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Ennis, Inc. Reports Results for the Quarter Ended May 31, 2019

Press release from the issuing company

Midlothian, Tex. – Ennis, Inc. (the “Company") today reported financial results for the first quarter ended May 31, 2019.

Highlights include:

  • Revenues increased $7.3 million, or 7.2% on a sequential quarter basis and $14.6 million, or 15.6% on a comparative quarter basis.
  • Earnings per diluted share for the current quarter were $0.37 compared to $0.36 for the comparable quarter last year.

Financial Overview
The Company’s revenues for the first quarter ended May 31, 2019 were $108.0 million compared to $93.4 million for the same quarter last year, an increase of $14.6 million, or 15.6%. Gross profit margin ("margin") was $32.7 million for the quarter, or 30.3%, as compared to $30.2 million, or 32.3% for the first quarter last year. Net earnings for the quarter were $9.6 million, or $0.37 per diluted share compared to $9.2 million, or $0.36 per diluted share, for the first quarter last year.

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “We are pleased with our performance for the first quarter of fiscal year 2020. Our gross profit margin showed a nice improvement over the sequential quarter increasing from 28.9% to 30.3%, as did EBITDA which increased over the sequential quarter from $15.4 million to $17.7 million, representing 15.3% and 16.4% of sales, respectively. Our acquisitions continued to perform adding approximately $19.3 million to our comparable sales and $0.04 to our comparable earnings per diluted share. The paper supply has loosened because of the influx of imports due to the strengthening of the U.S. dollar, resulting in more paper pricing stability. With cash on hand we repurchased over 62,000 shares of our common stock in the market at an average price of $19.54 per share during the current quarter. During the quarter we also adopted the recent lease accounting pronouncement (ASU 2016-02 – topic 842) which pertains to the recognition of right-to-use assets and operating lease liabilities on our balance sheet. The impact of the adoption were increases to both our assets and liabilities by approximately $18 million, which had little impact on our balance sheet overall. We believe we continue to have one of the strongest balance sheets in the industry, with low debt and significant cash. With our low debt level and profitability, we don’t have any issues with the current deductibility of our interest expense under the new tax regulations. Given our financial position, we will continue to explore strategic opportunities as a way to profitably utilize our cash and leverage our balance sheet and when advantageous, repurchase our shares in the marketplace.”

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, the Company reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from operations before interest expense, tax expense, depreciation, and amortization). From time to time 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. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit agreement.

Reconciliations of non-GAAP financial measures reported for the quarter to the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following table. Other companies may calculate non-GAAP adjusted financial measures differently than Ennis, which limits the usefulness of the non-GAAP measures for comparison with these other companies. While management believes the Company’s non-GAAP financial measures are useful in evaluating Ennis, this information 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 first quarter of this year and the first quarter of last year to the most comparable GAAP measure, net earnings (dollars in thousands).



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