Two different recent Press Releases from Ennis are reprinted in this blog post. One deals with Ennis’ recently reported financial results; the other one announces Ennis’ acquisition of Printgraphics.
I would not normally post on Reprographics 101 financial results (or comments) about a company that’s not in the “reprographics” industry, but, in this case, I’ve done that, simply because of a comment Ennis’ CEO made in the financial results press release:
In the first press release reprinted below, Ennis’ CEO says, “The new manufacturing facility in Agua Prieta, MX is fully operational and all production has now been transitioned from our Anaheim, CA facility to this facility.” While that “transition” might be good for Ennis’ bottom line, that’s not a good sign for the U.S. job market. More U.S. jobs moving outside of the U.S.
Many years ago, early in my career in the reprographics business, we did operate an “offset printing” division (well, I should really call it a “department” rather than a “division.”) In conjunction with our offset printing business, we were a “reseller” of Ennis business forms. They were a great company to deal with – quick on quotes and fantastic on delivery of completed jobs.
Here are the two Press Releases:
“Ennis Reports Results for Three and Six Months End”
Wednesday, September 28, 2011
Press release from the issuing company
Midlothian, - Ennis, Inc., today reported financial results for the three and six months ended August 31, 2011.
Financial Overview For the quarter, consolidated net sales decreased by $12.6 million, or 8.8%, from $143.0 million for the quarter ended August 31, 2010 to $130.4 million for the quarter ended August 31, 2011. Print sales for the quarter were stable at $69.2 million, compared to $69.1 million for the same quarter last year. Due to unexpected softness in the market, Apparel sales for the quarter ended August 31, 2011 were $61.2 million, compared to $73.9 million for the same quarter last year, or a decrease of 17.2%. Overall gross profit margins ("margins") decreased from 27.8% to 26.1% for the quarters ended August 31, 2010 and August 31, 2011, respectively. Print margins increased during the period from 28.2% to 28.6%, while Apparel margins due to higher input costs decreased from 27.4% to 23.4%. Net earnings for the quarter decreased from $12.1 million, or 8.5% of sales, for the quarter ended August 31, 2010 to $9.7 million, or 7.4% of sales, for the quarter ended August 31, 2011. Diluted EPS decreased from $0.47 per share to $0.37 per share for the quarters ended August 31, 2010 and August 31, 2011, respectively.
For the six month period, net sales decreased from $283.8 million for the six months ended August 31, 2010 to $273.6 million for the six months ended August 31, 2011, or 3.6%. Print sales for the period again remained relatively stable at $136.3 million, compared to $136.9 million for the same period last year. Apparel sales for the period were $137.3 million, compared to $146.8 million for the same period last year, or a decrease of 6.5%. Overall margins decreased from 28.9% to 27.0% for the six months ended August 31, 2010 and 2011, respectively. Print margins decreased slightly during the period from 29.2% to 28.7%, while Apparel margins decreased from 28.5% to 25.3%, again due to higher raw material costs. Net earnings for the period, decreased from $25.2 million, or 8.9% of sales, for the six months ended August 31, 2010 to $21.1 million, or 7.7% of sales, for the six months ended August 31, 2011. Diluted earnings decreased from $0.97 per share to $0.81 per share for the six months ended August 31, 2010 and 2011, respectively.
The Company, during the quarter, generated $19.0 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $22.2 million for the comparable quarter last year. For the six month period ended August 31, 2011, the Company generated $40.9 million of EBITDA during the period, compared to $46.0 million for the comparable period last year.
Keith Walters, Chairman, Chief Executive Officer and President, commented by saying, "Overall the operational results for the quarter were as expected. Print continued to deliver steady revenue levels and operational results, while margins in our Apparel division were compressed some, due to higher raw material costs. Our Apparel raw material cost, on a comparable basis, was up approximately 50%, with continued increases expected over the next six months as the impact of the higher priced cotton makes its way through inventory. What wasn't expected was the softness in the market during the last quarter. Whether this is just a temporary situation or one we will have to manage for an extended period of time is unknown. As we indicated previously, manufacturers' ability to navigate through this period of higher cotton costs was dependent upon many factors, one being the continued economic recovery. The current softness in the marketplace will make this an even more challenging task for all concerned. The new manufacturing facility in Agua Prieta, MX is fully operational and all production has now been transitioned from our Anaheim, CA facility to this facility. So while many challenges have been negotiated to date, many challenges and uncertainties continue to mark the short term landscape. However, as always, we will remain vigilant to the task at hand."
“Printgraphics Acquired By Ennis”
Tuesday, October 04, 2011
Press release from the issuing company
Ennis, Inc. ("Ennis"), has acquired all of the stock of Printgraphics, Inc. as of October 1, 2011. Printgraphics has two locations, Vandalia, Ohio and Nevada, Iowa, both of which will continue producing their current products and services. Printgraphics has been a leading wholesale manufacturer of fully integrated document solutions for over 33 years and is now recognized as the 21st largest and 14th fastest growing company in our industry.
Paul Curry, President of Printgraphics, will continue in his role and noted, "We are extremely pleased to announce that Printgraphics has become part of the Ennis family of companies effective October 1, 2011. Ennis is one of the largest and most highly successful printing resellers in the industry. The acquisition of Printgraphics by Ennis will ensure the continued growth of the company into the future by allowing us to take advantage of their vast network of suppliers and economic strength."
"It is also important to note that our customers will essentially see no change in their daily interaction with Printgraphics. The Ennis business model will allow us to operate as an autonomous business unit. This means our name and all of the associates at Printgraphics that have earned your trust over our long history will continue to be here to serve you now and into the future."
Keith Walters, Chairman, President and CEO of Ennis also noted, "We are very happy to have Printgraphics join the Ennis organization. We are delighted to have Paul and his team continue to work with the Printgraphics customers and continue their fine tradition of quality products and service. As we have done with our other acquisitions, Printgraphics' customers will see no change in their daily interaction with Printgraphics."
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