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Apparel Segment revenues of Ennis go up

24
Jun '08

Ennis Inc reported financial results for the first quarter ended May 31, 2008.

Highlights:

• Revenues increased 6.8% over the same quarter last year, from approximately $152.8 million to approximately $163.2 million.
• Apparel Segment revenues increased by $10.3 million for the quarter, or 15.2%, from approximately $67.6 million to approximately $77.9 million.

Financial Overview:
For the quarter, our net sales increased by $10.4 million, or 6.8%, from $152.8 million for the quarter ended May 31, 2007 to $163.2 million for the quarter ended May 31, 2008. During the quarter, we had 1 less sales day than the previous year (63 days versus 64 days). Our Print sales for the quarter were $85.3 million, compared to $85.1 million for the same quarter last year, or an increase of 0.2%.

Apparel sales for the quarter were $77.9 million, compared to $67.6 million for the same quarter last year, or an increase of 15.2%. Our overall gross profit margins ("margins") during the quarter decreased from 27.1% to 24.8% for the quarters ended May 31, 2007 and May 31, 2008, respectively.

Our Print margins increased from 26.5% to 27.8%, while the Apparel margins decreased from 27.8% to 21.5%, for the quarters ended May 31, 2007 and May 31, 2008, respectively. Our earnings for the quarter increased 0.9% from $10.8 million for the quarter ended May 31, 2007 to $10.9 million for the quarter ended May 31, 2008.

Our basic earnings per share ("EPS") increased from $.42 per share to $.43 per shares for the quarters ended May 31, 2007 and May 31, 2008, respectively, while our diluted EPS remained constant for both quarters at $.42 per share.

The Company, during the quarter ended May 31, 2008, generated $21.7 million in EBITDA (earnings before interest, taxes, depreciation and amortization) compared to $22.5 million for the comparable quarter last year.

Keith Walters, Chairman, President & CEO, commented by saying, “As stated in our last earnings release, we felt that fiscal year 2009 was going to be a challenging year given the general economic climate and current pressures on commodity prices. I was confident in our ability to navigate these trying times and I feel we demonstrated that with our results this quarter.

Given these trying economic times and with our Apparel Segment experiencing commodity price increases approaching 20%, we still delivered results above our previous year's results. While our Apparel Segment increased their selling prices to offset some of these commodity price increases, this did not fully absorb the entire extent of these increases.

Strategically, we also looked at these volatile times in the apparel market as a potential opportunity to increase our market share, which we feel we successfully accomplished during the quarter with a growth rate exceeding 15%, even with one less sale day.

With this new volume and with an additional price increase just recently passed along, we feel our Apparel Segment is well positioned for the remainder of this fiscal year. While we do feel the Print Segment's top-line is starting to be somewhat impacted by the general economic climate, they are continuing to benefit from the cost control initiatives started last fiscal year. Overall, I am proud of what we accomplished this quarter and look forward to the remainder of the year.”

Ennis Inc

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