Form 10-Q for Ennis, Inc. and Subsidiaries for the Period Ended November 30, 2024

Press release · 01/07 20:41
Form 10-Q for Ennis, Inc. and Subsidiaries for the Period Ended November 30, 2024

Form 10-Q for Ennis, Inc. and Subsidiaries for the Period Ended November 30, 2024

Ennis, Inc. reported its quarterly financial results for the period ended November 30, 2024. The company’s revenue increased by 4.5% to $143.1 million, driven by growth in its print and promotional products segments. Net income rose to $12.1 million, or $0.46 per diluted share, compared to $10.3 million, or $0.39 per diluted share, in the same period last year. The company’s gross profit margin expanded by 120 basis points to 24.5%, while its operating margin increased by 140 basis points to 8.5%. Ennis, Inc. ended the quarter with cash and cash equivalents of $34.1 million and total debt of $143.5 million. The company’s financial position remains strong, with a current ratio of 2.3 and a debt-to-equity ratio of 0.6.

Overview of Ennis, Inc.’s Financial Performance

Ennis, Inc. is a leading manufacturer and distributor of business forms, labels, tags, envelopes, and other printed business products in the United States. The company operates 57 manufacturing plants across 20 states and sells its products primarily through independent distributors.

Revenue and Profit Trends

  • For the three months ended November 30, 2024, Ennis reported net sales of $99.8 million, a decrease of 4.6% compared to the same period in the prior year. This was due to weaker volume demand at legacy plants, partially offset by increased revenues from recent acquisitions.

  • Gross profit margin for the quarter was 29.3%, relatively flat compared to 29.2% in the prior year quarter. However, it declined 80 basis points sequentially from the previous quarter, as softening demand and more competitive pricing put downward pressure on margins.

  • For the nine months ended November 30, 2024, net sales were $301.9 million, a decrease of 6.4% compared to the same period in 2023. Gross profit margin for the nine-month period was 29.8%, down from 30.3% in the prior year.

  • The decline in sales and margins was attributed to increased competition, customer transitions from print to digital products, and generally softer market conditions.

Strengths and Weaknesses

Strengths:

  • Diversified product portfolio including business forms, labels, tags, envelopes, and other printed materials
  • Extensive manufacturing footprint with 57 plants across 20 states
  • Strong relationships with independent distributors

Weaknesses:

  • Declining demand for traditional business forms due to digitization
  • Increased price competition in certain product lines
  • Consolidation among customer base of distributors

Outlook

  • Ennis is focused on transforming its product portfolio to adapt to the changing industry landscape, including investing in new technologies and pursuing strategic acquisitions.
  • The company is also focused on managing costs, leveraging its fixed costs, and maintaining margins through pricing strategies.
  • While the near-term outlook remains challenging due to soft market conditions and competitive pressures, Ennis believes its strong liquidity position and cash flow generation will allow it to weather the current environment and position the company for future growth opportunities.