ebf-ex991

Midlothian, TX. September 23, 2019 -- Ennis, Inc. (the “Company"), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2019. Highlights include:

The Company’s revenues for the second quarter ended August 31, 2019 were $108.8 million compared to $98.6 million for the same quarter last year, an increase of 10.3%. Gross profit margin ("margin") was $32.5 million for the quarter, or 29.8%, as compared to $30.3 million, or 30.8% for the second quarter last year. Net earnings for the quarter were $9.5 million, or $0.37 per diluted share compared, to $9.6 million, or $0.37 per diluted share, for the second quarter last year.

The Company’s revenues for the six month period ended August 31, 2019 were $216.8 million compared to $192.0 million for the same period last year, an increase of 12.9%. Margin was $65.2 million, or 30.0%, as compared to $60.5 million, or 31.5% for the six month periods ended August 31, 2019 and August 31, 2018, respectively. Net earnings from operations for the six month period ended August 31, 2019 were $19.2 million, or $0.74 per diluted share compared to $18.8 million, or $0.74 per diluted share for the same period last year.

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Overall we are pleased with our performance for the quarter. While our gross profit margin showed a slight decline from the sequential quarter, decreasing from 30.3% to 29.8%, our EBITDA margin was consistent in the low to mid 16% range. Our gross profit margin percentage continues to be impacted by our past four acquisitions, which all had gross profit margins considerably lower than our historical gross profit margin. While their margins are improving, until these acquisitions are fully integrated into our systems we would expect to continue to see a comparable negative impact on our consolidated gross profit margin percentage. With that being said, these same acquisitions added $35.4 million in sales and $0.08 in diluted earnings per share for the six month period. During the quarter, we completed the acquisition of The Flesh Company and its wholly owned subsidiary, Impression Direct, Inc. The Flesh Company is truly regarded as one of the outstanding companies in the print industry with a heritage that dates back over 100 years. These companies provide business forms, checks, direct mail services, integrated products and labels. This transaction will be accretive to earnings. We continue to strategically repurchase our shares and acquired over 22,000 shares during the quarter. We have repurchased almost 294,000 shares since the acquisition of Wright Business Graphics, which represents about 35.4% of the shares issued as consideration for that acquisition. Given our strong financial position, we will continue to explore strategic opportunities as a way to profitably utilize our cash and leverage our balance sheet, and when advantageous, repurchase our shares in the marketplace.”

To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, the Company reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from operations before interest expense, tax expense, depreciation, and amortization).

From time to time 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. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit agreement.

Reconciliations of non-GAAP financial measures reported for the quarter and fiscal year-to-date to the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following table. Other companies may calculate non-GAAP adjusted financial measures differently than Ennis, which limits the usefulness of the non-GAAP measures for comparison with these other companies. While management believes the Company’s non-GAAP financial measures are useful in evaluating Ennis, this information 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 and six months ended August 31, 2019 and August 31, 2018 to the most comparable GAAP measure, net earnings (dollars in thousands).

On September 20, 2019 the Board of Directors declared a quarterly cash dividend of 22.5 cents a share on the Company’s common stock. The dividend is payable on November 8, 2019 to shareholders of record on October 11, 2019.

Since 1909, Ennis has been primarily engaged in the production and sale of business forms 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, 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, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, plastic cards, secure and negotiable documents, envelopes, tags and labels and other custom products. For more information, visit www.ennis.com.

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 Company’s ability to effectively manage its business functions while growing its business in a competitive environment, the Company’s ability to adapt and expand its services in such an

environment and 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, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 28, 2019 and its Quarterly Report on Form10-Q for the quarter ended May 31, 2019. 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.

Mr. Richard L. Travis, Jr., CFO, Treasurer and Principal Financial and Accounting Officer

	Three months ended					Six months ended
Condensed Consolidated Operating Results	August 31,					August 31,
		2019			2018		2019			2018
Revenues	$	108,816		$	98,591	$	216,849		$	192,010
Cost of goods sold		76,358			68,268		151,695			131,496
Gross profit margin		32,458			30,323		65,154			60,514
Operating expenses		19,644			17,565		39,347			35,296
Operating income		12,814			12,758		25,807			25,218
Other (income) expense		(68	)		2		(91	)		133
Earnings before income taxes		12,882			12,756		25,898			25,085
Income tax expense		3,349			3,189		6,733			6,271
Net earnings	$	9,533		$	9,567	$	19,165		$	18,814

Weighted average common shares outstanding
Basic		26,029,359			25,671,643		26,034,122			25,510,356
Diluted		26,029,359			25,685,514		26,034,122			25,522,831

Earnings per share
Basic	$	0.37		$	0.37	$	0.74		$	0.74
Diluted	$	0.37		$	0.37	$	0.74		$	0.74

						August 31,			February 28,
Condensed Consolidated Balance Sheet Information							2019			2018
Assets
Current Assets
Cash						$	52,500		$	88,442
Accounts receivable, net							43,689			40,357
Inventories, net							39,108			35,411
Other							1,743			1,955
Total Current Assets							137,040			166,165
Property, plant & equipment, net							60,519			53,134
Operating lease right-of-use assets							20,818			—
Goodwill and intangible assets							143,663			142,906
Other							848			880
Total Assets						$	362,888		$	363,085
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable						$	17,908		$	13,728
Accrued expenses							15,144			17,895
Current portion of operating lease liabilities							5,302			—
Total Current Liabilities							38,354			31,623
Long-term debt							—			30,000
Other non-current liabilities							28,517			12,335
Total liabilities							66,871			73,958
Shareholders' Equity							296,017			289,127
Total Liabilities and Shareholders' Equity						$	362,888		$	363,085

						Six months ended
						August 31,
Condensed Consolidated Cash Flow Information							2019			2018
Cash provided by operating activities						$	27,718		$	24,250
Cash used in investing activities							(20,264	)		(29,575	)
Cash used in financing activities							(43,396	)		(11,422	)
Change in cash							(35,942	)		(16,747	)
Cash at beginning of period							88,442			96,230
Cash at end of period						$	52,500		$	79,483

	Three months ended						Six months ended
	August 31,						August 31,
		2019			2018			2019			2018
Net earnings	$	9,533		$	9,567		$	19,165		$	18,814
Income tax expense		3,349			3,189			6,733			6,271
Interest expense		280			287			597			548
Depreciation and amortization		4,496			3,778			8,876			7,228
EBITDA (non-GAAP)	$	17,658		$	16,821		$	35,371		$	32,861

% of sales		16.2	%		17.1	%		16.3	%		17.1	%