Ennis Inc reported financial results for the first quarter ended May 31, 2007.
Highlights: Revenues increased 5.3% over the same quarter last year, from approximately $145.1 million to approximately $152.8 million. Print Segment revenues increased by 10.4% over the same quarter last year, from $77.1 million to $85.1 million. Apparel revenues were flat for the quarter.
Diluted EPS for the quarter was $.42 per shares compared to $.44 per shares for the same quarter last year, which principally resulted from our decision to increase our cut/sew capacity in our Mexican facilities.
Financial Overview: For the quarter, net sales increased by approximately $7.7 million, or 5.3% from $145.1 million for the quarter ended May 31, 2006 to $152.8 million for the quarter ended May 31, 2007. Print group sales increased $8.0 million, or 10.4%, from $77.1 million to $85.1 million for the quarter ended May 31, 2006 and 2007, respectively.
Apparel group sales, quarter over quarter, however remained relatively flat at $68.0 million and $67.7 million for the quarter ended May 31, 2006 and 2007, respectively. Management believes that the Apparel sales during the quarter were negatively impacted by their pre-quarter inventory position, which hindered their ability to capture certain opportunity sales during this period.
Traditionally, the Apparel group rebuilds their inventory levels in the last half of the fiscal year for the upcoming summer buying season due to the normal falloff of demand during the winter season. However, during the second half of last fiscal year demand was at or above forecasted sales levels.
As a result, production levels were only able to stay abreast of then current sales levels, which resulted in their inventory position not being as robust in the fourth quarter of fiscal year 2007 as it was during the same period last fiscal year. As a result, several initiatives were implemented during the current quarter to improve their inventory position and to meet their forecasted demand. Some of these initiatives in turn had a negative impact on their margin during the period.
Overall our margins for the current period were $38.6 million, or 25.3% of sales, compared to $37.8 million, or 26.1% of sales for the same period last year. Due to improved operational efficiencies, our Print margins, as a percentage of sales, improved from 25.2% for the same quarter last year to 26.4% for the current quarter.
marketing@alchempro.com
