PART I: FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited condensed consolidated financial statements of Ennis, Inc. for the period ended August 31, 2025, including balance sheets, statements of operations, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed notes on significant accounting policies, revenue recognition, investments, receivables, inventories, property, acquisitions, leases, goodwill, intangible assets, accrued expenses, credit facilities, shareholders' equity, stock-based compensation, pension plans, earnings per share, concentrations of risk, related party transactions, income taxes, other contingencies, segment reporting, and subsequent events [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric (in thousands) | August 31, 2025 | February 28, 2025 | Change | | :-------------------- | :-------------- | :---------------- | :----- | | Cash | $31,886 | $67,000 | $(35,114) | | Short-term investments | $— | $5,475 | $(5,475) | | Inventories, net | $62,078 | $38,797 | $23,281 | | Goodwill | $106,906 | $94,349 | $12,557 | | Intangible assets, net | $40,645 | $33,270 | $7,375 | | Total assets | $361,833 | $348,935 | $12,898 | | Accounts payable | $19,641 | $13,799 | $5,842 | | Accrued expenses | $17,262 | $15,339 | $1,923 | | Total liabilities | $56,453 | $46,955 | $9,498 | | Total shareholders' equity | $305,380 | $301,980 | $3,400 | - Total Assets increased to **$361.8 million** at August 31, 2025, from **$348.9 million** at February 28, 2025, primarily driven by increases in inventories, goodwill, and intangible assets[10](index=10&type=chunk) - Current Assets decreased to **$138.9 million** at August 31, 2025, from **$152.7 million** at February 28, 2025, mainly due to a significant reduction in cash and the absence of short-term investments[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, including net sales, expenses, and net earnings | Metric (in thousands, except per share) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $98,676 | $99,038 | $195,872 | $202,146 |\n| Cost of goods sold | $68,574 | $69,259 | $135,541 | $141,463 |\n| Gross profit | $30,102 | $29,779 | $60,331 | $60,683 |\n| Selling, general and administrative | $17,719 | $16,557 | $34,665 | $33,727 |\n| Income from operations | $12,383 | $13,183 | $25,666 | $26,913 |\n| Other income (expense) | $5,761 | $1,034 | $5,993 | $2,045 |\n| Earnings before income taxes | $18,144 | $14,217 | $31,659 | $28,958 |\n| Income tax expense | $4,989 | $3,909 | $8,706 | $7,963 |\n| Net earnings | $13,155 | $10,308 | $22,953 | $20,995 |\n| Basic EPS | $0.51 | $0.40 | $0.89 | $0.81 |\n| Diluted EPS | $0.51 | $0.40 | $0.89 | $0.80 | - Net sales for the three months ended August 31, 2025, decreased by **0.3%** year-over-year to **$98.7 million**, while net sales for the six months decreased by **3.1%** to **$195.9 million**[12](index=12&type=chunk) - Net earnings for the three months ended August 31, 2025, increased by **27.6%** year-over-year to **$13.2 million**, and for the six months, increased by **9.3%** to **$23.0 million**[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents net earnings and other comprehensive income items, reflecting the total change in equity from non-owner sources | Metric (in thousands) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net earnings | $13,155 | $10,308 | $22,953 | $20,995 |\n| Adjustment to pension, net of taxes | $343 | $(528) | $686 | $(156) |\n| Comprehensive income | $13,498 | $9,780 | $23,639 | $20,839 | - Comprehensive income for the three months ended August 31, 2025, increased by **38.0%** year-over-year to **$13.5 million**, and for the six months, increased by **13.4%** to **$23.6 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This section details the changes in the company's shareholders' equity over time, including net earnings, dividends, and stock repurchases - Total Shareholders' Equity increased to **$305.4 million** at August 31, 2025, from **$302.0 million** at February 28, 2025[16](index=16&type=chunk) - Common stock repurchases for the six months ended August 31, 2025, amounted to **$8.6 million**, a significant increase from **$1.8 million** in the prior year[16](index=16&type=chunk) - Dividends paid for the six months ended August 31, 2025, were **$13.1 million**, consistent with **$13.0 million** in the prior year[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across operating, investing, and financing activities | Metric (in thousands) | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :-------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $18,425 | $34,941 |\n| Net cash used in investing activities | $(31,954) | $(1,777) |\n| Net cash used in financing activities | $(21,585) | $(14,784) |\n| Net change in cash and cash equivalents | $(35,114) | $18,380 |\n| Cash and cash equivalents at end of period | $31,886 | $99,977 | - Net cash provided by operating activities decreased to **$18.4 million** for the six months ended August 31, 2025, from **$34.9 million** in the prior year, primarily due to increased inventories and changes in receivables[19](index=19&type=chunk) - Net cash used in investing activities significantly increased to **$32.0 million** in 2025 from **$1.8 million** in 2024, driven by business acquisitions[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Significant Accounting Policies and General Matters](index=8&type=section&id=1.%20Significant%20Accounting%20Policies%20and%20General%20Matters) This note describes the key accounting principles and general considerations used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim statements, relying on management estimates and assumptions[22](index=22&type=chunk) - ASU 2023-09 (Income Tax Disclosures), effective fiscal 2026, will expand income tax disclosures but is not expected to materially impact financial statements[23](index=23&type=chunk) - ASU 2024-03 (Expense Disaggregation), effective fiscal 2028, will require additional income statement expense disclosures but is not expected to materially impact financial statements[24](index=24&type=chunk) [2. Revenue](index=9&type=section&id=2.%20Revenue) This note details the company's revenue recognition policies and sources - Substantially all revenue is derived from the sale of printed products in the continental U.S., recognized at a point in time upon transfer of control (generally shipment)[27](index=27&type=chunk) - Revenue from print-and-store arrangements was **$6.1 million** for the six months ended August 31, 2025, a decrease from **$6.9 million** in the prior year[28](index=28&type=chunk) - The Company operates in one reportable segment, 'Print,' and does not have material contract assets or liabilities[30](index=30&type=chunk) [3. Short-term Investments and Fair Value Measurements](index=10&type=section&id=3.%20Short-term%20Investments%20and%20Fair%20Value%20Measurements) This note explains the company's short-term investment holdings and fair value measurement practices - Short-term investments, classified as held-to-maturity U.S. Treasury Bills, were **$0** at August 31, 2025, down from **$5.5 million** at February 28, 2025[36](index=36&type=chunk)[37](index=37&type=chunk) - These investments were stated at amortized cost with a zero credit loss allowance due to their high credit rating and risk-free nature[36](index=36&type=chunk) [4. Receivables](index=10&type=section&id=4.%20Receivables) This note provides information on the company's accounts and other receivables, including credit policies and allowances - Accounts receivable are primarily from North American customers, with credit extended based on financial condition, requested amount, and payment history[38](index=38&type=chunk) | Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Balance at beginning of period | $1,758 | $1,720 | $1,713 | $1,707 |\n| Bad debt expense, net of recoveries | $28 | $67 | $118 | $177 |\n| Accounts written off | $(127) | $(11) | $(172) | $(108) |\n| Balance at end of period | $1,659 | $1,776 | $1,659 | $1,776 | - Other receivables mainly consist of vendor rebate receivables, recognized as a reduction in cost of inventory when related inventory is sold[42](index=42&type=chunk) [5. Inventories](index=12&type=section&id=5.%20Inventories) This note details the valuation methods and composition of the company's inventories - Inventories are valued at the lower of FIFO cost or market, with **11.1%** (August 31, 2025) and **7.1%** (February 28, 2025) valued at LIFO[43](index=43&type=chunk) - Reserves for excess and obsolete inventory were **$1.9 million** at August 31, 2025, up from **$1.8 million** at February 28, 2025[43](index=43&type=chunk) | Component (in thousands) | August 31, 2025 | February 28, 2025 | | :-------- | :-------------- | :---------------- | | Raw material | $35,231 | $20,862 |\n| Work-in-process | $5,545 | $4,919 |\n| Finished goods | $21,302 | $13,016 |\n| Total | $62,078 | $38,797 | [6. Property, Plant and Equipment](index=12&type=section&id=6.%20Property%2C%20Plant%20and%20Equipment) This note outlines the company's property, plant, and equipment, including depreciation policies and net carrying amounts | Component (in thousands) | August 31, 2025 | February 28, 2025 | | :----------------------- | :-------------- | :---------------- | | Plant, machinery and equipment | $160,324 | $158,730 |\n| Land and buildings | $72,472 | $67,946 |\n| Computer equipment and software | $10,350 | $10,597 |\n| Other | $3,946 | $3,995 |\n| Property, plant and equipment | $247,092 | $241,268 |\n| Less accumulated depreciation | $189,128 | $188,682 |\n| Property, plant and equipment, net | $57,964 | $52,586 | - Property, plant and equipment, net, increased to **$58.0 million** at August 31, 2025, from **$52.6 million** at February 28, 2025[45](index=45&type=chunk) [7. Acquisitions](index=12&type=section&id=7.%20Acquisitions) This note describes recent business acquisitions, including purchase prices, goodwill, and intangible assets recognized - On April 11, 2025, the Company acquired Northeastern Envelope Company (NEC) and Envelope Superstore (ESS) for approximately **$34.9 million** in cash, strengthening production capabilities in the Northeast and Southeast U.S[48](index=48&type=chunk) - The NEC and ESS acquisition resulted in **$12.6 million** in goodwill and **$11.3 million** in definite-lived intangible assets (2-13 years), both tax-deductible[48](index=48&type=chunk) - On June 26, 2024, the Company acquired Printing Technologies (PTI) for approximately **$5.5 million** in cash, adding **$2.0 million** in tax-deductible intangible assets and diversifying product offerings[50](index=50&type=chunk) [8. Leases](index=16&type=section&id=8.%20Leases) This note details the company's lease arrangements, including right-of-use assets and lease liabilities - The Company leases facilities and equipment under operating leases, typically **1-5 years**, recorded as right-of-use assets and lease liabilities[53](index=53&type=chunk) | Metric (in thousands) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease cost | $1,434 | $1,389 | $2,865 | $2,736 |\n| Operating cash flows from operating leases | $1,446 | $1,410 | $2,892 | $2,779 |\n| Right-of-use assets obtained | $1,793 | $847 | $4,092 | $1,495 | - Total future minimum lease payments under non-cancelable operating leases are **$11.7 million**, with a present value of lease liabilities of **$11.0 million**[59](index=59&type=chunk) [9. Goodwill and Intangible Assets](index=18&type=section&id=9.%20Goodwill%20and%20Intangible%20Assets) This note provides information on the company's goodwill and other intangible assets, including amortization and impairment testing - Goodwill is not amortized and is tested for impairment annually as of December 1; no impairment charge was required as of August 31, 2025[60](index=60&type=chunk)[62](index=62&type=chunk) | Intangible Asset | Weighted Average Remaining Life (years) | Gross Carrying Amount (Aug 31, 2025) | Accumulated Amortization (Aug 31, 2025) | Net (Aug 31, 2025) | Net (Feb 28, 2025) | | :--------------- | :------------------------------------ | :----------------------------------- | :-------------------------------------- | :----------------- | :----------------- | | Trademarks and trade names | 6.2 | $32,411 | $17,549 | $14,862 | $14,367 |\n| Customer lists | 7.5 | $93,133 | $67,791 | $25,342 | $18,413 |\n| Non-compete | 0.9 | $280 | $234 | $46 | $49 |\n| Technology | 4.3 | $650 | $255 | $395 | $441 |\n| Total | 7.0 | $126,474 | $85,829 | $40,645 | $33,270 | - Goodwill increased by **$12.6 million** to **$106.9 million** at August 31, 2025, primarily due to the acquisition of NEC and ESS[67](index=67&type=chunk)[68](index=68&type=chunk) [10. Accrued Expenses](index=20&type=section&id=10.%20Accrued%20Expenses) This note details the composition of the company's accrued expenses | Component (in thousands) | August 31, 2025 | February 28, 2025 | | :----------------------- | :-------------- | :---------------- | | Employee compensation and benefits | $12,372 | $11,505 |\n| Taxes other than income | $2,430 | $1,440 |\n| Accrued legal and professional fees | $483 | $521 |\n| Accrued utilities | $118 | $108 |\n| Income taxes payable | $586 | $567 |\n| Other accrued expenses | $1,273 | $1,198 |\n| Total | $17,262 | $15,339 | - Total accrued expenses increased to **$17.3 million** at August 31, 2025, from **$15.3 million** at February 28, 2025, mainly due to higher employee compensation and benefits and taxes other than income[70](index=70&type=chunk) [11. Credit Facility](index=20&type=section&id=11.%20Credit%20Facility) This note describes the company's credit arrangements and outstanding balances - As of August 31, 2025, the Company had **$0.2 million** outstanding under a standby letter of credit arrangement, secured by a cash collateral bank account[71](index=71&type=chunk) [12. Shareholders' Equity](index=20&type=section&id=12.%20Shareholders%27%20Equity) This note provides details on the company's shareholders' equity, including stock repurchase programs and dividends - The Board authorized a stock repurchase program with cumulative funds up to **$60.0 million**[72](index=72&type=chunk) - During the six months ended August 31, 2025, the Company repurchased **456,671 shares** of common stock at an average price of **$18.54**, with **$13.1 million** remaining available under the program[73](index=73&type=chunk) - Since the program's inception in October 2008, **2,791,015 common shares** have been repurchased at an average price of **$16.81 per share**[73](index=73&type=chunk) [13. Stock Based Compensation](index=20&type=section&id=13.%20Stock%20Based%20Compensation) This note explains the company's stock-based compensation plans and related expenses - The Company grants stock options, restricted stock, and RSUs to key executives, managerial employees, and non-employee directors under the 2021 Long-Term Incentive Plan[74](index=74&type=chunk) | Period | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Stock-based Compensation Expense (in thousands) | $0.8 | $0.7 | $1.3 | $2.5 | - As of August 31, 2025, there was **$0.1 million** of unrecognized compensation cost related to unvested stock options (**0.6 years** remaining service period) and **$0.7 million** for unvested restricted stock (**2.4 years** remaining service period)[78](index=78&type=chunk)[79](index=79&type=chunk) [14. Pension Plan](index=23&type=section&id=14.%20Pension%20Plan) This note details the company's defined benefit pension plan, including costs and funding status - The Company has a noncontributory defined benefit pension plan covering approximately **12%** of employees; new employees hired after January 1, 2009, are excluded[85](index=85&type=chunk) | Component (in thousands) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :----------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service cost | $152 | $166 | $303 | $332 |\n| Interest cost | $648 | $649 | $1,298 | $1,298 |\n| Expected return on plan assets | $(710) | $(755) | $(1,420) | $(1,510) |\n| Amortization of unrecognized net loss | $366 | $436 | $732 | $872 |\n| Net periodic benefit cost | $456 | $496 | $913 | $992 | - The Company is not required to make a contribution to the pension plan for fiscal year 2026, but made a **$1.2 million** contribution in fiscal year 2025[87](index=87&type=chunk) [15. Earnings Per Share](index=24&type=section&id=15.%20Earnings%20Per%20Share) This note outlines the calculation of basic and diluted earnings per share - Basic EPS is computed by dividing net earnings by weighted average common shares outstanding; diluted EPS reflects potential dilution from stock options and RSUs using the treasury stock method[88](index=88&type=chunk) | Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic weighted average common shares outstanding | 25,718,068 | 26,009,876 | 25,836,670 | 26,015,195 |\n| Effect of dilutive securities | 73,579 | 44,623 | 68,955 | 140,966 |\n| Diluted weighted average common shares outstanding | 25,791,647 | 26,054,499 | 25,905,625 | 26,156,161 |\n| Net earnings - basic | $0.51 | $0.40 | $0.89 | $0.81 |\n| Net earnings - diluted | $0.51 | $0.40 | $0.89 | $0.80 |\n| Cash dividends per share | $0.25 | $0.25 | $0.50 | $0.50 | - Unvested share-based payment awards with non-forfeitable dividend rights are treated as participating securities in EPS computation[89](index=89&type=chunk) [16. Concentrations of Risk](index=26&type=section&id=16.%20Concentrations%20of%20Risk) This note identifies significant concentrations of credit and supply chain risks faced by the company - The Company's credit risk is concentrated in cash and accounts receivable; **$31.4 million** of cash balances were not federally insured at August 31, 2025[92](index=92&type=chunk) - The Company purchases paper products from a limited number of suppliers, posing a risk if alternative sources are not available at comparable cost or quality[94](index=94&type=chunk) [17. Related Party Transactions](index=26&type=section&id=17.%20Related%20Party%20Transactions) This note discloses transactions with entities controlled by related parties - The Company leases a facility and sells products to entities controlled by a Board member, with a total right-of-use asset and related lease liability of **$1.5 million** at August 31, 2025[95](index=95&type=chunk) - For the six months ended August 31, 2025, total lease payments were approximately **$0.3 million** and product sales were **$2.1 million** to director-controlled entities[95](index=95&type=chunk) [18. Income Taxes](index=26&type=section&id=18.%20Income%20Taxes) This note provides information on the company's income tax expense, effective tax rate, and cash payments - The effective tax rate for the three and six months ended August 31, 2025 and 2024, remained flat at **27.5%**[97](index=97&type=chunk) - Cash payments for income taxes (net of refunds) were **$8.8 million** for the six months ended August 31, 2025, down from **$9.2 million** in the prior year[97](index=97&type=chunk) - The Company is evaluating the tax provisions of the One Big Beautiful Bill Act (OBBBA) but does not expect a material impact on its financial statements[98](index=98&type=chunk) [19. Other Contingencies](index=27&type=section&id=19.%20Other%20Contingencies) This note discusses other potential liabilities and legal matters - The Company does not believe the disposition of any current litigation matter will have a material adverse effect on its consolidated financial position or results of operations[101](index=101&type=chunk) - The Company recognized **$5.7 million** in cash proceeds from a legal settlement against Wright Printing Company, fully resolving the matter[102](index=102&type=chunk) - A liability reserve of approximately **$0.4 million** has been accrued related to a lawsuit concerning the lease of the former B&D Litho facility, with the case scheduled for trial in Q1 2026[103](index=103&type=chunk) [20. Segment Reporting](index=27&type=section&id=20.%20Segment%20Reporting) This note details the company's operating segments and how performance is evaluated - The Company operates as a single reportable segment called 'Print,' manufacturing custom or semi-custom printed products primarily for independent distributors in the U.S[105](index=105&type=chunk) - The Chief Operating Decision Maker (CODM) evaluates performance and allocates resources on a consolidated basis using consolidated net income and total assets[104](index=104&type=chunk)[107](index=107&type=chunk) | Metric (in thousands) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Segment operating net sales | $98,676 | $99,038 | $195,872 | $202,146 |\n| Segment cost of goods sold | $68,574 | $69,259 | $135,541 | $141,463 |\n| Segment SG&A expenses | $17,719 | $16,557 | $34,665 | $33,727 |\n| Consolidated net earnings | $13,155 | $10,308 | $22,953 | $20,995 | [21. Subsequent Events](index=28&type=section&id=21.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date - On September 22, 2025, the Board declared a quarterly cash dividend of **$0.25 per share**, payable November 7, 2025, with an expected payout of approximately **$6.5 million**[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and operational results, highlighting key performance drivers, business challenges, and liquidity. It includes a cautionary statement regarding forward-looking information and detailed analysis of net sales, cost of goods sold, SG&A expenses, and other income for the three and six months ended August 31, 2025, compared to the prior year, along with a discussion of capital resources and future outlook [Cautionary Statement Regarding Forward-Looking Statements](index=29&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report - All statements in the report, other than historical facts, are forward-looking and subject to known and unknown risks, uncertainties, and other factors[113](index=113&type=chunk)[114](index=114&type=chunk) - The Company disclaims any duty to update these statements, which are based on current views and assumptions[115](index=115&type=chunk) - Key risks include general economic conditions, inflation, supply chain disruptions, ability to control operational costs, dependence on key suppliers, rising raw material costs, cybersecurity, and ability to integrate acquisitions[116](index=116&type=chunk) [Overview](index=29&type=section&id=Overview) This section provides a brief introduction to Ennis, Inc.'s business and product distribution - Ennis, Inc. (organized in 1909) prints and manufactures a broad line of business forms and other business products[117](index=117&type=chunk) - Products are distributed throughout the United States primarily through independent distributors, including commercial printers, direct mail, and software companies[117](index=117&type=chunk) [Business Overview](index=30&type=section&id=Business%20Overview) This section details Ennis, Inc.'s market position, operational footprint, and raw material sourcing - Ennis is believed to be the largest provider of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders to independent distributors in the United States[119](index=119&type=chunk)[122](index=122&type=chunk) - The Company operates **55 manufacturing plants** across **20 states**, with approximately **96%** of products being custom or semi-custom[120](index=120&type=chunk) - Raw materials, primarily paper, are purchased from a limited number of major suppliers at favorable prices due to high volume[124](index=124&type=chunk) [Recent Acquisitions](index=30&type=section&id=Recent%20Acquisitions) This section describes the company's recent strategic acquisitions and their impact - On April 11, 2025, the Company acquired Northeastern Envelope Company (NEC) and Envelope Superstore (ESS) for approximately **$34.9 million** in cash[48](index=48&type=chunk)[126](index=126&type=chunk) - NEC and ESS generated approximately **$26.0 million** in sales for their fiscal year ended December 31, 2024, and the acquisition strengthens production capabilities in the Northeast U.S[126](index=126&type=chunk) [Our Business Challenges](index=32&type=section&id=Our%20Business%20Challenges) This section discusses the industry trends and operational challenges facing the company - The industry faces consolidation of traditional supply channels, product obsolescence, paper supplier capacity adjustments, and increased pricing due to demand/supply imbalance[128](index=128&type=chunk) - The Company is transforming its product portfolio to address declining demand for traditional documents by investing in new technology, developing strategic relationships, and pursuing acquisitions in niche markets[128](index=128&type=chunk) - Recent mill closures and consolidations could lead to paper price fluctuations; the Company invested in buffer stock for carbonless paper due to the closure of the sole U.S. producer[129](index=129&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) This section addresses the key accounting estimates that require significant management judgment - No material changes to critical accounting estimates (pension plan, goodwill/intangible impairment, credit losses, inventory allowances) occurred during the quarter ended August 31, 2025, as described in the Annual Report on Form 10-K[132](index=132&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to new accounting standards and their potential impact on the financial statements - Refer to Note 1 of the accompanying unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements[133](index=133&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over specific periods [Consolidated Summary](index=34&type=section&id=Consolidated%20Summary) This section provides a high-level overview of key financial metrics for the periods presented | Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | 6 Months Ended Aug 31, 2025 | 6 Months Ended Aug 31, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $98,676 | $99,038 | $195,872 | $202,146 |\n| Cost of goods sold | $68,574 | $69,259 | $135,541 | $141,463 |\n| Gross profit margin | 30.5% | 30.1% | 30.8% | 30.0% |\n| Selling, general and administrative | $17,719 | $16,557 | $34,665 | $33,727 |\n| Income from operations | $12,383 | $13,183 | $25,666 | $26,913 |\n| Other income | $5,761 | $1,034 | $5,993 | $2,045 |\n| Net earnings | $13,155 | $10,308 | $22,953 | $20,995 | [Three months ended August 31, 2025 vs. 2024](index=34&type=section&id=Three%20months%20ended%20August%2031%2C%202025%20compared%20to%20three%20months%20ended%20August%2031%2C%202024) This section compares the company's financial performance for the three-month periods - Net Sales decreased by **$0.3 million** (**-0.3%**) to **$98.7 million**, with weaker volume demand (**$5.9 million** decrease) partially offset by recent acquisitions (**$5.5 million** increase)[138](index=138&type=chunk) - Gross Profit increased to **$30.1 million** (**30.5%** of revenue) from **$29.8 million** (**30.1%** of revenue), reflecting cost management and pricing actions[139](index=139&type=chunk) - Other Income significantly increased to **$5.8 million** from **$1.0 million**, primarily due to **$5.7 million** in legal settlement proceeds[143](index=143&type=chunk) - Net Earnings increased to **$13.2 million** from **$10.3 million**, with diluted EPS of **$0.51**, positively impacted by **$0.03** from acquisitions and **$0.14** from the lawsuit settlement[145](index=145&type=chunk) [Six months ended August 31, 2025 vs. 2024](index=36&type=section&id=Six%20months%20ended%20August%2031%2C%202025%20compared%20to%20six%20months%20ended%20August%2031%2C%202024) This section compares the company's financial performance for the six-month periods - Net Sales decreased by **$6.2 million** (**-3.1%**) to **$195.9 million**, with weaker volume demand (**$17.3 million** decrease) partially offset by recent acquisitions (**$11.0 million** increase)[147](index=147&type=chunk) - Gross Profit decreased slightly to **$60.3 million** from **$60.7 million**, but gross profit margin increased to **30.8%** from **30.0%**[148](index=148&type=chunk) - Other Income significantly increased to **$6.0 million** from **$2.0 million**, primarily due to **$5.7 million** in legal settlement proceeds[152](index=152&type=chunk) - Net Earnings increased by **$2.0 million** to **$23.0 million**, with diluted EPS of **$0.89**, positively impacted by **$0.03** from acquisitions and **$0.14** from the lawsuit settlement[154](index=154&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash, including working capital and cash flows [Working Capital](index=37&type=section&id=Working%20Capital) This section analyzes the company's short-term assets and liabilities, indicating its operational liquidity | Metric (in thousands) | August 31, 2025 | February 28, 2025 | | :-------------------- | :-------------- | :---------------- | | Working capital | $97,760 | $119,436 |\n| Cash | $31,886 | $67,000 |\n| Short-term investments | $— | $5,475 | - Working capital decreased by **$21.6 million** (**-18.1%**) to **$97.8 million** at August 31, 2025, primarily due to the **$34.9 million** acquisition of NEC and ESS and a strategic increase in inventory levels[156](index=156&type=chunk) - The current ratio decreased from **4.6:1.0** at February 28, 2025, to **3.4:1.0** at August 31, 2025[156](index=156&type=chunk) [Cash flows from operating activities](index=37&type=section&id=Cash%20flows%20from%20operating%20activities) This section details the cash generated or used by the company's primary business operations - Net cash provided by operating activities decreased to **$18.4 million** for the six months ended August 31, 2025, from **$34.9 million** in the prior year, primarily due to increased inventories and changes in receivables[157](index=157&type=chunk) - This decrease was mainly due to an increase in inventories (**$20.8 million** cash used) and an increase in accounts receivable (**$2.0 million** cash used), partially offset by an increase in accounts payable and accrued expenses (**$7.3 million** cash provided)[157](index=157&type=chunk) [Cash flows from investing activities](index=37&type=section&id=Cash%20flows%20from%20investing%20activities) This section outlines the cash used for or generated from investment-related activities, such as acquisitions and capital expenditures - Net cash used in investing activities significantly increased to **$32.0 million** for the six months ended August 31, 2025, from **$1.8 million** in the prior year, primarily driven by **$34.9 million** used for business acquisitions[158](index=158&type=chunk) - Capital expenditures were **$2.8 million** in 2025, down from **$3.6 million** in 2024[158](index=158&type=chunk) [Cash flows from financing activities](index=37&type=section&id=Cash%20flows%20from%20financing%20activities) This section describes the cash flows related to debt, equity, and dividend payments - Net cash used in financing activities increased by **$6.8 million** to **$21.6 million** for the six months ended August 31, 2025, compared to **$14.8 million** in the prior year[159](index=159&type=chunk) - This increase was mainly due to higher common stock repurchases (**$8.6 million** in 2025 vs. **$1.8 million** in 2024), while dividend payments remained consistent at approximately **$13.1 million**[159](index=159&type=chunk) [Credit Facility](index=37&type=section&id=Credit%20Facility) This section provides information on the company's available credit lines and their utilization - As of August 31, 2025, **$0.2 million** was outstanding under a standby letter of credit arrangement[160](index=160&type=chunk) - The Company anticipates sufficient cash, short-term investments, and operating cash flows to fund future expenditures, including acquisitions[160](index=160&type=chunk) [Pension Plan](index=37&type=section&id=Pension%20Plan) This section discusses the funding and obligations related to the company's defined benefit pension plan - The Company is not required to make a contribution to the pension plan for fiscal year 2026, but made a **$1.2 million** contribution in fiscal year 2025[161](index=161&type=chunk) - At August 31, 2025, the Company had a funded pension asset of **$1.4 million**[161](index=161&type=chunk) [Inventories](index=37&type=section&id=Inventories) This section explains the company's inventory management strategy and its impact on liquidity - The Company strategically increased inventory levels to mitigate risks from paper industry consolidation and the closure of the sole U.S. carbonless paper mill[165](index=165&type=chunk) - Long-term supply agreements with key paper vendors establish pricing but do not impose minimum purchase obligations, though rebate programs are contingent on minimum purchase volumes[165](index=165&type=chunk) [Capital Expenditures](index=39&type=section&id=Capital%20Expenditures) This section details the company's spending on property, plant, and equipment - Capital expenditures for operational maintenance are expected to range between **$4.0 million** and **$7.0 million** over the next twelve months, consistent with historical levels[155](index=155&type=chunk)[166](index=166&type=chunk) - For the six months ended August 31, 2025, **$2.8 million** was spent on capital expenditures, funded from the cash balance[166](index=166&type=chunk) [Contractual Obligations](index=39&type=section&id=Contractual%20Obligations) This section outlines the company's long-term commitments and liabilities - No significant changes in contractual obligations since February 28, 2025, that would materially impact results or financial condition[167](index=167&type=chunk) - The Company does not have off-balance sheet arrangements or special-purpose entities[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, primarily focusing on interest rate risk. It notes that while there was no outstanding debt as of August 31, 2025, future borrowings would expose the Company to interest rate fluctuations, which may be managed through interest rate swaps [Market Risk](index=40&type=section&id=Market%20Risk) This section details the company's exposure to financial market fluctuations, particularly interest rate changes - The Company is exposed to interest rate risk on short-term and long-term financial instruments with variable interest rates[170](index=170&type=chunk) - Interest rate swaps may be utilized to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates, but derivative instruments are not used for trading purposes[170](index=170&type=chunk) - As of August 31, 2025, the Company had no outstanding debt, but would be exposed to interest rate risk if it borrows in the future[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's disclosure controls and procedures, affirming their effectiveness as of August 31, 2025, based on evaluation by the CEO and CFO. It also states that there have been no material changes in internal control over financial reporting during the period [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section describes the assessment of the effectiveness of the company's disclosure controls - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of August 31, 2025[172](index=172&type=chunk) - Based on this evaluation, disclosure controls and procedures are concluded to be effective in providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[172](index=172&type=chunk) [Changes in Internal Control Over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports any material changes in the company's internal control over financial reporting - No changes in internal control over financial reporting occurred during the three and six months ended August 31, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[173](index=173&type=chunk) PART II: OTHER INFORMATION This section includes legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the Company's involvement in legal matters, stating that ongoing litigation is not expected to have a material adverse effect on its financial position or operations. It specifically mentions a lawsuit regarding the former B&D Litho facility, for which a liability reserve of $0.4 million has been accrued - The Company is involved in various litigation matters in the ordinary course of business, but does not believe any current matter will have a material adverse effect on its consolidated financial position or results of operations[175](index=175&type=chunk) - A lawsuit in Arizona concerning the lease of the former B&D Litho facility has resulted in a preliminary ruling against the Company for failure to maintain certain equipment and surfaces[176](index=176&type=chunk) - A liability reserve of approximately **$0.4 million** has been accrued for this claim, with the case scheduled for trial in Q1 2026[176](index=176&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the Company's risk factors since those discussed in its Annual Report on Form 10-K for the fiscal year ended February 28, 2025 - No material changes in Risk Factors have occurred since those previously discussed in the Annual Report on Form 10-K for the fiscal year ended February 28, 2025[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's stock repurchase program, including the latest funding authorization and the number of shares repurchased during the period, as well as the remaining authorized amount - The Board authorized an additional **$20.0 million** for the share repurchase program in July 2022, bringing the cumulative authorized funds to **$60.0 million**[179](index=179&type=chunk) - During the six months ended August 31, 2025, the Company repurchased **456,671 shares** of common stock at an average price of **$18.54**, with **$13.1 million** remaining available under the program[180](index=180&type=chunk) - As of August 31, 2025, **$13.1 million** remained available for repurchases under the program[180](index=180&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the 10-Q report, including corporate organizational documents, certifications from the CEO and CFO, and XBRL-formatted financial data - Exhibits include Restated Articles of Incorporation, Amendment to Articles of Incorporation, and Fourth Amended and Restated Bylaws[182](index=182&type=chunk) - Certifications pursuant to Rule 13a-14(a) from the Chief Executive Officer and Chief Financial Officer are filed herewith[182](index=182&type=chunk)[183](index=183&type=chunk) - The report includes Inline XBRL formatted financial information for the quarter ended August 31, 2025[182](index=182&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers - The report is signed by Keith S. Walters, Chairman, Chief Executive Officer and President, and Vera Burnett, Chief Financial Officer, Treasurer and Principal Financial and Accounting Officer, on October 3, 2025[187](index=187&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Ennis, Inc. reported a slight revenue decrease but improved profitability metrics, including gross profit margin, net earnings, and diluted EPS, for both the quarter and six-month period ended August 31, 2025 [Quarterly Performance Overview](index=1&type=section&id=Quarterly%20Performance%20Overview) For the quarter ended August 31, 2025, Ennis, Inc. reported a slight revenue decrease but significant improvements in gross profit margin, net earnings, and diluted EPS compared to the prior year's quarter | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (Millions) | Change (%) | | :------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Revenues | $98.7 | $99.0 | -$0.3 | -0.3% | | Gross Profits | $30.1 | $29.8 | +$0.3 | +1.0% | | Gross Profit Margin | 30.5% | 30.1% | +0.4 pts | | | Net Earnings | $13.2 | $10.3 | +$2.9 | +28.2% | | Diluted EPS | $0.51 | $0.40 | +$0.11 | +27.5% | [Six-Month Period Performance Overview](index=1&type=section&id=Six-Month%20Period%20Performance%20Overview) For the six-month period ended August 31, 2025, the Company experienced a revenue decline but improved gross profit margin, net earnings, and diluted EPS compared to the same period last year | Metric | 6M 2025 (Millions) | 6M 2024 (Millions) | Change (Millions) | Change (%) | | :------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Revenues | $195.9 | $202.1 | -$6.2 | -3.1% | | Gross Profit Margin | 30.8% | 30.0% | +0.8 pts | | | Net Earnings | $23.0 | $21.0 | +$2.0 | +9.5% | | Diluted EPS | $0.89 | $0.80 | +$0.09 | +11.3% | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlights improved gross margins and EBITDA, positive impacts from a legal settlement and acquisitions, and a strong debt-free balance sheet supporting share repurchases and future acquisitions [CEO's Review of Performance](index=1&type=section&id=CEO's%20Review%20of%20Performance) CEO Keith Walters noted that quarterly performance met expectations despite a sales volume decline, driven by improved gross margin and a significant increase in EBITDA. Results were positively impacted by a legal settlement and contributions from recent acquisitions - Sales volume declined, but gross margin improved to **30.5%** (up **40 basis points YoY**), though down **60 basis points QoQ**[3](index=3&type=chunk) EBITDA Performance | Metric | Q3 2025 (Millions) | Q2 2025 (Millions) | Q3 2024 (Millions) | | :----- | :----------------- | :----------------- | :----------------- | | EBITDA | $22.5 | $17.7 | $18.4 | | % of Sales | 22.8% | 18.2% | 18.6% | - A **$5.7 million** collection from a trade secret theft judgment positively impacted the quarter's results[3](index=3&type=chunk) - Recent acquisitions contributed approximately **$5.5 million** in revenues for the quarter and **$11.0 million** for the six-month period, positively impacting diluted EPS by **$0.03** for the quarter and **$0.06** for the six-month period, with Northeastern Envelope Company (NEC) and Printing Technologies, Inc. (PTI) delivering strong results[4](index=4&type=chunk) [Strategic Initiatives and Financial Position](index=3&type=section&id=Strategic%20Initiatives%20and%20Financial%20Position) The Company maintains a strong, debt-free balance sheet with sufficient cash reserves. Strategic inventory building for carbonless paper is complete, and cash flow is expected to strengthen. Ennis continues to repurchase shares and plans to pursue acquisitions without debt - The Company boasts a strong balance sheet with **no debt** and sufficient cash reserves, expecting cash flow to strengthen in coming quarters[6](index=6&type=chunk) - Strategically built additional inventory of carbonless paper following the closure of the only domestic producer, anticipating lower purchasing needs ahead[6](index=6&type=chunk) - Repurchased **456,671 shares** of common stock for **$8.5 million** year-to-date[6](index=6&type=chunk) - Financial position allows for debt-free operations and acquisitions, with access to credit for larger opportunities[6](index=6&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The Company presents EBITDA as a key non-GAAP measure, providing a reconciliation to net earnings to offer additional insights into operational performance [EBITDA Reconciliation](index=3&type=section&id=EBITDA%20Reconciliation) The Company provides EBITDA as a non-GAAP financial measure to offer supplemental information on financial and business trends, reconciling it to net earnings for both the three- and six-month periods - EBITDA is presented as a non-GAAP measure to provide supplemental information for assessing results of operations, calculated as net earnings before interest expense, tax expense, depreciation, and amortization[7](index=7&type=chunk)[8](index=8&type=chunk) EBITDA Reconciliation Table | Metric (in thousands) | Three months ended Aug 31, 2025 | Three months ended Aug 31, 2024 | Six months ended Aug 31, 2025 | Six months ended Aug 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net earnings | $13,155 | $10,308 | $22,953 | $20,995 | | Income tax expense | $4,989 | $3,909 | $8,706 | $7,963 | | Depreciation & amortization | $4,309 | $4,186 | $8,492 | $8,430 | | **EBITDA (non-GAAP)** | **$22,453** | **$18,403** | **$40,151** | **$37,388** | | % of sales | 22.8% | 18.6% | 20.5% | 18.5% | [Other Corporate News](index=3&type=section&id=Other%20Corporate%20News) The Board of Directors declared a quarterly cash dividend of 25.0 cents per share, payable in November 2025 [Quarterly Dividend Declaration](index=3&type=section&id=Quarterly%20Dividend%20Declaration) Ennis, Inc.'s Board of Directors declared a quarterly cash dividend of 25.0 cents per share - A quarterly cash dividend of **25.0 cents per share** was declared on September 19, 2025[11](index=11&type=chunk) - The dividend is payable on November 7, 2025, to shareholders of record on October 10, 2025[11](index=11&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) Ennis, Inc. is a leading private-label printed business product supplier, providing a safe harbor statement for forward-looking information subject to various business risks [About Ennis, Inc.](index=3&type=section&id=About%20Ennis,%20Inc.) Ennis, Inc., founded in 1909 and headquartered in Midlothian, Texas, is a leading private-label printed business product supplier in the U.S., offering a wide range of custom printed products through a national distributor network - Founded in 1909, Ennis, Inc. is one of the largest private-label printed business product suppliers in the United States[12](index=12&type=chunk) - The Company manufactures and sells various products including business forms, integrated forms and labels, presentation products, advertising specialties, secure documents, specialty packaging, and envelopes[12](index=12&type=chunk) [Forward-Looking Statements (Safe Harbor)](index=5&type=section&id=Forward-Looking%20Statements%20(Safe%20Harbor)) This section provides a safe harbor statement under the Private Securities Litigation Reform Act of 1995, cautioning that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements are identified by words like 'anticipate,' 'expect,' 'believe,' and 'intend,' and are subject to risks and uncertainties[13](index=13&type=chunk) - Key risks include erosion of demand due to digital technologies, risks related to acquisitions and integration, and variability in raw material prices (e.g., paper)[13](index=13&type=chunk) - The Company disclaims any duty to update or revise forward-looking statements after the release date[13](index=13&type=chunk) [Unaudited Condensed Consolidated Financial Information](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Information) This section presents the unaudited condensed consolidated operating results, balance sheet, and cash flow information for the periods ended August 31, 2025 [Condensed Consolidated Operating Results](index=6&type=section&id=Condensed%20Consolidated%20Operating%20Results) The condensed consolidated operating results detail the Company's financial performance for the three and six months ended August 31, 2025, compared to the prior year, showing changes in sales, costs, and earnings Condensed Consolidated Operating Results (in thousands) | Metric (in thousands) | Three months ended Aug 31, 2025 | Three months ended Aug 31, 2024 | Six months ended Aug 31, 2025 | Six months ended Aug 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net sales | $98,676 | $99,038 | $195,872 | $202,146 | | Cost of goods sold | $68,574 | $69,259 | $135,541 | $141,463 | | Gross profit | $30,102 | $29,779 | $60,331 | $60,683 | | Selling, general and administrative | $17,719 | $16,557 | $34,665 | $33,727 | | Income from operations | $12,383 | $13,183 | $25,666 | $26,913 | | Net earnings | $13,155 | $10,308 | $22,953 | $20,995 | | Diluted EPS | $0.51 | $0.40 | $0.89 | $0.80 | [Condensed Consolidated Balance Sheet Information](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheet%20Information) The balance sheet provides a snapshot of the Company's financial position as of August 31, 2025, compared to February 28, 2025, highlighting changes in assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheet (in thousands) | Metric (in thousands) | August 31, 2025 | February 28, 2025 | | :-------------------- | :-------------- | :---------------- | | Cash | $31,886 | $67,000 | | Accounts receivable, net | $42,157 | $38,753 | | Inventories, net | $62,078 | $38,797 | | Total Current Assets | $138,914 | $152,740 | | Goodwill and intangible assets, net | $147,551 | $127,619 | | Total Assets | $361,833 | $348,935 | | Total Current Liabilities | $41,154 | $33,304 | | Total Liabilities | $56,453 | $46,955 | | Shareholders' equity | $305,380 | $301,980 | [Condensed Consolidated Cash Flow Information](index=6&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Information) The cash flow statement outlines the sources and uses of cash for the six months ended August 31, 2025, showing a net decrease in cash primarily due to investing and financing activities Condensed Consolidated Cash Flow (in thousands) | Metric (in thousands) | Six months ended Aug 31, 2025 | Six months ended Aug 31, 2024 | | :-------------------- | :---------------------------- | :---------------------------- | | Cash provided by operating activities | $18,424 | $34,941 | | Cash provided by (used in) investing activities | ($31,954) | ($1,777) | | Cash used in financing activities | ($21,584) | ($14,784) | | Change in cash | ($35,114) | $18,380 | | Cash at end of period | $31,886 | $99,977 |

Core Insights - Ennis, Inc. reported revenues of $98.7 million for the quarter ended August 31, 2025, reflecting a slight decrease of $0.3 million or -0.3% compared to $99.0 million in the same quarter last year [1] - The earnings per diluted share increased to $0.51 for the current quarter, up from $0.40 in the comparative quarter last year [1] - The gross profit margin for the quarter was 30.5%, an improvement from 30.1% in the previous year [1]

Core Viewpoint - The recent commentary on Ennis, Inc. (NYSE: EBF) maintains a 'Hold' position despite some concerning technical indicators on the intermediate chart [1] Company Analysis - Ennis, Inc. is a US-based printing-related company that has been under observation for its stock performance [1] - The company is noted for its focus on generating income through undervalued profitable stocks with strong balance sheets and minimal debt [1] Investment Strategy - The investment approach includes writing calls against positions to generate additional income when opportunities arise [1] - Risk management is emphasized through position sizing and the use of trailing stop losses over time [1]

Financial Performance - Net sales for the quarter ended May 31, 2025, were $97.2 million, a decrease of $5.9 million or -5.7% compared to $103.1 million in the same quarter of the prior year[138]. - Income from operations for the quarter was $13.3 million, representing 13.7% of net sales, compared to $13.7 million or 13.3% in the prior year[137]. - Net earnings for the quarter were $9.8 million, or 10.1% of net sales, down from $10.7 million or 10.4% in the same quarter last year[137]. - Gross profit was $30.2 million, or 31.1% of revenue, for the quarter ended May 31, 2025, compared to $30.9 million, or 30.0% of revenue, for the same quarter in the prior year[139]. - Cash provided by operating activities was $7.96 million for the three months ended May 31, 2025, compared to $23.1 million for the same period in 2024[149]. - Working capital decreased by $29.2 million, or -24.4%, from $119.4 million at February 28, 2025, to $90.2 million at May 31, 2025[148]. - The effective income tax rate remained flat at 27.5% for the three months ended May 31, 2025, compared to the same period in 2024[144]. Sales and Revenue - Sales from legacy plants decreased by $11.4 million due to weaker volume demand, partially offset by an increase of approximately $5.5 million in revenues from recent acquisitions[138]. - The company acquired the net assets and business of NEC and ESS, which generated approximately $26.0 million in sales for the fiscal year ended December 31, 2024[127]. Cost Management - Cost of goods sold decreased by $5.2 million, or -7.2%, from $72.2 million to $67.0 million for the three months ended May 31, 2024, and 2025 respectively[139]. - Selling, general, and administrative expenses decreased by $0.3 million, or -1.7%, from $17.2 million to $16.9 million for the three months ended May 31, 2024, and 2025 respectively[140]. - The company continues to focus on managing product costs and maintaining margins amid competitive pressures and fluctuating raw material prices[130]. Industry Challenges - The printing industry is facing challenges such as product obsolescence and increased pricing due to supply chain disruptions[129]. Manufacturing and Operations - Approximately 96% of the business products manufactured are custom and semi-custom products, tailored to customer specifications[121]. - The company operates 57 manufacturing plants across 20 states in the U.S.[121]. Capital Expenditures - Capital expenditures for the three months ended May 31, 2025 were approximately $1.4 million, with expected capital requirements for the current fiscal year between $4.0 million and $7.0 million[156]. - Cash used in investing activities was $30.8 million for the three months ended May 31, 2025, compared to $5.1 million for the same period in 2024, primarily due to the acquisition of NEC and ESS for approximately $34.9 million[150].

Financial Performance - Revenues for the first quarter ended May 31, 2025, were $97.2 million, a decrease of $5.9 million or 5.7% compared to $103.1 million for the same quarter last year[1] - Net earnings for the quarter were $9.8 million, or $0.38 per diluted share, compared to $10.7 million, or $0.41 per diluted share for the same quarter last year[1] - EBITDA for the current quarter was $17.7 million, or 18.2% of sales, compared to $19.0 million, or 18.4% of sales for the same quarter last year[2] Profitability Metrics - Gross profit margin increased to 31.1% for the quarter, up from 30.0% for the same quarter last year[2] - Recent acquisitions generated approximately $5.5 million in revenues during the quarter and positively impacted diluted earnings per share by $0.035[3] Cash Flow and Capital Management - Cash provided by operating activities was $7.96 million, while cash used in investing activities was $(30.8) million for the quarter[15] - The company repurchased 260,560 shares of common stock at an average price of $19.00 per share, reducing cash balances to $32.0 million[5] Dividends and Financial Position - The company declared a quarterly cash dividend of $0.25 per share, payable on August 11, 2025[10] - The company maintains a strong financial position with no debt and anticipates timely access to credit for future acquisitions[5] Inventory and Supply Chain Management - The company is investing in additional inventory to mitigate supply disruptions from the closure of the sole U.S. mill producing carbonless paper[4]

Core Insights - The article emphasizes the importance of taking proactive steps towards career advancement by suggesting individuals start their own businesses instead of waiting for promotions that may not materialize [1]. Group 1 - The quote from Sallie Krawcheck encourages a shift in mindset from hoping for external validation to creating personal opportunities [1].

Company Operations and Acquisitions - Ennis, Inc. operates 56 manufacturing plants across 20 states in the U.S., primarily producing custom and semi-custom printed products, with approximately 94% of products tailored to customer specifications [18]. - The company acquired Printing Technologies, Inc. on June 26, 2024, which generated approximately $12.5 million in sales in the year prior to the acquisition, enhancing production capabilities [24]. - On October 11, 2023, Ennis acquired Eagle Graphics, Inc. and Diamond Graphics, Inc., which together generated approximately $8.7 million in sales in the previous year, strengthening production in the Northeast [25]. - The acquisition of UMC Print on June 2, 2023, added approximately $16.1 million in sales for 2022, expanding the distributor customer base and product offerings [26]. Financial Performance - Net sales for fiscal year 2025 were $394.6 million, a decrease of $25.5 million or -6.1% from $420.1 million in fiscal year 2024, primarily due to a $38.7 million decrease in volume demand [126]. - Cost of goods sold decreased by $17.4 million or -5.9% from $294.8 million in fiscal year 2024 to $277.3 million in fiscal year 2025, resulting in a gross profit margin of 29.7% [128]. - Selling, general and administrative expenses for fiscal year 2025 were $65.4 million, a decrease of $3.5 million or -5.0% from $68.8 million in fiscal year 2024 [130]. - Income from operations decreased by $4.5 million to $52.0 million or 13.2% of net sales in fiscal year 2025, compared to $56.5 million or 13.4% in fiscal year 2024 [133]. - Net earnings for fiscal year 2025 were $40.2 million, or $1.54 per diluted share, down from $42.6 million or $1.64 per diluted share in fiscal year 2024 [137]. Employee and Labor Relations - The company employs 1,856 individuals, with 157 represented by labor unions, maintaining a good relationship with employees and unions [42]. - Employee health benefits costs are significant and have risen, impacting financial results and cash flow [76]. - Labor shortages and rising labor-related costs could adversely impact the company's earnings [62]. Environmental and Sustainability Efforts - Ennis recycled 21.1 million pounds of paper and 1.1 million pounds of cardboard in fiscal year 2025, demonstrating commitment to environmental stewardship [35]. - The company’s primary paper supplier is certified by SFI, FSC, and PEFC, ensuring sustainable sourcing of raw materials [38]. Risks and Challenges - The company faces risks from global and local market conditions, which can adversely affect sales, margins, and net income [49]. - The company has a significant reliance on a limited number of suppliers for raw materials, which could impact operations if disruptions occur [54]. - The prices for paper and raw materials have been volatile, with significant fluctuations potentially impacting operating results [55]. - The company is monitoring changes in U.S. tariff and trade policies, which could lead to higher costs and impact demand from customers [65]. - The company is exposed to the risk of non-payment by customers, which could materially affect results of operations [68]. Cybersecurity and Technology - The company experienced a ransomware attack on November 30, 2022, which was eliminated, and systems were restored [74]. - The company has implemented additional security measures, including multifactor authentication and a robust firewall, to enhance network security [75]. - The company views cybersecurity as a shared responsibility and conducts annual risk assessments and penetration testing to maintain a robust cybersecurity program [80]. - The company has not identified any material risks from cybersecurity threats that have affected business operations or financial conditions during the fiscal year ended February 28, 2025 [81]. Shareholder Returns and Stock Performance - The company's common stock price fluctuated between $18.88 and $25.75 during the fiscal year ended February 28, 2025, with a trading volume of 7,439 thousand shares in the first quarter [98]. - A special dividend of $2.50 per share was paid in addition to the ordinary dividend of $0.25 per share during the third quarter of fiscal year 2025 [99]. - The company has authorized a stock repurchase program of up to $60.0 million, with $21.5 million remaining as of February 28, 2025 [101]. - Since the program's inception in October 2008, the company has repurchased 2,334,344 shares at an average price of $16.47 per share, with 91,883 shares repurchased in fiscal year 2025 at an average price of $19.79 [101]. Pension and Retirement Plans - As of February 28, 2025, the company's Pension Plan was 103% funded on a projected benefit obligation basis and 109% on an accumulated benefit obligation basis [57]. - Approximately 12% of the company's employees are covered by a noncontributory defined benefit retirement plan [57]. - The expected rate of return on pension plan assets was 5.50% as of February 28, 2025, down from 6.00% in the previous year [117]. - The discount rate for pension obligations was 5.15% for fiscal years 2024 and 2025, with a 10-basis point change impacting pension liability by approximately $0.5 million [118]. Inventory and Capital Expenditures - The allowance for excess and obsolete inventory was $1.8 million for fiscal year 2025, up from $1.7 million in fiscal year 2024 [124]. - The company intends to build a surplus of inventory as a buffer until transitioning to other sources of carbonless paper [150]. - The company anticipates capital expenditures for fiscal year 2025 to be between $4.0 million and $7.0 million, funded through existing cash flows [151]. Legal Matters - The company is involved in litigation matters but does not believe any current matter will materially affect its consolidated financial position or results of operations [93]. - The company has accrued a liability reserve of approximately $0.4 million related to a lawsuit concerning the lease of a facility [95].

Financial Performance - Revenues for the fourth quarter were $92.7 million, a decrease of 4.8% from $97.4 million in the same quarter last year[2] - Net earnings for the fourth quarter were $9.0 million, or $0.35 per diluted share, compared to $10.1 million, or $0.39 per diluted share in the same quarter last year[2][6] - For the fiscal year, revenues were $394.6 million, down 6.1% from $420.1 million in the previous fiscal year[3] - Net earnings for the fiscal year were $40.2 million, or $1.54 per diluted share, compared to $42.6 million, or $1.64 per diluted share in the previous fiscal year[3][6] Profitability - Gross profit for the fourth quarter was $27.4 million, representing a gross profit margin of 29.5%, up from 28.4% in the prior year quarter[2][4] - Gross profits for the fiscal year totaled $117.3 million, with a gross profit margin of 29.7%, slightly down from 29.8% in the prior fiscal year[3][6] - EBITDA for the fourth quarter was $16.5 million, or 17.8% of sales, compared to $18.1 million, or 18.6% of sales in the same quarter last year[4][12] Shareholder Returns - The company returned $92.0 million to shareholders in dividends, including a special dividend of $2.50 per share[8] Financial Position - The company maintains a strong financial position with $72.5 million in cash and short-term investments and no debt[8] Acquisitions - Recent acquisitions generated approximately $2.5 million in revenues for the quarter and $13.2 million for the year[5]

Financial Performance - Net sales for the three months ended November 30, 2024, were $99,771,000, a decrease of 4.0% compared to $104,621,000 for the same period in 2023[133] - Net earnings for the three months ended November 30, 2024, were $10,204,000, representing a 3.0% increase from $9,906,000 in the prior year[133] - The company reported earnings before income taxes of $14,075,000 for the three months ended November 30, 2024, compared to $13,816,000 in the same period of 2023[133] - Net sales for the quarter ended November 30, 2024, were $99.8 million, a decrease of $4.8 million or -4.6% compared to $104.6 million for the same quarter in the prior year[134] - Net earnings for the quarter were $10.2 million, an increase from $9.9 million in the comparable quarter of the prior year, with after-tax earnings per diluted share at $0.39 compared to $0.38 last year[141][143] - For the nine months ended November 30, 2024, net sales were $301.9 million, a decrease of $20.8 million or -6.4% compared to $322.7 million for the same period last year[144] Profitability Metrics - Gross profit margin for the three months ended November 30, 2024, was 29.3%, slightly up from 29.2% in the same period of 2023[133] - Cost of goods sold for the three months ended November 30, 2024, was $70,522,000, which is 70.7% of net sales, compared to 70.8% in the same period of 2023[133] - Gross profit for the quarter was $29.2 million, representing a gross profit margin of 29.3%, which is a slight increase from 29.2% in the same quarter last year[135] - Gross profit margin for the nine-month period was 29.8%, down from 30.3% in the prior year, reflecting continued pressure from soft market conditions[145] Expenses - Selling, general and administrative expenses for the three months ended November 30, 2024, were $16,341,000, a decrease from $17,410,000 in the same period of 2023[133] - Selling, general, and administrative (SG&A) expenses decreased to $16.3 million, or 16.4% of net sales, down from $17.4 million or 16.6% in the prior year[136] - Income from operations for the quarter was $13.0 million, or 13.1% of net sales, remaining relatively flat compared to $13.1 million, or 12.5% of net sales, for the same quarter last year[138] Cash Flow and Working Capital - Net cash provided by operating activities was $53.1 million for the nine months ended November 30, 2024, compared to $52.5 million in the prior year[155] - Working capital decreased by $47.5 million or -28.3% to $120.1 million due to a special dividend of $65.0 million paid to shareholders during the nine months ended November 30, 2024[154] Debt and Financial Structure - As of November 30, 2024, the company had no outstanding debt, indicating a current lack of leverage in its financial structure[166] - The company is exposed to interest rate risk on both short-term and long-term financial instruments with variable interest rates, which may impact future borrowing costs[166] - The company may utilize interest rate swaps in the future to manage overall borrowing costs and mitigate adverse fluctuations in interest rates[166] Market Conditions and Strategic Initiatives - The company aims to transform its product offerings to adapt to digital business environments and is exploring new market opportunities through acquisitions[124] - The company faces challenges from increased pricing and supply chain disruptions, impacting operational results and margins[125] - The company continues to maintain a majority of its historical business despite ongoing consolidation among its distributor customers[126] - The market risk discussion includes forward-looking statements, suggesting potential variability in actual results based on market conditions[167]