Consolidated gross profit margin ("margin") for the quarter increased 610 basis points from 19.8%, for the same quarter last year, to 25.9%. For a quarter comparison basis, print margin increased from 27.9% to 29.7%, and apparel margin increased from 7.0% to 20.3%. Our apparel margin continues to increase on both a comparable and sequential quarter basis, as lower priced cotton is starting to favorably impact apparel’s margin.
The Company expects its margins will continue to improve as average finished goods costs continue to decline and sales volume increases. Print margins improved from the continued elimination of duplicative costs by the further integration of recent acquisitions. As a result, net earnings increased from $3.9 million, or 2.7% of net sales, for the quarter ended May 31, 2012 to $8.5 million, or 6.1% of net sales, for the quarter ended May 31, 2013. Diluted earnings per share increased from $0.15 for the same quarter last year to $0.33 for the quarter.
During the quarter, the Company generated $17.0 million in EBITDA (a non-GAAP financial measure calculated as net earnings before interest, taxes, depreciation, and amortization) compared to $10.0 million for the comparable quarter last year.
Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Overall we are pleased with our results for the quarter. Our apparel results continued to improve on both a sequential and comparative basis, as lower priced cotton, which has been flowing into our finished goods inventory, is starting to impact our operational results. We realized a 240 basis point sequential margin improvement last quarter and a 270 basis point sequential margin improvement this quarter.
"We would expect our apparel margin to continue to improve as the average carrying value of our finished goods inventory declines and as our operational efficiencies improve as production levels increase. While the overall apparel market continues to be challenged, both from a pricing and volume perspective, we have seen some pricing stability. Our print margin remained healthy improving 180 basis points over last year’s comparable quarter, as we continue to eliminate duplicate costs associated with our recent acquisitions. Overall we feel positive about the quarter and the remainder of the year.”
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