FY2025 Annual Report

Published: 2025-06-09 10:08:06 ET EBF

Published on 06/09/2025 at 10:08

CONTENTS ENNIS BOARD OF DIRECTORS

3 Message to Shareholders 8 Financial Highlights

Form 10-K

Corporate Info

Keith S. Walters

Chairman of the Board, CEO and President of Ennis, Inc.

John R. Blind

Retired and Former Vice President of the Printing and Carbonless Division of the Specialty Papers Business Unit of Glatfelter

Aaron Carter

Assistant Regional Vice President for Ross Stores, Inc.

Barbara T. Clemens

Retired and Former Vice President of Sales and Customer Service for Boise Paper, a division of Packaging Corporation of America

Gary S. Mozina

Chief Executive Officer of Stevenson Holdings, Inc.

Troy L. Priddy

President of Troy Priddy Custom Homes

Alejandro Quiroz

Chairman of the Board, President and CEO of InveStore

Michael J. Schaefer

Retired and Former Executive Vice President, CFO and Treasurer of Methodist Health Systems

Margaret A. Walters

Retired Educator

ENNIS CORPORATE EXECUTIVE OFFICERS

Keith S. Walters

Chairman of the Board, CEO and President

Vera Burnett

Chief Financial Officer and Treasurer

Wade Brewer

Chief Operating Officer

Dan Gus

General Counsel and Secretary

Keith S. Walters

Chairman, CEO & President

Letter To Shareholders

The results for the year have been available for some time, so I don't believe it is useful to analyze them again in detail. While this was not one of our strongest years, we feel we had a solid performance by making the adjustments needed to continue our track record of predictable results. We think this space is better used for discussions of the future. My style has always been to avoid corporate speak in these letters. I am asking some of our executives to make contributions to the letter with that same approach in mind. We will review this year's financial results before the executives share their comments.

Financial Results

The Company's net sales for the fourth quarter ended February 28, 2025, were $92.7 million compared to $97.4 million for the same quarter last year, a decrease of 4.8%. Our gross profit margin was $27.4 million, or 29.5% as compared to $27.7 million, or 28.4% for the same quarter last year. Net earnings for the quarter were $9.0 million, or $0.35 per diluted share as compared to $10.1 million, or $0.39 per diluted share for the same quarter last year. The Company's net sales for the fiscal year ended February 28, 2025, were $394.6 million compared to $420.1 million for fiscal year 2024, a decrease of 6.1%. Gross profit margin was

$117.3 million, or 29.7% as compared to $125.3 million, or 29.8% for the prior fiscal year. 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 for the prior fiscal year.

Competitive pricing from competitors placed downward pressure on our top line, resulting in a decline in the volume of products sold. Our acquisitions partially offset the sales volume decline by $13.2 million and positively impacted $0.04 per diluted share for the year. We have completed the implementations of our ERP systems and are beginning to see the margins of most of the acquired businesses to expected levels.

We continue to maintain a strong financial position with $72.5 million in cash and short-term investments. Working Capital of $119.4 million and no debt and a current ratio of 4.6 to 1.0, calculated by dividing our current assets by our current liabilities. During the fiscal year, we returned $92.0 million to shareholders in dividends which included a special dividend of $2.50 per share. Our profitability and strong financial condition allow us to continue operations and take advantage of acquisitions without incurring debt. Given those strengths, we also anticipate timely access to credit should larger acquisition opportunities materialize. We continue to focus on returning value to shareholders by delivering profitability and through our quarterly dividends.

Our strong financial results in fiscal 2025 reflect both the efficacy of our business model and our continued focus on improving our core value drivers.

During fiscal year 2025, we acquired the assets of Printing Technologies, Inc. (PTI) located in Indianapolis, IN. Founded in 1994, PTI is a leading manufacturer of innovative media solutions used in all types of printing technologies, including direct thermal, thermal transfer, ink jet, dot matrix and laser. PTI is a renowned brand with a diverse range of unique products and we are looking forward to leveraging these new capabilities to enhance Ennis' product offerings.

Subsequent to year-end, we acquired Northeastern Envelope in Old Forge, PA. Founded in 1966, Northeastern Envelope is a leading manufacturer to the trade of a wide variety of envelopes. In addition to their custom converting and manufacturing, Northeastern also inventories hundreds of double-window and single-window envelopes allowing for same-day shipping. Northeastern Envelope and the Burke family are well known and respected throughout the envelope manufacturing industry. The addition of Northeastern to our existing facilities, Wisco Envelope and National Imprint, strengthens Ennis' envelope converting and printing in this strategic part of the country where we service many customers.

I am privileged to report that this is the 28th shareholder letter I have written as CEO of the Ennis Inc. Corporation. In that time, Ennis has grown to be an important stabilizing factor in the markets we serve. We have accomplished much of our success by continuing to find acquisitions which fit our model. We have been able to accomplish this without incurring long term debt. Our balance sheet and P & L' s are significantly benefited by doing most of the closing and integration work in-house. The ability to self-fund our finances is due to our internal controls and the successful installation of our Enterprise Resource Planning (ERP) system in those acquisitions. Anyone that has attempted even one integration of an ERP system knows that success is not a foregone conclusion.

While I have no immediate plans to retire from Ennis, I feel it is important to introduce our shareholders to some of our key executives. These are the people that have made our success possible for such a sustained period of time. They are also the employees I would expect to play an important role in our company moving forward when I do retire or move into a more limited role in the company.

While the five executives I will highlight in this letter are not a complete list of our bench of talent, it is a good cross-section of the key areas of the business. I am asking each of them to write a section on their current duties, goals they envision for the company, management style, or anything they feel is important for the shareholders to evaluate the future of the company.

WADE BREWER

Chief Operating Officer

I have been in the printing industry over forty-one years. PrintXcel and Printegra were part of an Ennis acquisition consisting of eleven facilities acquired in 2012 overseen by me as the VP of Operations. After speaking with Keith Walters about his operating system, I took on the role of General Manager controlling three facilities to learn and understand the Ennis system and culture. I later moved to the position of Ennis Business Unit Director over seventeen facilities before moving in to the Director of Manufacturing role. In 2024, I moved into the role of Chief Operating Officer with responsibility of all facilities via three Business Unit Directors, the System Implementation Team and the VP of Sales and Marketing reporting directly to me. I have spent the last several years reporting directly to, and learning from Keith Walters, our Chairman and CEO.

Our operations group continues to control cost with the business situations each facility encounters. Our operating systems consistently adjust our real time cost to incoming business. This allows the General Manager to adjust what the businesses environment dictate our needs are in real time. The Ennis system also allows our Business Unit Directors to monitor multiple plants simultaneously. The in-depth Ennis system design we use for our operations is nonexistent in the print manufacturing world today based on my experience.

The current environment has presented a unique challenge in the market due to the announcement of the Pixelle mill closure in Chillicothe, OH. This closure removes from the market all carbonless roll paper produced in North America. This change has also reduced the amount of uncoated freesheet offered by Pixelle. This closure has caused disruption in the entire traditional forms market.

Ennis will cover the needs of customers in the same fashion as we did during the pandemic. Our multiple plant inventory and consigned inventories have given us a long runway to work with foreign carbonless vendors.

Our national footprint of multiple carbonless facilities also helps us in saving costs by producing products in regional shipping lanes reducing our transportation spend to customers.

We at Ennis recognize the disruption issues this mill closure has caused our industry. We would like to share that our thoughts are with the employees at the Chillicothe mill. Pixelle has been an amazing partner with Ennis for many years. We wish them all the very best.

While the above-mentioned mill is closing, the Spring Grove and Freemont mills will not be affected. Uncoated papers, security paper and carbonless sheets will still be available. This insures Pixelle continues to supply Ennis with raw material, keeping our long-term relationship strong.

Our UMC facility near Kansas City has continued to show positive returns. Ennis added several pieces of state-of-the-art equipment to UMC recently. These additions allowed UMC to produce orders from our School Photo Marketing facility previously outsourced. We were also able to purchase additional equipment for our PrintXcel Toledo, OH facility that will allow us to produce in-house all marketing flyer work for our school photographer customers. We can now produce in-house all products from our School Photo Marketing facility previously outsourced to non-Ennis facilities.

Our operations team is also diligently working on systems training with our new acquisitions, Northeastern Envelope Company in Old Forge, Pennsylvania and Envelope Super Store in Hiram, Georgia. This allows us to ensure all personnel are trained and knowledgeable on our operating system. This training will be completed by our second quarter. The system training process has been streamlined over the past two years. We now see our systems and processes installed much quicker than we had in the past. This allows Ennis to work through multiple acquisitions at an accelerated rate.

Our team continues to monitor the lease costs and other fixed cost that affect facility profitability to ensure we preplan potential tuck-ins, consolidations and/or acquisitions. Our national footprint enhances our ability to serve our customers with minimal freight cost and turn times.

Regardless of what we see in business conditions and sales fluctuations, we continue to use our costing system

to maintain gross margins. The operations team continues to work together to define and implement our cost-saving processes, which maximizes profitability. Our newly appointed VP of Sales and Marketing's dedication to collaborate even closer with our Operations Team promises a great year for Ennis and our shareholders.

DAN GUS

General Counsel and Assistant Secretary

I have been the Company's general counsel since 2021 after 10 years of service as its outside counsel. I am responsible for all of the Company's legal service needs, but I did not make the move to Ennis just to run a legal department. I came to Ennis to help run a successful company that generates value for its shareholders.

Years ago, I was a partner in a Dallas law firm litigating business disputes. I was a successful trial lawyer, but I wanted to be more than just a skilled lawyer at a good firm. My work all boiled down to allocating losses and I wanted it to have greater significance than that. I wanted to create value, not just allocate losses, so I resigned from my partnership and opened up a one-man shop in Dallas' southern suburbs. When that first client check came in -from Ennis by the way - I knew my venture would succeed. Faster than I would have imagined, I built a firm larger than my former Dallas firm. I launched other successful businesses along the way that were complementary to the law firm.

Keith Walters then approached me in late 2020 about joining Ennis as part of its executive succession plan. I knew Ennis was a great company and joining its executive team was the perfect opportunity to help create value on a whole other level.

I revamped the Company's team of outside counsel and have brought work back in-house to save money for the Company and its shareholders. I manage all of the Company's litigation matters. I work with our CFO on SEC reporting and compliance matters. I review, draft and negotiate contracts with customers and vendors. I work with the Board on a wide variety of governance matters. As gratifying as that has been, I like doing more than just legal work.

I embraced the responsibilities required to develop skills and knowledge to help run the Company. A few months after I joined Ennis, Keith Walters was sidelined with a

positive COVID test during the week our general managers present their annual marketing and budget plans. Keith hated missing such important presentations, but he turned it into a training opportunity. He worked with me and Wade Brewer over the phone every day to review the managers' written presentations so that Wade and I would be prepared to question the managers about the details of their marketing and budget plans. This crash course forced me to become familiar with the diverse capabilities, operations, finances and managers of all the Company's plants.

Keith assigned me to supervise the Company's marketing department and learn how Ennis markets its plants and products to a diverse distributor base. I serve on the committees that oversee our various benefit plans and improvements to our I.T. systems. I mastered the details of our self-insured medical plan to help Ennis defend against a Department of Labor audit that threatened a plan that has saved the Company and its employees millions of dollars. When Ron Graham retired earlier this year, I inherited his responsibilities for the Company's human resources team.

I broadened my understanding of the Company's business and the printing industry by taking a leading role in vetting and buying other printing businesses. I review dozens of potential acquisitions every year. I analyze each company's financial statements, prepare the financial pro forma, and lead the due diligence work. I do site visits to help decide whether a business is a good fit for Ennis. Ennis is selective about acquisition opportunities. We have a steady stream of opportunities presented to us, but we don't set arbitrary acquisition goals to close deals just for the sake of doing an acquisition. We don't just look to do deals; we look to do the right deals. We are confident that the right acquisition opportunities will be available to us for years to come.

When we identify the right acquisition opportunities, we handle the purchase negotiations and preparation of the transaction documents without the assistance of outside counsel, which has substantially reduced our acquisition costs. My acquisition work continues after the closing as our team approach carries over to the work of integrating new acquisitions into our business systems.

These responsibilities have developed my ability to manage like a manufacturing executive. Keith recently assigned me to lead the team that negotiated and closed the purchase

of Northeastern Envelope Company, the largest acquisition during my time with the Company. The owner commented that his attorney and accountant were both worried about how fast we had gone from the letter of intent to the closing day. As he compared me to his lawyer, he commented, "You don't talk or act like a lawyer. You think like a business guy."

To me, that was high praise that signified that I had completed the transition from skilled attorney to seasoned business executive. I am grateful that Ennis has provided me that opportunity and I am excited to be a part of Ennis' promising future.

VERA BURNETT

CFO and Treasurer

I have been with the company since 1997, more than 28 years. I was initially hired as an accounting manager and now serve as the Chief Financial Officer and Treasurer. I graduated from the University of Texas at Arlington with a Bachelor of Business Administration degree. I hold designations as Certified Public Accountant (CPA) and Chartered Global Management Accountant (CGMA).

My experience prior to Ennis was as controller of a small business. I implemented the company's accounting system and learned the accounting set up through practical application and gained hands-on experience in various areas of business. In public accounting. I worked in audit and tax mostly with small businesses allowing me to gain diverse skills and knowledge.

One of the reasons I appreciate working at Ennis is that I have always enjoyed working with small businesses. Although we are a larger corporation, our plants operate with the flexibility and agility of small companies. Each General Manager has the autonomy to make key decisions related to pricing, production, labor, and customer relations. This enables them to respond quickly to market demands and optimize profitability. The small-business mindset allows our plants to build strong customer relationships, offer tailored solutions, and adapt operations swiftly to meet specific needs.

Ennis provides the advantages of a larger organization, such as pricing power with vendors, advanced ERP systems, and reduced burdens around accounting, tax compliance, and legal fees. The finance team acts as a support function to help the plants maintain and grow their operations. The

team handles cash management, inventory cost, customer and vendor setups, payroll and all taxes. This balance of entrepreneurial spirit and corporate support makes Ennis a unique and rewarding place to work.

We have tripled the number of plant locations through acquisitions since I joined Ennis in 1997. While our transaction and regulatory volume has increased, we have successfully kept our corporate accounting staff lean by streamlining processes and leveraging technology. The Corporate Finance team has worked closely with our Information Technology team to implemented a fully integrated ERP system that allows us to consolidate financials quickly and efficiently each month with minimal manual effort. We have also refined our integration process to ensure that new acquisitions are typically onboarded into our quoting and manufacturing systems within one year, often with most ERP modules integrated within just a few months.

Ennis ERP system allows our individual plants to enter their own data while maintain centralized control functions at the corporate level. This structure allows for localized timely data entry and decision-making at the plant level, while enabling the corporate finance to manage and review financial statements and critical financial functions. Our clear approval levels for cash expenditures and cost justification requirements for capital projects prevent waste and ensures responsible financial management. This process helps ensure that expenditures are necessary, reasonable, and aligns with our objectives. Each plant's financials are reviewed by its General Manager, Business Unit Director, Officers and the Board of Directors. I believe our financial transparency leads to better decision-making and can ultimately increase profitability.

STEVEN OSTERLOH

Vice President Sales & Marketing

May 18th marked my 27th anniversary at Ennis. I am grateful to have spent most of my career at Ennis because it has allowed me to provide for my family, grow professionally, and build many friendships throughout our industry.

I've been asked many times why I have stayed with one company for so long. The answer is easy. Ennis is a well-run, financially conservative company with a lean management team that gave me opportunities to play an important role within an industry-leading public company. My responsibilities have grown over the years, but even early in my career I had direct access to the executive team giving me the opportunity to make and influence decisions. My career started with Wallace Computer Services, one of the best-run companies in the printing industry that was known for its excellent sales training programs. Those programs and the experience of working on multi-million-dollar accounts gave me an excellent foundation for my move to Ennis. My experience at Wallace helped me relate to many of Ennis' distributors who also had worked at some of the major direct manufacturers. Some of those relationships have lasted more than 25 years and we are now working with their sons or daughters who are now leading those distributor businesses.

Keith Walters started with Ennis in 1997 and my arrival was about a year later. Over the last 27 years, the Company has achieved significant growth in total customers, product lines, locations and shareholder returns. The Company has added numerous locations and brands through acquisitions and tuck-ins. Working on integrating these acquisitions throughout my time at Ennis has always been rewarding. My more recent work in helping discover or identify acquisition opportunities has been even more rewarding. Helping Ennis expand into new locations and product lines allows me to support our customers as they grow their businesses by providing a single partner that can meet many of their customers' needs.

My responsibilities over the years have focused on marketing, e-commerce, and selling to our franchise or larger distributor customers. Chief Revenue Officer Terry Pennington's recent retirement provided an opportunity to combine the roles of VP of Marketing and Head of Sales into one position. Terry worked closely with me over the past year to ensure a smooth transition in which the Company did not lose his wealth of knowledge and relationships upon his retirement. We are even seeing increased business due to our collaboration in making this important transition.

Consolidation of the sales and marketing functions under one leader was a logical evolution and will best serve the company by aligning our message through one voice. This

year we will be focusing on getting our National Sales Team, Marketing, General Managers and our front-line plant employees working together to focus on profitable selling. Top-line sales are a priority, but not at the sacrifice of profits. I've worked closely with our General Managers throughout my career and the trustful, working relationships we have developed will assist us in reaching these new goals.

The printing industry continues to evolve. Our distributor channel continues to see consolidation as older owners look to exit the business. Our larger distributor customers are gaining more traction in national accounts historically serviced by the major direct manufacturers. The remaining major direct manufacturers are exiting the manufacturing of select product segments opening up opportunities for Ennis to be their manufacturer of choice. Acquisition and tuck-in market activity is increasing. Ennis is well-positioned to benefit from this evolution.

Our management team is diverse in our expertise and together we complement each other. I am looking forward to the future just as much as I am proud of what we've accomplished so far.

WAYNE LEAKS

Director of I.T.

I am a second-generation Ennis employee for 32 years. My mom retired from the Ennis custom plant after 39 years of service. My mom and I were featured together in a publication in 2009 during the Ennis centennial anniversary. I graduated from the University of North Texas with a Bachelors in Computer Science in 1992. This was shortly after the recession of 1991 and two years before the Internet boom, so the I.T. job market was slow. I had worked part-time at the Ennis plant as a shrink wrapper during the summer months of college. After college I continued working at the Ennis plant while my I.T. job search continued. The General Manager at the plant had ideas about utilizing my computer skills in other departments at the plant and he hired me full-time. I worked in Composition helping with system maintenance, data backups, and server upgrades. I also worked with customer service helping with quoting and doing maintenance on the customer service computers. My experience in these various departments at the plant was extremely valuable and I am grateful for it.

A few months later, the Data Processing Manager at the Ennis corporate office reached out to me. Ennis had recently hired a new Data Processing Manager. He was working on his

plan to move Ennis from the legacy Burroughs mainframe system to a new ERP system. He believed I could be a valuable asset in that effort and hired me as an employee in the Data Processing department at the corporate office. My first position was Helpdesk Technician, where I was responsible for setting up desktop computers and training corporate employees on the use of these new computers. The corporate office was still located in Ennis, Texas at that time. When I graduated college, I assumed I would need to find a job with a company in the DFW metroplex in order to utilize my computer skills. What a blessing it was to find a job where I could make use of my computer skills in my home town where the company was founded and I have lived my entire life. I am also now the Pastor of a local church in Ennis, Texas and I was recently elected as a Trustee to the Ennis ISD school board.

Next, I was promoted to Network Administrator where I designed and led the installation of the Ennis-wide area network. This made it possible for the plants to connect to the new Ennis email server, web server and new ERP system. 1994 and 1995 would be important years for my career and for Ennis as a company. The World Wide Web was in its infancy but quickly experiencing exponential growth. Also, in 1995 the Internet was fully commercialized in the U.S. I was able to help place Ennis among those companies at the forefront of this new technology and the tremendous potential it offered for business growth. In June 1995 I registered the domain name ennis.com and Ennis purchased its first Windows servers for company email and the Company's first website. For the next 28 years I continued to maintain the company's network, servers, and security.

In the fall of 2021, I was promoted to Director of I.T. I am extremely grateful to our CEO Keith Walters for his confidence in allowing me this opportunity. I am also grateful for all the support and guidance of former V.P. of Administration Ron Graham. What a tremendous journey it has been for me these 32 years since my first days as a pat time shrink wrapper to the Director of I.T. today.

Ennis has been wonderful to me. Now I look forward to achieving new milestones with the fantastic team we have assembled today. In today's world, there are so many challenges that I.T. departments face with cybersecurity at the forefront. The Ennis systems are a huge part of the success of our company and Ennis is deeply committed to protecting the data of employees and customers. Having

designed the Ennis network from the ground up 32 years ago, I feel I am in a great position to lead that effort. Effective security is a team effort and I am extremely proud of the team we have assembled. I look forward to leading the next generation of talented team members who will continue to keep Ennis network and systems safe and secure.

BOARD DISCUSSION

We will have two new Board members on the Ennis Board of Directors after the shareholders meeting. Mr. John Blind notified us that after serving on the Board for nine years he would not be running for reelection for another three-year term. Mr. Blind informed us he wished to spend more time with his friends and family moving forward. The position required extensive travel on his part as he currently resides in Ohio. John served as Chair of the Nominating and Governance Committee, a member of the Compensation Committee, and as the Lead Director. We would like to thank John for the work and advice he provided over those nine years. John gave us several months' notice, enabling the Nominating and Governance Committee to do a complete search and vetting process as required. The focus was to look for a financial expert with heavy experience in public companies plus Securities Exchange Commission knowledge and experience. This is an area the Board felt we needed to strengthen from both a depth and knowledge standpoint. We found that in our nominee.

Mr. Wally Gruenes, a former National Managing Partner of Consumer and Industrial Products at Grant Thornton, will sit for election to the Company's Board of Directors at the annual shareholders meeting. Upon his election, it is anticipated that Mr. Gruenes will succeed Mr. Schaefer as chair of the Board's Audit Committee.

The Board also has made the decision to not nominate Mr. Michael Schaefer for another three-year term. We published an 8-K in early May which gave color to the Board decision on Mr. Schaefer making it redundant to repeat here. Unfortunately, this change in circumstances did not give the Nominating and Governance Committee the time needed to properly complete a search and vetting process on a second nominee by the time frame required to publish the proxy statement. Therefore, we will have just two nominees in the proxy this year. The Board plans to appoint an additional director to serve a one-year term as the opening occurs after the shareholders meeting. The intent is for that one-year director to be an independent

director by SEC guidelines. Next year the Board intends to have four candidates on the ballot for the shareholders to approve.

MANAGEMENT CHANGES

After decades of dedicated service, we announce the retirements of two respected leaders. Ronald Graham, Vice President of Administration, with 27 years of service and Terry Pennington, Chief Revenue Officer with 19 years of service. We extend our deepest gratitude for their countless contributions and wish them both a fulfilling and well-earned retirement.

LOOKING AHEAD

Reflecting on my 28th year writing this letter reminds me that the foundation of Ennis' success has always been its people. They are the ones who have built a company that consistently generates reliable results even in changing times. Our consistent performance, even in more challenging years, is a credit to our operating model, conservative financial approach and our commitment to doing things the right way.

This year, I've chosen to spotlight key members of our leadership team-not just to recognize their contributions, but to provide you, our shareholders, with a window into the strength of the bench that will carry Ennis forward. These executives play an increasingly vital role in our daily operations and long-term strategy and I believe you'll share my confidence in their capabilities.

Our focus remains on disciplined growth, strong returns, and operational excellence. We will continue to identify opportunities that align with our model, invest in our systems and people, and make decisions that put longterm shareholder value at the center.

On behalf of our board, our leadership team, and the entire Ennis organization, thank you for your continued trust and support.

Sincerely,

Keith S. Walters

Chairman, President & CEO

FINANCIAL HIGHLIGHTS

WORKING CAPITAL

in millions -

LONG-TERM DEBT

in millions -

*$65 million was returned to shareholders in a special dividend in November 2024.

CURRENT RATIO

- to 1.0 -

LONG-TERM DEBT TO EQUITY RATIO

- to 1.0 -

SELECTED CONSOLIDATED FINANCIAL DATA

FISCAL YEAR ENDED

(Dollars and shares in thousands, except per share amounts)

2025 2024 2023

Net Sales

$394,618

$420,109

$431,837

Cross profit margin

117,294

125,342

131,050

Earnings before taxes

55,454

59,123

64,930

Net earnings

$40,222

$42,597

$47,300

Earnings and diridends per share:

Basic

1.55

1.65

1.83

Diluted

1.54

1.64

1.82

*Diridends

3.50

1.00

Weighted arerage common shares outstanding:

Basic

26,025

25,843

25,819

Diluted

26,159

25,940

25,951

*$65 million was returned to shareholders in a special dividend in November 2024.

Washington, D.C. 20549

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

For the fiscal year ended February 28, 2025

For the transition period from to Commission File Number 1-5807

(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:

Trading

Title of each class Symbol(s) Name of each exchange on which registered

Common Stock, par value $2.50 per share EBF New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 Data 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, a 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 has filed a report on and attestation to its management's assessment of the effectiveness of internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-a(b). ☐

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

The aggregate market value of voting stock held by non-affiliates of the Registrant as of August 31, 2024 was approximately $599 million. Shares of voting stock held by executive officers, directors and holders of more than 10% of the outstanding voting stock have been excluded from this calculation because such persons may be deemed to be affiliates. Exclusion of such shares should not be construed to indicate that any of such persons possesses the power, direct or indirect, to control the Registrant, or that any such person is controlled by or under common control with the Registrant.

The number of shares of the Registrant's Common Stock, par value $2.50, outstanding at May 6, 2025 was 26,053,221.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the 2025 Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.

ENNIS, INC. AND SUBSIDIARIES FORM 10-K

FOR THE PERIOD ENDED FEBRUARY 28, 2025

TABLE OF CONTENTS

PART I:

Item 1

Business..........................................................................................................................................

Item 1A

Risk Factors ....................................................................................................................................

Item 1B

Unresolved Staff Comments...........................................................................................................

Item 1C

Cybersecurity..................................................................................................................................

Item 2

Properties........................................................................................................................................

Item 3

Legal Proceedings ..........................................................................................................................

Item 4

Mine Safety Disclosures .................................................................................................................

PART II:

Item 5

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities...................................................................................................

Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations .........

Item 7A

Quantitative and Qualitative Disclosures about Market Risk .........................................................

Item 8

Consolidated Financial Statements and Supplementary Data ........................................................

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .........

Item 9A

Controls and Procedures.................................................................................................................

Item 9B

Other Information ...........................................................................................................................

Item 9C

Disclosure Regarding Foreign Jurisdiction that Prevent Inspections .............................................

PART III:

Item 10

Directors, Executive Officers and Corporate Governance .............................................................

Item 11

Item 12

Executive Compensation ................................................................................................................

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters...................................................................................................................

Item 13

Certain Relationships and Related Transactions, and Director Independence ...............................

Item 14

Principal Accountant Fees and Services.........................................................................................

PART IV:

Item 15 Exhibits and Financial Statement Schedules29

Signatures 30

Cautionary Statements Regarding Forward-Looking Statements

All of the statements in this Annual Report on Form 10-K, other than historical facts, are forward-looking statements, including, without limitation, the statements made in the "Management's Discussion and Analysis of Financial Condition and Results of Operations," particularly under the caption "Overview." 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, Ennis, Inc. 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 Ennis, Inc. 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. Ennis, Inc. 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 Ennis, Inc. 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 the impact of the internet and other electronic media on the demand for forms and printed materials; general economic, business and labor conditions, including 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 or sabotage; 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 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; and our ability to identify, manage or integrate acquisitions.

PART I

ITEM 1. BUSINESS

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. Ennis is primarily a "trade printer" that manufactures a broad range of printed products that are resold throughout the United States through a network of 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.

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. We operate 56 manufacturing plants throughout the United States in 20 strategically located states as one reportable segment; printing services and manufacture of business forms. Approximately 94% 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 GraphicsSMand 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®, and National Imprint Corporation® (which provide custom and imprinted envelopes); Northstar® and General Financial Supply® (which provide financial and security documents); InfosealSMand 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.

There are a number of competitors that operate in this segment. We believe our strategic locations and buying power permit us to compete on a favorable basis within the distributor market on competitive factors, such as service, quality, and price.

Distribution of business forms and other business products throughout the United States is primarily done through independent distributors, including business forms distributors, resellers, direct mail, commercial printers, software companies, and advertising agencies.

Raw materials principally consist of a wide variety of weights, widths, colors, sizes, and qualities of paper for business products purchased primarily from one major supplier at favorable prices based on our high volume of business with that supplier relative to our competitors.

Business products usage in the printing industry is generally not seasonal. General economic conditions and contraction of the traditional business forms industry are the predominant factors in quarterly volume fluctuations.

Recent Acquisitions

We have completed a number of acquisitions in recent years.

On June 26, 2024, we acquired the assets and business of Printing Technologies, Inc. ("PTI") in Indianapolis, Indiana. In the last full year preceding the acquisition, PTI generated approximately $12.5 million in combined sales. The acquisition of PTI strengthens our production capabilities and diversifies our product offerings to serve our large and growing customer base.

On October 11, 2023, we acquired the assets and business of Eagle Graphics, Inc. ("Eagle") in Annville, Pennsylvania, and Diamond Graphics, Inc. ("Diamond") in Bensalem, Pennsylvania. In the last full year preceding the acquisition, Eagle and Diamond generated approximately $8.7 million in combined sales. The acquisition of these facilities strengthens our production capabilities to serve our large and growing customer base in the Northeast part of the country.

On June 2, 2023, we acquired the assets and business of UMC Print ("UMC") in Overland Park, Kansas, which reported approximately $16.1 million in 2022. The addition of UMC added new commercial printing capabilities, expanded our distributor customer base and provided our existing distributors with new product offerings to further drive their growth.

On May 23, 2023 we acquired the real estate and operations of Stylecraft Printing Company ("Stylecraft") in Canton, Michigan, which prior to the acquisition generated approximately $7.0 million in sales for its fiscal year ended December 31, 2022. Stylecraft is a trade only printer since 1967 specializing in business forms, integrated products and commercial printing.

Patents, Licenses, Franchises and Concessions

Other than the patent for our VersaSeal® product, we do not have any significant patents, licenses, franchises, or concessions.

Intellectual Property

We market our products under a number of trademarks and trade names. The protection of our trademarks is important to our business. We believe that our registered and common law trademarks have significant value and these trademarks are important to our ability to create and sustain demand for our products. We have registered trademarks in the United States for Ennis®, EnnisOnlineSM, Block Graphics®, Enfusion®, 360º Custom LabelsSM, Admore®, CashManagementSupply.comSM, Securestar®, Northstar®, MICRLink®, MICR ConnectionTM, General Financial Supply®, Calibrated Forms®, PrintXcel®, Printegra®, Trade Envelopes®, Witt Printing®, Genforms®, Royal Business Forms®, Crabar/GBFSM, BF&SSM,Adams McClure®, Advertising ConceptsTM, ColorWorx®, Allen-Bailey Tag & LabelSM, Atlas Tag & Label®, PrintgraphicsSM, Uncompromised Check Solutions®, VersaSeal®, VersaSeal SecureX®, Folder Express®, Wisco®, National Imprint Corporation®, Star Award Ribbon®, Kay Toledo Tag®, Falcon Business FormsSM, Forms ManufacturersSM, Mutual Graphics®, TRI-C Business FormsSM, SSP®, EOSTouchpoint®, Printersmall®, Check Guard®, Envirofolder®, Independent®, Independent Checks®, Independent Folders®, Independent Large Format Solutions®, Wright Business GraphicsSM, Wright 360SM, Integrated Print & GraphicsSM, the Flesh CompanySM, MegaformSM, Safe®, InfosealSM, StylecraftSM, UMC PrintSM, Eagle GraphicsSM, Diamond GraphicsSM, Printing Technologies and variations of these brands as well as other trademarks. We have similar trademark registrations internationally for certain trademarks.

Customers

Our customer population includes one customer with 5.3% of our consolidated accounts receivables and no single customer account for as much as five percent of our consolidated net sales at fiscal year ended February 28, 2025. No single customer accounts for as much as five percent of our consolidated net sales or accounts receivables during fiscal years 2024 or 2023.

Backlog

At February 28, 2025, our backlog of firm orders was approximately $25.7 million, compared to approximately

$33.7 million at February 29, 2024. The reduction in backlog from fiscal 2024 to fiscal 2025 is due primarily to a combination of change in product mix requiring shorter lead times for ordering and reduction in sales volume.

Research and Development

While we seek new products to sell through our distribution channel, there have been no material amounts spent on research and development in fiscal years 2025, 2024 or 2023.

Environment

We are subject to various federal, state, and local environmental laws and regulations concerning, among other things, wastewater discharges, air emissions and solid waste disposal. Our manufacturing processes do not emit substantial foreign substances into the environment. We do not believe that our compliance with federal, state, or local statutes or regulations relating to the protection of the environment has any material effect upon capital expenditures, earnings or our competitive position. There can be no assurance, however, that future changes in federal, state, or local regulations, interpretations of existing regulations or the discovery of currently unknown problems or conditions will not require substantial additional expenditures. Similarly, the extent of our liability, if any, for past failures to comply with laws, regulations, and permits applicable to our operations cannot be determined.

Environmental Stewardship

Ennis respects the environment and makes all attempts to protect our natural resources. We believe we comply with all laws and regulations regarding the use and preservation of our land, air, and water. This principle has been part of our Code of Conduct since 2005. Our goal of operating in an environmentally responsible manner aligns with our goals of operating a profitable and responsible business. For example, we recycle waste material generated in our printing processes to generate income from selling the scrap material. We recycled 21.1 million pounds of paper and 1.1 million pounds of cardboard and cores in fiscal year 2025. Additionally, the use of soy-based inks allow us to avoid cleaning solutions that may pose environmental hazards. We use environmentally friendly cleaning agents to insure that our wastewater is not contaminated and does not require special disposal.

Many of our plants engage with local energy suppliers to ask for recommendations on lowering energy usage. Participation in these energy audits generally results in replacing old lighting with more efficient LED lighting. Additionally, newer digital technology, which we have implemented in several of our locations, relies on less energy than older web-based presses due to shorter runs and ink jet technology.

Another aspect of our business model which reduces carbon emissions is the reduction in transportation costs for our employees, as well as our customers. A number of our facilities are located in small towns where the employees have a short commute, and travel time is minimal. Our geographical dispersion reduces the amount of transportation time and distance associated with delivering our products to our customers. Likewise, we use third party transportation and logistical companies to pick up and deliver our products. Partnering with larger shipping organizations that have the scale to be more resourceful and implement more energy efficient delivery methods enables us to ship our products in an efficient and effective manner.

Our primary supplier of paper is vital to our business as they supply raw materials that are minimally altered during the production process. Our primary supplier is SFI, FSC and PEFC certified. The SFI Forest Management Standard covers key values such as protection of biodiversity, species at risk and wildlife habitat; sustainable harvest levels; protection of water quality; and prompt regeneration. FSC certification ensures that that paper we buy from SFI comes from responsibly-managed forests that provide environmental, social and economic benefits. PEFC cares for forests globally and locally. They work to protect our forests by promoting sustainable forest management through certification. This means that all can benefit from the many paper products that forests provide now, while ensuring these forests will be around for generations to come. The Company's primary paper supplier ensures that all of their supply chain materials are sourced with similar accredited suppliers allowing for more transparency and a more trustworthy supplier commitment to quality, safety and the protection of our natural resources.

Additionally, we use material safety sheets which outline potential hazardous materials so as to minimize the use of more hazardous materials. Given the low and de minimis use of these potentially hazardous materials, our plants generally fit in the lowest category of reporting standards to various state and local environmental agencies. The Company requires facility managers to minimize the use or site storage of any hazardous chemicals. Two thirds of our facilities are categorized as Very Small Quantity Generators and one third are considered Small Quantity Generators under the Environmental Protection Agency's ("EPA") hazardous waste regulations. Any hazardous waste generated is stored and properly disposed of in compliance with all EPA regulations and permits.

Two of our largest facilities have solvent recovery systems which allows the recovery of press plate washing solutions for re-use. These systems result in a substantial reduction of any hazardous waste. The Company ensures that we are in compliance with applicable state and federal environmental laws on hazardous materials including Proposition 65 in California and federal Conflict Minerals compliance.

Attention to choice of material suppliers, transportation partners, energy usage and avoidance of hazardous wastes that might impact wastewater disposal, are part of the business model that improves or avoids damage to the environment we live and work in.

Human Capital

At February 28, 2025, we had 1,856 employees. 157 employees are represented by labor unions under collective bargaining agreements, which are subject to periodic negotiations. We believe we have a good working relationship with our employees and all of the unions that represent our employees.

Social Responsibility

Equal Employment Opportunity: Ennis promotes a cooperative and productive work environment by supporting the cultural and ethnic diversity of its workforce and is committed to providing equal employment opportunity to all qualified employees and applicants. Pursuant to our Code of Conduct adopted in 2005 and reviewed at least annually, we do not unlawfully discriminate on the basis of race, color, sex, sexual orientation, religion, national origin, marital status, age, disability, or veteran status in any personnel practice, including recruitment, hiring, training, promotion, and discipline. We are an Equal Opportunity Employer and we comply with all employment laws including Title VII of the Civil Rights Act of 1964, Immigration and Nationality Act, and the Immigration Reform and Control Act. We take allegations of harassment and unlawful discrimination seriously and address all such concerns that are raised regarding our Code of Conduct.

Safety and Health: A safe and clean work environment is important to the well-being of all Ennis employees. Ennis complies with applicable safety and health regulations and appropriate practices. Throughout the year facilities are reviewed monthly to determine if the accidents/injuries that occurred could have been avoided. Incidents are reviewed to determine measures that can be taken to prevent reoccurrence of claims at that facility or another facility. A monthly Facility Report is sent to all facilities reminding them about safety issues and certain claims that have occurred in other locations. Annually, facilities are required to submit an audit of compliance with mandated OSHA safety programs. Facilities that have higher than normal claims are worked with directly or visited by a business director or a representative from our workers' compensation carrier. Protocols and trainings are in place to protect the health and safety of all our employees. Safety audits are completed throughout the organization. The Company strictly monitors safety issues in all of our facilities, and each facility has someone in charge of review and training of employees on safety issues. Consistent with our culture of promoting workplace safety, our plants take pride in detailing the amount of time since the last safety incident and strive to maintain the lack of an occurrence.

Ennis is dedicated to ensuring that business is conducted ethically. All Ennis management must read, agree with, and sign a Code of Conduct and Ethics policy at least annually.

Each of our locations support local non-profit organizations, educational institutions and youth sport teams based on their local community needs. The majority of our locations are located in suburban or rural communities where the plant is a major employer and supporter of the local economy. Some examples include Midlothian Educational Foundation (Ennis is a founding member), Project Graduation, Toys for Tots, Angel Trees, United Way fundraisers, and youth sport team sponsorships. Additional support includes in-kind donations, volunteer hours and financial support for various local organizations.

Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge under the Investors Relations page on our website, https://www.ennis.com, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"). Information on our website is not included as a part of, or incorporated by reference into, this report. Our SEC filings are also available through the SEC's website, https://www.sec.gov.

ITEM 1A. RISK FACTORS

You should carefully consider the risks described below, as well as the other information included or incorporated by reference in this Annual Report on Form 10-K, before making an investment in our common stock. The risks described below are not the only ones we face in our business. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. If any of the following risks occur, our business, financial condition or operating results could be materially harmed. In such an event, our common stock could decline in price and you may lose all or part of your investment.

Risks related to our business and operations

Our results and financial condition are affected by global and local market conditions, competitors' pricing strategies, and risks due to new or increased tariffs, which can adversely affect our sales, margins, and net income.

Our results of operations can be affected by local, national and worldwide market conditions. The consequences of domestic and international economic uncertainty or instability, volatility in commodity markets, and domestic or international policy uncertainty, all of which we have seen in the past, can all impact economic activity. Unfavorable conditions can depress the demand for our products and thus sales in a given market and may prompt competitor's pricing strategies that adversely affect our margins or constrain our operating flexibility. Certain macroeconomic events, such as crises in the financial markets, inflation, high interest rates, tariffs, recessionary concerns, cost and labor pressures, distribution challenges and the availability of paper could have a more wide-ranging and prolonged impact on the general business environment, which could also adversely affect us. Whether we can manage these risks effectively depends on several factors, including (i) our ability to manage movements in commodity prices and the impact of government actions to manage national economic conditions such as consumer spending, inflation rates and

unemployment levels, particularly given the past volatility in the global financial markets, (ii) the impact on our margins of labor costs given our labor-intensive business model, the trend toward higher wages in both mature and developing markets and the potential impact of union organizing efforts on day-to-day operations of our manufacturing facilities and (iii) other factors, which may be beyond our control.

Digital technologies will continue to erode the demand for our printed business documents.

The printing industry continues to experience weakening demand for printed products. The increasing sophistication of software, internet technologies, and digital equipment combined with our customers' general preference and digital substitutions, as well as governmental influences for paperless business environments will continue to reduce the number of traditional printed documents sold. Moreover, the documents that will continue to coexist with software applications will likely contain less value-added print content.

Increasing postal rates make direct mail campaigns more expensive, potentially leading our customers to reduce their demand for our products and shift to alternative marketing channels. Many of our custom-printed documents help companies control their internal business processes and facilitate the flow of information. These applications will increasingly be conducted over the internet or through other electronic payment systems. The predominant method of our customers' communication with their customers is by printed information. As their customers become more accepting of internet communications, our customers may increasingly opt for what is perceived to be a less costly electronic option, which would reduce our revenue. The pace of these trends is difficult to predict. These factors will tend to reduce the industry-wide demand for printed documents and require us to gain market share to maintain or increase our current level of print-based revenue which could place pressure on our operating margins.

In response to the gradual obsolescence of our standardized business forms, we continue to develop our capability to provide custom and full-color products. If new printing capabilities and new product introductions do not continue to offset the obsolescence of our standardized business forms products and we are unable to increase our market share, our sales and profits will be affected. Decreases in sales of our standardized business forms and products due to obsolescence could also reduce our gross margins or impact the value of our recorded goodwill and intangible assets. This reduction could in turn adversely impact our profits, unless we are able to offset the reduction through the introduction of new high margin products and services or realize cost savings in other areas.

We obtain our raw materials from a limited number of suppliers, and any disruption in our relationships with these suppliers, or any substantial increase in the price of raw materials or material shortages could have a material adverse effect on us.

We currently purchase a large majority of our paper products (a significant input to our print products) from one major supplier at favorable costs based on our high volume of business with this supplier relative to our competitors. Traditionally we have purchased our paper products from a limited number of suppliers, all of which must meet stringent quality and on-time delivery standards under long-term contracts. The closing of paper mills as recently announced would reduce capacity, potentially increasing prices and require us to seek alternative suppliers. We predominantly purchase our other raw materials from domestic suppliers but may be required to source from international suppliers if our domestic suppliers are unable to meet our supply requirements. Fluctuations in the quality of our paper commodity, unexpected price changes, decline in overall distribution channels or other factors that relate to our suppliers could have a material adverse effect on our operating results.

Paper is a commodity that is subject to frequent increases or decreases in price, and these fluctuations are sometimes significant. The prices for paper and many of our raw materials have been volatile and may continue to increase due to overall inflationary pressure and global market conditions. We believe there is no effective market of derivative instruments to insulate us against unexpected changes in price of paper in a cost-effective manner and negotiated purchase contracts provide only limited protection against price increases. Generally, when paper prices increase, we attempt to recover the higher costs by raising the prices of our products to our customers. In the price-competitive marketplaces in which we operate, however, we may not always be able to pass through any or all of the higher costs. As such, any significant increase in the price of paper or shortage in its availability could have a material adverse effect on our results of operations.

Challenging financial market conditions and changes in long-term interest rates could adversely impact the funded status of our pension plan.

We maintain a noncontributory defined benefit retirement plan (the "Pension Plan") covering approximately 12% of our employees. As of February 28, 2025, the Pension Plan was 103% funded on a projected benefit obligation ("PBO") basis and 109% on an accumulated benefit obligation ("ABO") basis. Included in our financial results are Pension Plan costs that are measured using actuarial valuations. The actuarial assumptions used may differ from actual results. In addition, as our Pension Plan assets are invested in marketable securities, fluctuations in market values can negatively impact our funded status, recorded pension liability and future required minimum contribution levels. A decline in long-term interest rates puts downward pressure on the discount rate used by plan sponsors to determine their pension liabilities. Each 10-basis point change in the discount rate impacts our computed pension liability by approximately $0.5 million. Similar to fluctuations in market values, a drop in the discount rate can negatively impact our funded status, recorded pension liability and future contribution levels. Also, continued changes in the mortality assumptions can impact our funded status. Additionally, as we experienced in recent years, the number of participants taking lump sum distributions at retirement could be sufficiently high as to cause a settlement charge, which would impact current earnings of the Pension Plan.

We may be unable to identify or to complete acquisitions or to successfully integrate the businesses we acquire.

We have evaluated, and may continue to evaluate, potential acquisition transactions. We attempt to address the potential risks inherent in assessing the attractiveness of acquisition candidates, as well as other challenges such as retaining the employees and integrating the operations of the businesses we acquire. Integrating acquired operations involves significant risks and uncertainties, including maintenance of uniform standards, controls, policies and procedures; diversion of management's attention from normal business operations during the integration process; unplanned expenses associated with integration efforts; and unidentified issues not discovered in due diligence, including legal contingencies. Due to these risks and others, there can be no guarantee that the businesses we acquire will lead to the cost savings or increases in net sales that we expect or desire. Additionally, there can be no assurance that suitable acquisition opportunities will be available in the future, which could harm our strategic business plan as acquisitions are part of our strategy to offset normal print attrition.

Our distributor customers may be acquired by other manufacturers who redirect business within their plants.

Some of our customers are being absorbed by the distribution channels of some of our manufacturing competitors. However, we do not believe this will significantly impact our business model. We have continued to sell to some of these customers even after they were absorbed by our competition because of the breadth of our product line and our geographic diversity.

Our distributors face increased competition from various sources, such as office supply superstores. Increased competition may require us to reduce prices or to offer other incentives in order to enable our distributors to attract new customers and retain existing customers.

Low price, high value office supply chain stores offer standardized business forms, checks and related products. Because of their size, these superstores have the buying power to offer many of these products at competitive prices. These superstores also offer the convenience of "one-stop" shopping for a broad array of office supplies that our distributors do not offer. In addition, superstores have the financial strength to reduce prices or increase promotional discounts to expand market share. This could result in us reducing our prices or offering incentives in order to enable our distributors to attract new customers and retain existing customers, which could reduce our profits.

We could experience labor disputes, labor shortages and increases in cost of labor that could disrupt our business in the future and impact operating results.

As of February 28, 2025, approximately 8% of our employees are represented by labor unions under collective bargaining agreements, which are subject to periodic negotiations. While we believe we have a good working relationship with all of the unions, there can be no assurance that any future labor negotiations will prove successful, which may result in a significant increase in the cost of labor, or may break down and result in the disruption of our business or operations.

We have faced a tight labor market due to competitive wage increases, labor shortages and turnover. Labor shortages and rising labor-related costs could adversely impact our earnings.

We face intense competition to gain market share, which may lead some competitors to sell substantial amounts of goods at prices against which we cannot profitably compete.

Our marketing strategy is to differentiate ourselves by providing quality service and quality products to our customers. Even if this strategy is successful, the results may be offset by reductions in demand or price declines due to competitors' pricing strategies or other micro or macro-economic factors. We face the risk of our competition following a strategy of selling its products at or below cost in order to cover some amount of fixed costs, especially in stressed economic times.

Environmental regulations may impact our future operating results.

We are subject to extensive and changing federal, state and foreign laws and regulations establishing health and environmental quality standards, concerning, among other things, wastewater discharges, air emissions and solid waste disposal, and may be subject to liability or penalties for violations of those standards. We are also subject to laws and regulations governing remediation of contamination at facilities currently or formerly owned or operated by us or to which we have sent hazardous substances or wastes for treatment, recycling or disposal. We may be subject to future liabilities or obligations as a result of new or more stringent interpretations of existing laws and regulations. In addition, we may have liabilities or obligations in the future if we discover any environmental contamination or liability at any of our facilities, or at the facilities we may acquire.

Changes in U.S. tariff and trade policy could adversely affect our business.

We are monitoring changes and potential changes to U.S. tariff and trade policies under the current Presidential administration, along with reciprocal tariffs or other countermeasures imposed or that may be imposed by other countries in response. The current environment is dynamic and uncertain, as the U.S. President has imposed, modified and paused tariffs, and granted exemptions from tariffs, on different countries and products multiple times since taking office in January 2025. Changing U.S. tariff and trade policies could cause higher inflation, higher interest rates and slower economic growth or recession in the U.S. We predominantly purchase our other raw materials from domestic suppliers but may be required to source from international suppliers if our domestic suppliers are unable to meet our supply requirements. Our domestic suppliers may incur tariffs leading to increased prices. These changes and uncertainties regarding future changes could result in higher costs to our business and impact demand from our customers. These factors could have a material adverse effect on our business.

We are subject to taxation related risks.

We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Applicable tax rates and the jurisdictions within which we operate can vary and therefore our effective tax rate may be adversely affected by changes in the mix of our earnings by jurisdiction. We may be subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.

Income, sales or other tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are applied. Most recently, on August 16, 2022, legislation commonly known as the Inflation Reduction Act (the "IRA") was signed into law. Among other things, the IRA includes a 1% excise tax on certain corporate stock repurchases, applicable to repurchases after December 31, 2022, and also a new minimum tax based on book income. Following the 2018 U.S. Supreme Court decision in South Dakota v Wayfair, states may require an out-of-state seller with no physical presence in the state to collect and remit sales tax on goods the seller ships to consumers in the state. While the company now collects, remits and reports sales tax in states that it does business in, the adoption of new laws by taxing authorities could create significant increases in internal cost necessary to capture data, collect and remit tax. All of these factors and uncertainties may adversely affect our results of operations, financial position and cash flows.

We are exposed to the risk of non-payment by our customers on a significant amount of our sales.

Our extension of credit involves considerable judgment and is based on an evaluation of each customer's financial condition and payment history. We monitor our credit risk exposure by periodically obtaining credit reports and updated financials on our customers. We generally see a heightened amount of bankruptcies by our customers during

economic downturns. While we maintain an allowance for credit losses based upon our historical trends and other available information, in times of economic turmoil, there is heightened risk that our historical indicators may prove to be inaccurate. The inability to collect on sales to significant customers or a group of customers could have a material adverse effect on our results of operations.

Our business incurs significant freight and transportation costs.

We incur transportation expenses to ship our products to our customers. Significant increases in the costs of freight and transportation could have a material adverse effect on our results of operations, as there can be no assurance that we could pass on these increased costs to our customers. Government regulations can and have impacted the availability of drivers, which will be a significant challenge to the transportation industry. Costs to employ drivers have increased and transportation shortages have become more prevalent. Additionally, the challenge of employing new drivers for the increasingly larger web-based economy could create shortages in trucks and drivers which could impact our sales.

A natural disaster, catastrophe, pandemic or other unexpected events could adversely affect our operations.

The occurrence of one or more unexpected events, including war, acts of terrorism or violence, civil unrest, epidemics or pandemics, fires, tornadoes, hurricanes, earthquakes, floods and other forms of severe weather in the United States could adversely affect our operations and financial performance. Although we maintain third party insurance against various liability risks and risks of property loss for items we believe are economically reasonable to insure, we could incur uninsured losses and liabilities arising from such events which would adversely affect our results of operations and financial condition.

We depend on the reliability of our information technology ("IT") and network infrastructure as well as those of third parties. If these systems fail, our operations may be adversely affected.

We depend on IT and data processing systems to operate our business, and a significant malfunction or disruption in the operation of our systems may disrupt our business and adversely affect our ability to operate and compete in the markets we serve. This could take various forms, including through the injection of ransomware on our IT infrastructure rendering it inoperable without the payment of some form of cyber currency. These systems include systems that we own and operate, as well as systems of our vendors or other third parties. Such systems are susceptible to ransomware attacks, malfunctions, interruptions and phishing scams, for example. We also periodically upgrade and install new systems, which if installed or programmed incorrectly, may cause significant disruptions. These disruptions could interrupt our operations and adversely affect our results of operations, financial condition and cash flows.

Increasing global cybersecurity attacks and regulatory focus on privacy and security issues could impact our business, expose us to increased liability, subject us to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business.

Along with our own data and information in the normal course of our business, we and our customers and partners collect and retain significant volumes of certain types of data, some of which are subject to specific laws and regulations. Complying with varying jurisdictional requirements is becoming increasingly complex and could increase the costs and difficulty of compliance, and violations of applicable data protection laws. Many of our clients provide us with information they consider confidential or sensitive, and many of our clients' industries have established standards for safeguarding the confidentiality, integrity and availability of information relating to their businesses and customers. Data stored in our systems or available through web portals is susceptible to cybercrime or intentional disruption, which have increased globally across all industries in terms of sophistication and frequency. Disclosure of data maintained on our network, a security breach of our systems or other similar events may damage our reputation, subject us to regulatory enforcement action, third party litigation and cause significant reputational or financial harm for our clients and partners. Any of these outcomes may adversely affect our results of operations, financial condition and cash flows.

As previously disclosed, the Company was targeted with an encryption ransomware attack on November 30, 2022. The Company eliminated the ransomware and restored its systems. Since then, the Company has implemented additional security measures to make it more difficult for an outside agent to gain access to our network, such as a

multifactor authentication (MFA) protocol and a robust firewall to strengthen the Company's network. Despite us improving our information technology general controls, we cannot give any assurances that the Company will not become the subject of a future more sophisticated, or more harmful attack.

Increases in the cost of employee benefits could impact our financial results and cash flow.

Our expenses relating to employee health benefits are significant. Unfavorable changes in the cost of such benefits could impact our financial results and cash flow. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform could result in significant changes to the U.S. healthcare system. While the Company has various cost control measures in place and employs an outside oversight review on larger claims, employee health benefits have been and are expected to continue to be a significant cost to us and may increase due to factors outside the Company's control.

Risks related to our securities

Because of the volatility in the stock market in general, the market price of our Common Stock will also likely be volatile.

The stock markets have historically experienced price and volume fluctuations that at times have been extreme and have affected, and continue to affect, the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may negatively impact the market price of our common stock. If the market price of our Class A common stock falls below your investment price, you may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management's attention.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There are no unresolved SEC staff comments.

ITEM 1C. CYBERSECURITY

We believe that cybersecurity is important to maintaining the trust of our customers and employees. We have implemented a cybersecurity risk management program that is designed to identify, assess, manage, mitigate, and respond to cybersecurity threats which could adversely affect the confidentiality of our data and the integrity of our business operations and financial systems. Our cybersecurity program is based on best practices and guidelines of the National Institute of Standards and Technology Cybersecurity Framework. We have company-wide policies and procedures in place that further enhance our ability to identify and manage cybersecurity risk.

Annual risk assessments and penetration testing are performed by independent third party consultants. These tests are useful tools for maintaining a robust cybersecurity program to protect our investors, customers, employees, vendors, and intellectual property. The results of these tests are presented annually to the Board of Directors ("Board"), Audit Committee, and senior management for review to ensure compliance with cybersecurity standards.

During the fiscal year ended February 28, 2025, we have not identified any risks from cybersecurity threats that have materially affected our business operations or financial conditions.

Governance

Our Board of Directors, Audit Committee and senior management oversee risk management to ensure that the Company's policies and procedures are functioning as intended to protect the Company's information systems from

cybersecurity threats. The Audit Committee performs an annual review and discussion of the Company's cybersecurity program, which includes planned actions in the event of a threat or recovery situation.

Our IT team is led by the Director of Information Technology and is responsible for regular assessment and management of cybersecurity risks. The Director of Information Technology has constant access to the Audit Committee to provide regular updates as necessary regarding any new developments.

We view cybersecurity as a shared responsibility of the Audit Committee and the IT team led by the Director of Information Technology, and we incorporate external resources and advisors as needed to conduct evaluations of our security controls through penetration testing, independent audits and consulting on best practices. The results of those tests are presented annually to the Board.

ITEM 2. PROPERTIES

Our corporate headquarters are located in Midlothian, Texas, and we operate manufacturing facilities throughout the United States. See the table below for additional information regarding our locations.

All of our properties are used for the production, warehousing and shipping of business products, including the following: business forms, flexographic printing, and advertising specialties (Wolfe City, Texas); presentation products (Macomb, Michigan; De Pere, Wisconsin and Columbus, Kansas); printed and electronic promotional media (Columbus, Kansas); envelopes (Portland, Oregon; Columbus, Kansas; Tullahoma, Tennessee and Claysburg, Pennsylvania); financial forms (Minneapolis/St. Paul, Minnesota; Nevada, Iowa and Bridgewater, Virginia); statement printing and mailing (Roanoke, Virginia; Arlington, Texas; South Elgin, Illinois, and Overland Park, Kansas); kiosk media, thermal, ATM, and pay station receipts (Indianapolis, Indiana); and pressure seal products (Roanoke, Virginia and Clarksville, Tennessee).

Our plants are operated at production levels required to meet our forecasted customer demands. Production levels fluctuate with market demands and depend upon the product mix at any given point in time. Equipment is added as existing machinery becomes obsolete or not repairable, and as new equipment becomes necessary to meet market demands; however, at any given time, these additions and replacements are not considered to be material additions to property, plant and equipment, although such additions or replacements may increase a plant's efficiency or capacity.

All of our facilities are believed to be in good condition. We do not anticipate that substantial expansion, refurbishing, or re-equipping of our facilities will be required in the near future.

All of our rented property is held under leases with original terms of one or more years, expiring at various times through March 2030. Some leases include options to renew at our discretion. Generally, we are able to maintain or renew leases as they expire without significant difficulty, but leases in certain markets may be subject to significant rent increases that necessitate consolidating operations to maintain profitability.

Approximate Square Footage

Location

General Use

Owned

Leased

Fairhope, Alabama

Manufacturing

65,000

Sun City, California

Two Manufacturing Facilities and Warehouse

52,617

1,911

Denver, Colorado

One Manufacturing Facility

60,000

Lithia Springs, Georgia

Manufacturing

40,050

Harvard, Illinois

Manufacturing and Warehouse

42,000

South Elgin, Illinois

Manufacturing

70,500

Indianapolis, Indiana

Manufacturing

34,630

DeWitt, Iowa

Two Manufacturing Facilities

95,000

Nevada, Iowa

Two Manufacturing Facilities

232,000

Columbus, Kansas

Two Manufacturing Facilities and Warehouse

174,089

Ft. Scott, Kansas

Manufacturing

86,660

Girard, Kansas

Manufacturing

69,474

Overland Park, Kansas

Two Manufacturing Facilities

26,750

Parsons, Kansas

Manufacturing & One Warehouse

122,740

40,000

Canton, Michigan

Two Manufacturing Facilities and Warehouse

32,958

13,490

Macomb, Michigan

Manufacturing

56,350

Brooklyn Park, Minnesota

Manufacturing

94,800

El Dorado Springs, Missouri

Manufacturing

70,894

Fenton, Missouri

Vacant **

26,847

Marlboro, New Jersey

Manufacturing and Warehouse

7,450

Caledonia, New York

Manufacturing and one vacant

191,730

Fairport, New York

Two Manufacturing Facilities

40,800

Coshocton, Ohio

Manufacturing

24,750

Toledo, Ohio

Three Manufacturing Facilities

120,947

Portland, Oregon

Two Manufacturing Facilities

261,765

Annville, Pennsylvania

Manufacturing

37,000

Claysburg, Pennsylvania

Manufacturing

69,000

Clarksville, Tennessee

Manufacturing

51,900

Powell, Tennessee

Manufacturing

43,968

Tullahoma, Tennessee

Two Manufacturing Facilities

142,061

Arlington, Texas

Two Manufacturing Facilities

69,935

Ennis, Texas

Three Manufacturing Facilities *

325,118

Houston, Texas

Manufacturing

29,668

Wolfe City, Texas

Two Manufacturing Facilities

119,259

Bridgewater, Virginia

Manufacturing

25,730

Chatham, Virginia

Two Manufacturing Facilities

127,956

Roanoke, Virginia

Manufacturing

110,000

DePere, Wisconsin

Manufacturing

123,187

Mosinee, Wisconsin

Manufacturing

5,400

Neenah, Wisconsin

Two Manufacturing Facilities & One Warehouse

72,354

97,161

2,622,360

983,539

Corporate Offices

Ennis, Texas

Administrative Offices

9,300

Midlothian, Texas

Executive and Administrative Offices

28,000

37,300

Totals 2,659,660 983,539

* 22,000 square feet of Ennis, Texas location leased

** The Company exited the lease facility and is actively looking to sublease the remaining noncancellable lease term through July 2027.

ITEM 3. LEGAL PROCEEDINGS

From time to time we are involved in various litigation matters arising in the ordinary course of our business. We do not believe the disposition of any current matter will have a material adverse effect on our 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 plaintiff landlord generally alleges that the defendants failed to maintain the leased premises in good condition. The landlord seeks more than $4.0 million in repair costs and other consequential damages even though the landlord sold the facility without making the supposedly necessary repairs. 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 not be tried until the first calendar quarter of 2026.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the New York Stock Exchange ("NYSE") under the trading symbol "EBF". The following table sets forth the high and low sales prices, the common stock trading volume as reported by the NYSE and dividends per share paid by the Company for the periods indicated:

Common Stock Price Range

High Low

Common Stock Trading Volume (number of shares

in thousands)

Dividends per share of Common

Stock

Fiscal Year Ended February 28, 2025

First Quarter

$ 25.75

$ 18.88

7,439

$ 0.250

Second Quarter

24.37

20.55

5,964

$ 0.250

Third Quarter

25.75

20.02

11,775

$ 2.750

Fourth Quarter

21.72

19.76

7,700

$ 0.250

Fiscal Year Ended February 29, 2024

First Quarter

$ 22.19

$ 18.94

7,812

$ 0.250

Second Quarter

22.46

19.38

5,412

$ 0.250

Third Quarter

21.99

20.55

4,317

$ 0.250

Fourth Quarter

23.17

19.75

6,288

$ 0.250

On May 6, 2025, the last reported sale price of our common stock on the NYSE was $18.39, and there were approximately 596 shareholders of record. Cash dividends may be paid, or repurchases of our common stock may be made, from time to time as our Board deems appropriate, after considering our growth rate, operating results, financial condition, cash requirements, restrictive lending covenants, and such other factors as the Board may deem appropriate.

A dividend of $0.25 per share of our common stock was paid in each quarter of fiscal years 2023, 2024 and 2025. During the third quarter of fiscal year 2025, a special dividend of $2.50 per share of our common stock was paid in addition to the ordinary dividend of $0.25 per share of our common stock.

Dividends are declared at the discretion of the Board and future dividends will depend on our future earnings, cash flow, financial requirements and other factors. The Board does view the dividend as an important aspect of owning Ennis stock and continues to rank it high in priority in allocating the Company's earnings.

Our 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. Repurchases may be commenced or suspended at any time or from time to time without prior notice, provided that any purchases must be made in accordance with applicable insider trading rules and securities laws and regulations. Since the program's inception in October 2008, we have repurchased 2,334,344 common shares under the program at an average price of $16.47 per share. During our fiscal year 2025, we repurchased 91,883 shares of common stock at an average price of $19.79 per share. As of February 28, 2025, $21.5 million remained available to repurchase shares of common stock under the program.

Stock Performance Graph

The graph below matches Ennis, Inc.'s cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P 500 index and the Russell 2000 index. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from February 29, 2020 to February 28, 2025.

2020

2021

2022

2023

2024

2025

Ennis, Inc.

$ 100.00

$ 103.62

$ 103.08

$ 125.43

$ 122.94

$ 150.98

S&P 500

100.00

131.29

152.81

141.06

184.01

217.88

Russell 2000

100.00

151.00

141.92

133.39

146.79

156.61

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

ITEM 6. [Reserved]

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis provides material historical and prospective disclosures intended to enable investors and other users to assess our financial condition and results of operations. Statements that are not historical are forward-looking and involve risk and uncertainties, including those discussed under the caption "Risk Factors" in Item 1A of this Annual Report on Form 10-K and elsewhere in this Report. You should read this discussion and analysis in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Report. The words "anticipate," "preliminary," "expect," "believe," "intend" and similar expressions identify forward-looking statements. 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.

In view of such uncertainties, investors should not place undue reliance on our forward-looking statements since such statements may prove to be inaccurate and speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This Management's Discussion and Analysis covers the continuing operations of the Company, which are comprised of the production and sale of business forms and other business products. This Management's Discussion and Analysis includes the following sections:

Overview - An overall discussion regarding our Company, the business challenges and opportunities we believe are key to our success, and our plans for facing these challenges relating to our continuing operations.

Critical Accounting Estimates - A discussion of the accounting policies that require our most critical judgments and estimates relating to our continuing operations. This discussion provides insight into the level of subjectivity, quality, and variability involved in these judgments and estimates. This section also provides a summary of recently adopted and recently issued accounting pronouncements that have or may materially affect our business.

Results of Operations - An analysis of our consolidated results of operations and segment results for the three years presented in our Consolidated Financial Statements. This analysis discusses material trends within our continuing business and provides important information necessary for an understanding of our continuing operating results.

Liquidity and Capital Resources - An analysis of our cash flows and a discussion of our financial condition and contractual obligations. This section provides information necessary to evaluate our ability to generate cash and to meet existing and known future cash requirements over both the short and long term.

References to 2025, 2024 and 2023 refer to the fiscal years ended February 28, 2025, February 29, 2024 and

February 28, 2023, respectively.

Overview

The Company - 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.

Our Business Challenges - Our industry is currently experiencing consolidation of traditional supply channels, product obsolescence, paper supplier capacity adjustments, and increased pricing and potential supply allocations due to demand/supply curve imbalance. Technology advances have made electronic distribution of documents, internet hosting, digital printing and print-on-demand valid, cost-effective alternatives to traditional custom-printed documents and customer communications. Improved equipment has become more accessible to our competitors. We face highly competitive conditions throughout our supply chain in an already over-supplied, price-competitive print industry. In

addition to the risk factors discussed under the caption "Risk Factors" in Item 1A of this Annual Report, some of the key challenges of our business include the following:

Transformation of our portfolio of products - While traditional business documents are essential in order to conduct business, many are being replaced through the use of cheaper paper grades or imported paper, or devalued with advances in digital technologies, causing steady declines in demand for a portion of our current product line. Transforming our product offerings in order to continue to provide innovative, valuable solutions through lower labor and fixed charges to our customers on a proactive basis will require us to make investments in new and existing technology and to develop key strategic business relationships, such as print-on-demand services and product offerings that assist customers in their transition to digital business environments. In addition, we will continue to look for new market opportunities and niches through acquisitions, such as the addition of our envelope offerings, tag offerings, folder offerings, healthcare wristbands, specialty packaging, direct mail, pressure seal products, secure document solutions, innovative in-mold label offerings and long-run integrated products with high color web printing, which provide us with an opportunity for growth and differentiate us from our competition. The ability to make investments in new and existing technology and/or to acquire new market opportunities through acquisitions is dependent on the Company's liquidity and operational results.

Production capacity and price competition within our industry - Industry supply of paper products is subject to fluctuation as changing industry conditions have and will continue to influence producers to idle or permanently close individual machines or mills, and or convert them to different product lines, such as packaging to offset a decline in demand. Recently, there have been consolidations of paper suppliers and mill closure announcements which may cause the paper prices to fluctuate substantially in the future. The only domestic source of carbonless paper announced that it is closing its factory. We intend to build a surplus of inventory as buffer inventory until we transition to other sources. While margins remain under pressure due to the resulting weak volumes, we continue to focus on effectively managing and controlling our product costs through the use of forecasting, production and costing models, as well as working closely with our suppliers to reduce our procurement costs, in order to minimize effects on our operational results. In addition, we will continue to look for ways to reduce and leverage our fixed costs and focus on maintaining our margins.

Continued consolidation of our customers - Our customers are distributors, many of which are consolidating or are being acquired by competitors. We continue to maintain a majority of the business we have had with our customers historically, but it is possible that these consolidations and acquisitions, which we expect to continue in the future, ultimately will impact our margins and sales.

Critical Accounting Estimates

In preparing our Consolidated Financial Statements, we are required to make estimates and assumptions that affect the disclosures and reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and judgments on an ongoing basis, including those related to allowance for credit losses, inventory valuations, property, plant and equipment, intangible assets, pension plan obligations, accrued liabilities and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We believe the following accounting estimates are the most critical due to the application of significant subjective assumptions and judgments in the preparation of such estimates, which are included in our Consolidated Financial Statements.

Disclaimer

Ennis Inc. published this content on June 09, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 09, 2025 at 14:07 UTC.