Ennis FY'14 apparel sales grow 1.9%

22 Apr '14

5 min read

Net earnings for the period decreased from $24.7 million, or 4.6% of net sales for the fiscal year ended February 28, 2013, to $13.2 million, or 2.4% of net sales for the fiscal year ended February 28, 2014, due to the goodwill and trademark impairment charge of $24.2 million in the fourth quarter.

Diluted earnings per share decreased from $0.95 to $0.50 for each year, respectively. Excluding the impairment charge, non-GAAP net earnings for the year would have been approximately $35.3 million, or approximately $1.35 per diluted share.

During the fourth quarter, the Company generated $16.6 million in EBITDA compared to $14.6 million for the comparable quarter last year. For the fiscal year ended February 28, 2014, the Company generated $71.5 million of EBITDA compared to $53.5 million for the comparable period last year.

Keith Walters, Chairman, Chief Executive Officer and President, commented, “Overall our results before taking into account the impairment charge continue to show improvement over comparable periods. Our EBITDA was 12.6% for the quarter compared to 11.8% for the same quarter last year and 13.2% for the year compared to 10.0% for last year. Our apparel results continued to improve during the quarter, even though the impact of lower raw material costs over comparable quarters has all but dissipated.

“While we continue to make cost-side improvements, the apparel market continues to be extremely challenging, both from a volume and pricing perspective. Apparel volumes, during the quarter, continued to be softer than expected, especially on the East Coast and Mid-West. We attribute this weakness to the extreme weather conditions experienced across the country this winter.

"Due to this market softness, pricing pressures continued to be prevalent in the marketplace. Whether discounted pricing, which we believe is driven by a desire to maintain production volumes, coupled with overall softness in the marketplace, will continue into the next fiscal year is unknown.

“With respect to the print segment, our sales during the quarter were softer than expected. Combined with the impact of our recent acquisitions, these resulted in our print margin being down slightly during the quarter. Even so, our print margin continued to fall within its historical parameters. While the market continues to be challenging, we remain optimistic about the upcoming fiscal year on many fronts.

“We look forward to the impact of our acquisitions on next years’ operational results. Potential acquisition opportunities remain strong. Our apparel manufacturing facility continues to show improvement and we expect it to increase the contribution to our operating results as production levels continue to increase. While the apparel market continues to be challenging, it has recently shown signs of improving, so while there are still many unknowns about the upcoming year, we continue to be optimistic and will remain opportunistic.”

Ennis, Inc

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