MIDLOTHIAN, Texas-- Ennis, Inc., today reported financial results for the quarter and the year ended February 28, 2007.
* Revenues increased by $25.3 million over the last year, or 4.5%.
* Earnings before income taxes increased 3.8% for the year, from approximately $64.0 million to approximately $66.4 million.
* Diluted EPS increased by 2.5%, from $1.58 per share to $1.62 per share for the year.
For the year, net sales increased by approximately $25.3 million, or 4.5% from $559.4 million for the year ended February 28, 2006 to $584.7 million for the year ended February 28, 2007. Our Print sales for the period were $325.7 million, compared to $321.4 million for the same period last year, or an increase of 1.3%. Our Apparel sales for the period were $259.0 million, compared to $238.0 million for the same period last year, or an increase of 8.8%.
The Company's margins overall declined slightly from 25.4% for the year ended February 28, 2006 to 25.0% for the year ended February 28, 2007. Our Print margins increased slightly for the period from 24.8% to 25.2%. Our Apparel margins due to raw material cost increases and market penetration pricing strategies, decreased for the period from 26.1% to 24.7%. Our earnings before income taxes increased $2.4 million, or 3.8% from $64.0 million, or 11.4% of sales to $66.4 million, or 11.4% of sales for the years ended February 28, 2006 and 2007, respectively. However, due to a higher effective tax rate this year, our net earnings increased by only 2.7%, or $1.1 million from $40.5 million for the year ended February 28, 2006 to $41.6 million for the year ended February 28, 2007.
The higher effective tax rate this year was caused by a higher foreign and state income tax burden over the previous year. Our diluted earnings increased from $1.58 per share to $1.62 per share for the year ended February 28, 2006 and 2007, respectively.
For the fourth quarter, net sales increased by $5.6 million, or 4.3% from $130.5 for the three months ended February 28, 2006 to $136.1 million for the three months ended February 28, 2007. Our Print sales for the quarter were $80.7 million, compared to $78.9 million for the same quarter last year, or an increase of 2.3%. Notwithstanding the favorable effect of acquisitions on our sales, the loss of the large print segment customers discussed in previous press releases reduced our growth in sales.
Our Apparel sales during the period were $55.4 million, compared to $51.6 million for the same quarter last year, or an increase of 7.4%. The Company's margins for the quarter were 23.4% compared to 24.3% for the same quarter last year. Our Print margins were 25.0% for the quarter, compared to 22.4% for the same quarter last year. This favorable margin improvement in year over year quarterly comparisons was due to the loss of the Print Segment customers mentioned in last years' press release.
Our Apparel margins for the quarter were 21.1% compared to 27.3% for the same quarter last year. While in the prior period our Apparel margins were favorably impacted by product mix, material costs, manufacturing efficiencies and inventory reserves, all these factors unfavorably impacted our margins during the current period. While our earnings before income taxes for the quarter decreased by $0.5 million, or 3.8% from $13.2 million, or 10.1% of sales, to $12.7 million, or 9.3% of sales, due to a higher effective tax rate this quarter over the same quarter last year, our net earnings for the quarter decreased by $1.5 million, or 16.1% from $9.3 million for the three months ended February 28, 2006 to $7.8 million for the three months ended February 28, 2007.
While as mentioned above our overall effective tax rate for the year was higher than last year due to increased provision for foreign and state income taxes, the previous years' quarter was favorably impacted by a revised estimate in our manufacturer's job and foreign tax credits which caused our effective tax rate for the quarter to be approximately 29.4% compared to 38.6% for the current period.
Our diluted earnings for the three months ended February 28, 2007 were $.30 per share, compared to $.36 per share for the three months ended February 28, 2006. Without the impact of the higher effective tax rate this period, our diluted earnings per share for the quarter would have been $.35 per share.
The Company generated approximately $18.3 million in EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter compared to $19.2 million for the comparable quarter last year, and $90.4 million for the year ended February 28, 2007 compared to $90.6 million for the comparable period last year.
Keith Walters, Chairman, President & CEO, commented by saying, "Given the challenging environment in the Print and Apparel segments this year we are pleased with our fiscal year results. The Print segment continues to operate in a contracting and challenging industry. One of the Print segment's facilities had revenue declines exceeding 50% from the previous year through the loss of two major customers.
"The loss of these customers, as discussed in previous releases, had an impact on our organic sales growth but improved our margins. During the year, we were able to successfully complete two acquisitions in the Print Segment which added $30.3 million to our sales and $.07 to our earnings per share. Our Print segment's material costs increased in bond and specialty papers significantly compared to increases over the last decade. The market only allowed us to pass some of these increases on to our customers in a timely manner.
"In addition, the sales decline reduced overhead absorption which negatively impacted our profits during the quarter. Our Apparel sector experienced material cost increases as well. Yarn cost increased 4% this fiscal year. Market factors would not allow us to pass these costs through to our customers, which significantly impacted our margins during the quarter. One of those factors was the high level of inventory held by some of our competitors. We will continue to explore opportunities to reduce the cost of our domestic apparel knitting and dyeing operations to further reduce this component of our manufacturing costs. Notwithstanding the challenges to our Company discussed above, we are proud of the fact that we produced record sales and profits for our shareholders this fiscal year."
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