Ennis, Inc., parent company of several industry suppliers, including Folder Express (PPAI 354129), Independent Folders (PPAI 111993) and Admore, Inc. (PPAI 111144), has issued a statement on its financial performance for its fiscal year 2020’s first quarter, which ended May 31. The Midlothian, Texas-based company reports revenues of $108 million compared to $93.4 million for the same quarter last year, an increase of $14.6 million, or 15.6 percent. Its gross profit margin for the quarter was $32.7 million, or 30.3 percent, as compared to $30.2 million, or 32.3 percent 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 and $0.36 per diluted share one year ago.
“We are pleased with our performance for the first quarter of fiscal year 2020,” says Keith Walters, chairman, CEO and president. “Our gross profit margin showed a nice improvement over the sequential quarter increasing from 28.9 percent to 30.3 percent, as did EBITDA [Earnings Before Interest, Tax, Depreciation And Amortization], which increased over the sequential quarter from $15.4 million to $17.7 million, representing 15.3 percent and 16.4 percent 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.”
Walters adds, “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.”
