Post Earnings Coverage as Ennis Q2 Results Outperform Expectations

LONDON, UK / ACCESSWIRE / October 3, 2016 / Active Wall St. announces its post-earnings coverage on Ennis Inc. (NYSE: EBF). The company posted its financial results for the second quarter fiscal 2017 (Q2 FY17) and first half fiscal 2017 (H1 FY17) on September 27, 2016. The Midlothian, Texas-based company reported better-than-expected net sales and quarterly earnings numbers in Q2 FY17. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the three months ended on August 31, 2016, Ennis’ net sales from continuing operations were $91.25 million, down 9.3% from $100.46 million reported in the prior year’s corresponding quarter. Net sales from continuing operations topped analysts’ forecasts by $1.52 million.

Ennis’s earnings from continuing operations for Q2 FY17 came in at $6.78 million, or $0.26 per diluted share, compared to $9.61 million, or $0.37 per diluted share, in Q2 FY16. The company’s adjusted net earnings from continuing operations for Q2 FY17 stood at $8.97 million, or $0.35 per diluted share, above analysts’ expectations of $0.26 per diluted share.

During H1 FY17, the wholesale printing and apparel manufacturers’ net sales from continuing operations declined 7.9% to $181.66 million from $197.22 million recorded in the comparable year ago period. Ennis reported earnings from continuing operations of $13.47 million, or $0.52 per diluted share, for H1 FY17 compared to $18.37 million, or $0.95 per diluted share, in H1 FY16.

“The financial performance for the quarter was an improvement over the sequential quarter’s results,” said Keith Walters, Chief Executive Officer and President of Ennis Inc., “Overall, the business climate remains challenging, as we face predatory pricing, among other factors. However, we continue to believe we are well positioned to not only provide our customers quality products, but products that are competitively priced.”

Operating Metrics

In Q2 FY17, Ennis’ non-GAAP EBITDA was $14.18 million, or 15.5% of net sales, compared to $18.38 million, or 18.3% of revenues, in the year ago quarter. For Q2 FY17, gross profit margin form continuing operations came in at $27.04 million, or 29.6% of net sales, versus $31.36 million, or 29.5% of net sales in Q2 FY16.

During the reported quarter, the relocation expenses related to the company’s Folder Express operation and $2.3 million charge for higher than normal medical expenses negatively impacted the operations.

Cash Flow & Balance Sheet

During the first half of fiscal 2016, the company generated $29.08 million of cash from operating activities compared to $60.19 million in the prior-year’s comparable period. As on August 31, 2016, the company had $85.23 million in cash and cash equivalents compared to a balance of $7.96 million as on February 29, 2016. Additionally, the company reported long-term debt of $30.00 million in its books as on August 31, 2016 down from $40.00 million as on February 29, 2016.

Share Repurchases and Dividends

Ennis repurchased approximately 104,000 shares of its common stock at an average price of $17.22 per share during the reported quarter. The company’s management has announced a quarterly dividend of 17 1/2 cents a share on its common stock, which will be paid on November 07, 2016, to all the shareholders registered on records as of the close of business on October 14, 2016.

Stock Performance

On Friday, September 30, 2016, Ennis’ shares was slightly down 0.59%, finishing the day at $16.85 with volume of 186.45 thousand shares exchanging hands by the close of the trading session, which was higher than the 3 months average volume of 173.91 thousand shares.. For the last one month, the stock has gained 1.63%. Furthermore, in the last twelve months, the stock gained 6.77%. The stock is trading at a PE ratio of 14.99 and has a dividend yield of 4.15%.

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