MIDLOTHIAN, Texas (AP) _ Ennis Inc. (EBF) on Monday reported fiscal first-quarter net income of $4.2 million.
On a per-share basis, the Midlothian-based company said it had profit of 16 cents.
The company posted revenue of $89 million in the period.
Ennis shares have fallen 24% since the beginning of the year. The stock has decreased 14% in the last 12 months.
“While our first quarter was significantly impacted by the COVID-19 pandemic, it was within our expectations. In February, the U.S. economy officially slid into a recession after the longest period of economic growth the U.S. has ever had,” said Keith Walters, chairman, CEO and president. “As Federal Reserve Chairman Powell noted recently, we went from the lowest unemployment rate in 50 years to the highest unemployment rate in 90 years, and we did it in two months. As such, we saw extreme weakness in our transactional forms sales for the quarter given a countrywide lockdown that virtually stopped the country’s economic engine. However, certain sectors of the economy did not experience a downturn, resulting in sales in several of our specialty products remaining flat which helped flatten the downward curve in our total sales.”
To reduce costs, the company said it has furloughed 320 people and several facilities, and exited some leased facilities.
“We will continue to monitor the incoming order volume so that we can proactively adjust our costs accordingly,” said Walters. “All of these actions to reduce variable and fixed costs are ongoing as we evaluate our projected sales and cost structure. We believe the cost cutting measures we are implementing will not impact our ability to service increased volume when the economy improves. Although no one is sure of the exact timing of an economic recovery, the Federal Reserve recently announced its view of an economic decline of -6.5% for 2020 and a 9.3% unemployment rate at year-end. As I said in my shareholder letter in May, we will continue to stay focused during this period of economic and social unrest. We will continue to explore acquisitions that make sense and hunt for new sales in new markets and new channels. We will focus, as always, on maintaining our dividend. We expect that our strong balance sheet and strong free-cash flow position should provide us with the means to accomplish these objectives. With the Federal Reserve currently forecasting no rise in interest rates till 2023, dividend paying stocks may be one of few choices for yield seeking investors.” Founded in 1909, the company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. Ennis manufactures and sells business forms, other printed business products, printed and electronic media, integrated forms and labels, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, plastic cards, secure and negotiable documents, specialty packaging, direct mail, envelopes, tags and labels and other custom products