Ennis, Inc. Reports Decline in Net Sales and Profitability for Six Months Ended August 31, 2024

Ennis, Inc. reported its financial results for the six months ended August 31, 2024, revealing a decline in both net sales and profitability compared to the same period in the previous year. Net sales for the six-month period totaled $202.1 million, down from $218.1 million, reflecting a decrease of $15.9 million (7.3%). This decline was attributed to a $23.0 million reduction in revenue from legacy business due to softening demand and increased competition, partially offset by approximately $7.1 million in revenue from recent acquisitions.

For the three months ended August 31, 2024, net sales were $99.0 million, a decrease of $7.8 million (7.3%) from $106.8 million in the same quarter of 2023. Gross profit for the quarter was $29.8 million, representing a gross margin of 30.1%, down from 31.0% in the prior year. The cost of goods sold decreased to $69.3 million, down $4.4 million (6.0%) from the previous year.

Operating income for the six months ended August 31, 2024, was $26.9 million (13.3% of net sales), compared to $30.4 million (13.9% of net sales) for the same period in 2023. Net earnings for the six months were $21.0 million, down from $22.5 million, with diluted earnings per share decreasing to $0.80 from $0.87.

Ennis, Inc. has been active in expanding its operations through acquisitions, having acquired Printing Technologies, Inc. for approximately $5.6 million in cash on June 26, 2024, and previously acquiring Eagle Graphics and Diamond Graphics for about $7.9 million in cash on October 11, 2023. These acquisitions are aimed at enhancing production capabilities and expanding market reach, particularly in the Northeast and Midwest regions of the United States.

The company reported a cash balance of $99.977 million as of August 31, 2024, an increase from $81.6 million as of February 29, 2024. Working capital also improved to $178.5 million, up from $167.6 million, primarily due to increases in cash and short-term investments. The current ratio improved from 6.0:1.0 to 6.3:1.0 during the same period.

Ennis, Inc. has also initiated a stock repurchase program, with $21.5 million remaining available for future repurchases as of August 31, 2024. The company declared a quarterly cash dividend of $0.25 per share and a one-time special dividend of $2.50 per share, with an expected total payout of approximately $72.4 million.

Overall, while Ennis, Inc. faced challenges in revenue generation and profitability, strategic acquisitions and a strong cash position indicate ongoing efforts to adapt to market conditions.