Financial Performance - Net sales for the quarter ended May 31, 2025, were $97.2 million, a decrease of $5.9 million or -5.7% compared to $103.1 million in the same quarter of the prior year[138]. - Income from operations for the quarter was $13.3 million, representing 13.7% of net sales, compared to $13.7 million or 13.3% in the prior year[137]. - Net earnings for the quarter were $9.8 million, or 10.1% of net sales, down from $10.7 million or 10.4% in the same quarter last year[137]. - Gross profit was $30.2 million, or 31.1% of revenue, for the quarter ended May 31, 2025, compared to $30.9 million, or 30.0% of revenue, for the same quarter in the prior year[139]. - Cash provided by operating activities was $7.96 million for the three months ended May 31, 2025, compared to $23.1 million for the same period in 2024[149]. - Working capital decreased by $29.2 million, or -24.4%, from $119.4 million at February 28, 2025, to $90.2 million at May 31, 2025[148]. - The effective income tax rate remained flat at 27.5% for the three months ended May 31, 2025, compared to the same period in 2024[144]. Sales and Revenue - Sales from legacy plants decreased by $11.4 million due to weaker volume demand, partially offset by an increase of approximately $5.5 million in revenues from recent acquisitions[138]. - The company acquired the net assets and business of NEC and ESS, which generated approximately $26.0 million in sales for the fiscal year ended December 31, 2024[127]. Cost Management - Cost of goods sold decreased by $5.2 million, or -7.2%, from $72.2 million to $67.0 million for the three months ended May 31, 2024, and 2025 respectively[139]. - Selling, general, and administrative expenses decreased by $0.3 million, or -1.7%, from $17.2 million to $16.9 million for the three months ended May 31, 2024, and 2025 respectively[140]. - The company continues to focus on managing product costs and maintaining margins amid competitive pressures and fluctuating raw material prices[130]. Industry Challenges - The printing industry is facing challenges such as product obsolescence and increased pricing due to supply chain disruptions[129]. Manufacturing and Operations - Approximately 96% of the business products manufactured are custom and semi-custom products, tailored to customer specifications[121]. - The company operates 57 manufacturing plants across 20 states in the U.S.[121]. Capital Expenditures - Capital expenditures for the three months ended May 31, 2025 were approximately $1.4 million, with expected capital requirements for the current fiscal year between $4.0 million and $7.0 million[156]. - Cash used in investing activities was $30.8 million for the three months ended May 31, 2025, compared to $5.1 million for the same period in 2024, primarily due to the acquisition of NEC and ESS for approximately $34.9 million[150].
Ennis(EBF) - 2026 Q1 - Quarterly Report