Ennis(EBF) - 2026 Q2 - Quarterly Results

Financial Highlights Ennis, Inc. reported a slight revenue decrease but improved profitability metrics, including gross profit margin, net earnings, and diluted EPS, for both the quarter and six-month period ended August 31, 2025 Quarterly Performance Overview For the quarter ended August 31, 2025, Ennis, Inc. reported a slight revenue decrease but significant improvements in gross profit margin, net earnings, and diluted EPS compared to the prior year's quarter | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (Millions) | Change (%) | | :------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Revenues | $98.7 | $99.0 | -$0.3 | -0.3% | | Gross Profits | $30.1 | $29.8 | +$0.3 | +1.0% | | Gross Profit Margin | 30.5% | 30.1% | +0.4 pts | | | Net Earnings | $13.2 | $10.3 | +$2.9 | +28.2% | | Diluted EPS | $0.51 | $0.40 | +$0.11 | +27.5% | Six-Month Period Performance Overview For the six-month period ended August 31, 2025, the Company experienced a revenue decline but improved gross profit margin, net earnings, and diluted EPS compared to the same period last year | Metric | 6M 2025 (Millions) | 6M 2024 (Millions) | Change (Millions) | Change (%) | | :------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Revenues | $195.9 | $202.1 | -$6.2 | -3.1% | | Gross Profit Margin | 30.8% | 30.0% | +0.8 pts | | | Net Earnings | $23.0 | $21.0 | +$2.0 | +9.5% | | Diluted EPS | $0.89 | $0.80 | +$0.09 | +11.3% | Management Commentary Management highlights improved gross margins and EBITDA, positive impacts from a legal settlement and acquisitions, and a strong debt-free balance sheet supporting share repurchases and future acquisitions CEO's Review of Performance CEO Keith Walters noted that quarterly performance met expectations despite a sales volume decline, driven by improved gross margin and a significant increase in EBITDA. Results were positively impacted by a legal settlement and contributions from recent acquisitions - Sales volume declined, but gross margin improved to 30.5% (up 40 basis points YoY), though down 60 basis points QoQ[3] EBITDA Performance | Metric | Q3 2025 (Millions) | Q2 2025 (Millions) | Q3 2024 (Millions) | | :----- | :----------------- | :----------------- | :----------------- | | EBITDA | $22.5 | $17.7 | $18.4 | | % of Sales | 22.8% | 18.2% | 18.6% | - A $5.7 million collection from a trade secret theft judgment positively impacted the quarter's results[3] - Recent acquisitions contributed approximately $5.5 million in revenues for the quarter and $11.0 million for the six-month period, positively impacting diluted EPS by $0.03 for the quarter and $0.06 for the six-month period, with Northeastern Envelope Company (NEC) and Printing Technologies, Inc. (PTI) delivering strong results[4] Strategic Initiatives and Financial Position The Company maintains a strong, debt-free balance sheet with sufficient cash reserves. Strategic inventory building for carbonless paper is complete, and cash flow is expected to strengthen. Ennis continues to repurchase shares and plans to pursue acquisitions without debt - The Company boasts a strong balance sheet with no debt and sufficient cash reserves, expecting cash flow to strengthen in coming quarters[6] - Strategically built additional inventory of carbonless paper following the closure of the only domestic producer, anticipating lower purchasing needs ahead[6] - Repurchased 456,671 shares of common stock for $8.5 million year-to-date[6] - Financial position allows for debt-free operations and acquisitions, with access to credit for larger opportunities[6] Non-GAAP Financial Measures The Company presents EBITDA as a key non-GAAP measure, providing a reconciliation to net earnings to offer additional insights into operational performance EBITDA Reconciliation The Company provides EBITDA as a non-GAAP financial measure to offer supplemental information on financial and business trends, reconciling it to net earnings for both the three- and six-month periods - EBITDA is presented as a non-GAAP measure to provide supplemental information for assessing results of operations, calculated as net earnings before interest expense, tax expense, depreciation, and amortization[7][8] EBITDA Reconciliation Table | Metric (in thousands) | Three months ended Aug 31, 2025 | Three months ended Aug 31, 2024 | Six months ended Aug 31, 2025 | Six months ended Aug 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net earnings | $13,155 | $10,308 | $22,953 | $20,995 | | Income tax expense | $4,989 | $3,909 | $8,706 | $7,963 | | Depreciation & amortization | $4,309 | $4,186 | $8,492 | $8,430 | | EBITDA (non-GAAP) | $22,453 | $18,403 | $40,151 | $37,388 | | % of sales | 22.8% | 18.6% | 20.5% | 18.5% | Other Corporate News The Board of Directors declared a quarterly cash dividend of 25.0 cents per share, payable in November 2025 Quarterly Dividend Declaration Ennis, Inc.'s Board of Directors declared a quarterly cash dividend of 25.0 cents per share - A quarterly cash dividend of 25.0 cents per share was declared on September 19, 2025[11] - The dividend is payable on November 7, 2025, to shareholders of record on October 10, 2025[11] Company Information Ennis, Inc. is a leading private-label printed business product supplier, providing a safe harbor statement for forward-looking information subject to various business risks About Ennis, Inc. Ennis, Inc., founded in 1909 and headquartered in Midlothian, Texas, is a leading private-label printed business product supplier in the U.S., offering a wide range of custom printed products through a national distributor network - Founded in 1909, Ennis, Inc. is one of the largest private-label printed business product suppliers in the United States[12] - The Company manufactures and sells various products including business forms, integrated forms and labels, presentation products, advertising specialties, secure documents, specialty packaging, and envelopes[12] Forward-Looking Statements (Safe Harbor) This section provides a safe harbor statement under the Private Securities Litigation Reform Act of 1995, cautioning that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements are identified by words like 'anticipate,' 'expect,' 'believe,' and 'intend,' and are subject to risks and uncertainties[13] - Key risks include erosion of demand due to digital technologies, risks related to acquisitions and integration, and variability in raw material prices (e.g., paper)[13] - The Company disclaims any duty to update or revise forward-looking statements after the release date[13] Unaudited Condensed Consolidated Financial Information This section presents the unaudited condensed consolidated operating results, balance sheet, and cash flow information for the periods ended August 31, 2025 Condensed Consolidated Operating Results The condensed consolidated operating results detail the Company's financial performance for the three and six months ended August 31, 2025, compared to the prior year, showing changes in sales, costs, and earnings Condensed Consolidated Operating Results (in thousands) | Metric (in thousands) | Three months ended Aug 31, 2025 | Three months ended Aug 31, 2024 | Six months ended Aug 31, 2025 | Six months ended Aug 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net sales | $98,676 | $99,038 | $195,872 | $202,146 | | Cost of goods sold | $68,574 | $69,259 | $135,541 | $141,463 | | Gross profit | $30,102 | $29,779 | $60,331 | $60,683 | | Selling, general and administrative | $17,719 | $16,557 | $34,665 | $33,727 | | Income from operations | $12,383 | $13,183 | $25,666 | $26,913 | | Net earnings | $13,155 | $10,308 | $22,953 | $20,995 | | Diluted EPS | $0.51 | $0.40 | $0.89 | $0.80 | Condensed Consolidated Balance Sheet Information The balance sheet provides a snapshot of the Company's financial position as of August 31, 2025, compared to February 28, 2025, highlighting changes in assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheet (in thousands) | Metric (in thousands) | August 31, 2025 | February 28, 2025 | | :-------------------- | :-------------- | :---------------- | | Cash | $31,886 | $67,000 | | Accounts receivable, net | $42,157 | $38,753 | | Inventories, net | $62,078 | $38,797 | | Total Current Assets | $138,914 | $152,740 | | Goodwill and intangible assets, net | $147,551 | $127,619 | | Total Assets | $361,833 | $348,935 | | Total Current Liabilities | $41,154 | $33,304 | | Total Liabilities | $56,453 | $46,955 | | Shareholders' equity | $305,380 | $301,980 | Condensed Consolidated Cash Flow Information The cash flow statement outlines the sources and uses of cash for the six months ended August 31, 2025, showing a net decrease in cash primarily due to investing and financing activities Condensed Consolidated Cash Flow (in thousands) | Metric (in thousands) | Six months ended Aug 31, 2025 | Six months ended Aug 31, 2024 | | :-------------------- | :---------------------------- | :---------------------------- | | Cash provided by operating activities | $18,424 | $34,941 | | Cash provided by (used in) investing activities | ($31,954) | ($1,777) | | Cash used in financing activities | ($21,584) | ($14,784) | | Change in cash | ($35,114) | $18,380 | | Cash at end of period | $31,886 | $99,977 |