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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended May 31, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from to

Commission File Number 1-5807

ENNIS, INC.

(Exact Name of Registrant as Specified in Its Charter)


Texas		75-0256410
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2441 Presidential Pkwy., Midlothian, Texas		76065
(Address of Principal Executive Offices)		(Zip code)

Registrant’s Telephone Number, Including Area Code: (972) 775-9801

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, par value $2.50 per share

     EBF

     New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 23, 2025, there were 25,795,161 shares of the Registrant’s common stock outstanding.

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2025

TABLE OF CONTENTS


PART I: FINANCIAL INFORMATION

	Item 1. Condensed Consolidated Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets at May 31, 2025 and February 28, 2025	3

	Condensed Consolidated Statements of Operations for the three months ended May 31, 2025 and May 31, 2024	5

	Condensed Consolidated Statements of Comprehensive Income for the three months ended May 31, 2025 and May 31, 2024	6

	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended May 31, 2025 and May 31, 2024	7

	Condensed Consolidated Statements of Cash Flows for the three months ended May 31, 2025 and May 31, 2024	8

	Notes to Condensed Consolidated Financial Statements (unaudited)	9

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	29

	Item 4. Controls and Procedures	29

PART II: OTHER INFORMATION

	Item 1. Legal Proceedings	29

	Item 1A. Risk Factors	30

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 3. Defaults Upon Senior Securities	30

	Item 4. Mine Safety Disclosures	30

	Item 5. Other Information	30

	Item 6. Exhibits	30

SIGNATURES		31

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ENNIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)


	May 31,		February 28,
	2025		2025
Assets
Current assets
Cash and cash equivalents	$	32,623	$	67,000
Short-term investments		—		5,475
Accounts receivable, net		36,942		37,037
Other receivables		10,646		1,716
Inventories, net		53,109		38,797
Prepaid expenses		2,725		2,587
Prepaid income taxes		—		128
Total current assets		136,045		152,740
Property, plant and equipment
Plant, machinery and equipment		161,316		158,730
Land and buildings		71,703		67,946
Computer equipment and software		10,488		10,597
Other		3,947		3,995
Total property, plant and equipment		247,454		241,268
Less accumulated depreciation		188,368		188,682
Property, plant and equipment, net		59,086		52,586
Operating lease right-of-use assets, net		10,808		9,833
Goodwill		106,756		94,349
Intangible assets, net		42,824		33,270
Net pension asset		1,422		1,422
Other assets		4,719		4,735
Total assets	$	361,660	$	348,935

See accompanying notes to condensed consolidated financial statements.

ENNIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS-Continued

(unaudited, in thousands, except for par value and share amounts)


	May 31,			February 28,
	2025			2025
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	23,144		$	13,799
Accrued expenses		18,391			15,339
Current portion of operating lease liabilities		4,271			4,166
Total current liabilities		45,806			33,304
Deferred income taxes		7,955			7,841
Operating lease liabilities, net of current portion		6,246			5,310
Other liabilities		501			500
Total liabilities		60,508			46,955
Shareholders’ equity
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at May 31, 2025 and February 28, 2025		75,134			75,134
Additional paid-in capital		125,677			125,452
Retained earnings		187,658			184,430
Accumulated other comprehensive loss:
Minimum pension liability, net of taxes		(11,083	)		(11,426	)
Treasury stock		(76,234	)		(71,610	)
Total shareholders’ equity		301,152			301,980
Total liabilities and shareholders' equity	$	361,660		$	348,935

See accompanying notes to condensed consolidated financial statements.

ENNIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share amounts)


	Three months ended
	May 31,
	2025			2024
Net sales	$	97,197		$	103,108
Cost of goods sold		66,967			72,204
Gross profit		30,230			30,904
Selling, general and administrative		16,947			17,170
Loss from disposal of assets		—			4
Income from operations		13,283			13,730
Other income (expense)
Interest income		550			1,359
Other, net		(318	)		(348	)
Total other income (expense)		232			1,011
Earnings before income taxes		13,515			14,741
Income tax expense		3,716			4,054
Net earnings	$	9,799		$	10,687
Weighted average common shares outstanding
Basic		25,956,639			26,156,928
Diluted		26,021,247			26,279,646
Earnings per share
Basic	$	0.38		$	0.41
Diluted	$	0.38		$	0.41

See accompanying notes to condensed consolidated financial statements.

ENNIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)


	Three months ended
	May 31,
	2025		2024
Net earnings	$	9,799	$	10,687
Adjustment to pension, net of taxes		343		372
Comprehensive income	$	10,142	$	11,059

See accompanying notes to condensed consolidated financial statements.

ENNIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited, in thousands, except share and per share amounts)


											Accumulated
					Additional						Other
	Common Stock				Paid-in			Retained			Comprehensive			Treasury Stock
	Shares		Amount		Capital			Earnings			Income (Loss)			Shares			Amount			Total
Balance February 28, 2025		30,053,443	$	75,134	$	125,452		$	184,430		$	(11,426	)		(4,060,655	)	$	(71,610	)	$	301,980
Net earnings		—		—		—			9,799			—			—			—			9,799
Adjustment to pension, net of deferred tax of $114		—		—		—			—			343			—			—			343
Dividends paid ($0.25 per share)		—		—		—			(6,571	)		—			—			—			(6,571	)
Stock based compensation		—		—		568			—			—			—			—			568
Exercise of stock options and restricted stock		—		—		(343	)		—			—			21,933			387			44
Common stock repurchases		—		—		—			—			—			(260,560	)		(5,011	)		(5,011	)
Balance May 31, 2025		30,053,443	$	75,134	$	125,677		$	187,658		$	(11,083	)		(4,299,282	)	$	(76,234	)	$	301,152

Balance February 29, 2024		30,053,443	$	75,134	$	126,253		$	236,196		$	(13,019	)		(4,250,226	)	$	(74,723	)	$	349,841
Net earnings		—		—		—			10,687			—			—			—			10,687
Adjustment to pension, net of deferred tax of $124		—		—		—			—			372			—			—			372
Dividends paid ($0.25 per share)		—		—		—			(6,460	)		—			—			—			(6,460	)
Stock based compensation		—		—		1,760			—			—			—			—			1,760
Exercise of stock options and restricted stock		—		—		(4,065	)		—			—			231,216			4,065			—
Common stock repurchases		—		—		—			—			—			(91,883	)		(1,827	)		(1,827	)
Balance May 31, 2024		30,053,443	$	75,134	$	123,948		$	240,423		$	(12,647	)		(4,110,893	)	$	(72,485	)	$	354,373

See accompanying notes to condensed consolidated financial statements.

ENNIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Three months ended
	May 31,
	2025			2024
Cash flows from operating activities:
Net earnings	$	9,799		$	10,687
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		2,239			2,314
Amortization of intangible assets		1,944			1,929
Loss from disposal of assets		—			4
Amortization of discount on short-term investments		(25	)		(408	)
Bad debt expense, net of recoveries		90			110
Stock based compensation		568			1,760
Deferred income taxes		—			56
Net pension expense		457			496
Changes in operating assets and liabilities, net of the effects of acquisitions
Accounts and other receivables		(7,340	)		3,190
Prepaid expenses and income taxes		(10	)		677
Inventories		(11,798	)		(966	)
Other assets		16			—
Accounts payable and accrued expenses		11,953			3,275
Other liabilities		67			(19	)
Net cash provided by operating activities		7,960			23,105
Cash flows from investing activities:
Capital expenditures		(1,368	)		(2,510	)
Purchase of businesses, net of cash acquired		(34,931	)		—
Purchase of short-term investments		—			(10,093	)
Maturity of short-term investments		5,500			7,500
Proceeds from disposal of plant and property		—			51
Net cash used in investing activities		(30,799	)		(5,052	)
Cash flows from financing activities:
Dividends paid		(6,571	)		(6,460	)
Common stock repurchases		(5,011	)		(1,827	)
Proceeds from exercise of stock options		44			—
Net cash used in financing activities		(11,538	)		(8,287	)
Net change in cash and cash equivalents		(34,377	)		9,766
Cash and cash equivalents at beginning of period		67,000			81,597
Cash and cash equivalents at end of period	$	32,623		$	91,363

See accompanying notes to condensed consolidated financial statements.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

1. Significant Accounting Policies and General Matters

Basis of Presentation

These unaudited condensed consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2025 have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP') and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2025, from which the accompanying consolidated balance sheet at February 28, 2025 was derived. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included and are of a normal recurring nature. The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in a public entity’s income tax rate reconciliation table and other disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024 (fiscal 2026 for the Company), but early adoption is permitted. This ASU should be applied on a prospective basis, although retrospective application is permitted. Management expects the adoption of the pronouncement will result in additional disclosures in its Consolidated Financial Statements for fiscal year 2026 but does not expect it to have a material impact on our Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, that requires entities to disclose additional information in the notes to the financial statements about prescribed categories underlying any relevant income statement expense caption. The new standard is effective for annual reporting periods beginning after December 15, 2026 (fiscal year 2028 for the Company and interim periods within annual reporting periods beginning after December 15, 2027. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements but will result in some disaggregation of the Company’s income statement expenses in the notes to the Consolidated Financial Statements.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

2. Revenue

Nature of Revenues

Substantially all of the Company’s revenue is derived from the sale of printed products in the continental United States of America and is primarily recognized at a point in time in an amount that reflects the consideration the Company expects to be provided in exchange for those goods. Revenue from the sale of commercial printing products, including shipping and handling fees billed to customers, is recognized when the performance obligation is met upon the transfer of control to the customer, which is generally upon shipment to the customer when the terms of the sale are freight on board ("FOB") shipping point, or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination. Net sales represent gross sales invoiced to customers, less certain related charges, including sales tax, discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant.

In a small number of cases and upon customer request, the Company prints and stores printed product for customer specified future delivery, generally within the same year as the product is manufactured. In this case, revenue is recognized upon the transfer of control when manufacturing is complete and title and risk of ownership is passed to the customer while the inventory remains in the Company’s warehouse. Approximately $3.0 million and $3.8 million of revenue was recognized under these arrangements during the three months ended May 31, 2025 and 2024, respectively.

Storage revenue for certain customers may be recognized over time rather than at a point in time. The amount of storage revenue is immaterial to the Consolidated Financial Statements. As the output method for measure of progress is determined to be appropriate, the Company recognizes revenue in the amount for which it has the right to invoice for revenue that is recognized over time and for which it demonstrates that the invoiced amount corresponds directly with the value to the customer for the performance completed to date.

The Company does not disaggregate revenue and operates in one reportable segment consisting of printed product revenue, which is reported as net sales on the condensed consolidated statements of operations. See Note 19. The Company does not have material contract assets and contract liabilities as of May 31, 2025.

Significant Judgments

Generally, the Company’s contracts with customers are comprised of a written quote and customer purchase order or statement of work, and governed by the Company’s trade terms and conditions. In certain instances, it may be further supplemented by separate pricing agreements and customer incentive arrangements, which typically only affect the contract’s transaction price. Contracts do not contain a significant financing component as payment terms on invoiced amounts are typically between 30 to 90 days, based on the Company’s credit assessment of individual customers, as well as industry expectations. Product returns are not significant as the bulk of the Company's sales are custom in nature.

From time to time, the Company may offer incentives to its customers considered to be variable consideration including volume-based rebates or early payment discounts. Customer incentives considered to be variable consideration are recorded as a reduction to revenue as part of the transaction price at contract inception when there is a basis to reasonably estimate the amount of the incentive and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Customer incentives are allocated entirely to the single performance obligation of transferring printed product to the customer and are not considered material.

For customers with terms of FOB shipping point, the Company accounts for shipping and handling activities performed after the control of the printed product has been transferred to the customer as a fulfillment cost. The Company accrues for the costs of shipping and handling activities if revenue is recognized before contractually agreed shipping and handling activities occur.

The Company’s contracts with customers are generally short-term in nature. Accordingly, the Company does not disclose the value of unsatisfied performance obligations nor the timing of revenue recognition.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

3. Short-term Investments and Fair Value Measurements

Short-term investments are securities with original maturities of greater than three months but less than twelve months and were comprised of U.S. Treasury Bills. The Company determines the classification of these securities as trading, available for sale or held to maturity at the time of purchase and re-evaluates these determinations at each balance sheet date. The Company's short-term investments were classified as held-to-maturity for the period presented as it had the positive intent and ability to hold these investments to maturity. The Company's held-to-maturity investments were stated at amortized cost with a zero credit loss allowance because the probability of default is virtually zero due to the high credit rating, long history of no credit losses and the widely recognized risk free nature of these investments.

Amortized cost and estimated fair value of investment securities classified as held-to-maturity were as follows at May 31, 2025 and February 28, 2025 (in thousands):


			Gross		Gross
	Cost or		Unrealized		Unrealized		Estimated
	Amortized		Holding		Holding		Fair
	Cost		Gains		Losses		Value
May 31, 2025
Investment securities due in less than one year	$	—	$	—	$	—	$	—

February 28, 2025
Investment securities due in less than one year	$	5,475	$	4	$	—	$	5,479

The Company’s short-term investments in investment securities were Level 1 fair value measure. The Company did not hold any Level 2 or 3 financial assets or liabilities measured at fair value on a recurring basis. There were no transfers between levels during the three months ended May 31, 2025.

4. Receivables

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are reduced by an allowance for an estimate of amounts that are uncollectible. Substantially all of the Company’s receivables are due from customers in North America. The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution). The Company does not typically require its customers to post a deposit or supply collateral. The Company’s allowance for credit losses is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible. This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends. Accounts receivable relate to credit extended directly to customers in the ordinary course of business.

The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance in the period the payment is received. Recoveries for the years presented were not significant to the financial statements. Credit losses from continuing operations have consistently been within management’s expectations.

The following table presents the activity in the Company’s allowance for credit losses (in thousands):


	Three months ended
	May 31,
	2025			2024
Balance at beginning of period	$	1,713		$	1,707
Bad debt expense, net of recoveries		90			110
Accounts written off		(45	)		(97	)
Balance at end of period	$	1,758		$	1,720

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

Other Receivables

Other receivables primarily consist of vendor rebate receivables which represent amounts due from vendors for volume and are generally negotiated at the beginning of the annual period. The Company receives volume-based rebates from certain suppliers. These rebates are recognized as a reduction in the cost of inventory and are recognized in cost of goods sold when the related inventory is sold. Rebates are accrued based on purchases and in accordance with the contractual terms.

5. Inventories

The Company values its inventories at the lower of first-in, first out (“FIFO”) cost or market cost, with the exception of approximately 10.4% and 7.1% of inventories which is valued at last-in, first-out (“LIFO”) as of May 31, 2025 and February 28, 2025, respectively, or net realizable value. The Company regularly reviews inventories on hand, using specific aging categories, and writes down the carrying value of its inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage. In assessing the ultimate realization of its inventories, the Company is required to make judgments as to future demand requirements. As actual future demand or market conditions may vary from those projected by the Company, adjustments to inventories may be required. Reserves for excess and obsolete inventory at May 31, 2025 and February 28, 2025 were $1.8 million and $1.8 million, respectively.

The following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):


	May 31,		February 28,
	2025		2025
Raw material	$	31,073	$	20,862
Work-in-process		5,736		4,919
Finished goods		16,300		13,016
	$	53,109	$	38,797

6. Acquisitions

The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values with certain limited exceptions permitted under US GAAP. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets and liabilities assumed, is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed in the period incurred.

Acquisition of Northeastern Envelope Company and Envelope Superstore

On April 11, 2025 the Company acquired the net assets and business of Northeastern Envelope Company ("NEC"), which is based in Old Forge, Pennsylvania, and Envelope Superstore ("ESS") which is based in Hiram, Georgia, for approximately $34.9 million in cash. The Company performed a preliminary allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on the estimated fair values prepared by management using the information available as of the acquisition date. All goodwill of $12.4 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives ranging from 2 to 13 years of approximately $11.5 million in connection with the transaction, which are also deductible for tax purposes. This allocation is preliminary and subject to change, which may be material. The acquisition of NEC and ESS strengthens our production capabilities to serve our customers in the Northeast United States.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

The following table summarizes the Company's purchase price allocation for NEC and ESS as of the acquisition date (in thousands):


Accounts receivable	$	1,585
Inventories		2,514
Right-of-use asset		601
Property, plant and equipment		7,371
Goodwill		12,407
Intangibles		11,498
Operating lease liability		(601	)
Accounts payable and accrued liabilities		(444	)
Acquisition price	$	34,931

Acquisition of Printing Technologies

On June 26, 2024, the Company acquired the assets and business of Printing Technologies, Inc. ("PTI"), which is based in Indianapolis, Indiana, for approximately $5.5 million in cash. The Company performed an allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on the estimated fair values using the information available as of the acquisition date. The Company recorded intangible assets with definite lives of approximately $2.0 million in connection with the transaction, which are deductible for tax purposes. The acquisition of PTI strengthens our production capabilities and diversifies our product offerings to enable us to better serve our broad customer base.

The following table summarizes the Company's purchase price allocation for PTI subsequent to the acquisition date (in thousands):


Accounts receivable	$	1,339
Inventories		1,826
Other assets		100
Right-of-use asset		847
Property, plant and equipment		887
Intangibles		2,012
Operating lease liability		(847	)
Accounts payable and accrued liabilities		(633	)
Acquisition price	$	5,531

The results of operations for PTI, NEC and ESS are included in the Company’s condensed consolidated financial statements from the respective dates of acquisition. The following table sets forth certain operating information on a pro forma basis as though each acquisition had occurred as of the beginning of the comparable prior period (that is, March 1, 2024). The following pro forma information includes the estimated impact of adjustments such as amortization of intangible assets, depreciation expense and interest expense and related tax effects (in thousands, except per share amounts).


	Three months ended
	May 31, 2025		May 31, 2024
Pro forma net sales	$	99,283	$	110,506
Pro forma net earnings		10,064		11,175
Pro forma earnings per share - diluted	$	0.39	$	0.43

The pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the full duration of the comparative periods presented.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

7. Leases

The Company leases certain of its facilities and equipment under operating leases, which are recorded as right-of-use assets and lease liabilities. The Company’s leases generally have terms of 1 – 5 years, with certain leases including renewal options to extend the leases for additional periods at the Company’s discretion. At lease inception, all renewal options reasonably certain to be exercised are considered when determining the lease term. The Company currently does not have leases that include options to purchase or provisions that would automatically transfer ownership of the leased property to the Company.

Operating lease expense is recognized on a straight-line basis over the lease term, and variable lease payments are expensed as incurred. The Company had no material variable lease costs for the three months ended May 31, 2025 and 2024.

The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and directs the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment.

Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates based on the information available at lease commencement date, as rates are not implicitly stated in most leases.

Components of lease expense for the three months ended May 31, 2025 and 2024 were as follows (in thousands):


	Three months ended
	May 31, 2025		May 31, 2024
Operating lease cost	$	1,431	$	1,347

Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,446	$	1,369

Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	2,299	$	648


Weighted Average Remaining Lease Terms
Operating leases	3.0 Years	2.4 Years

Weighted Average Discount Rate
Operating leases	4.39%	4.16%

Future minimum lease commitments under non-cancelable operating leases for each of the fiscal years ending are as follows (in thousands):


	Operating
	Lease
	Commitments
2026 (remaining 9 months)	$	3,384
2027		3,675
2028		2,254
2029		1,391
2030		477
2031		12
Total future minimum lease payments	$	11,193
Less imputed interest		676
Present value of lease liabilities	$	10,517

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

8. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized. Goodwill and other intangible assets are tested for impairment at a reporting unit level. The annual impairment test of goodwill and intangible assets is performed as of December 1 of each fiscal year.

The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.

If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded. A goodwill impairment charge was not required as of May 31, 2025.

Definite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances indicate that the asset may be impaired.

The carrying amount and accumulated amortization of the Company’s intangible assets at each balance sheet date are as follows (in thousands):


	Weighted
	Average
	Remaining		Gross
	Life		Carrying		Accumulated
As of May 31, 2025	(in years)		Amount		Amortization		Net
Definite-lived intangible assets
Trademarks and trade names		6.4	$	32,421	$	17,038	$	15,383
Customer lists		7.6		93,273		66,306		26,967
Non-compete		1.0		280		224		56
Technology		4.5		650		232		418
Total		7.1	$	126,624	$	83,800	$	42,824


As of February 28, 2025
Definite-lived intangible assets
Trademarks and trade names		6.9	$	30,911	$	16,544	$	14,367
Customer lists		4.8		83,303		64,890		18,413
Non-compete		0.8		261		212		49
Technology		4.8		650		209		441
Total		5.7	$	115,125	$	81,855	$	33,270

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

Aggregate amortization expense was $1.9 million for the three months ended May 31, 2025 and May 31, 2024.

The Company’s estimated amortization expense for the current and next five fiscal years is as follows (in thousands):


2026 (remaining)	$	6,726
2027	$	7,759
2028	$	6,245
2029	$	5,609
2030	$	4,394
2031	$	3,731

Changes in the net carrying amount of goodwill as of the dates indicated are as follows (in thousands):


Balance as of March 1, 2024	$	94,349
Goodwill acquired		—
Balance as of February 28, 2025		94,349
Goodwill acquired		12,407
Balance as of May 31, 2025	$	106,756

During fiscal year 2026, $12.4 million was added to goodwill related to the acquisition of NEC and ESS.

9. Accrued Expenses

The following table summarizes the components of accrued expenses as of the dates indicated (in thousands):


	May 31,		February 28,
	2025		2025
Employee compensation and benefits	$	10,759	$	11,505
Taxes other than income		1,866		1,440
Accrued legal and professional fees		342		521
Accrued utilities		138		108
Income taxes payable		3,960		567
Other accrued expenses		1,326		1,198
	$	18,391	$	15,339

10. Credit Facility

As of May 31, 2025, the Company had $0.3 million outstanding under a standby letters of credit arrangement secured by a cash collateral bank account.

11. Shareholders’ Equity

The Company’s board of directors (the "Board") has authorized the repurchase of the Company’s outstanding common stock through a stock repurchase program, which authorized amount is currently up to $60.0 million in the aggregate. Under the repurchase program, purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors. Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations. These repurchases may be commenced or suspended at any time or from time to time without prior notice.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

During the three months ended May 31, 2025, the Company repurchased 260,560 shares of common stock under the program at an average price of $19.04. Since the program’s inception in October 2008, there have been 2,594,904 common shares repurchased at an average price of $16.73 per share. As of May 31, 2025, $16.6 million remained available to repurchase shares of the Company’s common stock under the program.

12. Stock Based Compensation

The Company grants stock options, restricted stock and restricted stock units (“RSUs”) to key executives and managerial employees and non-employee directors. At May 31, 2025, the Company had one stock option plan, the 2021 Long-Term Incentive Plan of Ennis, Inc., adopted by the Board April 16, 2021 and affirmed by vote of the shareholders July 15, 2021 (the “Plan”). The plan authorized 1,033,648 shares of common stock for awards and expires June 30, 2031 and all unissued stock will expire on that date. May 31, 2025, the Company has 290,261 shares of unissued common stock reserved under the Plan for issuance. The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants based on the grant date fair value of the award for stock options, restricted stock grants and RSUs on a straight-line basis over the requisite service period. The estimated number of shares to be achieved for performance based RSUs is updated each reporting period. For the three months ended May 31, 2025 and May 31, 2024, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $0.7 million and $1.8 million, respectively.

Stock Options

The Company had the following stock option activity for the three months ended May 31, 2025.


						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life (in years)		(in thousands)
Outstanding at March 1, 2025		31,251		$	19.88		9.0		—
Granted		10,809			17.27
Terminated		—			—
Exercised		(2,500	)		17.27
Outstanding at May 31, 2025		39,560		$	19.33		8.3	$	11.7
Exercisable at May 31, 2025		26,222		$	19.05		8.5	$	11.7

A summary of the status of the Company’s unvested stock options at May 31, 2025 and the changes during the three months ended May 31, 2025 are presented below:


		Weighted
		Average
	Number	Grant Date
	of Options	Fair Value
Unvested at March 1, 2025	26,669	2.47
New grants	10,809	2.41
Vested	(24,140)	2.44
Forfeited	—	—
Unvested at May 31, 2025	13,338	2.47

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

As of May 31, 2025, there was $0.1 million of unrecognized compensation cost related to unvested stock options granted under the Plan. The weighted average remaining requisite service period of the unvested stock options was 0.9 years.

Restricted Stock

The following activity occurred with respect to the Company’s restricted stock awards for the three months ended May 31, 2025:


				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2025		41,667		$	21.68
Granted		—			—
Terminated		—			—
Vested		(667	)		17.58
Outstanding at May 31, 2025		41,000		$	21.68

As of May 31, 2025, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.1 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.5 years.

Restricted Stock Units

During the three months ended May 31, 2025, no performance-based or time-based RSUs were granted under the Plan. The fair value of the time-based RSUs was estimated based on the fair market value of the Company’s stock on the date of grant of $19.43 per unit. The fair value of the performance-based RSUs, using a Monte Carlo valuation model, was $19.97 per unit. The performance measures include a threshold, target and maximum performance level providing the grantees an opportunity to receive more or less shares than targeted depending on actual financial performance of the Company. The award will be based on the Company’s return on equity, EBITDA and adjusted for the Company’s Relative Shareholder Return as measured against a defined peer group. Holders of RSUs receive cash dividends equal to the dividends we declare and pay on our common stock, which are included in dividends paid in the Condensed Consolidated Financial Statements.

The performance-based RSUs vest on the third anniversary from the date of grant and the time-based RSUs vest ratably over three years from the date of grant.

The following activity occurred with respect to the Company’s restricted stock units for the three months ended May 31, 2025:


	Time-based					Performance-based
				Weighted				Weighted
				Average				Average
	Number of			Grant Date		Number of		Grant Date
	Shares			Fair Value		Shares		Fair Value
Outstanding at March 1, 2025 (1)		101,961		$	19.43		198,827	$	19.97
Granted		—			—		—		—
Change due to performance achievement		—			—		—		—
Terminated		(5,403	)		19.43		—		—
Vested		(28,582	)		19.43		—		—
Outstanding at May 31, 2025		67,976		$	19.43		198,827	$	19.97

(1) The number of shares of time-based grants may, upon vesting, convert 50% into common stock and the remaining 50% into two incentive stock options for each RSU with an exercise price equal to the closing price of the Company's stock on that date for employees who have not met their stock ownership requirements. The number of shares of performance-based grants includes an estimate 55,037 of additional RSUs at the maximum achievement level of 130% of target payout. Actual shares that may be issued can range from 0% to 130% of target.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

As of May 31, 2025, the total remaining unrecognized compensation cost of time-based RSUs was approximately $2.3 million over a weighted average remaining requisite service period of 1.9 years. As of May 31, 2025, the total remaining unrecognized compensation of performance-based RSUs was approximately $5.3 million over a weighted average remaining requisite service period of 1.9 years.

13. Pension Plan

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the "Pension Plan"), covering approximately 12% of the Company’s aggregate employees. Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination.

Pension expense is composed of the following components, included in cost of goods sold and selling, general, and administrative expenses in the Company’s consolidated statements of earnings (in thousands):


	Three months ended
	May 31,
	2025			2024
Components of net periodic benefit cost
Service cost	$	151		$	166
Interest cost		650			649
Expected return on plan assets		(710	)		(755	)
Amortization of:
Unrecognized net loss		366			436
Net periodic benefit cost	$	457		$	496

The Company is required to make contributions to the Pension Plan. These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). The assumptions used to calculate the pension funding deficit are different from the assumptions used to determine the net pension obligation for purposes of our condensed consolidated financial statements. Due to the enactment of the American Rescue Plan ("ARP") Act of 2021, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a 25-year average of interest rates plus or minus a corridor. Assuming a stable funding status, the Company would expect to make a cash contribution to the Pension Plan of between $1.0 million and $3.0 million per year. However, changes in actual investment returns or in discount rates could change this amount significantly. The Company is not required to make a contribution to the pension plan for fiscal year 2026. The Company made a $1.2 million contribution to the Pension Plan during the fiscal year 2025. As the Company's Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact the Company's funding status, associated liabilities recorded and future required minimum contributions. At May 31, 2025, the Company had an unfunded pension asset recorded on its condensed consolidated balance sheet of approximately $1.4 million.

14. Earnings Per Share

Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding during the applicable period. Diluted earnings per share reflect the potential dilution that could occur if stock options, performance-based RSUs or other contracts to issue common shares were exercised or converted into common stock. This is calculated using the treasury stock method.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

The following table sets forth the computation for basic and diluted earnings per share for the periods indicated:


	Three months ended
	May 31,
	2025		2024
Basic weighted average common shares outstanding		25,956,639		26,156,928
Effect of dilutive stock options, restricted stock, time-based RSUs and performance-based RSUs		64,608		122,718
Diluted weighted average common shares outstanding		26,021,247		26,279,646
Earnings per share
Net earnings - basic	$	0.38	$	0.41
Net earnings - diluted	$	0.38	$	0.41
Cash dividends per share	$	0.25	$	0.25

The Company treats unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share. The Company's unvested restricted shares participate on an equal basis with common shares; therefore, there is no difference in undistributed earnings allocated to each participating security. Accordingly, the presentation above is prepared on a combined basis. At May 31, 2025, 38,619 shares related to outstanding stock options were not included in the computation of earnings per diluted share as they were considered anti-dilutive.

15. Concentrations of Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and accounts receivable. Cash is placed with high-credit quality financial institutions. For the purposes of the condensed consolidated statements of cash flows, the Company considers cash to include cash on hand and in bank accounts. The Federal Deposit Insurance Corporation insures accounts up to $250,000. At May 31, 2025, cash balances included $32.1 million that was not federally insured because it represented amounts in individual accounts above the federally insured limit for each such account. This at-risk amount is subject to fluctuation on a daily basis. While management does not believe there is significant risk with respect to such deposits, no assurance can be made that the Company will not experience losses on the Company’s deposits.

The Company believes its credit risk with respect to accounts receivable is limited due to industry and geographic diversification. As disclosed on the condensed consolidated balance sheets, the Company maintains an allowance for credit losses to cover the Company’s estimate of credit losses associated with accounts receivable.

The Company, for quality and pricing reasons, purchases its paper products from a limited number of suppliers. While other sources may be available to the Company to purchase these products, they may not be available at the cost or at the quality the Company has come to expect.

16. Related Party Transactions

The Company leases a facility and sells product to an entity controlled by a member of the Board. The total right-of-use asset and related lease liability as of May 31, 2025 was $1.6 million and $1.6 million, respectively. The total right-of-use asset and related lease liability as of May 31, 2024 was $0.3 million and $0.3 million, respectively. During the three months ended May 31, 2025, total lease payments and sales made to the related party were approximately $0.1 million and $1.1 million, respectively. During the three months ended May 31, 2024, total lease payments and sales made to the related party were approximately $0.1 million and $0.7 million, respectively. The accounts receivable balances as of May 31, 2025 and 2024 were $0.2 and $0.2 million, respectively.

17. Income Taxes

The Company is subject to U.S. federal income tax as well as income taxes of multiple state jurisdictions. The quarterly income tax provision was computed based on the Company's estimated annualized effective tax rate and the full-year forecasted income or loss plus the tax impact of unusual, infrequent, or nonrecurring significant items during the period.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)

The Company's effective tax rate for the three months ended May 31, 2025 and 2024 was 27.5%. The Company made cash payments for income taxes, net of income tax refunds, of $0.2 million and $0.3 million for the three months ended May 31, 2025 and 2024, respectively.

18. Other Contingencies

In the ordinary course of business, the Company also enters into real property leases, which require the Company as lessee to indemnify the lessor from liabilities arising out of the Company’s occupancy of the properties. The Company’s indemnification obligations are generally covered under the Company’s general insurance policies.

From time to time, the Company is involved in various litigation matters arising in the ordinary course of business. The Company does not believe the disposition of any current matter will have a material adverse effect on its consolidated financial position or results of operations.

In October 2023, Crabar/GBF, Inc., a subsidiary of Ennis, was awarded $5.8 million in actual damages, exemplary damages and attorney’s fees in a case against Wright Printing Company, its owner Mark Wright, and CEO Mardra Sikora. Given the defendants’ pending appeal, we have not yet recognized a contingent gain from the October 2023 judgment. Nevertheless, the defendants have posted cash bonds that total approximately $5.1 million, which should be recoverable by the Company if defendants’ appeal is unsuccessful.

Ennis and one of its subsidiaries are defendants in a lawsuit in Arizona concerning the lease of the former B&D Litho facility that was closed in 2019. The Company has denied the landlord’s allegations and is vigorously contesting the landlord’s unreasonable claim. The Court has made a preliminary ruling that defendants failed to maintain the facility’s air conditioning equipment, paved surfaces and roof in good condition even though the landlord had assumed responsibility for some of those maintenance obligations. The Company has accrued a liability reserve of approximately $0.4 million related to this claim. The case will be tried during either the fourth calendar quarter of 2025 or the first calendar quarter of 2026.

19. Segment Reporting

The Company’s Chief Operating Decision Maker ("CODM") is its Chairman, President, and Chief Executive Office. The CODM evaluates performance and allocates resources on a consolidated basis using consolidated net income, earnings releases, investor presentations, and the Company’s SEC filings, as well as through the approval of the Company’s annual budget and forecast.

The single operating segment is also the Company's single reportable segment called “Print” and derives its operating revenues from the manufacturing of mostly custom or semi-custom printed products sold mostly to independent distributors in the United States. Independent distributors are responsible for selling the printed product to the end consumer. The single reportable segment derives its revenues by manufacturing print products at the Company's printing plants dispersed throughout the United States.

The accounting policies of this single reportable segment are the same as those described in the summary of significant accounting policies to the condensed consolidated financial statements.

The CODM assesses the performance of this reportable segment using the entity-wide revenue and expense information reported on the Statement of Operations and the more detailed expense categories disclosed in the table below. The primary measure of segment profit (loss) is consolidated net income (loss) as reported on the Condensed Consolidated Statement of Operations. In addition, segment assets reviewed by the CODM are reported on the Company’s Condensed Consolidated Balance Sheets as total assets.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2025
(unaudited)


	Three months ended May 31,
(Dollars in thousands)	2025			2024
Segment operating net sales	$	97,197		$	103,108

Segment operating expenses
Product purchases		30,218			32,426
Compensation expense		21,603			21,737
Product supplies		6,106			6,529
Manufacturing depreciation		2,110			2,157
Other product cost (1)		6,930			9,355
Segment cost of goods sold		66,967			72,204

Segment SG&A expenses
Compensation expense		11,585			11,369
Depreciation expense		130			157
Amortization expense		1,944			1,930
Other expense (2)		3,288			3,714
Segment SG&A expenses		16,947			17,170

Other segment items
(Gain) loss sale of asset		-			4
Interest (income) expense		(550	)		(1,359	)
Other expense		318			348
Provision for income tax		3,716			4,054

Consolidated net earnings	$	9,799		$	10,687

(1) Other product cost includes manufacturing overhead and freight expenses.

(2) SG&A, other expense includes professional services and utility services not included in the manufacturing process.

20. Subsequent Events

On June 20, 2025, the Board declared a quarterly cash dividend on the Company's common stock of $0.25 per share. The dividend is payable on August 11, 2025 to shareholders of record as of July 11, 2025. The expected payout for this dividend is approximately $6.5 million.

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2025

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read together with the unaudited consolidated financial statements and related notes of Ennis, Inc. (collectively with its subsidiaries, the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”), included in Part 1, Item 1 of this report, and with the audited consolidated financial statements and the related notes of the Company included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025.

All of the statements in this report, other than historical facts, are forward-looking statements, including, without limitation, the statements made in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relating to matters that are not historical in nature. The words “could,” “should,” “feel,” “anticipate,” “aim,” “preliminary,” “expect,” “believe,” “estimate,” “intend,” “intent,” “plan,” “will,” “foresee,” “project,” “forecast,” or the negative thereof or variations thereon, and similar expressions identify forward-looking statements.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for these forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that forward-looking statements are subject to known and unknown risks, uncertainties and other factors relating to its operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company. These known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those matters expressed in, anticipated by or implied by such forward-looking statements.

These statements reflect the current views and assumptions of management with respect to future events. The Company does not undertake, and hereby disclaims, any duty to update these forward-looking statements, even though its situation and circumstances may change in the future. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. The inclusion of any statement in this report does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

We believe these forward-looking statements are based upon reasonable assumptions. All such statements involve risks and uncertainties, and as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including but not limited to: general economic, business and labor conditions and the potential adverse effects of potential recessionary concerns, inflationary issues, U.S. import tariffs and supply chain disruptions and the potential impact on our operations; our ability to implement our strategic initiatives and control our operational costs; dependence on a limited number of key suppliers; our ability to recover the rising cost of raw materials and other costs (including energy, freight, labor and benefit costs) in markets that are highly price competitive and volatile; uninsured losses, including those from natural disasters, catastrophes, pandemics, theft, sabotage; the impact of future pandemics on the U.S. and local economies, our business operations, our workforce, our supply chain and our customer base; our ability to timely or adequately respond to technological changes in the industry; cybersecurity risks, the impact of the internet and other electronic media on the demand for forms and printed materials; the impact of foreign competition, tariffs, trade regulations and import restrictions; customer credit risk; competitors’ pricing strategies; a decline in business volume and profitability could result in an impairment in our reported goodwill negatively impacting our operational results; our ability to retain key management personnel; our ability to identify, manage or integrate acquisitions.; In addition to the factors indicated above, you should carefully consider the risks described in and incorporated by reference herein and in the risk factors in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025 before making an investment in our common stock.

Overview

Ennis, Inc. (formerly Ennis Business Forms, Inc.) (collectively with its subsidiaries, “the “Company,” “Registrant,” Ennis,” or “we,” “us,” or “our”) was organized under the laws of Texas in 1909. We print and manufacture a broad line of business forms and other business products. We distribute business products and forms throughout the United States primarily through independent distributors. This distributor channel encompasses independent print distributors, commercial printers, direct mail, fulfillment companies, payroll and accounts payable software companies, and advertising agencies, among others. We also sell products to many of our competitors to satisfy their customers’ needs.

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2025

Business Overview

Our management believes we are the largest provider of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders to independent distributors in the United States.

We are in the business of manufacturing, designing, and selling business forms and other printed business products primarily to distributors located in the United States. As of May 31, 2025, we operate 57 manufacturing plants throughout the United States in 20 strategically located states as one reportable segment: printing services. Approximately 96% of the business products we manufacture are custom and semi-custom products, constructed in a wide variety of sizes, colors, number of parts, and quantities on an individual job basis, depending upon the customers’ specifications.

The products we sell include snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure sensitive products in short, medium and long runs under the following labels: Ennis®, Royal Business Forms®, Block Graphics®, ColorWorx®, Enfusion®, Uncompromised Check Solutions®, VersaSeal®, Ad ConceptsSM, FormSource LimitedSM, Star Award Ribbon Company®, Witt Printing®, Genforms®, PrintGraphics®, Calibrated Forms®, PrintXcel®, Printegra®, Forms ManufacturersSM, Mutual Graphics®, TRI-C Business FormsSM, Major Business SystemsSM, Independent PrintingSM, Hayes Graphics®, Wright Business GraphicsSM, Wright 360SM, Integrated Print & GraphicsSM, the Flesh CompanySM, AmeriPrintSM; StylecraftSM, UMC PrintSM; Eagle GraphicsSM, Diamond GraphicsSM and Printing TechnologiesSM. We also sell the Adams McClure® brand (which provides Point of Purchase advertising); the Admore®, Folder Express®, and Independent Folders® brands (which provide presentation folders and document folders); Ennis Tag & LabelSM (which provides custom printed, high performance labels and custom and stock tags); Allen-Bailey Tag & LabelSM, Atlas Tag & Label®, Kay Toledo Tag®, and Special Service Partners® (SSP) (which provides custom and stock tags and labels); Trade Envelopes®, Block Graphics®, Wisco®, Northeastern Envelope CompanySM, Envelope SuperstoreSM and National Imprint Corporation® (which provide custom and imprinted envelopes); Northstar® and General Financial Supply® (which provide financial and security documents); InfosealSM and PrintXcel® (which provide custom and stock pressure seal documents). School Photo Marketing and National School Forms are a one-stop shop for over 1,400 school portrait photographers and professional photo labs nationwide, providing them with a complete array of products and services that reach over 15 million families and 30,000 schools, primarily in the K-8 market. We sell predominantly through independent distributors, as well as to many of our competitors. Northstar Computer Forms, Inc., one of our wholly-owned subsidiaries, also sells direct to a small number of customers, generally large banking organizations (where a distributor is not acceptable or available to the end-user). Adams McClure, LP, a wholly-owned subsidiary, also sells direct to a small number of customers, where sales are generally through advertising agencies.

The printing industry generally sells its products either predominantly to end users, a market dominated by a few large manufacturers, such as R.R. Donnelley and Taylor Corporation, or, like the Company, through a variety of independent distributors and distributor groups. While it is not possible, because of the lack of adequate public statistical information, to determine the Company’s share of the total business products market, management believes the Company is the largest producer of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders in the United States distributing primarily through independent distributors.

ENNIS, INC. 10-Q