Mon, Jun 30, 2:21 PM (14 days ago)
**Summary of Ennis, Inc. (EBF) Q1 2025 Financial Performance** **Revenue and Profitability:** - Net sales decreased by 5.7% to $97.2 million from $103.1 million in the prior year quarter, primarily due to weaker volume demand and increased competition. - Gross profit margin slightly improved to 31.1% from 30.0%, driven by cost management and pricing strategies. - Income from operations remained relatively flat at $13.3 million (13.7% of net sales) compared to $13.7 million (13.3% of net sales) in the prior year quarter. - Net earnings decreased by 8.4% to $9.8 million from $10.7 million, with earnings per diluted share at $0.38 compared to $0.41 in the prior year quarter. **Cash Flow and Liquidity:** - Cash provided by operating activities decreased to $8.0 million from $23.1 million in the prior year quarter, primarily due to increased inventory purchases and accounts receivable. - Cash used in investing activities increased to $30.8 million, mainly due to the acquisition of Northeastern Envelope Company and Envelope Superstore for $34.9 million. - Cash used in financing activities increased by $3.3 million, primarily due to higher stock repurchases. - Working capital decreased by 24.4% to $90.2 million, with a current ratio of 3.0 to 1.0. **Trends and Uncertainties:** - The company faces challenges from industry consolidation, product obsolescence, and increased competition. - The sole U.S. mill producing carbonless paper announced its closure, leading to inventory buffer stock purchases. - The company expects capital expenditures of $4.0 million to $7.0 million over the next twelve months. - No material changes in risk factors or legal proceedings that could significantly impact financial condition or results of operations. **Future Operations Impact:** - The company plans to maintain strong liquidity and operational results to support investments in technology and acquisitions. - The effective tax rate remained flat at 27.5%, and the company declared a quarterly cash dividend of $0.25 per share, payable on August 11, 2025. **Conclusion:** Ennis, Inc. reported a decline in net sales and earnings for Q1 2025, primarily due to weaker volume demand and increased competition. However, the company maintained stable gross profit margins and income from operations. The acquisition of new businesses and strategic investments in technology and acquisitions are expected to drive future growth. The company's strong liquidity position and operational efficiency are key factors in navigating industry challenges and maintaining financial health.