EX-99 2 exh99.txt EXHIBIT 99 Exhibit 99 (Ennis Logo) 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, January 7, 2005 ENNIS, INC. REPORTS THIRD QUARTER OPERATING RESULTS Midlothian, Texas -- Ennis, Inc. (NYSE: EBF) today reported operating results for its third quarter ended November 30, 2004. On November 1, 2004, the Company announced the acquisition of Royal Business Forms, Inc. (Royal), an Arlington, Texas based manufacturer of printed business forms. In a transaction valued at approximately $3.7 million, Ennis, Inc. acquired all of the capital stock of Royal in exchange for approximately 178,000 Ennis shares. Royal had approximately $12 million in sales for its fiscal year ended September 30, 2004, its most recent fiscal year. Also on November 19, 2004, the previously announced merger between the Company and Alstyle Apparel, Inc. was closed. These transactions, along with the acquisition of Crabar/GBF, Inc. as of June 29, 2004, represent a significant change in the size and nature of Ennis' business. Due to the timing of the Royal and Alstyle transactions, their impact on the quarter and nine months ended November 30, 2004 is relatively insignificant to the overall operating results. The inclusion of the results of operations of 1 Crabar/GBF, Inc. does have a significant impact on the third quarter and nine month results of operations. For the third quarter ended November 30, 2004, net sales amounted to $91,750,000 compared to $66,398,000 for the same period last year, an increase of 38.2%. Net earnings for the quarter amounted to $6,104,000 or $.35 per diluted share, compared to $4,475,000, or $.27 per diluted share for the corresponding period last year, an increase of 29.6%. Per share earnings computations were based on 17,326,580 shares for the quarter compared to 16,622,244 diluted shares for the corresponding period last year. For the nine months ended November 30, 2004, net sales amounted to $230,860,000 compared to $196,275,000 for the same period last year, an increase of 17.6%. Net earnings for the nine months amounted to $16,056,000 or $.95 per diluted share, compared to $13,076,000 or $.79 per diluted share for the corresponding period last year, an increase of 20.3%. Per share earnings computations were based on 16,924,120 diluted shares for the nine months compared to 16,577,927 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 42 production facilities and 7 additional distributions centers located in 17 states as well as Canada and Mexico, 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, point-of- purchase display advertising and activewear apparel. 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 November 30, 2004 2003 ---- ---- NET SALES $ 91,750 $ 66,398 ------- ------- COSTS AND EXPENSES: Cost of sales 68,876 48,824 Selling, general and administrative expenses 12,907 9,949 ------- ------- 81,783 58,773 ------- ------- EARNINGS FROM OPERATIONS 9,967 7,625 OTHER INCOME (EXPENSE): Investment income 82 6 Interest expense (288) (183) Other expense, net 108 (115) ------- ------- (98) (292) ------- ------- EARNINGS BEFORE INCOME TAXES 9,869 7,333 PROVISIONS FOR INCOME TAXES 3,765 2,858 ------- ------- NET EARNINGS $ 6,104 $ 4,475 ======= ======= PER SHARE AMOUNTS: Basic net earnings $ 0.36 $ 0.27 ======= ======= Diluted net earnings $ 0.35 $ 0.27 ======= ======= Dividends $ 0.155 $ 0.155 ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 16,959,463 16,363,391 ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 17,326,580 16,622,244 ========== ========== Nine Months Ended November 30, 2004 2003 ---- ---- NET SALES $ 230,860 $ 196,275 ------- ------- COSTS AND EXPENSES: Cost of sales 171,574 144,644 Selling, general and administrative 33,106 29,470 expenses ------- ------- 204,680 174,114 ------- ------- EARNINGS FROM OPERATIONS 26,180 22,161 OTHER INCOME (EXPENSE) Investment income 224 33 Interest expense (589) (662) Other expense, net 106 (326) ------- ------- (259) (955) ------- ------- EARNINGS BEFORE INCOME TAXES 25,921 21,206 PROVISIONS FOR INCOME TAXES 9,865 8,130 ------- ------- NET EARNINGS $ 16,056 $ 13,076 ======= ======= PER SHARE AMOUNTS: Basic net earnings $ 0.97 $ 0.80 ======= ======= Diluted net earnings $ 0.95 $ 0.79 ======= ======= Dividends $ 0.465 $ 0.465 ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 16,599,542 16,347,768 ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 16,924,120 16,577,927 ========== ========== 3 ENNIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited) November 30, February 29, 2004 2004 ---- ---- Assets CURRENT ASSETS: Cash and cash equivalents $ 12,023 $ 15,067 Accounts receivable, net 49,487 29,800 Inventories 79,831 13,721 Other current assets 8,881 5,017 ------- ------- Total current assets 150,222 63,605 ------- ------- PROPERTY, PLANT AND EQUIPMENT, NET 71,942 46,480 GOODWILL, NET 230,795 34,420 OTHER ASSETS 28,963 9,538 ------- ------- $ 481,922 $ 154,043 ======= ======= Liabilities and Shareholders' Equity CURRENT LIABILITIES: Current installments of long-term debt $ 19,073 $ 6,335 Accounts payable 36,843 5,804 Accrued expenses 36,688 13,261 ------- ------- Total current liabilities 92,604 25,400 ------- ------- ACCRUED PENSION 0 0 LONG-TERM DEBT, LESS CURRENT INSTALLMENTS 110,710 7,800 DEFERRED CREDITS, PRINCIPALLY FEDERAL INCOME TAXES 9,906 10,261 SHAREHOLDERS' EQUITY: Preferred stock, at par value -- -- Common stock, at par value 75,134 53,125 Additional capital 123,640 126 Retained earnings 153,750 145,653 Accumulated other comprehensive income (11) (114) ------- ------- 352,513 198,790 Treasury stock 83,811 88,208 ------- ------- Total shareholders' equity 268,702 110,582 ------- ------- $ 481,922 $ 154,043 ======= ======= 4 ENNIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) Nine Months Ended November 30, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 16,056 $ 13,076 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 6,766 7,074 Gain on sale of property, plant and equipment (239) -- Bad debt expense 657 668 Other -- -- Changes in operating assets and liabilities (3,368) 4,891 ------- ------- Net cash provided by operating activities 19,872 25,709 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (4,581) (3,040) Purchase of operating assets, net (114,620) -- of cash acquired Other 400 82 ------- ------- Net cash used in investing activities (118,801) (2,958) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Debt issued to finance acquisitions 109,500 -- Repayment of debt related to acquisitions (6,353) (5,538) Issue (purchase) of treasury shares, net 372 343 Dividends (7,634) (7,605) ------- ------- Net cash provided by (used in) financing activities 95,885 (12,800) ------- ------- NET CHANGE IN CASH AND EQUIVALENTS (3,044) 9,951 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 15,067 13,860 ------- ------- CASH AND EQUIVALENTS AT END OF PERIOD $ 12,023 $ 23,811 ======= ======= Management's report to shareholders contains 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 January 7, 2005. 5