Ennis reports financial results for quarter and fiscal year ending Feb. 28, 2023

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MIDLOTHIAN, Texas , April 24, 2023 (press release) –

Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the quarter and fiscal year ended February 28, 2023.  Highlights include:

 

  • Revenues were $102.7 million for the quarter, an increase of $3.0 million or 3.0% over last year's fourth quarter and $431.8 million for the fiscal year, an increase of $31.8 million, or 8.0% over last fiscal year.
  • Earnings per diluted share for the current quarter were $0.47 compared to $0.26 for the same quarter last year.
  • Gross profit margin was 30.3% for the fiscal year compared to 28.7% for the prior fiscal year.  Gross profit margin for the quarter increased from 27.5% last year to 27.6% this year.

 

Financial Overview

The Company’s revenues for the fourth quarter ended February 28, 2023 were $102.7 million compared to $99.7 million for the same quarter last year, an increase of 3.0%. The increase was attributable to $1.4 million in revenues from our recent acquisition of School Photo Marketing, as well as price increases that were partially offset by volume decreases attributable in part to seasonal factors. Gross profit margin was $28.4 million, or 27.6%, as compared to $27.4 million, or 27.5% for the same quarter last year. Our gross profit margin decreased on a sequential basis from 30.4% for the third quarter ended November 30, 2022 to 27.6%. Our margin during the period was negatively impacted by a decrease in revenue volume, increased cost of material and labor, and to a lesser extent by the acquisition of School Photo Marketing at the beginning of its low margin off-season. Our net earnings for the quarter were $12.2 million, or $0.47 per diluted share as compared to $6.7 million, or $0.26 per diluted share for the same quarter last year. Quarterly net earnings results were favorably impacted by a $5.8 million gain or $0.17 per diluted share from the sale of an unused manufacturing facility.

 

The Company’s revenues for the fiscal year ended February 28, 2023 were $431.8 million compared to $400.0 million for the prior fiscal year, an increase of 8.0%. Gross profit margin was $131.1 million, or 30.3%, as compared to $114.7 million, or 28.7% for the prior fiscal year. Net earnings for the fiscal year were $47.3 million or $1.82 per diluted share, compared to $29.0 million, or $1.11 per diluted share for the prior fiscal year. The $5.8 million gain from the sale of an unused manufacturing facility impacted the current fiscal year results by $0.17 per diluted share.

 

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, "We are pleased with our performance for the fourth quarter. Throughout our fiscal year ended February 28, 2023, we experienced strong demand for our products and navigated a challenging environment with supply chain disruptions and inflationary cost pressures not seen in decades. Our revenues and operating income for the quarter improved on a year-over-year basis. Our EBITDA increased from $60.7 million (15.2% of sales) for the fiscal year ended February 28, 2022 to $82.3 million (19.1% of sales) for the fiscal year ended February 28, 2023. In the fourth quarter, EBITDA increased from $15.8 million (15.8% of sales) to $20.5 million (19.9% of sales) over last year's fourth quarter. During the quarter we sold an unused manufacturing facility which resulted in a $5.8 million gain and increased our diluted earnings per share $0.17. Our Gross profit margin increased to 30.3% for the current fiscal year compared to 28.7% for the prior fiscal year, an increase of 1.6%.  Increased foreign imports and demand declines have currently stabilized price increases of North American printing & writing paper.  The extent to which import pressures remain in place will likely play a major role in price stability or decreases.  We continue to monitor incoming order volumes as well as rising raw material and other input costs so that we can proactively adjust our pricing and costs accordingly.  We believe we have one of the strongest balance sheets in the industry, with no debt and significant cash. Our profitability and strong financial condition will allow us to continue operations and fund acquisitions without incurring debt. Given those strengths, we also anticipate timely access to credit should larger acquisition opportunities materialize as we continue to explore strategic opportunities in the acquisition arena to increase profitability."

 

 

Non-GAAP Reconciliations

To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, from time to time the Company reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings before interest expense, tax expense, depreciation, and amortization).  The Company may also report adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure.  

Management believes that these non-GAAP financial measures provide useful information to investors as a supplement to reported GAAP financial information.  Management reviews these non-GAAP financial measures on a regular basis and uses them to evaluate and manage the performance of the Company’s operations.  Other companies may calculate non-GAAP financial measures differently than the Company, which limits the usefulness of the Company’s non-GAAP measures for comparison with these other companies.  While management believes the Company’s non-GAAP financial measures are useful in evaluating the Company, when this information is reported it should be considered as supplemental in nature and not as a substitute or an alternative for, or superior to, the related financial information prepared in accordance with GAAP.  These measures should be evaluated only in conjunction with the Company’s comparable GAAP financial measures. 

The following table reconciles EBITDA, a non-GAAP financial measure, for the three and twelve months ended February 28, 2023 and February 28, 2022 to the most comparable GAAP measure, net earnings (dollars in thousands).

 

 

 

Three months ended

 

 

Twelve months ended

 

 

 

February 28,

 

 

February 28,

 

 

February 28,

 

 

February 28,

 

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net earnings

 

$

12,193

 

 

$

6,655

 

 

$

47,300

 

 

$

28,982

 

Income tax expense

 

 

3,978

 

 

 

3,393

 

 

 

17,630

 

 

 

12,962

 

Interest expense

 

 

 

 

 

2

 

 

 

 

 

 

9

 

Depreciation and amortization

 

 

4,310

 

 

 

4,888

 

 

 

17,356

 

 

 

18,777

 

EBITDA (non-GAAP)

 

$

20,481

 

 

$

14,938

 

 

$

82,286

 

 

$

60,730

 

% of sales

 

 

19.9

%

 

 

15.0

%

 

 

19.1

%

 

 

15.2

%

 

In Other News

The 2023 Annual Meeting of Shareholders will be held on July 13, 2023, with a record date of May 24, 2023.

 

About Ennis

Founded in 1909, the Company is one of the largest private-label printed business product suppliers in the United States.  Headquartered in Midlothian, Texas, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors.  Ennis manufactures and sells business forms, other printed business products, printed and electronic media, integrated forms and labels, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, plastic cards, secure and negotiable documents, specialty packaging, direct mail, envelopes, tags and labels and other custom products.  For more information, visit www.ennis.com.

 

Safe Harbor under the Private Securities Litigation Reform Act of 1995

Certain statements that may be contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements.  In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements.  These statements are subject to numerous uncertainties, which include, but are not limited to, the severity and duration of the COVID-19 pandemic and related economic repercussions, the erosion of demand for our printer business documents as the result of digital technologies, risk or uncertainties related to the completion and integration of acquisitions, the limited number of available suppliers and variability in the prices of paper and other raw materials, and operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees and potential plant closures.  Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 28, 2022.  The Company does not undertake, and hereby disclaims, any duty or obligation to update or otherwise revise any forward-looking statements to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, although its situation and circumstances may change in the future. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

 

 

 

 

Ennis, Inc.

 

Unaudited Condensed Consolidated Financial Information

 

(In thousands, except share and per share amounts)

 

 

 

 

 

Three months ended

 

 

Twelve months ended

 

Condensed Consolidated Operating Results

 

February 28,

 

 

February 28,

 

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues

 

$

102,692

 

 

$

99,665

 

 

$

431,837

 

 

$

400,014

 

Cost of goods sold

 

 

74,342

 

 

 

72,229

 

 

 

300,787

 

 

 

285,291

 

Gross profit margin

 

 

28,350

 

 

 

27,436

 

 

 

131,050

 

 

 

114,723

 

Operating expenses

 

 

17,877

 

 

 

16,887

 

 

 

70,793

 

 

 

71,410

 

(Gain) Loss from disposal of assets

 

 

(5,911

)

 

 

4

 

 

 

(5,896

)

 

 

(271

)

Operating income

 

 

16,384

 

 

 

10,545

 

 

 

66,153

 

 

 

43,584

 

Other expense

 

 

213

 

 

 

497

 

 

 

1,223

 

 

 

1,640

 

Earnings before income taxes

 

 

16,171

 

 

 

10,048

 

 

 

64,930

 

 

 

41,944

 

Income tax expense

 

 

3,978

 

 

 

3,393

 

 

 

17,630

 

 

 

12,962

 

Net earnings

 

$

12,193

 

 

$

6,655

 

 

$

47,300

 

 

$

28,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

25,820,639

 

 

 

25,935,882

 

 

 

25,818,737

 

 

 

26,026,477

 

Diluted

 

 

25,959,448

 

 

 

25,935,882

 

 

 

25,951,141

 

 

 

26,109,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

 

$

0.26

 

 

$

1.83

 

 

$

1.11

 

Diluted

 

$

0.47

 

 

$

0.26

 

 

$

1.82

 

 

$

1.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 28,

 

 

February 28,

 

Condensed Consolidated Balance Sheet Information

 

 

 

 

 

 

 

 

2023

 

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 

 

 

$

93,968

 

 

$

85,606

 

Accounts receivable, net

 

 

 

 

 

 

 

 

53,507

 

 

 

39,022

 

Inventories, net

 

 

 

 

 

 

 

 

46,834

 

 

 

38,538

 

Other

 

 

 

 

 

 

 

 

2,317

 

 

 

1,863

 

Total Current Assets

 

 

 

 

 

 

 

 

196,626

 

 

 

165,029

 

Property, plant & equipment, net

 

 

 

 

 

 

 

 

47,789

 

 

 

53,633

 

Operating lease right-of-use assets

 

 

 

 

 

 

 

 

13,133

 

 

 

15,544

 

Goodwill and intangible assets

 

 

 

 

 

 

 

 

135,907

 

 

 

134,246

 

Other

 

 

 

 

 

 

 

 

380

 

 

 

392

 

Total Assets

 

 

 

 

 

 

 

$

393,835

 

 

$

368,844

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

 

 

 

$

18,333

 

 

$

16,678

 

Accrued expenses

 

 

 

 

 

 

 

 

18,067

 

 

 

15,422

 

Current portion of operating lease liabilities

 

 

 

 

 

 

 

 

4,847

 

 

 

5,090

 

Total Current Liabilities

 

 

 

 

 

 

 

 

41,247

 

 

 

37,190

 

Other non-current liabilities

 

 

 

 

 

 

 

 

21,156

 

 

 

27,839

 

Total liabilities

 

 

 

 

 

 

 

 

62,403

 

 

 

65,029

 

Shareholders' Equity

 

 

 

 

 

 

 

 

331,432

 

 

 

303,815

 

Total Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

$

393,835

 

 

$

368,844

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

 

 

 

 

 

February 28,

 

Condensed Consolidated Cash Flow Information

 

 

 

 

 

 

 

 

2023

 

 

 

2022

 

Cash provided by operating activities

 

 

 

 

 

 

 

$

46,776

 

 

$

50,678

 

Cash used in investing activities

 

 

 

 

 

 

 

 

(11,457

)

 

 

(10,052

)

Cash used in financing activities

 

 

 

 

 

 

 

 

(26,957

)

 

 

(30,210

)

Change in cash

 

 

 

 

 

 

 

 

8,362

 

 

 

10,416

 

Cash at beginning of period

 

 

 

 

 

 

 

 

85,606

 

 

 

75,190

 

Cash at end of period

 

 

 

 

 

 

 

$

93,968

 

 

$

85,606

 

 

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