Ennis Reports Growing Revenues In Third-Quarter Review

Ennis, Inc.—parent company of suppliers Independent Printing & Packaging (PPAI 111993, S2), Folder Express (PPAI 354129, S1) and Admore, Inc. (PPAI 111144, S10)—has released financial results for its fiscal third quarter, which ended November 30. Midlothian, Texas-headquartered Ennis reports revenues up over the same period last year by more than 10 percent.

Revenues for the third quarter were $103 million, compared to $92.4 million for the same quarter last year, an increase of $10.6 million, or 11.5 percent. Gross profit margin was $29.2 million, or 28.4 percent, as compared to $28.1 million, or 30.4 percent, last year, and net earnings for the quarter were $7.6 million, or $0.29 per diluted share, as compared to $8.4 million, or $0.32 per diluted share.

Ennis reports that revenues for the nine-month period which ended November 30 were $300.3 million, compared to $268.1 million for the same period last year, an increase of $32.2 million or 12 percent. Gross profit margin was $87.3 million, or 29.1 percent, up from $77.2 million, or 28.8 percent for the nine-month period that ended November 30, 2020. Net earnings for the first nine months of 2021 were $22.3 million, or $0.85 per diluted share compared to $19 million or $0.73 per diluted share for the same period last year, an increase of $3.3 million or $0.12 per diluted share.

“Our results for the quarter were within our expectations,” says Keith Walters, chairman, CEO and president. “Our recent acquisitions added approximately $7.8 million in revenues and $0.03 in diluted earnings per share for the quarter and $19.7 million in revenues and $0.07 in diluted earnings per share for the nine-month period, and our EBITDA margin was consistent in the low- to mid-15-percent range. Our gross profit margin percentage, 28.4 percent for the current quarter and 30.4 percent for the prior-year quarter, continues to be impacted by inflationary factors as well as the consolidation of a few of our underperforming manufacturing facilities. While our labor force has declined since last year by 4.6 percent, our cost of labor has increased 11.6 percent.”

Walters also explained that several factors have led to shortcomings in the supply of printing and writing papers. Those factors include disruption in production at one large paper plant due to fatal accidents, delays in converting plants to printing and writing papers from other papers, closing of facilities and moving to containerboard production, and the continued logistics problems of importing foreign paper. In turn, prices have been driven higher. He noted that uncoated papers are up 20 percent from November of last year, and likely to move up and last longer at those levels through next year, while coated papers are up 25 percent from November of last year with further price increases likely.

While paper mills are now operating at a very high capacity, they are basically producing to fill orders rather than stock inventory and are struggling to achieve that goal of restocking,” Walters says. “While the availability of paper in the North American market is tighter than it has been in a long time, our strong vendor relationship with our paper supplier allows us to meet customer demand for their business product needs. We also have been adjusting our pricing to cover paper inflation during the year, but the increasing backlog of unproduced orders creates timing issues which continues to have an impact on our gross profit margin. To account for those other inflationary factors, we anticipate that backlogged shipments when billed, and further pricing adjustments will bring our gross profit margins back to their historical levels.”

filed under December 2021 | Ennis
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