Ennis Reports a Q1 Increase in Print Sales of 4.6%
This financial overview includes the Company’s continuing print operations and its discontinued apparel operations on a separate and combined basis. The Company sold Alstyle Apparel on May 25, 2016, resulting in the print division becoming the on-going continuing operations of the Company thereafter.
The Company’s net print sales for the first quarter ended May 31, 2017 were $94.6 million compared to $90.4 million for the same quarter last year, an increase of 4.6%. Gross profit margin (“margin”) for continuing operations was $29.9 million for the quarter, or 31.6%, as compared to $26.7 million, or 29.5% for the same quarter last year. The Company’s margin in the first quarter last year was negatively impacted by approximately $1.3 million in connection with the move of one of its folder operations. Diluted earnings per share for the print operations were $0.31, compared to $0.26 for the same quarter last year.
Last year’s May 31, 2016 first quarter earnings from the apparel discontinued operations was $0.10 per diluted share, and the combined earnings for continued and discontinued operations was $0.36 per diluted share for the quarter. The net loss from the sale of the Company’s apparel operations during the quarter, net of tax, was $26.0 million, or ($1.01) per diluted share. The net loss included a $16.0 million, or $10.3 million net of taxes, write-off of the Company’s balance of foreign currency translation adjustments recorded in accumulated other comprehensive income. As a result, for the quarter ended May 31, 2016, the Company realized a net loss of ($16.9) million, or ($0.65) per diluted share.
The Company believes the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from continuing operations before interest, taxes, depreciation, and amortization) provides important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations. The Company believes adding back the specified items to net earnings provides a more meaningful comparison to the corresponding reported periods and internal budgets and forecasts, provides management with a more relevant measurement of operating performance and yields metrics which are more useful in assessing management performance. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit facility. While management believes this non-GAAP financial measure is useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute for, or superior to, the related financial information prepared in accordance with GAAP.
During the first quarter ending May 31, 2017, the Company generated EBITDA from print operations of $16.1 million compared to $13.8 million for the comparable quarter last year.
The following table reconciles EBITDA from print operations, a non-GAAP financial measure, to the most comparable GAAP measure, net earnings from continuing operations (dollars in thousands):
Keith Walters, chairman, CEO and president, commented on continuing operations by stating, “We are pleased with the operational performance during the first quarter. The integration of our most recent acquisition, Independent Printing Company, is coming along nicely. Its operations for the quarter added approximately $9.7 million in sales and $0.03 to our diluted earnings per share. On March 1, 2017, we changed the remaining useful lives of the Company’s trade names from indefinite-life to definite-life, which negatively impacted our financial results by approximately $0.01 per diluted share.
He continued, "Also, as recently announced, our Board, after considering our cash position, debt level, and anticipated cash flows, along with our focus on opportunities for share repurchases and acquisitions, increased our quarterly dividend rate from $0.175 per share to $0.20 per share, an increase of 14.3%. In connection with our share repurchase program, during the quarter we repurchased 191,033 shares of our common stock at an average price of $17.33 per share and have $18.4 million still available under our program. Finally, I would like to remind our shareholders that our annual shareholders’ meeting is scheduled for July 20, 2017 and we hope to see you there.”
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 the staff of Printing Impressions.