Home / Knowledge / News / Apparel/Garments / 'Fiscal year 2010 continues to be a challenging year' – Ennis CEO
'Fiscal year 2010 continues to be a challenging year' – Ennis CEO
23
Jun '09
Ennis Inc reported financial results for the first quarter ended May 31, 2009.

Highlights
• Consolidated revenues for the quarter were $130.8 million compared to $163.2 million for the same quarter last year, and $117.3 million for the previous quarter.
• Diluted earnings per share for the quarter were $0.26 per share compared to $0.42 per share for the same quarter last year, and $0.23 per share for the previous quarter on a pre-impairment pro-forma basis.
• Generated $25.2 million in cash from operations during the quarter, and improved cash position by $20.5 million.
Financial Overview

For the quarter, our consolidated net sales decreased by $32.4 million, or 19.8%, from $163.2 million for the quarter ended May 31, 2008 to $130.8 million for the quarter ended May 31, 2009. Our Print sales for the quarter were $71.7 million, compared to $85.3 million for the same quarter last year, or a decrease of 15.9%.

Apparel sales for the quarter were $59.1 million, compared to $77.9 million for the same quarter last year, or a decrease of 24.1%. Our overall gross profit margins ("margins") decreased from 24.8% to 23.7% for the quarter ended May 31, 2008 and May 31, 2009, respectively. Our Print margins decreased from 27.8% to 26.4% and our Apparel margins decreased from 21.5% to 20.4%, for the quarters ended May 31, 2008 and May 31, 2009, respectively.

Our earnings for the quarter decreased from $10.9 million for the quarter ended May 31, 2008 to $6.6 million for the quarter ended May 31, 2009. Our diluted EPS decreased from $.42 per share to $.26 per share for the quarters ended May 31, 2008 and May 31, 2009, respectively. Both the decrease in our earnings and our earnings per share related directly to the reduction in our sales during the quarter.

During the quarter, the Company generated $14.3 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $21.7 million for the comparable quarter last year. Operational cash flows increased from $16.7 million for the quarter ended May 31, 2008 to $25.2 million for the quarter ended May 31, 2009.

Keith Walters, Chairman, President & CEO, commented by saying, “Fiscal year 2010 continues to be a challenging year and our results continue to be significantly impacted by the economic recession. However, despite the economic environment, we are pleased with our ability to maintain our margins within 110 basis points of last year, given the significant decline in sales, which is a testament to the costs controls we have in place.

We continued to maintain a strong balance sheet, with excellent liquidity and leverage ratios. During the quarter, we were able to generate $25.2 million in cash from operations and increase our overall cash position by $20.5 million. We have recently broken ground on our new apparel manufacturing facilities in Agua Prieta, Mexico, which once completed, should significantly reduce our manufacturing and distribution costs.

While these economic times are difficult on all of us, we continue to feel confident with our ability to navigate these challenging times and believe we are starting to see some encouraging signs as our sales and profits both increased when compared to the most recent quarter.”

Ennis Inc


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