Ennis Inc., Midlothian, yesterday reported financial results for the second quarter ended Aug. 31, 2023.
The company’s revenues for the second quarter ended Aug. 31, 2023 were $106.8 million compared to $111.2 million for the same quarter last year, a decrease of $4.4 million, or 4.0%. Gross profit margin was $33.1 million, or 31.0%, as compared to $35.2 million, or 31.7%, for the same quarter last year. Net earnings for the quarter were $10.9 million, or $0.42 per diluted share, as compared to $12.2 million, or $0.47 per diluted share for the same quarter last year.
The company’s revenues for the six-month period ended Aug. 31, 2023 were $218.1 million compared to $218.9 million for the same period last year, a decrease of $0.8 million or 0.4%. Gross profit margin was $67.1 million, or 30.8%, as compared to $69.2 million, or 31.6% for the six-month periods ended Aug. 31, 2023, and Aug. 31, 2022, respectively. Net earnings for the six-month period ended Aug. 31, 2023 were $22.5 million, or $0.87 per diluted share compared to $23.8 million, or $0.92 per diluted share for the same period last year.
“Our results for the quarter were within our expectations,” said Keith Walters, chairman, CEO and president of Ennis Inc. “Our gross profit margin for the quarter of 31.0% is within our target range and showed improvement of 40 basis points from 30.6% in the sequential quarter ending May 31, 2023, and declined 70 basis points to 31.0% compared to 31.7% in the same prior year quarter. Our EBITDA remained relatively stable at $19.8 million or 18.5% of sales compared to the sequential quarter, $20.5 million or 18.4% of sales, and compared to the same quarter last year $21.3 million or 19.1% of sales.”
Last quarter, the company reported that a jury had awarded it $5 million in actual and punitive damages in a lawsuit against Wright Printing Company, its owner, CEO, and other employees. The award has not been recognized in the company’s financial reports due to post-verdict motions, including the company’s motion for its attorney’s fees, that are still pending before the court. The court’s rulings on the pending motions should clarify the total amount owed to the company for the jury verdict, attorney’s fees and interest. Given the financial disclosures made by the defendants, it appears that they have the financial wherewithal to satisfy most, if not all, of the eventual judgment. Accordingly, Ennis anticipates recognizing the judgment as a collectible receivable after the court rules on the pending motions. The ultimate collection of the judgment may be deferred until the defendants exhaust their appellate rights.
“We believe we have one of the strongest balance sheets in the industry, with no debt and significant cash,” Walters says. “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. We continue to focus on delivering profitability and returns to our shareholders.”
Source: Ennis Inc.
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