Ennis, Inc. (the “Company”), (NYSE: EBF), today reported
financial results for the second quarter ended August 31, 2024.
Highlights include:
- Revenues were $99.0 million for the quarter compared to
$106.8 million for the same quarter last year, a decrease of $7.8
million or 7.3%.
- Earnings per diluted share for the current quarter were
$0.40 compared to $0.42 for the comparative quarter last
year.
- Our gross profit margin for the quarter was 30.1% compared
to 31.0% for the comparative quarter last year.
Financial Overview
The Company’s revenues for the second quarter ended August 31,
2024 were $99.0 million compared to $106.8 million for the same
quarter last year, a decrease of $7.8 million, or 7.3%. Gross
profits totaled $29.8 million for a gross profit margin of 30.1%,
as compared to $33.1 million, or 31.0%, for the same quarter last
year. Net earnings for the quarter were $10.3 million, or $0.40 per
diluted share, as compared to $10.9 million, or $0.42 per diluted
share for the same quarter last year.
The Company’s revenues for the six-month period ended August 31,
2024 were $202.1 million compared to $218.1 million for the same
period last year, a decrease of $16.0 million or 7.3%. Gross profit
margin was $60.7 million, or 30.0%, as compared to $67.1 million,
or 30.8% for the six-month periods ended August 31, 2024 and August
31, 2023, respectively. Net earnings for the six-month period ended
August 31, 2024 were $21.0 million, or $0.80 per diluted share
compared to $22.5 million, or $0.87 per diluted share for the same
period last year.
Keith Walters, Chairman, Chief Executive Officer and President,
commented by stating, “Our results for the quarter met our
expectations as larger macroeconomic conditions have softened
demand and caused greater competition on price. During periods of
reduced demand like we are currently experiencing, we carefully
monitor and manage our costs in order to maintain our strong profit
margins. Thus, while sales decreased from the same quarter last
year, the Company’s EBITDA margin improved slightly to 18.6% of
sales compared to 18.5% of sales during last year’s second
quarter.
"During the current quarter, we completed the acquisition of
Printing Technologies, Inc (PTI). located in Indianapolis, Indiana.
PTI is a leading manufacturer of innovative media solutions used in
all types of printing technologies including direct thermal,
thermal transfer, ink jet, dot matrix and laser. This acquisition
continues to strengthen our production capabilities and diversify
our product offerings to enable us to better serve our broad
customer base. We will continue to explore acquisitions that make
sense and hunt for new sales in new markets and new channels.
"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. We continue to focus on delivering
profitability and returns to our shareholders."
Reconciliation Non-GAAP
Measure
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 six months ended August 31, 2024 and
2023 to the most comparable GAAP measure, net earnings (dollars in
thousands).
Three months ended
Six months ended
August 31,
August 31,
August 31,
August 31,
2024
2023
2024
2023
Net earnings
$
10,308
$
10,910
$
20,995
$
22,545
Income tax expense
3,909
4,373
7,963
8,898
Interest expense
—
—
—
—
Depreciation and amortization
4,187
4,497
8,430
8,841
EBITDA (non-GAAP)
$
18,404
$
19,780
$
37,388
$
40,284
% of sales
18.6
%
18.5
%
18.5
%
18.5
%
In Other News
On September 20, 2024 the Board of Directors declared a
quarterly cash dividend of 25.0 cents per share on the Company’s
common stock. The Board of Directors also approved a one-time
special dividend of $2.50 per share. Regarding the Board’s approval
of the special dividend, Keith Walters, Chairman, Chief Executive
Officer and President, commented by stating, “The Board’s approval
of a special dividend of $2.50 per share allows the shareholders to
further share in the Company’s accumulated profits. At the same
time, given the Company’s lack of debt, ample cash reserves, and
strong free cash flow, the Company still has the necessary cash
resources for its operations, capital investments and the continued
funding of its ongoing acquisitions program.” The ordinary dividend
and special dividend are both payable on November 8, 2024 to
shareholders of record on October 11, 2024.
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, 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 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, and the limited number of available suppliers and
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 29, 2024. 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
Six months ended
Condensed
Consolidated Operating Results
August 31,
August 31,
August 31,
August 31,
2024
2023
2024
2023
Net sales
$
99,038
$
106,760
$
202,146
$
218,054
Cost of goods sold
69,259
73,661
141,463
150,914
Gross profit
29,779
33,099
60,683
67,140
Selling, general and administrative
16,557
18,341
33,727
36,684
Loss from disposal of assets
39
52
43
52
Income from operations
13,183
14,706
26,913
30,404
Other income
(1,034
)
(577
)
(2,045
)
(1,039
)
Earnings before income taxes
14,217
15,283
28,958
31,443
Income tax expense
3,909
4,373
7,963
8,898
Net earnings
$
10,308
$
10,910
$
20,995
$
22,545
Weighted average
common shares outstanding
Basic
26,009,876
25,886,058
26,015,195
25,858,154
Diluted
26,054,499
26,050,983
26,156,161
26,010,739
Earnings per
share
Basic
$
0.40
$
0.42
$
0.81
$
0.87
Diluted
$
0.40
$
0.42
$
0.80
$
0.87
August 31,
February 29,
Condensed
Consolidated Balance Sheet Information
2024
2024
Assets
Current assets
Cash
$
99,977
$
81,597
Short-term investments
22,655
29,325
Accounts receivable, net
43,729
47,209
Inventories, net
41,742
40,037
Prepaid expenses
4,256
3,214
Total Current Assets
212,359
201,382
Property, plant & equipment, net
54,805
54,965
Operating lease right-of-use assets,
net
8,386
9,827
Goodwill and intangible assets, net
130,824
132,676
Other assets
440
340
Total Assets
$
406,814
$
399,190
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable
$
14,293
$
11,846
Accrued expenses
15,662
17,541
Current portion of operating lease
liabilities
3,940
4,414
Total Current Liabilities
33,895
33,801
Other non-current liabilities
14,550
15,548
Total liabilities
48,445
49,349
Shareholders' equity
358,369
349,841
Total Liabilities and Shareholders'
Equity
$
406,814
$
399,190
Six months ended
August 31,
Condensed
Consolidated Cash Flow Information
2024
2023
Cash provided by operating activities
$
34,941
$
34,934
Cash used in investing activities
(1,777
)
(15,640
)
Cash used in financing activities
(14,784
)
(12,922
)
Change in cash
18,380
6,372
Cash at beginning of period
81,597
93,968
Cash at end of period
$
99,977
$
100,340
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240923930840/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
Ennis (NYSE:EBF)
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