Ennis, Inc. (the “Company”), (NYSE: EBF), today reported
financial results for the third quarter ended November 30, 2022.
Highlights include:
- Revenues were $110.2 million for the quarter compared to
$103.0 million for the same quarter last year, an increase of $7.3
million or 7.1%.
- Earnings per diluted share for the current quarter were
$0.44 compared to $0.29 for the comparative quarter last year, an
increase of 50.2%.
- Our gross profit margin for the quarter was 30.4% compared
to 28.4% for the comparative quarter last year.
Financial Overview
The Company’s revenues for the third quarter ended November 30,
2022 were $110.2 million compared to $103.0 million for the same
quarter last year, an increase of $7.3 million, or 7.1%. Gross
profit margin was $33.5 million, or 30.4%, as compared to $29.2
million, or 28.4%, for the same quarter last year. Net earnings for
the quarter were $11.3 million, or $0.44 per diluted share, as
compared to $7.6 million, or $0.29 per diluted share, for the same
quarter last year.
The Company’s revenues for the nine-month period ended November
30, 2022 were $329.1 million compared to $300.3 million for the
same period last year, an increase of $28.8 million or 9.6%. Gross
profit margin was $102.7 million, or 31.2%, as compared to $87.3
million, or 29.1% for the nine-month periods ended November 30,
2022 and November 30, 2021, respectively. Net earnings for the
nine-month period ended November 30, 2022 were $35.1 million, or
$1.36 per diluted share compared to $22.3 million, or $0.86 per
diluted share for the same period last year.
Keith Walters, Chairman, Chief Executive Officer and President,
commented by stating, "We are pleased with our performance for the
third quarter. For the seventh consecutive quarter, revenues and
operating income improved on a year-over-year basis due to
continued strong customer demand for our products and our
disciplined cost management and pricing strategies. Our gross
profit margin increased to 30.4% for the current quarter from 28.4%
for the same prior year quarter, an increase of 2.0%. Our prior
year gross profit margin was impacted by inflationary factors and
the transitional increase in expense from the consolidation of a
few of our underperforming manufacturing facilities. Our EBITDA
increased from $15.4 million to $20.8 million over the same prior
year quarter. The demand for paper remains solid but we are
beginning to see import competition in the North American Paper and
Writing market. We continue to monitor incoming order volumes as
well as rising raw material and other input costs so that we can
proactively adjust our pricing and costs accordingly. At the end of
the current quarter, we completed the acquisition of School Photo
Marketing. School Photo Marketing provides printing, yearbook
publishing and marketing related services to over 1,400 school and
sports photographers around the country. This addition brings with
it many exciting possibilities to service this new channel with
products produced through Ennis manufacturing operations. We
believe we have one of the strongest balance sheets in the
industry, with no debt and significant cash. Our profitability and
strong financial condition will allow us to continue operations and
fund acquisitions without incurring debt. Given those strengths, we
also anticipate timely access to credit should larger acquisition
opportunities materialize as we continue to explore strategic
opportunities in the acquisition arena to increase
profitability."
Non-GAAP Reconciliations
To provide important supplemental information to both management
and investors regarding financial and business trends used in
assessing its results of operations, from time to time the Company
reports the non-GAAP financial measure of EBITDA (EBITDA is
calculated as net earnings before interest expense, tax expense,
depreciation, and amortization). 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. Other companies
may calculate non-GAAP financial measures differently than the
Company, which limits the usefulness of the Company’s non-GAAP
measures for comparison with these other companies. While
management believes the Company’s non-GAAP financial measures are
useful in evaluating the Company, when this information is reported
it 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 nine months ended November 30, 2022 to
the most comparable GAAP measure, net earnings (dollars in
thousands).
Three months ended
Nine months ended
November 30,
November 30,
November 30,
November 30,
2022
2021
2022
2021
Net earnings
$
11,286
$
7,563
$
35,107
$
22,327
Income tax expense
4,388
3,242
13,652
9,569
Interest expense
—
3
—
7
Depreciation and amortization
5,128
4,593
13,835
13,889
EBITDA (non-GAAP)
$
20,802
$
15,401
$
62,594
$
45,792
% of sales
18.9
%
15.0
%
19.0
%
15.2
%
In Other News
On December 15, 2022 the Board of Directors declared a quarterly
cash dividend of 25.0 cents per share on the Company’s common
stock. The dividend is payable on February 2, 2023 to shareholders
of record on January 5, 2023.
About Ennis
Founded in 1909, 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, integrated forms and
labels, presentation products, flex-o-graphic printing, advertising
specialties and Post-it® Notes, internal bank forms, plastic cards,
secure and negotiable documents, specialty packaging, direct mail,
envelopes, tags and labels and other custom products. For more
information, visit www.ennis.com.
Safe Harbor under the Private
Securities Litigation Reform Act of 1995
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 severity and duration of the COVID-19 pandemic and
related economic repercussions, the erosion of demand for our
printer business documents as the result of digital technologies,
risk or uncertainties related to the completion and integration of
acquisitions, the limited number of available suppliers and
variability in the prices of paper and other raw materials, and
operational challenges relating to the COVID-19 pandemic and
efforts to mitigate the spread of the virus, including logistical
challenges, protecting the health and well-being of our employees
and potential plant closures. 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, 2022. 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.
Three months ended
Nine months ended
Condensed
Consolidated Operating Results
November 30,
November 30,
2022
2021
2022
2021
Revenues
$
110,245
$
102,968
$
329,145
$
300,349
Cost of goods sold
76,768
73,768
226,445
213,062
Gross profit margin
33,477
29,200
102,700
87,287
Operating expenses
17,307
17,514
52,931
54,248
Operating income
16,170
11,686
49,769
33,039
Other expense
496
881
1,010
1,143
Earnings before income taxes
15,674
10,805
48,759
31,896
Income tax expense
4,388
3,242
13,652
9,569
Net earnings
$
11,286
$
7,563
$
35,107
$
22,327
Weighted average
common shares outstanding
Basic
25,809,581
26,020,210
25,812,216
26,053,898
Diluted
25,888,815
26,020,210
25,892,873
26,151,480
Earnings per share
Basic
$
0.44
$
0.29
$
1.36
$
0.86
Diluted
$
0.44
$
0.29
$
1.36
$
0.85
November 30,
February 28,
Condensed
Consolidated Balance Sheet Information
2022
2022
Assets
Current Assets
Cash
$
87,000
$
85,606
Accounts receivable, net
45,738
39,022
Inventories, net
49,922
38,538
Other
2,434
1,863
Total Current Assets
185,094
165,029
Property, plant & equipment, net
49,440
53,633
Operating lease right-of-use assets
14,214
15,544
Goodwill and intangible assets
137,516
134,246
Other
386
392
Total Assets
$
386,650
$
368,844
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable
$
15,361
$
16,678
Accrued expenses
19,117
15,422
Current portion of operating lease
liabilities
4,914
5,090
Total Current Liabilities
39,392
37,190
Other non-current liabilities
25,836
27,839
Total liabilities
65,228
65,029
Shareholders' Equity
321,422
303,815
Total Liabilities and Shareholders'
Equity
$
386,650
$
368,844
Nine months ended
November 30,
Condensed
Consolidated Cash Flow Information
2022
2021
Cash provided by operating activities
$
33,997
$
34,295
Cash used in investing activities
(12,105
)
(7,658
)
Cash used in financing activities
(20,498
)
(20,858
)
Change in cash
1,394
5,779
Cash at beginning of period
85,606
75,190
Cash at end of period
$
87,000
$
80,969
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221219005139/en/
For Further Information Contact: Mr. Keith S. Walters,
Chairman, Chief Executive Officer and President Ms. Vera Burnett,
Chief Financial Officer Mr. Dan Gus, General Counsel and Secretary
Ennis, Inc. Phone: (972) 775-9801 Fax: (972) 775-9820
www.ennis.com
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