EX-99.1 2 d39855exv99w1.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, 2006
     Midlothian, Texas September 22, 2006 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the three and six months ended August 31, 2006.
Quarterly Highlights
  •   Quarter-over-quarter sales increased from $148.1 million to $151.7 million, with Apparel sales being up 8.2% for the quarter to $69.5 million.
 
  •   Net earnings increased 9.4% over the same quarter last year, from $10.6 million to $11.6 million.
 
  •   Diluted EPS increased by 9.8% over the same quarter last year, from $.41 per share to $.45 per share.
Financial Overview
     For the quarter, net sales increased by $3.6 million, or 2.4% from $148.1 million for the three months ended August 31, 2005 to $151.7 million for the three months ended August 31, 2006. Sales in the Print Segment for the quarter were $82.3 million, compared to $83.9 million for the same quarter last year. The Apparel Segment sales for the quarter were $69.5 million, compared to $64.2 million for the same quarter last year. Overall margins during the quarter remained relatively constant at 25.2% for the three months ended August 31, 2006 and 2005. The Print Segment’s margins increased slightly from 24.5% to 24.9%, while the Apparel Segment’s margins decreased slightly from 26.0% to 25.6%, for the three months ended August 31, 2005 and 2006, respectively. Net earnings for the quarter increased by $1.0 million, or 9.4%, from $10.6 million for the three months ended August 31, 2005 to $11.6 million for the three months ended August 31, 2006. Diluted earnings (“EPS”) increased 9.8%, from $.41 per share to $.45 per share for the three months ended August 31, 2005 and 2006, respectively.
     For the period, net sales decreased slightly from $297.2 million for the six months ended August 31, 2005 to $296.8 million for the six months ended August 31, 2006, or 0.1%. Sales in the Print Segment for the period were $159.4 million, compared to $164.6 million for the same period last year. The Apparel Segment sales for the period were $137.5 million, compared to $132.6 million for the same period last year. Due mainly to improved margins realized at the Apparel Group during the period, the Company’s overall margins improved from 25.1% to 25.6% for the six months ended August 31, 2005 and 2006, respectively. The Print Segment’s margins decreased slightly from 25.1% to 25.0%, while our Apparel Segment’s margins increased from 25.2% to 26.4%, for the six months ended August 31, 2005 and 2006, respectively. Net earnings for the period increased by $1.9 million, or 9.0%, from $21.1 million for the six months ended August 31, 2005 to $23.0 million for the six months ended August 31, 2006. Diluted earnings increased 8.5%, from $.82 per share to $.89 per share for the six months ended August 31, 2005 and 2006, respectively.

 

 

     The decline in the Print Segment’s revenues for the period and the quarter continues to be due primarily to the loss of several large promotional customers and impact of the two plant closings last fiscal year. This decline has been partially offset by the impact of the Company’s recent acquisitions. Without the impact of the items mentioned, the Print Segment’s revenues for the quarter and the period would have actually increased slightly over the comparable periods last year.
     The Company generated $24.5 million in EBITDA (earnings before interest, taxes, depreciation and amortization) during the quarter, compared to $24.0 million for the comparable quarter last year. For the six month period, the Company generated $48.8 million in EBITDA during the period, compared to $48.2 million for the comparable period last year. Reconciliation of non-GAAP to GAAP measure (dollars in thousands):
                                 
    Three months ended     Six months ended  
    August 31,     August 31,  
    2006     2005     2006     2005  
 
Earnings before income taxes
   $ 18,482     $ 17,057     $ 36,465     $ 34,365  
Interest expense
     1,718       2,323       3,510       4,566  
Depreciation/amortization
     4,299       4,658       8,782       9,287  
 
                        
EBITDA (non-GAAP)
   $ 24,499     $ 24,038     $ 48,757     $ 48,218  
 
                        
     Keith Walters, Chairman, President & CEO, commented by saying, “We are extremely pleased with our results for the quarter. We continue to exceed profit expectations and increase our return to stakeholders. We are also extremely pleased with the increase in our Apparel Segment’s sales during the quarter. We believe this increase demonstrates that our Apparel Segment products continue to be desired by our customers and that they compete favorably in the marketplace. On the Print side, we realized that our closing of the two print plants last fiscal year and our decision to cease doing business with several major promotional customers would most likely impact our top-line in the short-term, however, being true to our stated focus on profit versus revenue growth, we felt that these were business decisions that needed to be made. We think the increase in our EPS not only for the quarter, but for the period, has proven this to be a sound business strategy and one in the best interest of our stakeholders and employees. We recently completed the acquisition of Block Graphics, which added envelope capabilities to our product line, and plan to continue to look for strategic acquisitions in both the print and apparel sectors.”
About Ennis
Ennis, Inc. (www.ennis.com) (formerly Ennis Business Forms, Inc.) 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 and Apparel Segment. The Print Segment is primarily engaged in the business of manufacturing and selling business forms and other printed business products, printed and electronic media, presentation products, flex-o-graphic printing, advertising specialties, Post-it® Notes, internal bank forms, secure and negotiable documents, custom products and envelopes. 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,  
Condensed Operating Results   2006     2005     2006     2005  
Revenues
   $ 151,718     $ 148,116     $ 296,831     $ 297,229  
Cost of goods sold
     113,477       110,864       220,775       222,499  
 
                        
Gross profit
     38,241       37,252       76,056       74,730  
Operating expenses
     18,322       17,791       36,400       35,628  
 
                        
Operating income
     19,919       19,461       39,656       39,102  
Other expense
     1,437       2,404       3,191       4,737  
Income tax expense
     6,839       6,481       13,492       13,231  
 
                        
Net earnings
   $ 11,643     $ 10,576     $ 22,973     $ 21,134  
 
                        
 
                                
Earnings per share
                                
Basic
   $ 0.46     $ 0.42     $ 0.90     $ 0.83  
 
                        
Diluted
   $ 0.45     $ 0.41     $ 0.89     $ 0.82  
 
                        
                 
    August 31,     February 28,  
Condensed Balance Sheet Information   2006     2006  
Current assets:
                
Cash
   $ 13,872     $ 13,860  
Accounts receivables, net
     48,311       41,686  
Inventories, net
     89,339       89,155  
Other
     17,042       13,754  
 
            
 
     168,564       158,455  
 
            
Property, plant & equipment, net
     70,031       63,803  
Other
     271,009       272,143  
 
            
 
   $ 509,604     $ 494,401  
 
            
Current liabilities
                
Accounts payable
   $ 27,913     $ 26,589  
Accrued expenses
     25,035       25,752  
Current portion of long-term debt
     5,963       11,620  
 
            
 
     58,911       63,961  
 
            
Long-term debt
     108,181       102,916  
Deferred credits
     29,524       30,189  
 
            
Total liabilities
     196,616       197,066  
 
            
 
Shareholders’ equity
     312,988       297,335  
 
            
 
   $ 509,604     $ 494,401  
 
            
                 
    Six months ended  
    August 31,  
Condensed Cash Flow Information   2006     2005  
Cash provided by operating activities
   $ 24,513     $ 18,103  
Cash used in investing activities
     (16,643 )     (5,942 )
Cash used in financing activities
     (7,867 )     (20,789 )
Effect of exchange rates on cash
     9       —  
 
            
Change in cash
     12       (8,628 )
Cash at beginning of period
     13,860       10,694  
 
            
Cash at end of period
   $ 13,872     $ 2,066