Ennis, Inc. Reports Results for the Quarter Ended May 31, 2019

World News: . []

Ennis, Inc. (the “Company"), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2019. Highlights include:

  • Revenues increased $7.3 million, or 7.2% on a sequential quarter basis and $14.6 million, or 15.6% on a comparative quarter basis.
  • Earnings per diluted share for the current quarter were $0.37 compared to $0.36 for the comparable quarter last year.

Financial Overview

The Company’s revenues for the first quarter ended May 31, 2019 were $108.0 million compared to $93.4 million for the same quarter last year, an increase of $14.6 million, or 15.6%. Gross profit margin ("margin") was $32.7 million for the quarter, or 30.3%, as compared to $30.2 million, or 32.3% for the first quarter last year. Net earnings for the quarter were $9.6 million, or $0.37 per diluted share compared to $9.2 million, or $0.36 per diluted share, for the first quarter last year.

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “We are pleased with our performance for the first quarter of fiscal year 2020. Our gross profit margin showed a nice improvement over the sequential quarter increasing from 28.9% to 30.3%, as did EBITDA which increased over the sequential quarter from $15.4 million to $17.7 million, representing 15.3% and 16.4% of sales, respectively. Our acquisitions continued to perform adding approximately $19.3 million to our comparable sales and $0.04 to our comparable earnings per diluted share. The paper supply has loosened because of the influx of imports due to the strengthening of the U.S. dollar, resulting in more paper pricing stability. With cash on hand we repurchased over 62,000 shares of our common stock in the market at an average price of $19.54 per share during the current quarter. During the quarter we also adopted the recent lease accounting pronouncement (ASU 2016-02 – topic 842) which pertains to the recognition of right-to-use assets and operating lease liabilities on our balance sheet. The impact of the adoption were increases to both our assets and liabilities by approximately $18 million, which had little impact on our balance sheet overall. We believe we continue to have one of the strongest balance sheets in the industry, with low debt and significant cash. With our low debt level and profitability, we don’t have any issues with the current deductibility of our interest expense under the new tax regulations. Given our financial position, we will continue to explore strategic opportunities as a way to profitably utilize our cash and leverage our balance sheet and, when advantageous, repurchase our shares in the marketplace.”

Non-GAAP Reconciliations

To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, the Company reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from operations before interest expense, tax expense, depreciation, and amortization). From time to time the Company may also report adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure.

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 reported for the quarter 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, a non-GAAP financial measure, for the first quarter of this year and the first quarter of last year to the most comparable GAAP measure, net earnings (dollars in thousands).

 

 

Three months ended

 

 

 

May 31,

 

 

 

 

2019

 

 

 

2018

 

Net earnings

 

$

9,632

 

 

$

9,247

 

Income tax expense

 

 

3,384

 

 

 

3,082

 

Interest expense

 

 

317

 

 

 

261

 

Depreciation and amortization

 

 

4,380

 

 

 

3,450

 

EBITDA (non-GAAP)

 

$

17,713

 

 

$

16,040

 

 

 

 

 

 

 

 

 

 

% of sales

 

 

16.4

%

 

 

17.2

%

About Ennis

Since 1909, Ennis has been primarily engaged in the production and sale of business forms 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, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. Ennis manufactures and sells 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, plastic cards, secure and negotiable documents, envelopes, tags and labels and other custom products. For more information, visit LINK  .

Safe Harbor under the Private Securities Litigation Reform Act of 1995

Certain statements that may be contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These statements are subject to numerous uncertainties, which include, but are not limited to, the Company’s ability to effectively manage its business functions while growing its business in a competitive environment, the Company’s ability to adapt and expand its services in such an environment and the variability in the prices of paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 28, 2019. The Company does not undertake, and hereby disclaims, any duty or obligation to update or otherwise revise any forward-looking statements to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, although its situation and circumstances may change in the future. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

Ennis, Inc.

Unaudited Condensed Consolidated Financial Information

(In thousands, except share and per share amounts)

 

 

 

Three months ended

 

Condensed Consolidated Operating Results

 

May 31,

 

 

 

 

2019

 

 

 

2018

 

Revenues

 

$

108,033

 

 

$

93,419

 

Cost of goods sold

 

 

75,337

 

 

 

63,228

 

Gross profit margin

 

 

32,696

 

 

 

30,191

 

Operating expenses

 

 

19,703

 

 

 

17,731

 

Operating income

 

 

12,993

 

 

 

12,460

 

Other (income) expense

 

 

(23

)

 

 

131

 

Earnings before income taxes

 

 

13,016

 

 

 

12,329

 

Income tax expense

 

 

3,384

 

 

 

3,082

 

Net earnings

 

$

9,632

 

 

$

9,247

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

26,028,337

 

 

 

25,333,673

 

Diluted

 

 

26,028,337

 

 

 

25,363,772

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

0.37

 

 

$

0.37

 

Diluted

 

$

0.37

 

 

$

0.36

 

 

 

 

 

 

 

 

 

 

 

 

May 31,

 

February 28,

Condensed Consolidated Balance Sheet Information

 

2019

 

2019

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

87,365

 

 

$

88,442

 

Accounts receivable, net

 

 

41,876

 

 

 

40,357

 

Inventories, net

 

 

36,826

 

 

 

35,411

 

Other

 

 

1,241

 

 

 

1,955

 

Total Current Assets

 

 

167,308

 

 

 

166,165

 

Property, plant & equipment, net

 

 

55,287

 

 

 

53,134

 

Operating lease right-of-use assets

 

 

18,653

 

 

 

 

Goodwill and intangible assets

 

 

143,712

 

 

 

142,906

 

Other

 

 

883

 

 

 

880

 

Total Assets

 

$

385,843

 

 

$

363,085

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

15,029

 

 

$

13,728

 

Accrued expenses

 

 

18,125

 

 

 

17,895

 

Current portion of operating lease liabilities

 

 

5,005

 

 

 

 

Total Current Liabilities

 

 

38,159

 

 

 

31,623

 

Long-term debt

 

 

30,000

 

 

 

30,000

 

Other non-current liabilities

 

 

25,420

 

 

 

12,335

 

Total liabilities

 

 

93,579

 

 

 

73,958

 

Shareholders' Equity

 

 

292,264

 

 

 

289,127

 

Total Liabilities and Shareholders' Equity

 

$

385,843

 

 

$

363,085

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

May 31,

 

Condensed Consolidated Cash Flow Information

 

 

2019

 

 

 

2018

 

Cash provided by operating activities

 

$

15,671

 

 

$

11,890

 

Cash used in investing activities

 

 

(9,661

)

 

 

(5,937

)

Cash used in financing activities

 

 

(7,087

)

 

 

(5,763

)

Change in cash

 

 

(1,077

)

 

 

190

 

Cash at beginning of period

 

 

88,442

 

 

 

96,230

 

Cash at end of period

 

$

87,365

 

 

$

96,420

 

 

More news and information about Ennis, Inc.

Published By:

Business Wire: 11:00 GMT Monday 24th June 2019

Published: .

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