Top 40 supplier Ennis (asi/52493) has announced that net sales for the fiscal third quarter ended November 30 were $88.7 million, a decrease of 9% compared to $97.5 million for the same quarter in 2015. So far for the fiscal year, the company reached $270.3 million in net sales, compared to $294.7 million for the same period last year, a decrease of 8.3%.
Results for the nine-month period were impacted by the relocation of the company’s Folder Express (asi/54896) operations from Omaha, NE, to Columbus, KS, which cost $2.7 million, as well as an increase in medical expenses at a cost of $4.3 million incurred during the current and previous quarters.
“While overall the quarter did not meet our expectations, we are pleased to report that the Folder Express operation no longer has a negative impact on our operational results,” said Keith Walters, chairman, CEO and president, in an official statement. “Although this operation has come a long way over the past nine months, we continue to focus on returning it to the contribution levels we believe are achievable for this business unit.”
Walters added that the company will address the recent spike in medical costs by instituting a cost reimbursement program for its health plan at the start of January.
Adjusted gross profit margin was $26.6 million, a decrease of 10.4% compared with $29.7 million for the same quarter last year. Diluted earnings per share from continuing operations decreased to 22 cents from 34 cents in the third quarter, and fell to 74 cents from $1.05 in the same nine-month period last year.
In April, Ennis sold a 100% equity stake in its Alstyle Apparel (asi/34817) division to Gildan Activewear (asi/56842) for $110 million. This followed its acquisition of the assets of forms manufacturer Major Business Systems in March.
“Our strong balance sheet supports our ability to pursue potential acquisition opportunities as they present themselves as we look to increasing the leverage of our corporate structure,” Walters said this week. “While market conditions continue to be challenging, we believe we are well positioned to not only provide quality products, but also products that are competitively priced.”
Ennis ranks sixth on Counselor’s list of Top 40 suppliers, with estimated 2015 revenue of $253 million.