Ennis Reports Pandemic’s Impact On Q2 Financials, First Six Months Of Fiscal 2020
Ennis, Inc. has issued financial results for its second quarter and the six months that ended August 31, reporting revenues of $86.6 million for the quarter, down 20.4 percent from second quarter 2019’s $108.8 million. Similarly, revenues at the Midlothian, Texas-headquartered company—parent company of several industry suppliers, including Folder Express (PPAI 354129, S1), Independent Folders (PPAI 111993, S2) and Admore, Inc. (PPAI 111144, S10)—for the first six months of the fiscal year were $175.6 million, compared to $216.9 million during the same period last year, a decrease of 19 percent.
Ennis’ gross profit margin was $25.2 million for the quarter, or 29 percent, as compared to $32.5 million, or 29.8 percent for the second quarter last year. Net earnings for the quarter were $6.4 million, or $0.25 per diluted share compared to $9.5 million, or $0.37 per diluted share last year. While net earnings for the quarter were down on a comparable basis, they were up 56 percent from $0.16 per diluted share for the sequential quarter.
The company’s margin for the six-month period ended August 31, 2020, was $49.1 million, or 27.9 percent, as compared to $65.2 million, or 30 percent for the six-month period that ended August 31, 2019. Net earnings for the six-month period were $10.6 million, or $0.41 per diluted share compared to $19.2 million, or $0.74 per diluted share for the same period last year.
“While our results continue to be significantly impacted by the COVID-19 pandemic, they continue to be within our expectations,” says Keith Walters, chairman, CEO and president. “During the second quarter, we continued to make significant advances in right-sizing our organization, which resulted in a 210 basis point improvement over our sequential quarter’s gross profit margin (from 26.9 percent to 29 percent), a $1.6 million decrease in our sequential quarter’s SG&A expenses, an increase in our sequential quarter’s cash position of over $8 million, and an increase in our sequential quarter’s EBITDA percent of sales from 11.3 percent to 15.1 percent.”
Walters adds, “The U.S. economy continues to be significantly impacted by the COVID-19 pandemic and while parts of the economy have started to re-open, unemployment rates continue to be extremely high and consumer optimism remains low. We continue to monitor incoming order volumes so that we can proactively adjust our costs accordingly. Although no one is sure of the exact timing of an economic recovery, we will continue to stay focused during this period of economic and social unrest. We will continue to explore acquisitions that make sense and hunt for new sales in new markets and new channels. We will focus, as always, on maintaining our dividend. We expect that our strong balance sheet and strong free-cash flow position should provide us with the means to accomplish these objectives.”