Ennis Reports Revenue Gains for Both Fourth Quarter and Fiscal Year Ended February 2023
Ennis, Inc. (the “Company”), (NYSE: EBF), reported financial results for the quarter and fiscal year ended February 28, 2023. Highlights include:
- Revenues were $102.7 million for the quarter, an increase of $3.0 million or 3.0% over last year's fourth quarter and $431.8 million for the fiscal year, an increase of $31.8 million, or 8.0% over last fiscal year.
- Earnings per diluted share for the current quarter were $0.47 compared to $0.26 for the same quarter last year.
- Gross profit margin was 30.3% for the fiscal year compared to 28.7% for the prior fiscal year. Gross profit margin for the quarter increased from 27.5% last year to 27.6% this year.
Financial Overview
The Company’s revenues for the fourth quarter ended February 28, 2023 were $102.7 million compared to $99.7 million for the same quarter last year, an increase of 3.0%. The increase was attributable to $1.4 million in revenues from our recent acquisition of School Photo Marketing, as well as price increases that were partially offset by volume decreases attributable in part to seasonal factors. Gross profit margin was $28.4 million, or 27.6%, as compared to $27.4 million, or 27.5% for the same quarter last year. Our gross profit margin decreased on a sequential basis from 30.4% for the third quarter ended November 30, 2022 to 27.6%. Our margin during the period was negatively impacted by a decrease in revenue volume, increased cost of material and labor, and to a lesser extent by the acquisition of School Photo Marketing at the beginning of its low margin off-season. Our net earnings for the quarter were $12.2 million, or $0.47 per diluted share as compared to $6.7 million, or $0.26 per diluted share for the same quarter last year. Quarterly net earnings results were favorably impacted by a $5.8 million gain or $0.17 per diluted share from the sale of an unused manufacturing facility.
The Company’s revenues for the fiscal year ended February 28, 2023 were $431.8 million compared to $400.0 million for the prior fiscal year, an increase of 8.0%. Gross profit margin was $131.1 million, or 30.3%, as compared to $114.7 million, or 28.7% for the prior fiscal year. Net earnings for the fiscal year were $47.3 million or $1.82 per diluted share, compared to $29.0 million, or $1.11 per diluted share for the prior fiscal year. The $5.8 million gain from the sale of an unused manufacturing facility impacted the current fiscal year results by $0.17 per diluted share.
Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, "We are pleased with our performance for the fourth quarter. Throughout our fiscal year ended February 28, 2023, we experienced strong demand for our products and navigated a challenging environment with supply chain disruptions and inflationary cost pressures not seen in decades. Our revenues and operating income for the quarter improved on a year-over-year basis. Our EBITDA increased from $60.7 million (15.2% of sales) for the fiscal year ended February 28, 2022 to $82.3 million (19.1% of sales) for the fiscal year ended February 28, 2023. In the fourth quarter, EBITDA increased from $15.8 million (15.8% of sales) to $20.5 million (19.9% of sales) over last year's fourth quarter. During the quarter we sold an unused manufacturing facility which resulted in a $5.8 million gain and increased our diluted earnings per share $0.17. Our Gross profit margin increased to 30.3% for the current fiscal year compared to 28.7% for the prior fiscal year, an increase of 1.6%. Increased foreign imports and demand declines have currently stabilized price increases of North American printing & writing paper. The extent to which import pressures remain in place will likely play a major role in price stability or decreases. We continue to monitor incoming order volumes as well as rising raw material and other input costs so that we can proactively adjust our pricing and costs accordingly. 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 as we continue to explore strategic opportunities in the acquisition arena to increase profitability."
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 twelve months ended February 28, 2023 and February 28, 2022 to the most comparable GAAP measure, net earnings (dollars in thousands).
Click to enlarge. | Credit: Ennis
In Other News
The 2023 Annual Meeting of Shareholders will be held on July 13, 2023, with a record date of May 24, 2023.
Unaudited Condensed Consolidated Financial Information
(In thousands, except share and per share amounts)
Click to enlarge. | Credit: Ennis
Click to enlarge. | Credit: Ennis
Click to enlarge. | Credit: Ennis
The preceding press release was provided by a company unaffiliated with Printing Impressions. The views expressed within do not directly reflect the thoughts or opinions of the staff of Printing Impressions.
