Revenue from recently acquired companies helped Ennis, Inc. (asi/52493) increase sales in the first quarter of its fiscal year, but earnings were flat during the three-month span compared to the same period the prior year.

The Midlothian, TX-based supplier of print and promotional products said Q1 sales rose 3.3% year over year to $111.3 million. Ennis acquired School Photo Marketing in November 2022 and Stylecraft Printing Company in May 2023; these firms contributed about $4.1 million to the Q1 topline revenue number.

Keith Walters, Ennis, Inc.

“The increase from acquisitions was partially offset by an otherwise slight decline in sales volume,” Ennis said in a statement.

For fiscal Q1, which concluded May 31, Ennis tallied net earnings of about $11.6 million, or $0.45 per diluted share. The performance was essentially steady with the previous year’s Q1, despite the sales increase in this fiscal year’s quarter.

Expenses tied to relocating operations from a leased facility into an existing location and legal costs that stemmed from pressing a successful lawsuit weighed down the bottom line. Still, in the long term, the relocation will save money and increase operational efficiency; Ennis is also expecting $5 million in awarded damages from the lawsuit, which will eventually be recognized in financials, executives said.

Meanwhile, Ennis’ Q1 earnings before interest, taxes, depreciation and amortization were about $20.5 million – again consistent with the prior year’s quarter, though down as a percentage of sales from 19.1% to 18.4%. At 30.6%, gross profit margin was up three percentage points from the quarter ended February 28, 2023, but down one percentage point from the prior year’s first quarter.

Ennis has been aggressive in making acquisitions of late. Beyond the School Photo Marketing and Stylecraft deals, the firm also acquired UMC Print in June – after the Q1 books had closed.

“The real impact of our latest acquisitions is expected to be seen in the remainder of fiscal year 2024,” said Ennis CEO/Chairman Keith Walters. “We will continue to explore acquisitions that make sense and hunt for new sales in new markets and new channels.”

Walters added: “We believe we have one of the strongest balance sheets in the industry, with no debt and significant cash. Our profitability and strong financial condition will allow us to continue operations and fund acquisitions without incurring debt. Given those strengths, we also anticipate timely access to credit should larger acquisition opportunities materialize.”

In April, Ennis shared that its full-year sales rose 8% year over year to $431.8 million for the fiscal year ended Feb. 28. Net earnings for the fiscal year were $47.3 million, or $1.82 per diluted share, compared to $29 million, or $1.11 per diluted share, for the prior fiscal year.