Midlothian, TX. -- Ennis, Inc. (the “Company”) today reported financial results for the second quarter ended August 31, 2023.  Highlights include: 

• Revenues were $106.8 million for the quarter compared to $111.2 million for the same quarter last year, a decrease of $4.4 million or 4.0%.

• Earnings per diluted share for the current quarter were $0.42 compared to $0.47 for the comparative quarter last year.

• Our gross profit margin for the quarter was 31.0% compared to 31.7% for the comparative quarter last year. 

Financial Overview 

The Company’s revenues for the second quarter ended August 31, 2023 were $106.8 million compared to $111.2 million for the same quarter last year, a decrease of $4.4 million, or 4.0%.  Gross profit margin was $33.1 million, or 31.0%, as compared to $35.2 million, or 31.7%, for the same quarter last year. Net earnings for the quarter were $10.9 million, or $0.42 per diluted share, as compared to $12.2 million, or $0.47 per diluted share for the same quarter last year.   

The Company’s revenues for the six-month period ended August 31, 2023 were $218.1 million compared to $218.9 million for the same period last year, a decrease of $0.8 million or 0.4%.  Gross profit margin was $67.1 million, or 30.8%, as compared to $69.2 million, or 31.6% for the six-month periods ended August 31, 2023 and August 31, 2022, respectively.  Net earnings for the six-month period ended August 31, 2023 were $22.5 million, or $0.87 per diluted share compared to $23.8 million, or $0.92 per diluted share for the same period last year.  

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Our results for the quarter were within our expectations.  Our gross profit margin for the quarter of 31.0% is within our target range and showed improvement of 40 basis points from 30.6% in the sequential quarter ending May 31, 2023 and declined 70 basis points to 31.0% compared to 31.7% in the same prior year quarter.  Our EBITDA remained relatively stable at $19.8 million or 18.5% of sales compared to the sequential quarter, $20.5 million or 18.4% of sales and compared to the same quarter last year $21.3 million or 19.1% of sales.  

"Our recent acquisitions added approximately $6.5 million in revenues and $0.02 in diluted earnings per share for the quarter and $10.6 million in revenues and $0.06 in diluted earnings per share for the six-month period.  These increases were offset by sales volume decline as some of our print partners have experienced slowness in their sales and reduced their outsourced work to us. We will continue to explore acquisitions that make sense and hunt for new sales in new markets and new channels.  As part of our regular course of business we continue to monitor incoming order volumes so that we can proactively adjust our costs accordingly and maintain our profitability. 

"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.  We continue to focus on delivering profitability and returns to our shareholders." 

Last quarter, the Company reported that a jury had awarded it $5 million in actual and punitive damages in a lawsuit against Wright Printing Company, its owner, CEO and other employees.  The award has not been recognized in the Company’s financial reports due to post-verdict motions, including the Company’s motion for its attorney’s fees, that are still pending before the Court.  The Court’s rulings on the pending motions should clarify the total amount owed to the Company for the jury verdict, attorney’s fees and interest.  Given the financial disclosures made by the defendants, it appears that they have the financial wherewithal to satisfy most, if not all, of the eventual judgment.  Accordingly, we anticipate recognizing the judgment as a collectible receivable after the Court rules on the pending motions.   The ultimate collection of the judgment may be deferred until the defendants exhaust their appellate rights.

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 six months ended August 31, 2023 to the most comparable GAAP measure, net earnings (dollars in thousands). 

In Other News

On September 15, 2023 the Board of Directors declared a quarterly cash dividend of 25.0 cents per share on the Company’s common stock.  The dividend is payable on November 3, 2023 to shareholders of record on October 6, 2023. 

For more information, visit www.ennis.com.