Dec 21 2006 -- Ennis, Inc. today reported financial results for the three and nine months ended November 30, 2006. Quarterly Highlights * Sales for the quarter increased 15.2% to $151.7 million from $131.7 million, with Apparel sales being up 22.6% for the quarter to $66.1 million. * Net earnings increased 6.9% over the same quarter last year, from $10.1 million to $10.8 million. * Diluted EPS increased by 7.7% over the same quarter last year, from $.39 per share to $.42 per share. Financial Overview For the quarter, net sales increased by $20.0 million, or 15.2% to $151.7 million for the three months ended November 30, 2006 from $131.7 million for the three months ended November 30, 2005. Sales in the Print Segment increased 10.0% for the quarter from $77.8 million to $85.6 million. Our Apparel Segment sales increased from $53.9 million to $66.1 million, or 22.6% for the quarter. Overall, our margins during the current quarter were 25.0%, compared to 27.0% for the three months ended November 30, 2005. Our apparel margins for the current quarter were 24.2%, compared to 27.5% for the same quarter last year. Our print margins for the current quarter were 25.7%, compared to 26.8% for the same quarter last year. Our apparel margins during the quarter were impacted by our fleece product sales, which increased over 300% over the previous year, as we currently have a lower margin on these products than we do on our traditional T-shirt products. Also, since these products are imported products they do not contribute to our manufacturing absorption. In addition to the fleece impact, we also strategically reduced our selling price on certain of our products to increase market penetration in certain select geographic areas, which due to the high level of our sales had the impact of reducing our manufactured inventory levels. While these decisions impacted our margins in the current quarter, we expect them to prove beneficial moving forward as we replenish this inventory through increased manufacturing efficiencies and absorption. The decline in our print margins was primarily due to raw material costs increases and product mix changes. Net earnings for the quarter increased by approximately $700,000, or 6.9%, from $10.1 million for the three months ended November 30, 2005 to $10.8 million for the three months ended November 30, 2006. Diluted earnings ("EPS") increased 7.7%, from $.39 per share to $.42 per share for the three months ended November 30, 2005 and 2006, respectively. Included in the prior years' results was a non-reoccurring trademark settlement gain, without this impact our net earnings would have been $9.5 million for the quarter and our diluted earnings per share $.37 per share. For the period, net sales increased from $428.9 million for the nine months ended November 30, 2005 to $448.6 million for the nine months ended November 30, 2006, or 4.6%. Sales in the Print Segment for the period were $245.0 million, compared to $242.5 million for the same period last year. The Apparel Segment sales for the period were $203.6 million, compared to $186.4 million for the same period last year. The Company's overall margins remained relatively stable during the period at 25.4% for the current period, compared to 25.7% for the nine months ended November 30, 2005. The Print Segment's margins decreased slightly from 25.6% to 25.2%, while our Apparel Segment's remained relatively constant at 25.8% to 25.7%, for the nine months ended November 30, 2005 and 2006, respectively. Net earnings for the period increased by $2.6 million, or 8.3%, from $31.2 million for the nine months ended November 30, 2005 to $33.8 million for the nine months ended November 30, 2006. Diluted earnings increased 8.3%, from $1.21 per share to $1.31 per share for the nine months ended November 30, 2005 and 2006, respectively. The Company generated $23.3 million in EBITDA (earnings before interest, taxes, depreciation and amortization) during the quarter, compared to $23.2 million for the comparable quarter last year. For the nine month period, the Company generated $72.1 million in EBITDA, compared to $71.4 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 our shareholders. We are also extremely pleased with the increase in our Apparel Segment's sales during the quarter. While we realized our strategy could potentially impact our apparel margins in the short-term, we believe sales growth of this magnitude is a good indication of our future ability to compete in this market and to gain valuable market share which should prove extremely beneficial from a manufacturing perspective in future periods. On the Print side, the decision to cease doing business with several promotional companies continues to have an impact our top line revenues in this segment. However, we are pleased to see that our recent acquisitions are now performing at a level to more than offset this negative revenue impact. We are also encouraged by the fact that these acquisitions added $.03 and $.05 to our diluted earnings per share for the periods." In other news, the Company announced today that the Board of Directors has declared a quarterly cash dividend of 15 1/2 cents a share on its common stock. The dividend is payable February 1, 2007 to shareholders of record on January 15, 2007.