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Ennis Business Forms, Inc.$19.65$.351.81%

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 Ennis, Inc. Reports Results for the Three and Six Months Ended August 31, 2017 and Declares Quarterly Dividend
   Monday, September 25, 2017 6:30:00 AM ET

Ennis, Inc. (the "Company"), (EBF ), today reported financial results for the three and six months ended August 31, 2017. Highlights include:

-- Revenues increased $3.7 million, or 4.1% on a comparative quarter basis and $7.8 million, or 4.3% for the six month period.

-- Gross profit margin increased from 29.6% to 32.4% on a comparative quarter basis.

-- Diluted earnings per share from continuing operations increased from $0.26 to $0.34 for the quarter and from $0.52 to $0.64 for the six month period.

Financial Overview

The financial overview for the six months includes only the Company’s continuing print operations as the results of its discontinued apparel operations have not changed. The Company sold Alstyle Apparel on May 25, 2016, resulting in the print division becoming the continuing operations of the Company.

The Company’s revenues for the quarter ended August 31, 2017 were $94.9 million compared to $91.2 million for the same quarter last year, an increase of 4.1%. Gross profit margin ("margin") was $30.8 million for the quarter, or 32.4%, as compared to $27.0 million, or 29.6% for the second quarter last year. Net earnings for the current quarter were $8.5 million, or $0.34 per diluted share compared to $6.8 million, or $0.26 per diluted share for the same quarter last year. During the 2016 second quarter, operational results included relocation and start-up costs arising from the Company’s folder operations and medical expenses in excess of historical levels. These costs and expenses negatively impacted the prior year’s quarterly net earnings by approximately $2.2 million, or $0.09 per diluted share.

The Company’s revenues for the six month period ended August 31, 2017 were $189.5 million compared to $181.7 million for the same period last year, an increase of 4.3%. Margin was $60.7 million, or 32.0%, as compared to $53.7 million, or 29.6%, for the six month period ended August 31, 2017 and August 31, 2016, respectively. Earnings from continuing operations for the six month period ended August 31, 2017 were $16.3 million, or $0.64 per diluted share compared to $13.5 million, or $0.52 per diluted share for the same period last year. The costs from the folder relocation and higher than historical medical expenses negatively impacted the Company’s net loss for the six months ended August 31, 2016 by approximately $3.1 million, or $0.12 per diluted share.

Non-GAAP Reconciliations

To provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations, from time to time the Company reports adjusted gross profit margin, adjusted earnings and adjusted diluted earnings per share, each of which is a non-GAAP financial measure. To provide additional information, the Company also reports the non-GAAP financial measure of EBITDA (EBITDA is calculated as earnings from operations before interest, taxes, depreciation, and amortization).

Management believes that these non-GAAP financial measures provide useful information to investors as a supplement to reported GAAP financial information. Management reviews these non-GAAP financial measures on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. These non-GAAP financial measures provide useful information to management in evaluating the Company’s period-to-period performance because they eliminate certain items that the Company does not consider to be indicative of earnings from on-going operating activities. Management believes that excluding these items provides more information on the underlying trends in the Company’s operating performance and allows for enhanced comparisons of the Company’s operating results to historical performance and against competitors. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit agreement.

Reconciliations of non-GAAP financial measures included herein to the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following table. Other companies may calculate non-GAAP adjusted financial measures differently than the Company, which limits the usefulness of the non-GAAP measures for comparison with these other companies. While management believes the Company’s non-GAAP financial measures are useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute or an alternative for, or superior to, the related financial information prepared in accordance with GAAP. These measures should be evaluated only in conjunction with the Company’s comparable GAAP financial measures.

The following table reconciles EBITDA from continuing operations, a non-GAAP financial measure, to the most comparable GAAP measure, net earnings from continuing operations (dollars in thousands).

                                                                                                              Three months ended                                                                                                                                 Six months ended
                                                                                                                                                        August 31,                                                                                                                                                                                                 August 31,
                                                                                                             2017                                                 2016                                                                                                            2017                                                 2016
                                                                                       -------------------------------------------------                                          -------------------------------------------------                                                               -------------------------------------------------                                          -------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                              
Net earnings from continuing operations                                                                   $  8,540                                                                                   $  6,784                                                                                                        $ 16,324                                                                                   $ 13,467
Income tax expense                                                                                           5,016                                                                                      3,981                                                                                                           9,587                                                                                      7,906
Interest expense                                                                                               204                                                                                        231                                                                                                             394                                                                                        233
Depreciation and amortization                                                             3,552                                                3,181                                                                     7,073                                                6,323  
                                                                                       -------------------- ------ --------------------                                           -------------------- ------ --------------------                                                                -------------------- ------ --------------------                                           -------------------- ------ --------------------
EBITDA from continuing operations (non-GAAP)                                                              $ 17,312                                                                                   $ 14,177                                                                                                        $ 33,378                                                                                   $ 27,929
                                                                                                                                                                                                                                                                                                                                                                                              
% of sales                                                                                                    18.2 %                                                                                     15.5 %                                                                                                          17.6 %                                                                                     15.4 %
                                                                                                                                                                                                                                                                                                                                                                                                                          

Keith Walters, Chairman, Chief Executive Officer and President, commented by stating, "We continue to be pleased with our operational performance during the year. Our recent acquisition continues to perform nicely with operating results improving as integration continues to progress. For the six months ended August 31, 2017, this addition has added approximately $20.0 million in revenues and $0.07 to our diluted earnings per share. Recent changes to our health program appear to have stemmed the tide, at least for the time being, in the rising costs of medical claims. As a result, we did not take an additional charge to our medical reserve as we did in last year’s second quarter. Also, the negative impact of the relocation and start-up of a folder operating company seems to be behind us, which also positively impacted our quarterly results. It appears the costs and expenses experienced last year related to the folder operation relocation and higher than historical medical expense have been successfully dealt with and are behind us from an operational perspective. While we feel the environment overall will remain challenging, we are positive about the remainder of this fiscal year. We continue to further strengthen one of the strongest balance sheets in the industry and our cash position remains significant."

In Other News

Ennis announces that on September 22, 2017 the Board of Directors declared a quarterly cash dividend of 20 cents a share on its common stock. The dividend is payable November 10, 2017 to shareholders of record on October 13, 2017.

About Ennis

Since 1909, Ennis has been primarily engaged in the production and sale of business forms and other business products. The Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. Ennis manufactures and sells business forms, other printed business products, printed and electronic media, presentation products, flex-o-graphic printing, advertising specialties and Post-it(R) Notes, internal bank forms, plastic cards, secure and negotiable documents, envelopes, tags and labels and other custom products. For more information, visit www.ennis.com.

Safe Harbor under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words "anticipate," "preliminary," "expect," "believe," "intend" and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These statements are subject to numerous uncertainties, which include, but are not limited to, the Company’s ability to effectively manage its business functions while growing its business in a competitive environment, the Company’s ability to adapt and expand its services in such an environment and the variability in the prices of paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 28, 2017 and its Quarterly Report on Form 10-Q for the fiscal quarter ending May 31, 2017. The Company does not undertake, and hereby disclaims, any duty or obligation to update or otherwise revise any forward-looking statements to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, although its situation and circumstances may change in the future. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

 
                                                                                                                                                                                                            Ennis, Inc.
                                                                                                                                                                                           Condensed Consolidated Financial Information
                                                                                                                                                                                        (In thousands, except share and per share amounts)
                                                                                                                                                                                                  
                                                                                                                                                  Three months ended                                                                                                                                                                             Six months ended
Condensed Consolidated Operating Results                                                                                                              August 31,                                                                                                                                                                                    August 31,
-----------------------------------------------------------
                                                                                                                    2017                                                                      2016                                                                                                     2017                                                                                           2016
                                                                                                      --------------------------------                                          --------------------------------                                                               -----------------------------------------------------                                          -----------------------------------------------------
    Revenues                                                                                                             $     94,887                                                              $     91,246                                                                                   $    189,477                                                                                   $    181,656
    Cost of goods sold                                                                                      64,100                                                 64,208                                                                     128,771                                                  127,924  
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
    Gross profit margin                                                                                                        30,787                                                                    27,038                                                                                         60,706                                                                                         53,732
    Operating expenses                                                                                      17,144                                                 16,053                                                                      34,531                                                   32,130  
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
    Operating income                                                                                                           13,643                                                                    10,985                                                                                         26,175                                                                                         21,602
    Other expense                                                                                               87                                                    220                                                                         264                                                      229  
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
    Earnings from continuing operations before income taxes                                                                    13,556                                                                    10,765                                                                                         25,911                                                                                         21,373
    Income tax expense                                                                                       5,016                                                  3,981                                                                       9,587                                                    7,906  
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
    Earnings from continuing operations                                                                                         8,540                                                                     6,784                                                                                         16,324                                                                                         13,467
    Income from discontinued operations, net of tax                                                                                 -                                                                         -                                                                                              -                                                                                          2,481
    Loss on sale of discontinued operations, net of tax                                                          -                                                      -                                                                           -                                                  (26,042 )
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
        Net earnings (loss)                                                                                              $      8,540                                                              $      6,784                                                                                   $     16,324                                                                $    (10,094 )
                                                                                                      ==================== ==========                                           ==================== ==========                                                                ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                               
Weighted average common shares outstanding
-----------------------------------------------------------
    Basic                                                                                               25,342,747                                             25,893,218                                                                  25,388,292                                               25,847,051  
                                                                                                      ==================== ==========                                           ==================== ==========                                                                ==================== ========== ====================                                           ==================== ========== ====================
    Diluted                                                                                             25,366,001                                             25,910,375                                                                  25,405,863                                               25,868,799  
                                                                                                      ==================== ==========                                           ==================== ==========                                                                ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                               
Earnings (loss) per share - basic and
diluted
-----------------------------------------------------------
    Earnings per share on continuing operations                                                                          $       0.34                                                              $       0.26                                                                                   $       0.64                                                                                   $       0.52
    Earnings per share on discontinued operations                                                                -                                                      -                                                                           -                                                     0.10  
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                 0.34                                                                      0.26                                                                                           0.64                                                                                           0.62
    Loss per share on sale of discontinued operations                                                            -                                                      -                                                                           -                                                    (1.01 )
                                                                                                      -------------------- ----------                                           -------------------- ----------                                                                -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
    Net earnings (loss)                                                                                                  $       0.34                                                              $       0.26                                                                                   $       0.64                                                                $      (0.39 )
                                                                                                      ==================== ==========                                           ==================== ==========                                                                ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                    August 31,                                                                                    February 28,
Condensed Consolidated Balance Sheet                                                                                                                                                                                                                                                                   2017                                                                                           2017
Information
-----------------------------------------------------------                                                                                                                                                                                                                    --------------------------------------------------                                             --------------------------------------------------
                                                                                                                                                                                                              Assets
Current assets
    Cash                                                                                                                                                                                                                                                                                          $     83,865                                                                                   $     80,466
    Accounts receivable, net                                                                                                                                                                                                                                                                            38,171                                                                                         37,368
    Inventories, net                                                                                                                                                                                                                                                                                    29,228                                                                                         27,965
    Other                                                                                                                                                                                                                                                                             3,652                                                    3,451  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                    154,916                                                  149,250  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
Property, plant & equipment                                                                                                                                                                                                                                                                             47,761                                                                                         49,995
Other                                                                                                                                                                                                                                                                               123,223                                                  125,040  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                  $    325,900                                                                $    324,285  
                                                                                                                                                                                                                                                                               ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                               Liabilities and Shareholders’ Equity
Current liabilities
    Accounts payable                                                                                                                                                                                                                                                                              $     10,753                                                                                   $     14,202
    Accrued expenses                                                                                                                                                                                                                                                                 15,543                                                   15,766  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                     26,296                                                   29,968  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
Long-term debt                                                                                                                                                                                                                                                                                          30,000                                                                                         30,000
Other non-current liabilities                                                                                                                                                                                                                                                        13,624                                                   12,962  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
    Total liabilities                                                                                                                                                                                                                                                                69,920                                                   72,930  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                               
Shareholders’ equity                                                                                                                                                                                                                                     255,980                                                  251,355  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                  $    325,900                                                                $    324,285  
                                                                                                                                                                                                                                                                               ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                 Six months ended
                                                                                                                                                                                                                                                                                                                                                    August 31,
Condensed Consolidated Cash Flow                                                                                                                                                                                                                                                                       2017                                                                                           2016
Information
-----------------------------------------------------------                                                                                                                                                                                                                    --------------------------------------------------                                             --------------------------------------------------
Cash provided by operating activities                                                                                                                                                                                                                                                             $     19,176                                                                                   $     29,078
Cash provided by (used in) investing activities                                                                                                                                                                                                                                                         (2,915 )                                                                                      105,253
Cash used in financing activities                                                                                                                                                                                                                                                   (12,862 )                                                                   (57,063 )
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
Change in cash                                                                                                                                                                                                                                                                                           3,399                                                                                         77,268
Cash at beginning of period                                                                                                                                                                                                                                                          80,466                                                    7,957  
                                                                                                                                                                                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
Cash at end of period                                                                                                                                                                                                                                                                             $     83,865                                                                $     85,225  
                                                                                                                                                                                                                                                                               ==================== ========== ====================                                           ==================== ========== ====================

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170925005215r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170925005215/en/

SOURCE: Ennis, Inc.

Ennis, Inc. 
Mr. Keith S. Walters, 972-775-9801 
Chairman, Chief Executive Officer and President 
or 
Mr. Richard L. Travis, Jr., 972-775-9801 
CFO, Treasurer and Principal Financial and Accounting Officer 
or 
Mr. Michael D. Magill, 972-775-9801 
Executive Vice President and Secretary 
Fax: 972-775-9820 
www.ennis.com


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