CORRECTED-Ennis Q3 revenue rises marginally, profit margin improves

Overview

• U.S. business product supplier's Q3 revenue rose 0.4% yr/yr

• EPS for Q3 beat the sole analyst estimate

• Company completed acquisition of CFC Print & Mail

Outlook

• Company expects cash flow to improve in coming periods

• Ennis anticipates no supply disruptions from transition to alternative carbonless paper sources

• Future share repurchases will be evaluated based on market conditions

Result Drivers

• GROSS MARGIN IMPROVEMENT - Ennis attributed the increase in gross profit margin to operational efficiencies and favorable margin profile of recent acquisitions

• ACQUISITION CONTRIBUTION - Revenue was positively impacted by the acquisition of CFC Print & Mail, contributing $5.8 mln in the quarter

• INVENTORY MANAGEMENT - Co reduced inventory levels in response to the closure of a domestic carbonless paper producer, transitioning to alternative sources without supply disruptions

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The one available analyst rating on the shares is "strong buy"

• The average consensus recommendation for the commercial printing services peer group is "buy."

• Wall Street's median 12-month price target for Ennis Inc is $23.00, about 27.3% above its December 19 closing price of $18.07

Press Release: ID:nBw8bhTl4a

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