Ennis, Inc. reported a decline in financial performance for the three months ended May 31, 2025, with net sales of $97.2 million, down 5.7% from $103.1 million in the same period last year. The decrease in sales was attributed to weaker demand from legacy plants, which saw a drop of $11.4 million, partially offset by a $5.5 million increase in revenue from recent acquisitions. The company's gross profit for the quarter was $30.2 million, representing a gross profit margin of 31.1%, compared to 30.0% in the prior year. Net earnings also fell to $9.8 million, or $0.38 per diluted share, down from $10.7 million, or $0.41 per diluted share, in the previous year.
In terms of operational changes, Ennis completed the acquisition of Northeastern Envelope Company and Envelope Superstore on April 11, 2025, for approximately $34.9 million. This acquisition is expected to enhance the company's production capabilities in the Northeast United States. The company also reported an increase in inventories, which rose to $53.1 million from $38.8 million, as part of its strategy to buffer against supply disruptions, particularly in light of the impending closure of the sole U.S. mill producing carbonless paper.
The company's current assets decreased to $136.0 million from $152.7 million, primarily due to a significant drop in cash and cash equivalents, which fell to $32.6 million from $67.0 million. Current liabilities increased to $45.8 million from $33.3 million, leading to a reduction in working capital from $119.4 million to $90.2 million. The current ratio also declined from 4.6 to 1.0 to 3.0 to 1.0, reflecting the impact of the recent acquisition and changes in cash reserves.
Looking ahead, Ennis anticipates that its cash balance, along with expected cash flows from operations, will be sufficient to meet its operating and capital requirements for the next twelve months. The company plans to maintain capital expenditures between $4.0 million and $7.0 million, consistent with historical levels. Ennis continues to face challenges from increased competition and a shift in customer preferences from print to digital products, which may impact future sales and profitability. The company remains focused on managing costs and exploring new market opportunities to sustain its competitive position in the printing industry.
About ENNIS, INC.
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