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Ennis Earnings and Revenues Rise

Monday, September 25, 2006

Press release from the issuing company

MIDLOTHIAN, Texas--Sept. 22, 2006-- Ennis, Inc., today reported financial results for the three and six months ended August 31, 2006. Quarterly Highlights * Quarter-over-quarter sales increased from $148.1 million to $151.7 million, with Apparel sales being up 8.2% for the quarter to $69.5 million. * Net earnings increased 9.4% over the same quarter last year, from $10.6 million to $11.6 million. * Diluted EPS increased by 9.8% over the same quarter last year, from $.41 per share to $.45 per share. Financial Overview For the quarter, net sales increased by $3.6 million, or 2.4% from $148.1 million for the three months ended August 31, 2005 to $151.7 million for the three months ended August 31, 2006. Sales in the Print Segment for the quarter were $82.3 million, compared to $83.9 million for the same quarter last year. The Apparel Segment sales for the quarter were $69.5 million, compared to $64.2 million for the same quarter last year. Overall margins during the quarter remained relatively constant at 25.2% for the three months ended August 31, 2006 and 2005. The Print Segment's margins increased slightly from 24.5% to 24.9%, while the Apparel Segment's margins decreased slightly from 26.0% to 25.6%, for the three months ended August 31, 2005 and 2006, respectively. Net earnings for the quarter increased by $1.0 million, or 9.4%, from $10.6 million for the three months ended August 31, 2005 to $11.6 million for the three months ended August 31, 2006. Diluted earnings ("EPS") increased 9.8%, from $.41 per share to $.45 per share for the three months ended August 31, 2005 and 2006, respectively. For the period, net sales decreased slightly from $297.2 million for the six months ended August 31, 2005 to $296.8 million for the six months ended August 31, 2006, or 0.1%. Sales in the Print Segment for the period were $159.4 million, compared to $164.6 million for the same period last year. The Apparel Segment sales for the period were $137.5 million, compared to $132.6 million for the same period last year. Due mainly to improved margins realized at the Apparel Group during the period, the Company's overall margins improved from 25.1% to 25.6% for the six months ended August 31, 2005 and 2006, respectively. The Print Segment's margins decreased slightly from 25.1% to 25.0%, while our Apparel Segment's margins increased from 25.2% to 26.4%, for the six months ended August 31, 2005 and 2006, respectively. Net earnings for the period increased by $1.9 million, or 9.0%, from $21.1 million for the six months ended August 31, 2005 to $23.0 million for the six months ended August 31, 2006. Diluted earnings increased 8.5%, from $.82 per share to $.89 per share for the six months ended August 31, 2005 and 2006, respectively. The decline in the Print Segment's revenues for the period and the quarter continues to be due primarily to the loss of several large promotional customers and impact of the two plant closings last fiscal year. This decline has been partially offset by the impact of the Company's recent acquisitions. Without the impact of the items mentioned, the Print Segment's revenues for the quarter and the period would have actually increased slightly over the comparable periods last year. The Company generated $24.5 million in EBITDA (earnings before interest, taxes, depreciation and amortization) during the quarter, compared to $24.0 million for the comparable quarter last year. For the six month period, the Company generated $48.8 million in EBITDA during the period, compared to $48.2 million for the comparable period last year. Keith Walters, Chairman, President & CEO, commented by saying, "We are extremely pleased with our results for the quarter. We continue to exceed profit expectations and increase our return to stakeholders. We are also extremely pleased with the increase in our Apparel Segment's sales during the quarter. We believe this increase demonstrates that our Apparel Segment products continue to be desired by our customers and that they compete favorably in the marketplace. On the Print side, we realized that our closing of the two print plants last fiscal year and our decision to cease doing business with several major promotional customers would most likely impact our top-line in the short-term, however, being true to our stated focus on profit versus revenue growth, we felt that these were business decisions that needed to be made. We think the increase in our EPS not only for the quarter, but for the period, has proven this to be a sound business strategy and one in the best interest of our stakeholders and employees. We recently completed the acquisition of Block Graphics, which added envelope capabilities to our product line, and plan to continue to look for strategic acquisitions in both the print and apparel sectors."

 

 

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