Ennis, Inc. Reports Additional Information on Year-End Results
Press release from the issuing company
MIDLOTHIAN, Texas--April 28, 2005-- Ennis, Inc. today is supplementing the information contained in yesterday's report on year-end results with the following information and inclusion of the year-end summary financial statements.
To clarify the information regarding the costs incurred for compliance with the Sarbanes-Oxley Act of 2002, the $1,500,000 (pre-tax) occurred over the last three quarters of the fiscal year in relatively equal amounts, and was not entirely absorbed into the fourth quarter.
To assist investors in their understanding of the results of the Alstyle Apparel operation, it is important to know that not only was the fourth quarter the low point in their annual operating cycle, but also that Alstyle Apparel's operating margins were lower than normal as a result of higher costs of goods sold than otherwise would have been expected. Alstyle Apparel was required to account for its finished goods inventory at acquisition date at the expected selling price less costs to dispose and a reasonable selling profit as required by Financial Accounting Standard No. 141. The adjustment totaled $1,225,000 and proportionally effected cost of sales as finished goods inventories were sold during the fourth quarter. The increase in cost of sales for the quarter on a pre-tax basis was $1,063,000 or $.03 per fully diluted share after income taxes.
Further, to the statement in the April 27 press release related to the Company's position that the Alstyle Apparel transaction would be accretive to earnings in the first full years' financials, the Company continues to believe that the information provided to shareholders in the June 25, 2004 announcement of the Alstyle Apparel merger are accurate. Additionally, the Company believes the process of integration of Alstyle Apparel is not only moving forward at a satisfactory rate, but is ahead of schedule, and that the financial benefits of integration are significant.
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