Ennis reports lower Q2 earnings amid soft demand

MIDLOTHIAN, Texas - Ennis, Inc. (NYSE: NYSE:EBF), a leading manufacturer of printed business products, disclosed its financial results for the second quarter ended August 31, 2024, with revenues falling 7.3% to $99.0 million from $106.8 million in the same quarter of the previous year. The company's earnings per diluted share also decreased to $0.40 from $0.42 year-over-year.

Despite a reduction in sales, the company's EBITDA margin saw a slight improvement to 18.6% from 18.5%. Ennis attributes this to diligent cost management in response to the current economic climate, which has dampened demand and intensified price competition.

The acquisition of Printing Technologies, Inc. (PTI) was completed during the quarter, aimed at enhancing production capabilities and diversifying product offerings. Ennis prides itself on a strong balance sheet, boasting no debt and substantial cash reserves, which positions the company to pursue further acquisitions and maintain operations without incurring debt.

The Board of Directors has declared a quarterly cash dividend of 25.0 cents per share and a special dividend of $2.50 per share, payable on November 8, 2024, to shareholders of record as of October 11, 2024. This move allows shareholders to partake in the company's accumulated profits while retaining sufficient funds for ongoing operations and the acquisitions program.

Ennis also provided non-GAAP financial measures, such as EBITDA, to offer additional insights into its operational performance. These supplemental measures are intended to complement GAAP financial reporting and provide a more comprehensive understanding of the company's financial results.

This financial disclosure, based on a press release statement, showcases Ennis's current financial health and strategic initiatives amidst challenging market conditions. The company continues to focus on delivering profitability and shareholder returns while navigating the broader economic environment.

In other recent news, Ennis Inc . reported a decrease in quarterly revenue and earnings, with a 7.4% drop in revenue to $103.1 million and earnings per diluted share declining to $0.41 from $0.45 in the previous year. Despite this, the company's EBITDA increased from $18.1 million to $19.0 million, maintaining an EBITDA to sales percentage of 18.4%. Ennis Inc. has also announced the acquisition of Printing Technologies, Inc. (PTI), a move expected to enhance its product offerings and market reach.

The financial terms of the acquisition were not disclosed, but the integration of PTI's innovative solutions is anticipated to provide additional value to both companies' customers. In other recent developments, Ennis Inc. secured shareholder approval on key proposals, with a significant majority of shareholders voting in favor of all management proposals. This included the re-election of three directors to the board and the appointment of CohnReznick, LLP as the independent registered public accounting firm for the fiscal year ending 2025.

Ennis Inc. also completed the integration of an ERP system at two recent acquisitions, which has started to yield improved performance. Furthermore, the company declared a quarterly cash dividend of 25.0 cents per share, indicating its ongoing financial management strategy to maintain a steady return to its shareholders. These are among the recent developments at Ennis Inc.

InvestingPro Insights

Ennis, Inc. (NYSE: EBF) continues to demonstrate financial resilience in a challenging economic landscape. A key highlight from the recent financial disclosures is the company's robust balance sheet, evidenced by an InvestingPro Tip that EBF holds more cash than debt. This financial prudence is crucial for Ennis as it enables the company to navigate market volatility with confidence and pursue strategic acquisitions like Printing Technologies, Inc. without leveraging its balance sheet.

InvestingPro Data reveals that Ennis has a market capitalization of 622.58 million USD and trades at a P/E ratio of approximately 15, which aligns with the industry average and suggests a fair valuation of the company's earnings. Furthermore, the company's commitment to returning value to its shareholders is underscored by another InvestingPro Tip: Ennis has maintained dividend payments for an impressive 52 consecutive years. This consistent dividend payout, coupled with a current dividend yield of 4.17%, makes Ennis an attractive stock for income-focused investors.

With an eye on the future, Ennis's stock is trading near its 52-week high, signaling positive investor sentiment and market confidence. For those interested in gaining deeper insights, there are additional InvestingPro Tips available on the platform, including predictions by analysts that the company will continue to be profitable this year.

For investors and stakeholders looking to delve further into Ennis's financials and future prospects, more detailed analysis and tips are available on InvestingPro. Visit https://www.investing.com/pro/EBF to explore a comprehensive set of metrics and expert insights, including several additional InvestingPro Tips that can guide investment decisions.

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