EX-99 2 exh99.txt EXHIBIT 99 Exhibit 99 Press Release 2441 Presidential Parkway (bullet) Midlothian, Texas 76065 (bullet) Phone 972.775.9801 (bullet) Fax 800.579.4271 (bullet) www.ennis.com FOR IMMEDIATE RELEASE FOR ADDITIONAL INFORMATION CONTACT: Keith S. Walters, Chairman President & CEO (800) 752-5386 Midlothian, Texas, September 27, 2004 ENNIS, INC. REPORTS SECOND QUARTER OPERATING RESULTS Midlothian, Texas -- Ennis, Inc. (NYSE: EBF) today reported operating results for its second quarter ended August 31, 2004. On June 25, 2004, the Company announced two related transactions, the purchase of Crabar/GBF, Inc. from Centrum Equities, Inc. and the merger between the Company and Centrum Acquisitions, Inc., the parent company of Alstyle Apparel. "These combined transactions will solidify the Company's position in the wholesale manufacturing portion of the business forms industry, and at the same time provide the Company with a new growth product line," stated Keith Walters, Chairman, President and CEO of Ennis, Inc. "Upon completion of these transactions, the combined entities will have annual revenues in excess of $500,000,000. The impact of the Crabar/GBF acquisition on June 30, 2004 is reflected in second quarter operating results, and the merger with Alstyle Apparel is expected to be completed late in the third fiscal quarter." For the second quarter ended August 31, 2004, net sales amounted to $73,374,000 compared to $65,003,000 for the same period last year, an increase of 12.9%. Net earnings for the quarter amounted to $5,370,000 or $.32 per diluted share, compared to $4,497,000, or $.27 per diluted share for the corresponding period last year, an increase of 19.4%. Per share 1 earnings computations were based on 16,745,451 shares for the quarter compared to 16,609,275 diluted shares for the corresponding period last year. For the six months ended August 31, 2004, net sales amounted to $139,110,000 compared to $129,877,000 for the same period last year, an increase of 7.1%. Net earnings for the six months amounted to $9,952,000 or $.59 per diluted share, compared to $8,601,000 or $.52 per diluted share for the corresponding period last year, an increase of 15.7%. Per share earnings computations were based on 16,715,645 diluted shares for the six months compared to 16,556,573 shares for the corresponding period last year. Ennis, Inc., (NYSE: EBF) is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, the Company has 37 production facilities located in 16 states, strategically located to serve the Company's national network of distributors. Ennis offers an extensive product line from simple to complex forms, laser cut- sheets, negotiable documents, internal bank forms, tags, labels, presentation folders, commercial printing, advertising specialties, screen printed products, and point-of-purchase display advertising that can be custom designed to customer needs. In addition, Ennis maintains highly proficient regional Customer Sales Centers to support distributors in their business efforts. 2 ENNIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in Thousands Except Per Share Amounts) (Unaudited) Three Months Ended August 31, 2004 2003 ---- ---- NET SALES $ 73,374 $ 65,003 -------- -------- COSTS AND EXPENSES: Cost of sales 54,022 47,496 Selling, general and administrative expenses 10,813 9,866 -------- -------- 64,835 57,362 -------- -------- EARNINGS FROM OPERATIONS 8,539 7,641 OTHER INCOME (EXPENSE): Investment income 137 13 Interest expense (167) (192) Other expense, net 79 (208) 49 (387) EARNINGS BEFORE INCOME TAXES 8,588 7,254 PROVISIONS FOR INCOME TAXES 3,218 2,757 -------- -------- NET EARNINGS $ 5,370 $ 4,497 ======= ======= PER SHARE AMOUNTS: Basic net earnings $ 0.33 $ 0.28 ======= ======= Diluted net earnings $ 0.32 $ 0.27 ======= ======= Dividends $ 0.155 $ 0.155 ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 16,427,776 16,347,228 ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 16,745,451 16,609,275 ========== ========== Six Months Ended August 31, 2004 2003 ---- ---- NET SALES $139,110 $129,877 -------- -------- COSTS AND EXPENSES: Cost of sales 102,698 95,820 Selling, general and administrative expenses 20,199 19,521 -------- -------- 122,897 115,341 -------- -------- EARNINGS FROM OPERATIONS 16,213 14,536 OTHER INCOME (EXPENSE) Investment income 142 27 Interest expense (301) (479) Other expense, net (2) (211) (161) (663) EARNINGS BEFORE INCOME TAXES 16,052 13,873 PROVISIONS FOR INCOME TAXES 6,100 5,272 -------- -------- NET EARNINGS $ 9,952 $ 8,601 ======= ======= PER SHARE AMOUNTS: Basic net earnings $ 0.61 $ 0.53 ======= ======= Diluted net earnings $ 0.59 $ 0.52 ======= ======= Dividends $ 0.310 $ 0.310 ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 16,416,737 16,340,968 ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 16,715,645 16,556,573 ========== ========== 3 ENNIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited) August 31, February 29, 2004 2004 ---- ---- Assets CURRENT ASSETS: Cash and cash equivalents $ 8,530 $ 15,067 Accounts receivable, net 37,622 29,800 Inventories 18,742 13,721 Other current assets 6,240 5,017 ------- ------- Total current assets 71,134 63,605 ------- ------- PROPERTY, PLANT AND EQUIPMENT, NET 52,308 46,480 GOODWILL, NET 42,567 34,420 OTHER ASSETS 9,476 9,538 ------- ------- $ 175,485 $ 154,043 ======= ======= Liabilities and Shareholders' Equity CURRENT LIABILITIES: Current installments of long-term debt $ 6,237 $ 6,335 Accounts payable 10,006 5,804 Accrued expenses 17,586 13,261 Federal and state income tax payable 138 -- ------- ------- Total current liabilities 33,967 25,400 ------- ------- LONG-TERM DEBT, LESS CURRENT INSTALLMENTS 16,000 7,800 DEFERRED CREDITS, PRINCIPALLY FEDERAL INCOME TAXES 9,635 10,261 SHAREHOLDERS' EQUITY: Preferred stock, at par value -- -- Common stock, at par value 53,125 53,125 Additional capital 126 126 Retained earnings 150,200 145,653 Accumulated other comprehensive income (40) (114) ------- ------- 203,411 198,790 Treasury stock (87,528) (88,208) ------- ------- Total shareholders' equity 115,883 110,582 ------- ------- $ 175,485 $ 154,043 ======= ======= 4 ENNIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) Six Months Ended August 31, 2004 2003 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 9,952 $ 8,601 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 4,424 4,775 Gain on sale of property, plant and equipment (188) (4) Bad debt expense 429 440 Other -- (275) Changes in operating assets and liabilities (3,047) 4,599 ------- ------- Net cash provided by operating activities 11,570 18,136 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,581) (2,402) Purchase operating assets, net of cash acquired (17,701) -- Other 235 63 ------- ------- Net cash used in investing activities (21,047) (2,339) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Debt issued to finance acquisitions 11,000 -- Repayment of debt issued to finance acquisition (3,335) (4,037) Issue (purchase) of treasury shares, net 363 330 Dividends (5,088) (5,068) ------- ------- Net cash (used in) provided by financing activities 2,940 (8,775) ------- ------- NET CHANGE IN CASH AND EQUIVALENTS (6,537) 7,022 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 15,067 13,860 ------- ------- CASH AND EQUIVALENTS AT END OF PERIOD $ 8,530 $ 20,882 ======= ======= Management's comments contain forward-looking statements that reflect the Company's current view with respect to future revenues and earnings. These statements are subject to numerous uncertainties, including (but not limited to) the rate at which the traditional business forms market is contracting, the application of technology to the production of business forms, demand for the Company's products in the context of a contracting market, variability in the prices of paper and other raw materials, and competitive conditions associated with the Company's products. Because of such uncertainties readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of September 27, 2004. 5