Ennis Reports Declining Sales

Top 40 supplier Ennis (asi/52493) announced sales of $86.6 million for the quarter ended February 28, 2017, a 5% year-over-year decrease. Gross profit margin was $24.9 million, or 28.8%, and net earnings for the quarter were $7.2 million. For the full fiscal year, Ennis reported its sales were $356.9 million, a decrease of 7.5% versus the prior 12 months. This announcement is the first full-year earnings report that Ennis has released since Gildan purchased Alstyle Apparel (asi/34817), Ennis’s apparel division, last year.

“Our performance for the quarter met our expectations,” said Keith Walters, CEO of Ennis. “The print market overall continues to be fairly soft with competitive pricing, resulting in downward pressure on operating margins. Our balance sheet remains strong with a debt ratio, net of cash, of negative 0.03%.”

To bolster its brand going forward, Ennis acquired Independent Printing Company in January of this year. Independent Printing, which offers presentation folders, checks, wide-format and commercial printing options, generates annual sales of approximately $37 million, according to Ennis. The acquisition has expanded Ennis’ network of folder facilities, giving the company added locations in Michigan, Kansas, California and Wisconsin.

“We are very pleased with the performance of this recent acquisition and are already seeing nice operational improvements,” said Walters. “Our balance sheet will continue to allow us to actively pursue acquisition opportunities as they present themselves as we look to utilize our cash and increase the leverage of our corporate structure.”

Ennis did not break out promotional product sales or provide a specific forecast for the upcoming fiscal year, but Walters added: “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.”

In its 2016 listing, Counselor ranked Ennis as the sixth largest supplier in the industry after the firm reported 2015 North American promotional product sales of $253 million.