MIDLOTHIAN, Texas -- (Business Wire)
Ennis, Inc. (the “Company"), (NYSE: EBF), today reported financial
results for the quarter and fiscal year ended February 28, 2015.
Highlights for the year include:
- Consolidated net sales increased 6.1% for the quarter and 7.0% for
the year.
- Print sales increased 7.3% for the quarter and 11.9% for the year.
- Apparel sales increased 3.5% over the comparable quarter and its
margin improved 240 basis points on a linked quarter basis.
- Adjusted diluted earnings per share (a non-GAAP measure) for the
quarter increased from $.30 per share to $.34 per share.
Financial Overview
The Company’s consolidated net sales for the quarter ended February 28,
2015 were $140.2 million compared to $132.1 million for the same quarter
last year, an increase of 6.1%. Print sales increased 7.3% from $89.9
million to $96.5 million and apparel sales increased 3.5% from $42.3
million to $43.8 million. Consolidated gross profit margin ("margin")
was $35.4 million for the quarter, or 25.2%, compared to $33.6 million,
or 25.4% for the same quarter last year. Print margin was 29.2% for the
quarter compared to 28.4% for the same quarter last year, while apparel
margin was 16.6% for the quarter compared to 19.0% for the comparable
quarter last year. While apparel margin continues to be negatively
impacted by marketplace dynamics, it increased more than 240 basis
points over its linked quarter margin of 14.2% and 180 basis points over
its November 30, 2014 year-to-date margin of 14.8%. Net earnings (loss)
for the quarter was $8.6 million, or $0.34 per diluted share as compared
to $(14.5) million, or $(0.55) per diluted share for the same quarter
last year, which prior year results were impacted by a goodwill and
trademark impairment charge of $24.2 million relating to the apparel
division.
For the fiscal year, consolidated net sales increased from $542.4
million for the year ended February 28, 2014 to $580.2 million for the
year ended February 28, 2015, or an increase of 7.0%. Print sales were
$380.4 million compared to $339.9 million for the same period last year,
an increase of $40.5 million, or 11.9%, while apparel sales decreased
$2.6 million, or 1.3% from $202.5 million to $199.9 million.
Consolidated margin for the period was $145.5 million, or 25.1%,
compared to $143.8 million, or 26.5%, for the same period last year.
Print margin increased from 29.7% to 30.3%, while apparel margin
decreased from 21.1% to 15.2% due to lower selling prices and higher
input costs for most of the year. As a result of an impairment charge in
the third quarter of this fiscal year and an impairment charge in the
fourth quarter of the last fiscal year, the consolidated net earnings
(loss) for the 2015 fiscal year was $(44.5) million, or $(1.72) per
diluted share and $13.2 million, or $.50 per diluted share for the 2014
fiscal year. Excluding the impairment charges in both fiscal years,
non-GAAP net earnings would have been approximately $34.6 million, or
approximately $1.34 per diluted share for fiscal 2015 compared to $35.3
million, or $1.35 per diluted share for fiscal 2014.
Non-GAAP Reconciliations
The Company believes the non-GAAP financial measures of 1) net earnings
and diluted earnings per share on a proforma basis that exclude the
impairment charges and 2) Adjusted EBITDA (Adjusted EBITDA is calculated
as net earnings before interest, taxes, depreciation, amortization, and
the impairment charges) provide important supplemental information to
both management and investors regarding financial and business trends
used in assessing its results of operations. The Company believes adding
back the specified items provides a more meaningful comparison to the
corresponding reported periods and internal budgets and forecasts,
provides management with a more relevant measurement of operating
performance and yields metrics which are more useful in assessing
management performance. In addition, Adjusted EBITDA is a component of
the financial covenants and an interest rate metric in the Company’s
credit facility. While management believes these non-GAAP financial
measures are useful in evaluating Ennis, this information should be
considered as supplemental in nature and not as a substitute for, or
superior to, the related financial information prepared in accordance
with GAAP.
The following table reconciles proforma net earnings and proforma
diluted earnings per share (“adjusted diluted earnings”), non-GAAP
financial measures, to the most comparable GAAP measures, net earnings
and diluted earnings per share, to illustrate the impact of the
impairment charge recognized in the third quarter of fiscal 2015 and the
fourth quarter of fiscal 2014 on reported earnings (dollars in
thousands, except per share).
|
| |
| |
| |
| |
| |
| |
| |
For the quarter ended February 28, 2015
| |
For the year ended February 28, 2015
|
| |
As
| | | |
Proforma
| |
As
| | | |
Proforma
|
| |
Reported
| |
Impairment
| |
Results
| |
Reported
| |
Impairment
| |
Results
|
| | | | | | | | | | | |
|
Earnings (loss) before
| | | | | | | | | | | | |
income taxes
| |
$
|
12,954
| | |
$
|
-
| | |
$
|
12,954
| |
$
|
(39,133
|
)
| |
$
|
(93,324
|
)
| |
$
|
54,191
|
| | | | | | | | | | | |
|
Income tax expense (benefit)
| | |
4,356
| | | |
-
| | | |
4,356
| | |
5,400
| | | |
(14,228
|
)
| | |
19,628
|
| |
| |
| |
| |
| |
| |
|
Net earnings (loss)
| |
$
|
8,598
|
| |
$
|
-
|
| |
$
|
8,598
| |
$
|
(44,533
|
)
| |
$
|
(79,096
|
)
| |
$
|
34,563
|
| | | | | | | | | | | |
|
Diluted earnings (loss) per share
| |
$
|
0.34
|
| |
$
|
-
|
| |
$
|
0.34
| |
$
|
(1.72
|
)
| |
$
|
(3.06
|
)
| |
$
|
1.34
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
| |
For the quarter ended February 28, 2014
| |
For the year ended February 28, 2014
|
| |
As
| | | |
Proforma
| |
As
| | | |
Proforma
|
| |
Reported
| |
Impairment
| |
Results
| |
Reported
| |
Impairment
| |
Results
|
| | | | | | | | | | | |
|
Earnings (loss) before
| | | | | | | | | | | | |
income taxes
| |
$
|
(12,105
|
)
| |
$
|
(24,226
|
)
| |
$
|
12,121
| |
$
|
31,792
| | |
$
|
(24,226
|
)
| |
$
|
56,018
|
| | | | | | | | | | | |
|
Income tax expense (benefit)
| | |
2,362
| | | |
(2,066
|
)
| | |
4,428
| | |
18,603
| | | |
(2,066
|
)
| | |
20,669
|
| |
| |
| |
| |
| |
| |
|
Net earnings (loss)
| |
$
|
(14,467
|
)
| |
$
|
(22,160
|
)
| |
$
|
7,693
| |
$
|
13,189
|
| |
$
|
(22,160
|
)
| |
$
|
35,349
|
| | | | | | | | | | | |
|
Diluted earnings (loss) per share
| |
$
|
(0.55
|
)
| |
$
|
(0.85
|
)
| |
$
|
0.30
| |
$
|
0.50
|
| |
$
|
(0.85
|
)
| |
$
|
1.35
|
| | | | | | | | | | | | | | | | | | | | | |
|
During the fourth quarter, the Company generated $17.7 million in
Adjusted EBITDA compared to $16.6 million in Adjusted EBITDA for the
comparable quarter last year. For the fiscal year ended February 28,
2015, the Company generated $72.5 million of Adjusted EBITDA compared to
$71.4 million of Adjusted EBITDA for the comparable period last year.
The following table reconciles Adjusted EBITDA, a non-GAAP financial
measure, to the most comparable GAAP measure, net earnings (loss)
(dollars in thousands).
|
| |
| |
| |
| |
| |
Three months ended
| |
Year ended
|
| |
February 28,
| |
February 28,
|
| |
|
2015
|
| |
|
2014
|
| |
|
2015
|
| |
|
2014
|
|
| | | | | | | |
|
Net earnings (loss)
| |
$
|
8,598
| | |
$
|
(14,467
|
)
| |
$
|
(44,533
|
)
| |
$
|
13,189
| |
Income tax expense
| | |
4,356
| | | |
2,362
| | | |
5,400
| | | |
18,603
| |
Interest expense
| | |
526
| | | |
459
| | | |
2,025
| | | |
1,268
| |
Depreciation/amortization
| | |
4,220
| | | |
3,989
| | | |
16,284
| | | |
14,070
| |
Impairment of goodwill and trademarks
| |
|
-
|
| |
|
24,226
|
| |
|
93,324
|
| |
|
24,226
|
|
Adjusted EBITDA (non-GAAP)
| |
$
|
17,700
|
| |
$
|
16,569
|
| |
$
|
72,500
|
| |
$
|
71,356
|
|
| | | | | | | |
|
% of sales
| | |
12.6
|
%
| | |
12.5
|
%
| | |
12.5
|
%
| | |
13.2
|
%
|
| |
Keith Walters, Chairman, Chief Executive Officer and President,
commented by stating, “The print group continued its strong performance
during the quarter improving gross profit margin by 80 basis points.
While on a comparable basis our apparel group continues to be impacted
by market dynamics, its gross profit margin during the current quarter
increased by more than 240 basis points over the previous quarter,
marking two sequential quarters of improvement. The discounting that has
been prevalent in the apparel marketplace for most of this fiscal year,
including the fourth quarter, is expected to continue into fiscal 2016.
As such, the ability to raise prices to offset any input cost increases
has been, and we believe will continue to remain, difficult. Margins
will continue to be compressed below historical levels unless relieved
from the cost side. Cotton may be a beacon of hope, as pricing has
dropped significantly over the past 6 months, unless manufacturers are
forced to concede these savings due to market pressures. Because of
these continuing dynamics, we still expect the current fiscal year for
apparel to be extremely challenging. Nonetheless, as discussed earlier,
we have recently seen positive margin developments from the apparel
group and would expect such developments to continue on into fiscal
2016. On the print front, we continue to be pleased with the integration
of our recent print acquisitions and the margins of our print group as a
whole. We expect these positive developments from the print group to
continue into the current fiscal year. The recent bankruptcy of a major
direct manufacturer in the print industry may provide additional
opportunities for the Company in the upcoming year. Overall, while we
believe fiscal year 2016 will be challenging, we continue to remain
optimistic about its potential.”
In Other News: The Company announced today that the Board of
Directors has set the record date and meeting date for the Annual
Shareholder Meeting. The 2015 Annual Meeting of Shareholders will be
held on July 23, 2015, with a record date of May 26, 2015.
About Ennis
Ennis, Inc. (www.ennis.com)
is primarily engaged in the production and sale of business forms,
apparel and other business products. The Company is one of the largest
private-label printed business product suppliers in the United States.
Headquartered in Midlothian, Texas, the Company has production and
distribution facilities strategically located throughout the United
States of America, Mexico and Canada, to serve the Company’s national
network of distributors. The Company, together with its subsidiaries,
operates in two business segments: print and apparel. The print segment
manufactures and sells business forms, other printed business products,
printed and electronic media, presentation products, flex-o-graphic
printing, advertising specialties and Post-it® Notes, internal bank
forms, plastic cards, secure and negotiable documents, envelopes and
other custom products. The apparel segment manufactures T-Shirts and
distributes T-Shirts and other active-wear apparel through nine
distribution centers located throughout North America.
Safe Harbor under The Private Securities
Litigation Reform Act of 1995
Certain statements 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 Company’s ability to
effectively manage its business functions while growing its business in
a competitive environment, the Company’s ability to adapt and expand its
services in such an environment and the variability in the prices of
cotton, paper and other raw materials. 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, 2014,
and its subsequent quarterly reports on Form 10-Q for its 2015 fiscal
year. 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. |
Condensed Consolidated Financial Information |
(In thousands, except share and per share amounts) |
| | | | | | | |
|
| | Three months ended | | Year ended |
Condensed Consolidated Operating Results | | February 28, | | February 28, |
| |
| 2015 |
| |
| 2014 |
| |
| 2015 |
| |
| 2014 |
|
Revenues
| |
$
|
140,242
| | |
$
|
132,138
| | |
$
|
580,240
| | |
$
|
542,442
| |
Cost of goods sold
| |
|
104,858
|
| |
|
98,558
|
| |
|
434,764
|
| |
|
398,649
|
|
Gross profit margin
| | |
35,384
| | | |
33,580
| | | |
145,476
| | | |
143,793
| |
Impairment of goodwill and trademarks
| | |
-
| | | |
24,226
| | | |
93,324
| | | |
24,226
| |
Operating expenses
| |
|
22,451
|
| |
|
21,045
|
| |
|
89,868
|
| |
|
86,403
|
|
Operating income (loss)
| | |
12,933
| | | |
(11,691
|
)
| | |
(37,716
|
)
| | |
33,164
| |
Other (income) expense
| |
|
(21
|
)
| |
|
414
|
| |
|
1,417
|
| |
|
1,372
|
|
Earnings (loss) before income taxes
| | |
12,954
| | | |
(12,105
|
)
| | |
(39,133
|
)
| | |
31,792
| |
Income tax expense
| |
|
4,356
|
| |
|
2,362
|
| |
|
5,400
|
| |
|
18,603
|
|
Net earnings (loss) | |
$
|
8,598
|
| |
$
|
(14,467
|
)
| |
$
|
(44,533
|
)
| |
$
|
13,189
|
|
| | | | | | | |
|
Weighted average common shares outstanding | | | | | | | | |
Basic
| |
|
25,612,296
|
| |
|
26,122,869
|
| |
|
25,864,352
|
| |
|
26,125,348
|
|
Diluted
| |
|
25,623,034
|
| |
|
26,122,869
|
| |
|
25,864,352
|
| |
|
26,146,325
|
|
| | | | | | | |
|
Earnings (loss) per share | | | | | | | | |
Basic
| |
$
|
0.34
|
| |
$
|
(0.55
|
)
| |
$
|
(1.72
|
)
| |
$
|
0.50
|
|
Diluted
| |
$
|
0.34
|
| |
$
|
(0.55
|
)
| |
$
|
(1.72
|
)
| |
$
|
0.50
|
|
| | | | | | | |
|
| | | | | | February 28, | | February 28, |
Condensed Consolidated Balance Sheet
Information | | | |
| 2015 |
| |
| 2014 |
|
Assets |
Current assets
| | | | | | | | |
Cash
| | | | | |
$
|
15,346
| | |
$
|
5,316
| |
Accounts receivable, net
| | | | | | |
62,865
| | | |
63,695
| |
Inventories, net
| | | | | | |
119,814
| | | |
130,095
| |
Other
| | | | | |
|
18,517
|
| |
|
15,037
|
|
| | | | | |
|
216,542
|
| |
|
214,143
|
|
Property, plant & equipment
| | | | | | |
92,875
| | | |
91,565
| |
Other
| | | | | |
|
143,845
|
| |
|
230,639
|
|
| | | | | |
$
|
453,262
|
| |
$
|
536,347
|
|
Liabilities and Shareholders' Equity |
Current liabilities
| | | | | | | | |
Accounts payable
| | | | | |
$
|
21,275
| | |
$
|
22,062
| |
Accrued expenses
| | | | | |
|
18,972
|
| |
|
19,815
|
|
| | | | | |
|
40,247
|
| |
|
41,877
|
|
Long-term debt
| | | | | | |
106,500
| | | |
105,500
| |
Other non-current liabilities
| | | | | |
|
21,835
|
| |
|
26,035
|
|
Total liabilities
| | | | | |
|
168,582
|
| |
|
173,412
|
|
| | | | | | | |
|
Shareholders’ equity
| | | | | |
|
284,680
|
| |
|
362,935
|
|
| | | | | |
$
|
453,262
|
| |
$
|
536,347
|
|
| | | | | | | |
|
| | | | | | Year ended |
| | | | | | February 28, |
Condensed Consolidated Cash Flow
Information | | | | | |
| 2015 |
| |
| 2014 |
|
Cash provided by operating activities
| | | | | |
$
|
65,204
| | |
$
|
32,755
| |
Cash used in investing activities
| | | | | | |
(29,410
|
)
| | |
(65,511
|
)
|
Cash provided by (used in) financing activities
| | | | | | |
(24,277
|
)
| | |
32,508
| |
Effect of exchange rates on cash
| | | | | |
|
(1,487
|
)
| |
|
(668
|
)
|
Change in cash
| | | | | | |
10,030
| | | |
(916
|
)
|
Cash at beginning of period
| | | | | |
|
5,316
|
| |
|
6,232
|
|
Cash at end of period
| | | | | |
$
|
15,346
|
| |
$
|
5,316
|
|
Contacts:
Ennis, Inc.
Mr. Keith S. Walters, 972-775-9801
Chairman,
Chief Executive Officer and President
or
Mr. Richard L.
Travis, Jr., 972-775-9801
CFO, Treasurer and Principal Financial
and Accounting Officer
or
Mr. Michael D. Magill, 972-775-9801
Executive
Vice President and Secretary
Fax: 972-775-9820
www.ennis.com
Source: Ennis, Inc.
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