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Ennis, Inc. Reports Results for the Quarter Ended May 31, 2022 and Declares Quarterly Dividend

Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2022. Highlights include:

  • Revenues were $107.7 million for the quarter compared to $96.9 million for the same quarter last year, an increase of $10.8 million or 11.1%.
  • Earnings per diluted share for the current quarter were $0.45 compared to $0.28 for the comparative quarter last year, an increase of 60.7%.
  • Our gross profit margin for the quarter was 31.6% compared to 30.1% for the comparative quarter last year.

Financial Overview

The Company’s revenues for the first quarter ended May 31, 2022 were $107.7 million compared to $96.9 million for the same quarter last year, an increase of $10.8 million, or 11.1%. The increase includes revenue contribution of approximately $1.9 million from AmeriPrint, an acquisition completed on May 31, 2021. Gross profit margin was $34.0 million, or 31.6%, as compared to $29.2 million, or 30.1%, for the same quarter last year. Net earnings for the quarter were $11.6 million, or $0.45 per diluted share, as compared to $7.3 million, or $0.28 per diluted share, for the same 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 2023, which began March 1, 2022. Customer demand for our product continues to be strong as seen in recent quarters and our gross profit margin showed a nice improvement of 150 basis points to 31.6% compared to 30.1% in the same prior year quarter and 410 basis points improvement compared to 27.5% the sequential quarter. Our EBITDA increased over the sequential quarter, $15.1 million to $20.5 million, representing 15.5% and 19.1% of sales, respectively. We made pricing adjustments to cover inflationary costs and improved operational efficiencies all of which contributed to the improved margins.

"North American paper markets remain extraordinarily tight, and further substantial price increases will continue to be a very real possibility until demand declines return in enough force and for long enough to rebalance the short-supplied market. While the availability of paper in the North American market is very low, our strong vendor relationship with our paper supplier allows us to meet customer demand for their business product needs. We continue to monitor incoming order volumes as well as rising raw material and other input costs so that we can proactively adjust our pricing and 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 purchased approximately 64,000 shares of our common stock in the first quarter under our stock repurchase program at an average price of $17.46 per share. In accordance with our repurchase program, we will continue to repurchase our shares when we believe the market price is undervalued. 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, 2022 to the most comparable GAAP measure, net earnings (dollars in thousands).

 

 

Three months ended

 

 

 

May 31,

 

 

May 31,

 

 

 

 

2022

 

 

 

2020

 

Net earnings

 

$

11,627

 

 

$

7,304

 

Income tax expense

 

 

4,523

 

 

 

3,130

 

Interest expense

 

 

 

 

 

2

 

Depreciation and amortization

 

 

4,378

 

 

 

4,634

 

EBITDA (non-GAAP)

 

$

20,528

 

 

$

15,070

 

% of sales

 

 

19.1

%

 

 

15.5

%

In Other News

On June 17, 2022 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 8, 2022 to shareholders of record on July 8, 2022.

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, 2022. 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,

 

 

 

 

2022

 

 

 

2021

 

Revenues

 

$

107,667

 

 

$

96,930

 

Cost of goods sold

 

 

73,663

 

 

 

67,744

 

Gross profit margin

 

 

34,004

 

 

 

29,186

 

Operating expenses

 

 

17,682

 

 

 

18,638

 

Operating income

 

 

16,322

 

 

 

10,548

 

Other expense

 

 

172

 

 

 

114

 

Earnings before income taxes

 

 

16,150

 

 

 

10,434

 

Income tax expense

 

 

4,523

 

 

 

3,130

 

Net earnings

 

$

11,627

 

 

$

7,304

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

Basic

 

 

25,812,078

 

 

 

26,029,355

 

Diluted

 

 

25,855,370

 

 

 

26,113,359

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Basic

 

$

0.45

 

 

$

0.28

 

Diluted

 

$

0.45

 

 

$

0.28

 

 

 

 

 

 

 

 

 

 

May 31,

 

 

February 28,

 

Condensed Consolidated Balance Sheet Information

 

 

2022

 

 

 

2021

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$

91,221

 

 

$

85,606

 

Accounts receivable, net

 

 

40,877

 

 

 

39,022

 

Inventories, net

 

 

43,900

 

 

 

38,538

 

Other

 

 

1,718

 

 

 

1,863

 

Total Current Assets

 

 

177,716

 

 

 

165,029

 

Property, plant & equipment, net

 

 

52,048

 

 

 

53,633

 

Operating lease right-of-use assets

 

 

14,965

 

 

 

15,544

 

Goodwill and intangible assets

 

 

132,489

 

 

 

134,246

 

Other

 

 

392

 

 

 

392

 

Total Assets

 

$

377,610

 

 

$

368,844

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

16,663

 

 

$

16,678

 

Accrued expenses

 

 

19,872

 

 

 

15,422

 

Current portion of operating lease liabilities

 

 

4,926

 

 

 

5,090

 

Total Current Liabilities

 

 

41,461

 

 

 

37,190

 

Long-term debt

 

 

 

 

 

 

Other non-current liabilities

 

 

27,522

 

 

 

27,839

 

Total liabilities

 

 

68,983

 

 

 

65,029

 

Shareholders' Equity

 

 

308,627

 

 

 

303,815

 

Total Liabilities and Shareholders' Equity

 

$

377,610

 

 

$

368,844

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

May 31,

 

Condensed Consolidated Cash Flow Information

 

 

2022

 

 

 

2021

 

Cash provided by operating activities

 

$

14,237

 

 

$

11,887

 

Cash provided by (used in) investing activities

 

 

(1,036

)

 

 

118

 

Cash used in financing activities

 

 

(7,586

)

 

 

(5,866

)

Change in cash

 

 

5,615

 

 

 

6,139

 

Cash at beginning of period

 

 

85,606

 

 

 

75,190

 

Cash at end of period

 

$

91,221

 

 

$

81,329

 

 

Contacts

For Further Information Contact:

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.

Phone: (972) 775-9801

Fax: (972) 775-9820

www.ennis.com

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