Ennis Posts Overall Sales Increase, Print Segment Decline
MIDLOTHIAN, TX—June 20, 2011—Ennis Inc. reported financial results for the first quarter ended May 31, 2011.
- Consolidated revenues for the quarter increased $2.6 million, or 1.8 percent over the comparable quarter last year.
- Apparel sales increased $3.1 million, or 4.2 percent over the comparable quarter last year.
For the quarter, consolidated net sales increased by $2.6 million, or 1.8 percent, from $140.7 million for the quarter ended May 31, 2010, to $143.3 million for the quarter ended May 31, 2011.
Print sales for the quarter were $67.1 million, compared to $67.8 million for the same quarter last year, or a decrease of 1.0 percent.
Apparel sales for the quarter were $76.1 million, compared to $73.0 million for the same quarter last year, or an increase of 4.2 percent.
Overall gross profit margins decreased from 30.0 percent to 27.7 percent for the quarters ended May 31, 2010 and May 31, 2011, respectively. Print margins decreased from 30.3 percent to 28.8 percent, and Apparel margins decreased from 29.7 percent to 26.8 percent, for the quarters ended May 31, 2010 and May 31, 2011, respectively.
Net earnings for the quarter decreased from $13.0 million, or 9.3 percent of sales, for the quarter ended May 31, 2010, to $11.4 million, or 8.0 percent of sales, for the quarter ended May 31, 2011.
The company, during the quarter, generated $21.9 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $23.7 million for the comparable quarter last year.
Keith Walters, chairman, CEO and president, commented, “Overall we are pleased with the operational results this quarter, even though our reported margins for both sectors decreased over their comparables due to higher raw material costs. In our Apparel sector alone, our raw material costs flowing through our operating results increased approximately 35 percent over the comparable quarter last year. In addition, our Apparel sector had manufacturing inefficiencies associated with the start-up and transition to our new manufacturing facility in Agua Prieta, Mexico of approximately $2.2 million, or 289 basis points, which were not incurred during the same quarter last year.
“Our major concern for the current fiscal year still remains the high cost of cotton. Even with the significant increase in our cotton cost flowing through our operating results this quarter, the current cost of cotton going into our inventory is still much higher. Our ability to pass these cost increases on to the market continues to be unknown and is dependent upon the continuing economic recovery and the actions of our competitors,”Walters added
“Sales for the Print sector appear to have stabilized, but still remain challenged. Apparel sales during the quarter were restricted some, to help facilitate the transition to our new manufacturing facility. The new apparel manufacturing facility continues to progress and we are in the final stages of transitioning production from our Anaheim, CA facility to the new facility. We continue to expect this transition to be completed by the end of our second fiscal quarter. So while many challenges were negotiated during the quarter, many challenges remain for fiscal year 2012. As always, we will continue to remain vigilant to the task at hand.”
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 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.