apparel on May 25, 2016, resulting in the apparel division being classified as discontinued operations and the print division remaining as the continuing operations of the Company.
The Company’s revenues for the fourth quarter ended February 28, 2018 were $87.1 million compared to $86.6 million for the same quarter last year, an increase of 0.6%. Gross profit margin (“margin”) was $26.3 million for the quarter, or 30.2%, as compared to $24.9 million, or 28.8% for the fourth quarter last year. Net earnings from continuing operations for the quarter were $8.2 million, or $0.32 per diluted share compared to $7.2 million, or $0.28 per diluted share for the fourth quarter last year. The enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on December 22, 2017 reduced the Company’s deferred tax expense and positively impacted our operating results by $3.6 million. In addition, due to the benefits of the Tax Act and the Company’s strong performance, the Company approved special and performance based bonuses, which negatively impacted the Company’s operating results by $1.4 million compared to the same quarter last year.
The Company’s revenues for the fiscal year ended February 28, 2018 were $370.2 million compared to $356.9 million for the same period last year, an increase of 3.7%. Margin was $116.9 million, or 31.6%, as compared to $104.0 million, or 29.1% for the fiscal years ended February 28, 2018 and February 28, 2017, respectively. Earnings from continuing operations for the fiscal year ended February 28, 2018 were $32.8 million, or $1.29 per diluted share compared to $26.4 million, or $1.03 per diluted share for the fiscal year ended February 28, 2017. For fiscal year 2017, the Company’s net earnings from continuing operations were negatively impacted by relocation and start-up costs of a folder operating company and higher than historical medical expenses of approximately $3.5 million, or $0.13 per diluted share. As noted above, the Company’s fiscal year 2018 earnings from continuing operations were positively impacted by the Tax Act by $3.6 million. This benefit was reduced by approximately $0.7 million due to a special bonus the Company elected to pay to its non-management level employees as a result of the tax savings it received from the Tax Act and $0.7 million due to the additional performance bonus.
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 adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure. To provide additional information, the Company also reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as earnings from operations before interest, taxes, depreciation, and amortization).
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. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit agreement.
Reconciliations of non-GAAP financial measures included herein to the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following table. Other companies may calculate non-GAAP adjusted financial measures differently than Ennis, which limits the usefulness of the non-GAAP measures for comparison with these other companies. While management believes the Company’s non-GAAP financial measures are useful in evaluating Ennis, this information 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 from continuing operations, a non-GAAP financial measure, to the most comparable GAAP measure, net earnings from continuing operations (dollars in thousands).
Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Overall, we were pleased with our operational performance this fiscal year and our ability to successfully put the negative overhangs of the prior fiscal year behind us. Changes we implemented last year have resulted in our health plan costs being more in line with historical averages, and the negative impact of the relocation and start-up of a folder operation appears to be fully behind us. The acquisition completed at the end of the 2017 fiscal year continues to out-perform our expectations, adding approximately $36.0 million to our revenues and contributing $0.13 to our diluted earnings per share this fiscal year. We are encouraged by the recently enacted Tax Cuts and Jobs Act of 2017 and the potential positive impact it may have for all U.S. manufacturers. In the fourth quarter we shared the savings the Company realized from the Tax Act by paying each of our non-management level employees a $500 special cash bonus and paying our shareholders a special one-time cash dividend of $0.10 per share. Going forward, although the print industry remains challenging, we are optimistic about our ability to navigate these waters and continue to return positive financial results to our shareholders. We have strengthened one of the strongest balance sheets in the industry and continue to improve our cash position.”
The preceding press release was provided by a company unaffiliated with Printing Impressions. The views expressed within do not directly reflect the thoughts or opinions of Printing Impressions.