On April 21, 2025, Ennis Inc (EBF, Financial) released its 8-K filing detailing the financial results for the quarter and fiscal year ended February 28, 2025. Ennis Inc, a prominent manufacturer and supplier of print products for the wholesale trade, reported a decline in both quarterly and annual revenues compared to the previous year.
Company Overview
Ennis Inc is a leading provider of print products, including advertising specialties, business forms, commercial printing, and eCommerce solutions. The company's diverse product range includes snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, and more, marketed under various labels such as Ennis, Royal Business Forms, and Block Graphics.
Financial Performance and Challenges
For the fourth quarter, Ennis Inc reported revenues of $92.7 million, a 4.8% decrease from the $97.4 million recorded in the same quarter last year. This figure fell short of the analyst estimate of $95.60 million. The company's earnings per diluted share (EPS) for the quarter were $0.35, below the estimated $0.37 and down from $0.39 in the previous year. Annually, revenues decreased by 6.1% to $394.6 million, missing the estimated $397.52 million. EPS dropped to $1.54 from $1.64, slightly under the estimated $1.56.
Key Financial Achievements
Despite the revenue decline, Ennis Inc achieved a gross profit margin increase for the quarter, rising to 29.5% from 28.4% in the previous year. This improvement is significant in the industrial products sector, where maintaining profitability amidst competitive pricing pressures is crucial. The annual gross profit margin remained relatively stable at 29.7%, compared to 29.8% last year.
Income Statement and Balance Sheet Highlights
Ennis Inc's net earnings for the quarter were $9.0 million, compared to $10.1 million in the same quarter last year. The company's EBITDA for the quarter was $16.5 million, representing 17.8% of sales, down from $18.1 million or 18.6% of sales in the previous year. The balance sheet remains strong with $72.5 million in cash and short-term investments, and no debt, positioning the company well for future acquisitions.
Keith Walters, Chairman, CEO, and President, commented, “Our performance for the quarter met our expectations. While competitive pricing placed downward pressure on our top line resulting in reduced volume, our gross profit margin showed an increase of 20 basis points from the sequential quarter, increasing from 29.3% to 29.5% and an increase of 110 basis points compared to 28.4% in the same prior year quarter.”
Cash Flow and Shareholder Returns
Ennis Inc generated $65.9 million in cash from operating activities for the fiscal year. The company returned $92.0 million to shareholders in dividends, including a special dividend of $2.50 per share. This reflects the company's commitment to returning value to shareholders while maintaining a robust financial position.
Analysis and Outlook
Ennis Inc's financial results highlight the challenges of competitive pricing and declining volumes in the print products industry. However, the company's strong gross profit margins and cash position provide a solid foundation for future growth and acquisitions. The implementation of ERP systems in recent acquisitions is expected to enhance margins further, although some acquisitions have yet to meet profit expectations. The company's focus on maintaining a debt-free balance sheet and exploring acquisition opportunities positions it well for long-term success.
Explore the complete 8-K earnings release (here) from Ennis Inc for further details.
