Ennis, Inc. (the “Company”), (NYSE: EBF), today reported
financial results for the first quarter ended May 31, 2023.
Highlights include:
- Revenues were $111.3 million for the quarter compared to
$107.7 million for the same quarter last year, an increase of $3.6
million or 3.3%.
- Earnings per diluted share for the current quarter were
$0.45 compared to $0.45 for the comparative quarter last
year.
- Our gross profit margin for the quarter was 30.6% compared
to 31.6% for the comparative quarter last year.
Financial Overview
The Company’s revenues for the first quarter ended May 31, 2023
were $111.3 million compared to $107.7 million for the same quarter
last year, an increase of $3.6 million, or 3.3%. The increase
includes revenue contributions of approximately $4.1 million from
School Photo Marketing, an acquisition completed on November 30,
2022, and Stylecraft Printing Company, an acquisition completed on
May 23, 2023. The increase from acquisitions was partially offset
by an otherwise slight decline in sales volume as purchasing
patterns have normalized since last year’s tight paper market.
Gross profit margin was $34.0 million, or 30.6%, as compared to
$34.0 million, or 31.6%, for the same quarter last year. Net
earnings for the quarter remained flat at $11.6 million, or $0.45
per diluted share, as compared to $11.6 million, or $0.45 per
diluted share, for the same quarter last year. Our recent
acquisitions contributed $0.04 in diluted earnings per share for
the quarter.
Keith Walters, Chairman, Chief Executive Officer and President,
commented by stating, “Our results for the quarter were within our
expectations. Our gross profit margin for the quarter of 30.6% is
within our target range and showed improvement of 300 basis points
from 27.6% in the sequential quarter ending February 28, 2023 and
declined 100 basis points to 30.6% compared to 31.6% in the same
prior year quarter. Our EBITDA remained relatively stable at $20.5
million or 18.4% of sales compared to the sequential quarter, $20.5
million or 19.9% of sales and compared to the same quarter last
year $20.5 million or 19.1% of sales.
"We incurred additional expenses this quarter in which we
anticipate the benefits to be recognized in future quarters. We
relocated one of our leased facilities into an existing location
with excess capacity. The lease renewal would have been an increase
of 70% and the move to an existing location is anticipated to
reduce future costs and improve our operational efficiency. We
incurred additional legal expenses during the quarter related to a
case against Wright Printing Company, its owner Mark Wright, and
CEO Mardra Sikora. In April 2023, we were awarded $5.0 million in
actual and punitive damages but the judgment award has not been
recognized in our financials to date. These additional expenses for
the quarter resulted in a decrease of $0.03 to our diluted earnings
per share.
"Our recent acquisitions contributed $4.1 million in sales
during the current quarter; however, the real impact of our latest
acquisitions is expected to be seen in the remainder of fiscal year
2024. Stylecraft Printing Company in Canton, Michigan expands our
product lines and geographical footprint, as well as adds a
well-known brand that has been serving the distributor channel for
more than 50 years. UMC Print, a leading trade-only printer
acquired after the quarter close, June 2, 2023, will add strategic
locations & capabilities to drive growth with our distributor
partners. We will continue to explore acquisitions that make sense
and hunt for new sales in new markets and new channels. As part of
our regular course of business we continue to monitor incoming
order volumes so that we can proactively adjust our costs
accordingly.
"We believe we have one of the strongest balance sheets in the
industry, with no debt and significant cash. Our profitability and
strong financial condition will allow us to continue operations and
fund acquisitions without incurring debt. Given those strengths, we
also anticipate timely access to credit should larger acquisition
opportunities materialize. We continue to focus on delivering
profitability and returns to our shareholders."
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, from time to time the Company
reports the non-GAAP financial measure of EBITDA (EBITDA is
calculated as net earnings before interest expense, tax expense,
depreciation, and amortization). 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. Other companies
may calculate non-GAAP financial measures differently than the
Company, which limits the usefulness of the Company’s non-GAAP
measures for comparison with these other companies. While
management believes the Company’s non-GAAP financial measures are
useful in evaluating the Company, when this information is reported
it 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 three months ended May 31, 2023 to the most
comparable GAAP measure, net earnings (dollars in thousands).
Three months ended
May 31,
May 31,
2023
2022
Net earnings
$
11,635
$
11,627
Income tax expense
4,525
4,523
Interest expense
—
—
Depreciation and amortization
4,344
4,378
EBITDA (non-GAAP)
$
20,504
$
20,528
% of sales
18.4
%
19.1
%
In Other News
On June 16, 2023 the Board of Directors declared a quarterly
cash dividend of 25.0 cents per share on the Company’s common
stock. The dividend is payable on August 7, 2023 to shareholders of
record on July 7, 2023.
About Ennis
Founded in 1909, 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, integrated forms and
labels, presentation products, flex-o-graphic printing, advertising
specialties and Post-it® Notes, internal bank forms, plastic cards,
secure and negotiable documents, specialty packaging, direct mail,
envelopes, tags and labels and other custom products. For more
information, visit www.ennis.com.
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 severity and duration of the COVID-19 pandemic and
related economic repercussions, the erosion of demand for our
printer business documents as the result of digital technologies,
risk or uncertainties related to the completion and integration of
acquisitions, the limited number of available suppliers and
variability in the prices of paper and other raw materials, and
operational challenges relating to the COVID-19 pandemic and
efforts to mitigate the spread of the virus, including logistical
challenges, protecting the health and well-being of our employees
and potential plant closures. 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, 2023. 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,
2023
2022
Net Sales
$
111,294
$
107,667
Cost of goods sold
77,253
73,663
Gross profit
34,041
34,004
Operating expenses
18,343
17,682
Income from operations
15,698
16,322
Other (income) expense
(462
)
172
Earnings from operations before income
taxes
16,160
16,150
Income tax expense
4,525
4,523
Net earnings
$
11,635
$
11,627
Weighted average
common shares outstanding
Basic
25,839,651
25,820,639
Diluted
25,979,533
25,959,448
Earnings per share
Basic
$
0.45
$
0.45
Diluted
$
0.45
$
0.45
Cash dividends per share
$
0.25
$
0.25
May 31,
February 28,
Condensed
Consolidated Balance Sheet Information
2023
2022
Assets
Current Assets
Cash
$
102,106
$
93,968
Accounts receivable, net
46,627
53,507
Inventories, net
48,048
46,834
Prepaid expenses
1,933
2,317
Total Current Assets
198,714
196,626
Net property, plant & equipment
50,601
47,789
Operating lease right-of-use assets,
net
11,877
13,133
Goodwill and intangible assets, net
134,488
135,907
Other assets
310
380
Total Assets
$
395,990
$
393,835
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable
$
14,465
$
18,333
Accrued expenses
19,195
18,067
Current portion of operating lease
liabilities
4,718
4,847
Total Current Liabilities
38,378
41,247
Other non-current liabilities
19,931
21,156
Total liabilities
58,309
62,403
Shareholders' Equity
337,681
331,432
Total Liabilities and Shareholders'
Equity
$
395,990
$
393,835
Three months ended
May 31,
Condensed
Consolidated Cash Flow Information
2023
2022
Cash provided by operating activities
$
21,726
$
14,237
Cash used in investing activities
(7,129
)
(1,036
)
Cash used in financing activities
(6,459
)
(7,586
)
Net change in cash
8,138
5,615
Cash at beginning of period
93,968
85,606
Cash at end of period
$
102,106
$
91,221
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230619332858/en/
Mr. Keith S. Walters, Chairman, Chief Executive Officer and
President Ms. Vera Burnett, Chief Financial Officer Mr. Dan Gus,
General Counsel and Secretary Ennis, Inc. 2441 Presidential
Parkway Midlothian, Texas 76065 Phone: (972) 775-9801 Fax: (972)
775-9820 www.ennis.com
Ennis (NYSE:EBF)
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Ennis (NYSE:EBF)
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