Ennis, Inc. (the “Company”), (NYSE: EBF), today reported
financial results for the quarter and fiscal year ended February
28, 2023. Highlights include:
- Revenues were $102.7 million for the quarter, an increase of
$3.0 million or 3.0% over last year's fourth quarter and $431.8
million for the fiscal year, an increase of $31.8 million, or 8.0%
over last fiscal year.
- Earnings per diluted share for the current quarter were
$0.47 compared to $0.26 for the same quarter last year.
- Gross profit margin was 30.3% for the fiscal year compared
to 28.7% for the prior fiscal year. Gross profit margin for the
quarter increased from 27.5% last year to 27.6% this year.
Financial Overview
The Company’s revenues for the fourth quarter ended February 28,
2023 were $102.7 million compared to $99.7 million for the same
quarter last year, an increase of 3.0%. The increase was
attributable to $1.4 million in revenues from our recent
acquisition of School Photo Marketing, as well as price increases
that were partially offset by volume decreases attributable in part
to seasonal factors. Gross profit margin was $28.4 million, or
27.6%, as compared to $27.4 million, or 27.5% for the same quarter
last year. Our gross profit margin decreased on a sequential basis
from 30.4% for the third quarter ended November 30, 2022 to 27.6%.
Our margin during the period was negatively impacted by a decrease
in revenue volume, increased cost of material and labor, and to a
lesser extent by the acquisition of School Photo Marketing at the
beginning of its low margin off-season. Our net earnings for the
quarter were $12.2 million, or $0.47 per diluted share as compared
to $6.7 million, or $0.26 per diluted share for the same quarter
last year. Quarterly net earnings results were favorably impacted
by a $5.8 million gain or $0.17 per diluted share from the sale of
an unused manufacturing facility.
The Company’s revenues for the fiscal year ended February 28,
2023 were $431.8 million compared to $400.0 million for the prior
fiscal year, an increase of 8.0%. Gross profit margin was $131.1
million, or 30.3%, as compared to $114.7 million, or 28.7% for the
prior fiscal year. Net earnings for the fiscal year were $47.3
million or $1.82 per diluted share, compared to $29.0 million, or
$1.11 per diluted share for the prior fiscal year. The $5.8 million
gain from the sale of an unused manufacturing facility impacted the
current fiscal year results by $0.17 per diluted share.
Keith Walters, Chairman, Chief Executive Officer and President,
commented by stating, "We are pleased with our performance for the
fourth quarter. Throughout our fiscal year ended February 28, 2023,
we experienced strong demand for our products and navigated a
challenging environment with supply chain disruptions and
inflationary cost pressures not seen in decades. Our revenues and
operating income for the quarter improved on a year-over-year
basis. Our EBITDA increased from $60.7 million (15.2% of sales) for
the fiscal year ended February 28, 2022 to $82.3 million (19.1% of
sales) for the fiscal year ended February 28, 2023. In the fourth
quarter, EBITDA increased from $15.8 million (15.8% of sales) to
$20.5 million (19.9% of sales) over last year's fourth quarter.
During the quarter we sold an unused manufacturing facility which
resulted in a $5.8 million gain and increased our diluted earnings
per share $0.17. Our Gross profit margin increased to 30.3% for the
current fiscal year compared to 28.7% for the prior fiscal year, an
increase of 1.6%. Increased foreign imports and demand declines
have currently stabilized price increases of North American
printing & writing paper. The extent to which import pressures
remain in place will likely play a major role in price stability or
decreases. 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. 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 twelve months ended February 28, 2023
and February 28, 2022 to the most comparable GAAP measure, net
earnings (dollars in thousands).
Three months ended
Twelve months ended
February 28,
February 28,
February 28,
February 28,
2023
2022
2023
2022
Net earnings
$
12,193
$
6,655
$
47,300
$
28,982
Income tax expense
3,978
3,393
17,630
12,962
Interest expense
—
2
—
9
Depreciation and amortization
4,310
4,888
17,356
18,777
EBITDA (non-GAAP)
$
20,481
$
14,938
$
82,286
$
60,730
% of sales
19.9
%
15.0
%
19.1
%
15.2
%
In Other News
The 2023 Annual Meeting of Shareholders will be held on July 13,
2023, with a record date of May 24, 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.
Ennis, Inc.
Unaudited Condensed
Consolidated Financial Information
(In thousands, except share
and per share amounts)
Three months ended
Twelve months ended
Condensed
Consolidated Operating Results
February 28,
February 28,
2023
2022
2023
2022
Revenues
$
102,692
$
99,665
$
431,837
$
400,014
Cost of goods sold
74,342
72,229
300,787
285,291
Gross profit margin
28,350
27,436
131,050
114,723
Operating expenses
17,877
16,887
70,793
71,410
(Gain) Loss from disposal of assets
(5,911
)
4
(5,896
)
(271
)
Operating income
16,384
10,545
66,153
43,584
Other expense
213
497
1,223
1,640
Earnings before income taxes
16,171
10,048
64,930
41,944
Income tax expense
3,978
3,393
17,630
12,962
Net earnings
$
12,193
$
6,655
$
47,300
$
28,982
Weighted average
common shares outstanding
Basic
25,820,639
25,935,882
25,818,737
26,026,477
Diluted
25,959,448
25,935,882
25,951,141
26,109,341
Earnings per
share
Basic
$
0.47
$
0.26
$
1.83
$
1.11
Diluted
$
0.47
$
0.26
$
1.82
$
1.11
February 28,
February 28,
Condensed
Consolidated Balance Sheet Information
2023
2022
Assets
Current Assets
Cash
$
93,968
$
85,606
Accounts receivable, net
53,507
39,022
Inventories, net
46,834
38,538
Other
2,317
1,863
Total Current Assets
196,626
165,029
Property, plant & equipment, net
47,789
53,633
Operating lease right-of-use assets
13,133
15,544
Goodwill and intangible assets
135,907
134,246
Other
380
392
Total Assets
$
393,835
$
368,844
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable
$
18,333
$
16,678
Accrued expenses
18,067
15,422
Current portion of operating lease
liabilities
4,847
5,090
Total Current Liabilities
41,247
37,190
Other non-current liabilities
21,156
27,839
Total liabilities
62,403
65,029
Shareholders' Equity
331,432
303,815
Total Liabilities and Shareholders'
Equity
$
393,835
$
368,844
Twelve months ended
February 28,
Condensed
Consolidated Cash Flow Information
2023
2022
Cash provided by operating activities
$
46,776
$
50,678
Cash used in investing activities
(11,457
)
(10,052
)
Cash used in financing activities
(26,957
)
(30,210
)
Change in cash
8,362
10,416
Cash at beginning of period
85,606
75,190
Cash at end of period
$
93,968
$
85,606
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230424005211/en/
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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