Ennis sales continue to be impacted by negative economic environment

22 Dec '09

4 min read

Ennis, Inc. reported financial results for the three and nine months ended November 30, 2009.

Keith Walters, Chairman, President & CEO, commented by saying, “Our earnings performance as a percentage of sales improved this quarter as compared to the same quarter last year, even with the 10.3% decline we experienced in our sales. Our sales continue to be impacted by the negative economic environment and competitors' pricing strategies. I am proud of the fact that during the quarter even given our competitors' pricing strategies, we were able to increase both our gross margin and net earnings margin, as a percent of sales, by 20 basis points and 30 basis points, respectively.”

“We continue to maintain a strong balance sheet, with excellent liquidity and leverage ratios. I am extremely pleased with our management of our balance sheet during this difficult time, as we have been able to generate $71.5 million in cash from our operations, almost doubling our last year's production, which we have used to fund our capital expenditures, increase our cash position and pay-down our outstanding debt, reducing our debt-to-equity to less than 0.14-to-1.0. While these economic times continue to be challenging, we remain optimistic in our ability to maintain our earnings level.”

Highlights:

• Consolidated revenues for the quarter ended November 30, 2009 were $127.8 million compared to $142.5 million for the quarter ended November 30, 2008, a decrease of $14.7 million or 10.3%.
• Consolidated gross profit margins increased 20 basis points from 26.6% for the quarter ended November 30, 2008 to 26.8% for the quarter ended November 30, 2009.
• Diluted earnings per share for the quarter were $0.36 per share compared to $0.38 per share for the same quarter last year.
• The Company generated $71.5 million in cash from operations during the nine month period ended November 30, 2009, an increase of $35.3 million, or 97.4%, over the comparable period last year.

Financial Overview:

For the quarter, consolidated net sales decreased by $14.7 million, or 10.3%, from $142.5 million for the quarter ended November 30, 2008 to $127.8 million for the quarter ended November 30, 2009. Print sales for the quarter were $70.6 million, compared to $82.6 million for the same quarter last year, or a decrease of 14.5%. Apparel sales for the quarter were $57.2 million, compared to $59.9 million for the same quarter last year, or a decrease of 4.5%. Overall gross profit margins ("margins") increased from 26.6% to 26.8% for the quarters ended November 30, 2008 and November 30, 2009, respectively.

Print margins increased from 26.4% to 28.5%, and Apparel margins decreased from 26.9% to 24.8%, for the quarters ended November 30, 2008 and November 30, 2009, respectively. Earnings for the quarter decreased from $9.9 million, or 6.9% of sales, for the quarter ended November 30, 2008 to $9.2 million, or 7.2% of sales, for the quarter ended November 30, 2009. Diluted EPS decreased from $0.38 per share to $0.36 per share for the quarters ended November 30, 2008 and November 30, 2009, respectively.

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