Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the third quarter ended November 30, 2021.
Highlights include:
*Revenues were $103.0 million for the quarter compared to $92.4 million for the same quarter last year, an increase of $10.6 million or 11.5%.
*Earnings per diluted share for the current quarter were $0.29 compared to $0.32 for the comparative quarter last year, a decrease of 9.4%.
*Our gross profit margin for the quarter was 28.4% compared to 30.4% for the comparative quarter last year.
Financial Overview
The Company’s revenues for the third quarter ended November 30, 2021 were $103.0 million compared to $92.4 million for the same quarter last year, an increase of $10.6 million, or 11.5%. Gross profit margin was $29.2 million, or 28.4%, as compared to $28.1 million, or 30.4%, for the same quarter last year. 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, for the same quarter last year.
The Company’s revenues for the nine-month period ended November 30, 2021 were $300.3 million compared to $268.1 million for the same period last year, an increase of $32.2 million or 12.0%. Gross profit margin was $87.3 million, or 29.1%, as compared to $77.2 million, or 28.8% for the nine-month periods ended November 30, 2021 and November 30, 2020, respectively. Net earnings for the nine-month period ended November 30, 2021 were $22.3 million, or $0.85 per diluted share compared to $19.0 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.
Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, “Our results for the quarter were within our expectations. 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% range. Our gross profit margin percentage, 28.4% for the current quarter and 30.4% 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%, our cost of labor has increased 11.6%. The supply of Printing and Writing (“P&W”) papers have been severely curtailed by a number of factors. Those factors include disruption in production at one large paper plant due to fatal accidents, delays in converting plants to P&W papers from other papers, closing of facilities and moving to containerboard production and the continued logistics problems of importing foreign paper. All of these factors have severely constricted the availability of P&W papers driving prices higher. Uncoated papers are up 20% from November of last year, and likely to move up and last longer at those levels through next year. Coated papers are up 25% 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. 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.
We are in the process of consolidating a few of our underperforming manufacturing facilities into existing locations with excess capacity to reduce future costs and improve our operational efficiency. These additional costs incurred impacted the quarter approximately $1.4 million or $0.04 in diluted earnings per share. We also recognized $0.7 million in pension settlement charges or $0.02 in diluted earnings per share. The settlement charges are non-cash charges that accelerate the recognition of unrecognized pension benefit cost that would have been incurred in subsequent periods when plan payments, primarily lump sums from qualified pension plans exceed a threshold of service and interest cost for the period.
more detail at: https://www.ennis.com/press-releases/financial/ennis-inc-reports-results-for-the-quarter-ended-november-30-2021-and-declares-quarterly-dividend/