EX-99.1 2 d60459exv99w1.htm PRESS RELEASE exv99w1
Exhibit 99.1
(ENNIS LOGO)
FOR IMMEDIATE RELEASE
ENNIS, INC. REPORTS RESULTS
FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2008
     Midlothian, Texas September 22, 2008 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2008.
Highlights
  §   Consolidated revenues increased 7.3% over the same quarter last year, from approximately $150.1 million to $161.1 million and 7.1% for the six month period, from approximately $302.9 million to $324.3 million.
 
  §   Apparel Segment revenues increased 13.8% over the same quarter last year, from approximately $66.5 million to $75.7 million and 14.5% for the six month period, from approximately $134.2 million to $153.6 million.
Financial Overview
     For the quarter, our consolidated net sales increased by $11.0 million, or 7.3%, from $150.1 million for the quarter ended August 31, 2007 to $161.1 million for the quarter ended August 31, 2008. Our Print sales for the quarter were $85.4 million, compared to $83.6 million for the same quarter last year, or an increase of 2.2%. Apparel sales for the quarter were $75.7 million, compared to $66.5 million for the same quarter last year, or an increase of 13.8%. Our overall gross profit margins (“margins”) decreased from 27.5% to 24.4% for the quarters ended August 31, 2007 and August 31, 2008, respectively. Our Print margins decreased from 27.8% to 26.1%, while the Apparel margins decreased from 27.2% to 22.4%, for the quarters ended August 31, 2007 and August 31, 2008, respectively. Our earnings for the quarter decreased from $11.1 million for the quarter ended August 31, 2007 to $9.3 million for the quarter ended August 31, 2008. Our diluted EPS decreased from $.43 per share to $.36 per share for the quarters ended August 31, 2007 and August 31, 2008, respectively. During the quarter, our earnings and EPS were impacted by a charge-off of a large apparel customer account due to that customer’s bankruptcy, as reported in our Form 8-K filing dated July 11, 2008. Without the impact associated with this charge-off, our earnings for the quarter would have been $10.6 million and our diluted EPS would have been $.41 per share.
     For the six month period, net sales increased from $302.9 million for the six months ended August 31, 2007 to $324.3 million for the six months ended August 31, 2008, or 7.1%. Our Print sales for the period were $170.7 million, compared to $168.7 million for the same period last year. Apparel sales for the period were $153.6 million, compared to $134.2 million for the same period last year. Our

 

 

Print margins remained relatively stable at 27.1% and 27.0%, while our Apparel margins decreased from 27.5% to 21.9%, for the six months ended August 31, 2007 and 2008, respectively. Net earnings for the period decreased from $21.9 million for the six months ended August 31, 2007 to $20.3 million for the six months ended August 31, 2008 ($21.6 million without the impact of the aforementioned charge-off). Diluted earnings decreased from $.85 per share to $.79 per share ($.84 without the impact of the aforementioned charge-off) for the six months ended August 31, 2007 and 2008, respectively.
     The Company, during the quarter, generated $18.8 million in EBITDA (earnings before interest, taxes, depreciation and amortization) compared to $22.8 million for the comparable quarter last year. For the period, the Company generated $40.5 million in EBITDA during the period, compared to $45.3 million for the comparable period last year. Operational cash flows increased from $17.5 million for the six months ended August 31, 2007 to $31.0 million for the same period this year.
Reconciliation of Non-GAAP to GAAP measure (dollars in thousands):
                                 
    Three months ended     Six months ended  
    August 31,     August 31,  
    2008     2007     2008     2007  
Earnings before income taxes
   $ 14,709     $ 17,680     $ 31,932     $ 34,817  
Interest expense
     892       1,393       1,925       2,885  
Depreciation/amortization
     3,193       3,704       6,593       7,583  
 
                        
EBITDA (non-GAAP)
   $ 18,794     $ 22,777     $ 40,450     $ 45,285  
 
                        
Keith Walters, Chairman, President & CEO, commented by saying, “fiscal year 2009 continues to be challenging given the general economic climate and continued pressures on commodity prices. Even with our past price increases, our Apparel Segment results continue to lag behind prior years’ results and as such we have recently instituted an additional price increase effective September 15, 2008 which should offset the commodity price increases being experienced by this segment. In addition, our Apparel Segment’s operational results were negatively impacted by the charge-off we had to take during the quarter associated with the bankruptcy filing of one of our customers. Our Print Segment’s top-line is continuing to be impacted by the general economic climate; however, our operational results continue to benefit from the cost control initiatives started last fiscal year. Overall, given the trying times all businesses are experiencing, the continued commodity price pressures and the impact of the bankruptcy filing, I am proud of what we accomplished this quarter and look forward to the remainder of the year.”
About Ennis
Ennis, Inc. (www.ennis.com) is primarily engaged in the production of and sale of business forms, apparel 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, the Company has production and distribution facilities strategically located throughout the United States of America, Mexico and Canada, to serve the Company’s national network of distributors. The Company, together with its subsidiaries, operates in two business segments: the Print Segment (“Print”) and Apparel Segment (“Apparel”). The Print Segment is primarily engaged in the business of manufacturing and selling 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, secure and negotiable documents, envelopes and other custom products. The Apparel Segment manufactures T-Shirts and distributes T-Shirts and other active-wear apparel through six distribution centers located throughout North America.

 

 

Safe Harbor Under The Private Securities Litigation Reform Act of 1995
Certain statements 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 rapidly changing environment, the Company’s ability to adapt and expand its services in such an environment, 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. The Company undertakes no obligation to revise any forward-looking statements or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. Readers 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.
For Further Information Contact:
Mr. Keith Walters, Chairman, Chief Executive Officer and President
Mr. Michael Magill, Executive Vice President
Mr. Richard L. Travis, Jr., Chief Financial Officer
Ennis, Inc.
2441 Presidential Parkway
Midlothian, Texas 76065
Phone: (972) 775-9801
Fax: (972) 775-9820
www.ennis.com

 

 

Ennis, Inc.
Condensed Financial Information
(In thousands, except per share amounts)
                                 
    Three months ended     Six months ended  
    August 31,     August 31,  
    2008     2007     2008     2007  
Condensed Operating Results
                                
Revenues
   $ 161,050     $ 150,086     $ 324,250     $ 302,860  
Cost of goods sold
     121,812       108,747       244,560       220,163  
 
                        
Gross profit
     39,238       41,339       79,690       82,697  
Operating expenses
     23,525       22,263       45,660       44,911  
 
                        
Operating income
     15,713       19,076       34,030       37,786  
Other expense
     1,004       1,396       2,098       2,969  
Income tax expense
     5,368       6,542       11,655       12,883  
 
                        
Net earnings
   $ 9,341     $ 11,138     $ 20,277     $ 21,934  
 
                        
 
                                
Earnings per share
                                
Basic
   $ 0.36     $ 0.44     $ 0.79     $ 0.86  
 
                        
Diluted
   $ 0.36     $ 0.43     $ 0.79     $ 0.85  
 
                        
                 
    August 31,     February 29,  
  2008     2008  
Condensed Balance Sheet Information
                
Current assets:
                
Cash
   $ 10,164     $ 3,393  
Accounts receivable, net
     77,179       72,278  
Inventories, net
     90,712       98,570  
Other
     13,046       11,578  
 
            
 
     191,101       185,819  
 
            
Property, plant & equipment
     56,902       58,988  
Other
     266,532       268,324  
 
            
 
   $ 514,535     $ 513,131  
 
            
 
                
Current liabilities
               
Accounts payable
   $ 33,702     $ 29,658  
Accrued expenses
     21,239       21,913  
Current portion of long-term debt
     224       255  
 
            
 
     55,165       51,826  
 
            
Long-term debt
     77,056       90,710  
Deferred credits
     21,400       22,116  
 
            
Total liabilities
     153,621       164,652  
 
            
 
                
Shareholders’ equity
     360,914       348,479  
 
            
 
   $ 514,535     $ 513,131  
 
            
                 
    Six months ended  
    August 31,  
  2008     2007  
Condensed Cash Flow Information
                
Cash provided by operating activities
   $ 31,017     $ 17,489  
Cash used in investing activities
     (2,604 )     (1,750 )
Cash used in financing activities
     (22,024 )     (15,844 )
Effect of exchange rates on cash
     382       53  
 
            
Change in cash
     6,771       (52 )
Cash at beginning of period
     3,393       3,582  
 
            
Cash at end of period
   $ 10,164     $ 3,530