Ennis Reveals Fiscal Year Earnings

Top 40 supplier Ennis (asi/52493) announced that it generated $569 million in net sales for its fiscal year, a decrease of 1.9% from the previous year. Its print sales increased by 1.4% to $385.9 million for the year, while its apparel sales from Alstyle Apparel (asi/34817) decreased to $183 million, a decline of 8.5%. Consolidated margins for the fiscal year, which ended February 29, did increase from $145.5 million to $152.7 million.

Print margins slightly decreased from 30.3% to 30.1% due to the company’s relocation of its folder operations from Omaha, NE, to Columbus, KS, as well as a one-time earn-out payment for last year’s acquisition of Kay Toledo Tag. Apparel margins increased from 15.2% to 19.9%, which the company attributed to lower input costs, stable selling prices and improved manufacturing efficiencies. Overall for the fiscal year, diluted earnings per share increased from a loss of $1.72 to positive $1.39, and adjusted EBITDA increased 9.5%.

“While overall we were pleased with the results for fiscal year 2016, we are looking forward to the challenges of fiscal year 2017 and what the future may bring,” said Keith Walters, chairman, president and CEO of Ennis.

Consolidated net sales for the supplier’s fiscal fourth quarter decreased by 8.6% to $128.2 million. The company’s print sales decreased 5.5% to $91.2 million for the quarter while apparel sales decreased 15.5% to $37 million. Consolidated gross profit margin increased 1.3%, while an impairment charge of $4.1 million related to apparel trademarks negatively affected results for the quarter and year.

Last month, Ennis announced it planned to divest Alstyle, and recently Gildan Activewear (asi/56842) agreed to purchase a 100% equity stake of the apparel division for $110 million. Ennis says the deal is expected to close in the supplier’s fiscal second quarter this summer.

“The sale [of Alstyle] will allow us to fully focus on our core print segment and utilize cash from the sale of Alstyle Apparel to further expand the print business through strategic acquisitions, which we have continually demonstrated excellent returns to our stockholders,” Walters said in the company’s fiscal year earnings statement. “In addition to further strengthening a strong balance sheet for the industry, it will also allow us to proceed aggressively with our strategic direction for the company. Our current leverage position will allow us to consider potentially many other uses of these funds as well.”

Ennis ranks as the sixth-largest supplier in the industry, after reporting $257 million in North American ad specialty sales for 2014.