Exhibit 99
(Ennis Logo)
Press Release
2441 Presidential Parkway (bullet) Midlothian, Texas 76065
(bullet) Phone 972.775.9801 (bullet) Fax 972.775.9820
FOR IMMEDIATE RELEASE FOR ADDITIONAL INFORMATION
CONTACT: Keith S. Walters,
Chairman, President & CEO
(800) 752-5386
Midlothian, Texas, June 15, 2005
ENNIS, INC. REPORTS FIRST QUARTER FISCAL 2006 RESULTS
Midlothian, Texas. -- Ennis, Inc. (NYSE: EBF) today reported
financial results for the first fiscal quarter ended May 31,
2005.
(bullet) Sales Increased $83.4 million over same quarter prior
year
(bullet) 130% Increase in Profits from $4.6 million to $10.6
million
(bullet) Growth in diluted EPS of $0.41 per share, 51% greater
than last year & previous quarter
Financial Overview
- ------------------
For the first quarter of fiscal 2006, net sales were $149.1
million compared to $65.7 million in the comparable quarter last
year, or an increase of $83.4 million. Net Sales for quarter
ended May 31, 2005 were 10.8% higher than the previous quarter's
sales of $134.5 million. Net income of $10.6 million for the
quarter ended May 31, 2005 increased by $6.0 million over the
prior year's quarterly level of $4.6 million, and by $3.6 million
over the previous quarter ended February 28, 2005. Diluted
earnings per share for the quarter ended May 31, 2005 were $0.41
compared to $0.27 in the quarters ended May 31, 2004 and February
28, 2005. As mentioned in the 10K for the fiscal year ended
February 28, 2005 profits in the apparel segment are strongest in
the first and second fiscal quarters for the Company. Profits in
the printing segment tend to be consistent from quarter to
quarter, absent the gain or loss of large customers.
The Company generated $23.9 million in EBITDA (earnings before
interest, taxes, depreciation and amortization) for the first
quarter of fiscal year 2006 compared to $9.8 million in the
comparable quarter of fiscal year 2005 and $18.0 million for the
quarter ended February 28, 2005. The increase of 143.9% in the
current quarter over the previous year's quarter was due
primarily to the acquisitions of Alstyle Apparel, Crabar/GBF and
Royal Business Forms.
Keith Walters, Chairman, President & CEO, commented by saying,
"we are delighted that the pro forma financial impact of the
merger with Alstyle, as set forth in the S-4 filed in September
of last year, have been exceeded by our first quarter results.
We continue to feel that this merger will continue to provide
increased value for our shareholders as the Company retires the
acquisition debt as quickly as the associated cash flows will
permit."
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Liquidity
During the fiscal quarter, the Company paid down a total of $14
million on the debt leaving a combined balance of $120 million in
funded debt at quarter end May 31, 2005. The Company continues to
believe that the debt generated from last year's acquisitions
will be retired in the three to four-year timeframe.
Print Solutions Performance
Sales in the Print Solutions Segment were $80.7 million for the
first fiscal quarter of 2006, up 22.8% over the prior year's
comparable quarter, primarily due to the Crabar/GBF and Royal
acquisitions. The Print Solutions Segment is comprised of sales
and profits of the Forms Solutions Group, Promotional Solutions
Group and Financial Solutions Group. Sales in the Forms
Solutions and Promotional Solutions Group increased due to
acquisitions of Crabar/GBF and Royal as well as an increase in
new business in the Promotional Solutions Group. The Financial
Solutions Group sales were flat in the current quarter compared
to the comparable quarter last year. The Print Solutions Segment
generated $13.3 million in EBITDA for the quarter ended May 31,
2005 compared to $11.5 million in the previous fiscal years
quarter, an increase of 15.7%. This increase was due to
acquisitions previously mentioned as well as the growth in sales
in the Promotional Products arena.
Apparel Solutions Performance
Sales in the Apparel Solutions Segment were $68.4 million for the
first fiscal quarter of 2006, an increase of 32.3% over the
previous quarter's sales of $51.7 million, or $16.7 million.
EBITDA generated by the Apparel Segment was $12.6 million or 80%
higher than the previous quarter amount of $7.0 million. This
increase was due to the seasonal increase in sales.
Selling, general and administrative (SG&A) expenses were $17.8
million or 12.0% of net sales, compared to $9.4 million or 14.3%
of net sales in the prior year quarter ended May 31, 2004. SG&A
in the previous quarter ended February 28, 2005 was $18.1 million
or 13.4% of net sales. The increase in SG&A of $8.4 million over
the prior year was primarily the result of the acquisitions of
Crabar/GBF, Royal and Alstyle Apparel. The Company continues to
focus on ways to reduce SG&A expenses from its acquisitions to
further enhance the profitability to the Company and improve its
cash flow to further reduce the acquisition debt.
Operational Issues
During the quarter, the Company has improved the internal
controls and its financial oversight of accounting matters of
Alstyle. Issues related to the financial reporting process
at fiscal year-end 2005 prompted the auditors to inform the Audit
Committee of a material weakness in the financial reporting
process of Alstyle. Corporate personnel of the Company closely
monitored the accounting processes of Alstyle for the quarter
ended May 31, 2005. Consequently, the financial close was
completed on a timely basis with no adjustments. The Company
feels it has satisfactorily addressed this material weakness and
plans to continue to provide close financial oversight in future
periods. Additionally, the Company reported a material weakness
related to the recording of assets involved in the acquisition
of Alstyle. The Company has improved its communication processes
and procedures related to acquisitions and feels that this
weakness, although isolated to one instance, has been remediated.
Additionally, the Company finished the closing of the Dayton,
Ohio administrative center for Crabar/GBF and the Edison, New
Jersey facility. With regard to the Edison closing, the Company
has relocated some people, equipment and sales to other locations
on the east coast. The Company
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also took advantage of the additional space available in its
Anaheim facility to relocate its Bell, California facility for
Admore into the additional space. The Cerritos facility for
GenForms will also relocate into the Anaheim facility during the
second quarter of this year.
About Ennis
- -----------
Ennis, Inc. (www.ennis.com) (formerly Ennis Business Forms,
Inc.) is primarily engaged in the production of and sale of
business forms, apparel and other business products. The Company
is one of the largest private-label printed business product
suppliers in the United States. Headquartered in Midlothian,
Texas, the Company has 41 production and distribution facilities
located throughout 16 states, Mexico and Canada, strategically
located to serve the Company's national network of distributors.
The Company, together with its subsidiaries, operates in two
business segments: the Printing Segment and Apparel Segment.
There are three groups within the Printing Segment: the Forms
Solutions Group, Promotional Solutions Group, and Financial
Solutions Group. The Apparel Segment consists entirely of the
Apparel Solutions Group. The Forms Solutions Group is primarily
engaged in the business of manufacturing and selling business
forms and other printed business products. The Promotional
Solutions Group is primarily engaged in the business of design,
production and distribution of printed and electronic media,
presentation products, flexographic printing, advertising
specialties and Post-it (registered trademark) Notes. The
Financial Solutions Group designs, manufactures and markets
printed forms and specializes in internal bank forms, secure and
negotiable documents and custom products. The Apparel Solutions
Group manufactures T-Shirts and distributes T-Shirts and other
activewear apparel through six distribution centers located
throughout North America.
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ENNIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
May February
2005 2005
---- ----
Assets
CURRENT ASSETS:
Cash and cash equivalents $ 6,894 $ 10,694
Accounts receivable, net 45,340 46,685
Inventories 75,639 79,900
Other current assets 12,361 11,894
------- -------
Total current assets 140,234 149,173
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 72,627 72,019
GOODWILL, NET 178,838 178,472
OTHER ASSETS 95,329 97,582
------- -------
$487,028 $497,246
======= =======
Liabilities and Shareholders' Equity
CURRENT LIABILITIES:
Current installments of long-term debt $ 17,860 $ 21,702
Accounts payable 29,378 33,887
Accrued expenses 20,770 24,405
Federal and state income tax payable 7,103 1,389
------- -------
Total current liabilities 75,111 81,383
------- -------
LONG-TERM DEBT,
LESS CURRENT INSTALLMENTS 102,149 112,342
DEFERRED CREDITS, PRINCIPALLY
FEDERAL INCOME TAXES 31,140 31,790
SHAREHOLDERS' EQUITY:
Preferred stock, at par value -- --
Common stock, at par value 75,134 75,134
Additional paid in capital 123,640 123,640
Retained earnings 162,975 156,666
Accumulated other comprehensive
income (loss) (16) 6
------- -------
361,733 355,446
Treasury stock 83,105 83,715
------- -------
Total shareholders' equity 278,628 271,731
------- -------
$487,028 $497,246
======= =======
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ENNIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Thousands Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended May, 2005 2004
---- ----
NET SALES $149,113 $ 65,736
------- -------
COSTS AND EXPENSES:
Cost of sales 111,635 48,676
Selling, general and
administrative expenses 17,837 9,386
------- -------
129,472 58,062
------- -------
EARNINGS FROM OPERATIONS 19,641 7,674
OTHER (EXPENSE):
Interest expense (2,243) (134)
Other expense, net (90) (76)
------- -------
(2,333) (210)
------- -------
EARNINGS BEFORE INCOME TAXES 17,308 7,464
PROVISIONS FOR INCOME TAXES 6,750 2,882
------- -------
NET EARNINGS $ 10,558 $ 4,582
======= =======
PER SHARE AMOUNTS:
Net earnings - basic $ 0.42 $ 0.28
======= =======
Net earnings - duluted $ 0.41 $ 0.27
======= =======
Cash dividends per share $ 0.155 $ 0.155
======= =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING - BASIC 25,426,595 16,406,631
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
DILUTED 25,692,557 16,694,550
========== ==========
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ENNIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
May,
2005 2004
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 10,558 $ 4,582
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization 4,387 2,242
Gain on sale of property, plant
and equipment (2) (3)
Changes in operating assets and
liabilities 3,811 4,857
------- -------
Net cash provided by
operating activities 18,754 11,678
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,521) (2,139)
Additional costs related to
acquisition (366) -
Proceeds from disposal of property 7 7
------- -------
Net cash used in investing
activities (4,880) (2,132)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issued 5,000 -
Repayment of debt issued (19,035) (1,500)
Issue (purchase) of treasury shares,
net 301 282
Dividends (3,940) (2,542)
------- -------
Net cash used in financing
activities (17,674) (3,760)
------- -------
NET CHANGE IN CASH AND EQUIVALENTS (3,800) 5,786
CASH AND EQUIVALENTS AT BEGINNING OF
PERIOD 10,694 15,067
------- -------
CASH AND EQUIVALENTS AT END OF PERIOD $ 6,894 $ 20,853
======= =======
This news release contains statements relating to future results
of the company including statements (i) that the Company expects
to retire the acquisition debt in the three to four-year time
frame, (ii) that this merger will continue to provide increased
value for our shareholders as the Company retires the acquisition
debt as quickly as the associated cash flows will permit, (iii)
that the Company feels that it has addressed previously
reported material weaknesses, (iv) that the Company continues to
focus on ways to reduce SG&A expenses from its acquisitions to
further enhance the profitability to the Company and improve its
cash flow to further reduce the acquisition debt, as well as
other anticipated, believed, planned, forecasted, expected,
targeted and estimated results and the company's outlook
concerning future results, that are "forward-looking statements"
as defined in the U.S. Private Securities Litigation Reform Act
of 1995. Readers are cautioned not to place undue reliance on
these forward-looking statements and any such forward-looking
statements are qualified in their entirety by reference to
the following cautionary statements. All forward-looking
statements speak only as of the date hereof and are based on
current expectations and involve a number of assumptions, risks
and uncertainties that could cause the actual results to differ
materially from such forward-looking statements.
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