Ennis Announces Quarter and Year Results, Adds $5 Million to Stock Repurchase Program
Ennis Inc., located in Midlothian, Texas, today reported financial results for the quarter and year ended February 29, 2012. The company's consolidated net sales for the quarter were $121.5 million, or down 7.5 percent from $131.4 million for the same quarter last year, while for the year net sales decreased from $550.0 million for the fiscal year ended February 28, 2011 to $517.0 million for the fiscal year ended February 29, 2012, or a decrease of 6.0 percent.
Print sales for the quarter were $72.4 million as compared to $66.2 million for the same quarter last year, an increase of $6.2 million, or 9.4 percent. For the year, print sales were at $278.0 million, compared to $272.7 million for last year, an increase of $5.3 million, or 1.9 percent. Apparel sales were down for both the quarter and the year. Sales were $49.1 million for the quarter, down $16.1 million as compared to $65.2 million for the same quarter last year. Overall apparel sales for the year were $239.0 million, down 139 percent from $277.3 million.
Ennis attributed their overall sales decreases to softness in the apparel market and continued pricing pressures. On a segment basis, our print margins increased, while apparel margins dropped due to continued higher input costs, primarily cotton.
"Our print operations continued to deliver revenue and operational results as expected," said Keith Walters, chairman, chief executive officer and president of Ennis Inc. "We feel good about our two print acquisitions this past year, and expect these acquisitions to add at least $80 million in sales and $.25 in diluted earnings."
Like most apparel suppliers, Ennis Inc., which owns Alstyle Apparel, was negatively impacted by soaring cotton costs in 2011. The company is still processing cotton purchased at the inflated prices due to contracts signed at that time which locked the price for cotton at a rate higher than it is today. "In addition, pricing in the marketplace has not been consistent with these higher costs, thus putting additional pressures on apparel margins," Walters said. "Products are being sold in the marketplace at prices, in certain circumstances, less than the associated raw material costs. Our philosophy has always been to try to at least cover our costs in our pricing. Consequently, we feel this has and will impact our apparel sales in the short-term. Therefore, while fiscal year 2012 was challenging, we view fiscal year 2013 to be equally challenging, due to the high priced cotton overhang in inventories and current market pricing on the sell side."