Ennis Reports Higher Sales but Lower Earnings Amid Legal Items
Ennis (EBF) reported a rise in sales to $102 million for Q3, up from $98.7 million year-over-year, while net earnings fell to $9.4 million compared to $13.2 million previously. The decline was partly attributed to legal charges and favorable judgments affecting the comparison periods. After excluding these items, diluted EPS showed a modest improvement of $0.02. Despite lower gross margins due to rising carbonless-paper costs, Ennis managed to increase its gross profit slightly to $30.5 million from $30.1 million. The company also reported strong cash flow generation in the first half and maintained a debt-free balance sheet with $54 million in cash as of August 31. However, much of the revenue growth came from acquisitions contributing about $2.3 million to sales. Management emphasized that supply continuity has been secured through alternative paper suppliers following domestic production closures.
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