恩尼斯首季淨銷售額微增1.5%至9861.5萬美元，經營現金流大增逾兩倍

10-Q
 
 
 
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 

  
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended May 31, 2026
OR
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from to 
Commission File Number 1-5807
 
ENNIS, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
 

 
 
 
 
 
 

 
 Texas

  

 75-0256410

 

 
 (State or Other Jurisdiction of 
Incorporation or Organization)

  

 (I.R.S. Employer 
Identification No.)

 

 
  

  

  

 

 
 2441 Presidential Pkwy., Midlothian, Texas

  

 76065

 

 
 (Address of Principal Executive Offices)

  

 (Zip code)

 

 Registrant’s Telephone Number, Including Area Code: (972) 775-9801
Securities registered pursuant to Section 12(b) of the Act: 
 

 
 
 
 
 
 
 
 

 
 Title of each class

  

 Trading
Symbol(s)

  

 Name of each exchange on which registered

 

 
 Common Stock, par value $2.50 per share

  

 EBF

  

 New York Stock Exchange

 

  
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 

 
 
 
 
 
 
 
 
 
 
 

 
 Large accelerated filer

 ☐

  

  

  

  

 Accelerated filer 

 ☒

 

 
  

  

  

  

  

  

  

  

 

 
 Non-accelerated filer

 ☐

  

  

  

  

 Smaller reporting company

 ☐

 

 
  

  

  

  

  

  

  

  

 

 
  

  

  

  

  

  

 Emerging growth company

 ☐

 

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 18, 2026, there were 25,298,272 shares of the Registrant’s common stock outstanding.
 
 

  

 
  

 ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED MAY 31, 2026
TABLE OF CONTENTS
 

 
 
 
 
 
 
 

 
 PART I: FINANCIAL INFORMATION

  

  

 

 
  

  

  

  

 

 
  

 Item 1. Condensed Consolidated Financial Statements (unaudited)

  

 3

 

 
  

  

  

  

 

 
  

 Condensed Consolidated Balance Sheets at May 31, 2026 and February 28, 2026

  

 3

 

 
  

  

  

  

 

 
  

 Condensed Consolidated Statements of Operations for the three months ended May 31, 2026 and May 31, 2025

  

 4

 

 
  

  

  

  

 

 
  

 Condensed Consolidated Statements of Comprehensive Income for the three months ended May 31, 2026 and May 31, 2025

  

 5

 

 
  

  

  

  

 

 
  

 Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended May 31, 2026 and May 31, 2025 

  

 6

 

 
  

  

  

  

 

 
  

 Condensed Consolidated Statements of Cash Flows for the three months ended May 31, 2026 and May 31, 2025

  

 7

 

 
  

  

  

  

 

 
  

 Notes to Condensed Consolidated Financial Statements (unaudited)

  

 8

 

 
  

  

  

  

 

 
  

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

  

 23

 

 
  

  

  

  

 

 
  

 Item 3. Quantitative and Qualitative Disclosures About Market Risk

  

 29

 

 
  

  

  

  

 

 
  

 Item 4. Controls and Procedures

  

 29

 

 
  

  

  

 

 
 PART II: OTHER INFORMATION

  

  

 

 
  

  

  

  

 

 
  

 Item 1. Legal Proceedings

  

 29

 

 
  

  

  

  

 

 
  

 Item 1A. Risk Factors

  

 30

 

 
  

  

  

  

 

 
  

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

  

 30

 

 
  

  

  

  

 

 
  

 Item 3. Defaults Upon Senior Securities

  

 30

 

 
  

  

  

  

 

 
  

 Item 4. Mine Safety Disclosures

  

 30

 

 
  

  

  

  

 

 
  

 Item 5. Other Information

  

 30

 

 
  

  

  

  

 

 
  

 Item 6. Exhibits

  

 30

 

 
  

  

  

 

 
 SIGNATURES

  

 31

 

  
 
 

  

 
  

 PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ENNIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 May 31,

  

  

 February 28,

  

 

 
  

  

 2026

  

  

 2026

  

 

 
 Assets

  

  

  

  

  

  

 

 
 Current assets

  

  

  

  

  

  

 

 
 Cash and cash equivalents

  

 $

 49,082

  

  

 $

 34,570

  

 

 
 Accounts receivable, net

  

  

 34,756

  

  

  

 37,983

  

 

 
 Other receivables

  

  

 785

  

  

  

 1,623

  

 

 
 Inventories, net

  

  

 56,067

  

  

  

 54,895

  

 

 
 Prepaid expenses

  

  

 2,763

  

  

  

 2,699

  

 

 
 Total current assets

  

  

 143,453

  

  

  

 131,770

  

 

 
 Property, plant and equipment, net

  

  

 61,534

  

  

  

 63,341

  

 

 
 Operating lease right-of-use assets, net

  

  

 8,330

  

  

  

 9,503

  

 

 
 Goodwill

  

  

 106,586

  

  

  

 106,586

  

 

 
 Intangible assets, net

  

  

 36,752

  

  

  

 38,832

  

 

 
 Pension asset, net

  

  

 2,208

  

  

  

 2,208

  

 

 
 Other assets

  

  

 4,655

  

  

  

 4,671

  

 

 
 Total assets

  

 $

 363,518

  

  

 $

 356,911

  

 

 
  

  

  

  

  

  

  

 

 
 Liabilities and Shareholders’ Equity

  

  

  

  

  

  

 

 
 Current liabilities

  

  

  

  

  

  

 

 
 Accounts payable

  

 $

 15,251

  

  

 $

 14,291

  

 

 
 Accrued expenses

  

  

 21,632

  

  

  

 16,846

  

 

 
 Current portion of operating lease liabilities

  

  

 3,801

  

  

  

 4,244

  

 

 
 Total current liabilities

  

  

 40,684

  

  

  

 35,381

  

 

 
 Deferred income taxes

  

  

 7,398

  

  

  

 7,309

  

 

 
 Operating lease liabilities, net of current portion

  

  

 4,253

  

  

  

 4,971

  

 

 
 Other liabilities

  

  

 518

  

  

  

 518

  

 

 
 Total liabilities

  

  

 52,853

  

  

  

 48,179

  

 

 
 Shareholders’ equity

  

  

  

  

  

  

 

 
 Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at May 31, 2026 and February 28, 2026

  

  

 75,134

  

  

  

 75,134

  

 

 
 Additional paid-in capital

  

  

 125,127

  

  

  

 127,057

  

 

 
 Retained earnings

  

  

 204,656

  

  

  

 201,155

  

 

 
 Accumulated other comprehensive loss:

  

  

  

  

  

  

 

 
 Minimum pension liability, net of taxes

  

  

 (9,230

 )

  

  

 (9,496

 )

 

 
 Treasury stock

  

  

 (85,022

 )

  

  

 (85,118

 )

 

 
 Total shareholders’ equity

  

  

 310,665

  

  

  

 308,732

  

 

 
 Total liabilities and shareholders' equity

  

 $

 363,518

  

  

 $

 356,911

  

 

  

 See accompanying notes to condensed consolidated financial statements.
 
3

 
  

 ENNIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three months ended

  

 

 
  

  

 May 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net sales

  

 $

 98,615

  

  

 $

 97,197

  

 

 
 Cost of goods sold

  

  

 67,532

  

  

  

 66,967

  

 

 
 Gross profit

  

  

 31,083

  

  

  

 30,230

  

 

 
 Selling, general and administrative

  

  

 17,508

  

  

  

 16,947

  

 

 
 Gain from disposal of assets

  

  

 (10

 )

  

  

 —

  

 

 
 Income from operations

  

  

 13,585

  

  

  

 13,283

  

 

 
 Other income (expense)

  

  

  

  

  

  

 

 
 Interest income

  

  

 367

  

  

  

 550

  

 

 
 Other expense, net

  

  

 (230

 )

  

  

 (318

 )

 

 
      Total other income (expense)

  

  

 137

  

  

  

 232

  

 

 
 Earnings before income taxes

  

  

 13,722

  

  

  

 13,515

  

 

 
 Income tax expense

  

  

 3,843

  

  

  

 3,716

  

 

 
 Net earnings

  

 $

 9,879

  

  

 $

 9,799

  

 

 
 Weighted average common shares outstanding

  

  

  

  

  

  

 

 
 Basic

  

  

 25,363,246

  

  

  

 25,956,639

  

 

 
 Diluted

  

  

 25,521,039

  

  

  

 26,021,247

  

 

 
 Earnings per share

  

  

  

  

  

  

 

 
 Basic

  

 $

 0.39

  

  

 $

 0.38

  

 

 
 Diluted

  

 $

 0.39

  

  

 $

 0.38

  

 

 

 See accompanying notes to condensed consolidated financial statements.
 
4

 
  

 ENNIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three months ended

  

 

 
  

  

 May 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net earnings

  

 $

 9,879

  

  

 $

 9,799

  

 

 
 Adjustment to pension, net of taxes

  

  

 266

  

  

  

 343

  

 

 
 Comprehensive income

  

 $

 10,145

  

  

 $

 10,142

  

 

  

 See accompanying notes to condensed consolidated financial statements.
 
5

 
  

 ENNIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(unaudited, in thousands, except share and per share amounts)
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 Accumulated

  

  

  

  

  

  

  

  

  

  

 

 
  

  

  

  

  

  

  

 Additional

  

  

  

  

  

 Other

  

  

  

  

  

  

  

  

  

  

 

 
  

 Common Stock

  

  

 Paid-in

  

  

 Retained

  

  

 Comprehensive

  

  

 Treasury Stock

  

  

  

  

 

 
  

 Shares

  

  

 Amount

  

  

 Capital

  

  

 Earnings

  

  

 Income (Loss)

  

  

 Shares

  

  

 Amount

  

  

 Total

  

 

 
 Balance February 28, 2026

  

 30,053,443

  

  

 $

 75,134

  

  

 $

 127,057

  

  

 $

 201,155

  

  

 $

 (9,496

 )

  

  

 (4,800,638

 )

  

 $

 (85,118

 )

  

 $

 308,732

  

 

 
 Net earnings

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 9,879

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 9,879

  

 

 
 Adjustment to pension, net of deferred tax of $91

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 266

  

  

  

 —

  

  

  

 —

  

  

  

 266

  

 

 
 Dividends paid ($0.25 per share)

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (6,378

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (6,378

 )

 

 
 Stock based compensation

  

 —

  

  

  

 —

  

  

  

 379

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 379

  

 

 
 Modification of share-based awards

  

 —

  

  

  

 —

  

  

  

 (2,213

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (2,213

 )

 

 
 Exercise of stock options and restricted stock

  

 —

  

  

  

 —

  

  

  

 (96

 )

  

  

 —

  

  

  

 —

  

  

  

 5,406

  

  

  

 96

  

  

  

 —

  

 

 
 Common stock repurchases

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Balance May 31, 2026

  

 30,053,443

  

  

 $

 75,134

  

  

 $

 125,127

  

  

 $

 204,656

  

  

 $

 (9,230

 )

  

  

 (4,795,232

 )

  

 $

 (85,022

 )

  

 $

 310,665

  

 

 
 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Balance February 28, 2025

  

 30,053,443

  

  

 $

 75,134

  

  

 $

 125,452

  

  

 $

 184,430

  

  

 $

 (11,426

 )

  

  

 (4,060,655

 )

  

 $

 (71,610

 )

  

 $

 301,980

  

 

 
 Net earnings

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 9,799

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 9,799

  

 

 
 Adjustment to pension, net of deferred tax of $114

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 343

  

  

  

 —

  

  

  

 —

  

  

  

 343

  

 

 
 Dividends paid ($0.25 per share)

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (6,571

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (6,571

 )

 

 
 Stock based compensation

  

 —

  

  

  

 —

  

  

  

 568

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 568

  

 

 
 Exercise of stock options and restricted stock

  

 —

  

  

  

 —

  

  

  

 (343

 )

  

  

 —

  

  

  

 —

  

  

  

 21,933

  

  

  

 387

  

  

  

 44

  

 

 
 Common stock repurchases

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (260,560

 )

  

  

 (5,011

 )

  

  

 (5,011

 )

 

 
 Balance May 31, 2025

  

 30,053,443

  

  

 $

 75,134

  

  

 $

 125,677

  

  

 $

 187,658

  

  

 $

 (11,083

 )

  

  

 (4,299,282

 )

  

 $

 (76,234

 )

  

 $

 301,152

  

 

  

 See accompanying notes to condensed consolidated financial statements.
 
6

 
  

 ENNIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three months ended

  

 

 
  

  

 May 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Cash flows from operating activities:

  

  

  

  

  

  

 

 
 Net earnings

  

 $

 9,879

  

  

 $

 9,799

  

 

 
 Adjustments to reconcile net earnings to net cash provided by operating activities:

  

  

  

  

  

  

 

 
 Depreciation

  

  

 2,159

  

  

  

 2,239

  

 

 
 Amortization of intangible assets

  

  

 2,080

  

  

  

 1,944

  

 

 
 (Gain) loss from disposal of assets

  

  

 (10

 )

  

  

 —

  

 

 
 Amortization of discount on short-term investments

  

  

 —

  

  

  

 (25

 )

 

 
 Credit losses

  

  

 107

  

  

  

 90

  

 

 
 Stock based compensation

  

  

 379

  

  

  

 568

  

 

 
 Net pension expense

  

  

 357

  

  

  

 457

  

 

 
 Changes in operating assets and liabilities, net of the effects of acquisitions

  

 

 
 Accounts and other receivables

  

  

 3,957

  

  

  

 (7,340

 )

 

 
 Prepaid expenses and income taxes

  

  

 (64

 )

  

  

 (10

 )

 

 
 Inventories

  

  

 (1,172

 )

  

  

 (11,798

 )

 

 
 Other assets

  

  

 16

  

  

  

 16

  

 

 
 Accounts payable and accrued expenses

  

  

 3,532

  

  

  

 11,953

  

 

 
 Other liabilities

  

  

 12

  

  

  

 67

  

 

 
 Net cash provided by operating activities

  

  

 21,232

  

  

  

 7,960

  

 

 
 Cash flows from investing activities:

  

  

  

  

  

  

 

 
 Capital expenditures

  

  

 (352

 )

  

  

 (1,368

 )

 

 
 Purchase of businesses, net of cash acquired

  

  

 —

  

  

  

 (34,931

 )

 

 
 Maturity of short-term investments

  

  

 —

  

  

  

 5,500

  

 

 
 Proceeds from disposal of plant and property

  

  

 10

  

  

  

 —

  

 

 
 Net cash used in investing activities

  

  

 (342

 )

  

  

 (30,799

 )

 

 
 Cash flows from financing activities:

  

  

  

  

  

  

 

 
 Dividends paid

  

  

 (6,378

 )

  

  

 (6,571

 )

 

 
 Common stock repurchases

  

  

 —

  

  

  

 (5,011

 )

 

 
 Proceeds from exercise of stock options

  

  

 —

  

  

  

 44

  

 

 
 Net cash used in financing activities

  

  

 (6,378

 )

  

  

 (11,538

 )

 

 
 Net change in cash and cash equivalents

  

  

 14,512

  

  

  

 (34,377

 )

 

 
 Cash and cash equivalents at beginning of period

  

  

 34,570

  

  

  

 67,000

  

 

 
 Cash and cash equivalents at end of period

  

 $

 49,082

  

  

 $

 32,623

  

 

 
  

  

  

  

  

  

  

 

 
 Supplemental disclosure of non-cash items:

  

  

  

  

  

  

 

 
 Modification of share-based awards from equity to liability

  

 $

 2,213

  

  

 $

 —

  

 

  

 See accompanying notes to condensed consolidated financial statements.
 
7

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 1. Significant Accounting Policies and General Matters 
Basis of Presentation 
These unaudited condensed consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the three months ended May 31, 2026 have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2026, from which the accompanying consolidated balance sheet at February 28, 2026 was derived. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included and are of a normal recurring nature. The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to credit losses, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

 
Recent Accounting Pronouncements
 
Issued Accounting Standards Not Yet Adopted
 
In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", that requires entities to disclose additional information in the notes to the financial statements about prescribed categories underlying any relevant income statement expense caption. The new standard is effective for annual reporting periods beginning after December 15, 2026 (fiscal year 2028 for the Company and interim periods within annual reporting periods beginning after December 15, 2027. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements but will result in some disaggregation of the Company’s income statement expenses in the notes to the Consolidated Financial Statements.
 
In July 2025, the FASB issued ASU 2025-05, "Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets" ("ASU 2025-05"). The amendments in this update provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB Accounting Standards Codification 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. An entity that elects this accounting policy must disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for the Company beginning in the fiscal year ending February 28, 2027. The Company is currently evaluating the impacts of the adoption of ASU 2025-05 on the Consolidated Financial Statements.

 

 8

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 2. Revenue
 
Nature of Revenues
Substantially all of the Company’s revenue is derived from the sale of printed products in the continental United States of America and is primarily recognized at a point in time in an amount that reflects the consideration the Company expects to be provided in exchange for those goods. Revenue from the sale of commercial printing products, including shipping and handling fees billed to customers, is recognized when the performance obligation is met upon the transfer of control to the customer, which is generally upon shipment to the customer when the terms of the sale are freight on board ("FOB") shipping point, or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination. Net sales represent gross sales invoiced to customers, less certain related charges, including sales tax, discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant.
In a small number of cases and upon customer request, the Company prints and stores printed product for customer specified future delivery, generally within the same year as the product is manufactured. In this case, revenue is recognized upon the transfer of control when manufacturing is complete and title and risk of ownership is passed to the customer while the inventory remains in the Company’s warehouse. Approximately $3.5 million and $3.0 million of revenue was recognized under these arrangements during the three months ended May 31, 2026 and 2025, respectively. 
Storage revenue for certain customers may be recognized over time rather than at a point in time. The amount of storage revenue is immaterial to the Condensed Consolidated Financial Statements. As the output method for measure of progress is determined to be appropriate, the Company recognizes revenue in the amount for which it has the right to invoice for revenue that is recognized over time and for which it demonstrates that the invoiced amount corresponds directly with the value to the customer for the performance completed to date.
The Company does not disaggregate revenue and operates in one reportable segment consisting of printed product revenue, which is reported as net sales on the condensed consolidated statements of operations. See Note 19. The Company does not have material contract assets or contract liabilities as of May 31, 2026.
Significant Judgments
Generally, the Company’s contracts with customers are comprised of a written quote and customer purchase order or statement of work, and governed by the Company’s trade terms and conditions. In certain instances, it may be further supplemented by separate pricing agreements and customer incentive arrangements, which typically only affect the contract’s transaction price. Contracts do not contain a significant financing component as payment terms on invoiced amounts are typically between 30 to 90 days, based on the Company’s credit assessment of individual customers, as well as industry expectations. Product returns are not significant as the bulk of the Company's sales are custom in nature.
From time to time, the Company may offer incentives to its customers considered to be variable consideration including volume-based rebates or early payment discounts. Customer incentives considered to be variable consideration are recorded as a reduction to revenue as part of the transaction price at contract inception when there is a basis to reasonably estimate the amount of the incentive and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Customer incentives are allocated entirely to the single performance obligation of transferring printed product to the customer and are not considered material.
For customers with terms of FOB shipping point, the Company accounts for shipping and handling activities performed after the control of the printed product has been transferred to the customer as a fulfillment cost. The Company accrues for the costs of shipping and handling activities if revenue is recognized before contractually agreed shipping and handling activities occur.
The Company’s contracts with customers are generally short-term in nature. Accordingly, the Company does not disclose the value of unsatisfied performance obligations nor the timing of revenue recognition.

 9

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 3. Receivables
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are reduced by an allowance for an estimate of amounts that are uncollectible. Substantially all of the Company’s receivables are due from customers in North America. The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution). The Company does not typically require its customers to post a deposit or supply collateral. The Company’s allowance for credit losses is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible. This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends. Accounts receivable relate to credit extended directly to customers in the ordinary course of business. 
The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance in the period the payment is received. Recoveries for the three months ended May 31, 2026 and 2025 were not significant to the Condensed Consolidated Financial Statements. Credit losses from continuing operations have consistently been within management’s expectations.
The following table presents the activity in the Company’s allowance for credit losses (in thousands):
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three months ended

  

 

 
  

  

 May 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Balance at beginning of period

  

 $

 1,617

  

  

 $

 1,713

  

 

 
 Credit losses

  

  

 107

  

  

  

 90

  

 

 
 Recoveries

  

  

 (116

 )

  

  

 —

  

 

 
 Accounts written off

  

  

 (10

 )

  

  

 (45

 )

 

 
 Balance at end of period

  

 $

 1,598

  

  

 $

 1,758

  

 

 
Other Receivables

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

 10

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 4. Inventories
The Company values its inventories at the lower of first-in, first out (“FIFO”) cost or market cost, with the exception of approximately 5.8% and 5.6% of inventories are valued at last-in, first-out (“LIFO”) as of May 31, 2026 and February 28, 2026, respectively, or net realizable value. The excess of current cost at FIFO over LIFO stated values was approximately $6.4 million and $6.1 million as of May 31, 2026 and February 28, 2026, respectively. The Company regularly reviews inventories on hand, using specific aging categories, and writes down the carrying value of its inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage. In assessing the ultimate realization of its inventories, the Company is required to make judgments as to future demand requirements. As actual future demand or market conditions may vary from those projected by the Company, adjustments to inventories may be required. The allowance for aged obsolete inventory at May 31, 2026 and February 28, 2026 were $1.9 million and $1.9 million, respectively. The aged inventory allowance is recorded primarily to account for the decrease in market value of general stock inventory that is not manufactured to specific customer order.
The following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 May 31,

  

  

 February 28,

  

 

 
  

  

 2026

  

  

 2026

  

 

 
 Raw material, net

  

 $

 34,241

  

  

 $

 35,346

  

 

 
 Work-in-process

  

  

 5,222

  

  

  

 4,344

  

 

 
 Finished goods

  

  

 16,604

  

  

  

 15,205

  

 

 
 Total inventory, net

  

 $

 56,067

  

  

 $

 54,895

  

 

 

 

 
5. Property, Plant and Equipment
 
The following table presents a summary of property, plant and equipment, net:
 

 
 
 
 
 
 
 
 
 
 
 

 
  

 May 31,

  

  

 February 28,

  

 

 
  

 2026

  

  

 2026

  

 

 
 Plant, machinery and equipment

 $

 160,207

  

  

 $

 160,300

  

 

 
 Land and buildings

  

 80,736

  

  

  

 80,712

  

 

 
 Computer equipment and software

  

 9,906

  

  

  

 10,429

  

 

 
 Other

  

 3,695

  

  

  

 3,872

  

 

 
 Property, plant and equipment

  

 254,544

  

  

  

 255,313

  

 

 
 Less accumulated depreciation

  

 193,010

  

  

  

 191,972

  

 

 
 Property, plant and equipment, net

 $

 61,534

  

  

 $

 63,341

  

 

 
 

 
6. Acquisitions
The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values with certain limited exceptions permitted under US GAAP. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets and liabilities assumed, is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed are greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed in the period incurred. During the three months ended May 31, 2026 and 2025, the acquisition related costs were not significant to the Company's Condensed Consolidated Financial Statements.
 

 11

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 Acquisition of CFC Print & Mail
On November 14, 2025, the Company acquired the assets and business of CFC Print & Mail ("CFC"), which is based in Grand Prairie, TX for approximately $3.9 million in cash. The Company performed an allocation of the total consideration and recorded the underlying assets acquired (including certain identified intangible assets, consisting primarily of customer lists and trade names) and liabilities assumed based on the estimated fair values using the information available as of the acquisition date. The Company recorded intangible assets with definite lives ranging from 2 to 13 years of approximately $2.3 million in connection with the transaction, which are deductible for tax purposes. The acquisition of CFC further strengthens our leading position in the business products and commercial print sector.
The following table summarizes the Company's purchase price allocation for CFC as of the acquisition date (in thousands):
 

 
 
 
 
 
 
 

 
 Accounts receivable

 $

 652

  

 

 
 Inventories

  

 336

  

 

 
 Other assets

  

 56

  

 

 
 Right-of-use asset

  

 239

  

 

 
 Property, plant and equipment

  

 1,000

  

 

 
 Intangibles

  

 2,307

  

 

 
 Operating lease liability

  

 (239

 )

 

 
 Accounts payable and accrued liabilities

  

 (418

 )

 

 
 Acquisition price

 $

 3,933

  

 

 
 
 
Acquisition of Northeastern Envelope Company and Envelope Superstore
On April 11, 2025 the Company acquired the net assets and business of Northeastern Envelope Company ("NEC"), which is based in Old Forge, Pennsylvania, and Envelope Superstore ("ESS") which is based in Hiram, Georgia, for approximately $35.0 million in cash. The Company performed an allocation of the total consideration and recorded the underlying assets acquired (including certain identified intangible assets, consisting primarily of customer lists and trade names) and liabilities assumed based on the estimated fair values prepared by management using the information available as of the acquisition date. All goodwill of $12.2 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives ranging from 2 to 13 years of approximately $11.3 million in connection with the transaction, which are also deductible for tax purposes. The acquisition of NEC and ESS strengthens our production capabilities to serve our customers in the Northeast and Southeast United States.
The following table summarizes the Company's purchase price allocation for NEC and ESS as of the acquisition date (in thousands):
 

 
 
 
 
 
 
 

 
 Accounts receivable

 $

 1,585

  

 

 
 Inventories

  

 2,914

  

 

 
 Right-of-use asset

  

 601

  

 

 
 Property, plant and equipment

  

 7,371

  

 

 
 Goodwill

  

 12,237

  

 

 
 Intangibles

  

 11,348

  

 

 
 Operating lease liability

  

 (601

 )

 

 
 Accounts payable and accrued liabilities

  

 (458

 )

 

 
 Acquisition price

 $

 34,997

  

 

 
 
 
The results of operations for NEC, ESS, and CFC are included in the Company’s condensed consolidated financial statements from the respective dates of acquisition. The following table sets forth certain operating information on a pro forma basis as though each acquisition had occurred as of the beginning of the comparable prior period (that is, March 1, 2025). The following pro forma information includes the estimated impact of adjustments such as amortization of intangible assets, depreciation expense and interest expense and related tax effects (in thousands, except per share amounts).
 

 12

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three months ended

  

 

 
  

  

 May 31, 2026

  

  

 May 31, 2025

  

 

 
 Pro forma net sales

  

 $

 98,615

  

  

 $

 101,059

  

 

 
 Pro forma net earnings

  

  

 9,879

  

  

  

 10,151

  

 

 
 Pro forma earnings per share - diluted

  

 $

 0.39

  

  

 $

 0.39

  

 

 

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

 
7. Leases
The Company leases certain of its facilities and equipment under operating leases, which are recorded as right-of-use assets and lease liabilities. The Company’s leases generally have terms of 1 – 5 years, with certain leases including renewal options to extend the leases for additional periods at the Company’s discretion. At lease inception, all renewal options reasonably certain to be exercised are considered when determining the lease term. The Company currently does not have leases that include options to purchase or provisions that would automatically transfer ownership of the leased property to the Company.
Operating lease expense is recognized on a straight-line basis over the lease term, and variable lease payments are expensed as incurred. The Company had no material variable lease costs for the three months ended May 31, 2026 and 2025.
The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and directs the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment.
Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates based on the information available at lease commencement date, as rates are not implicitly stated in most leases.
 
Lease expense is recognized in cost of sales and selling, general and administrative expense within the Company's Condensed Consolidated Statements of Operations, based on the underlying nature of the leased asset.
Components of lease expense for the three months ended May 31, 2026 and 2025 were as follows (in thousands):
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three months ended

  

 

 
  

  

 May 31, 2026

  

  

 May 31, 2025

  

 

 
 Operating lease cost

  

 $

 1,267

  

  

 $

 1,431

  

 

 
 

  

  

  

  

  

  

 

 
 Supplemental cash flow information related to leases was as follows:

  

  

  

  

  

  

 

 
 Cash paid for amounts included in the measurement of lease liabilities

  

  

  

  

  

  

 

 
 Operating cash flows from operating leases

  

 $

 1,278

  

  

 $

 1,446

  

 

 
 

  

  

  

  

  

  

 

 
 Right-of-use assets obtained in exchange for lease obligations

  

  

  

  

  

  

 

 
 Operating leases

  

 $

 —

  

  

 $

 2,299

  

 

  
 

 
 
 
 
 
 
 
 

 
 Weighted Average Remaining Lease Terms

  

  

  

  

 

 
 Operating leases

  

 2.8 Years

  

 3.0 Years

 

 
 

  

  

  

  

 

 
 Weighted Average Discount Rate

  

  

  

  

 

 
 Operating leases

  

 4.25%

  

 4.39%

 

 
 

 13

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

 Future minimum lease commitments under non-cancelable operating leases for the current and next five fiscal years is as follows (in thousands):
 

 
 
 
 
 
 
 
 

 
  

  

 Operating

  

 

 
  

  

 Lease

  

 

 
  

  

 Commitments

  

 

 
 2027 (remaining)

  

 $

 3,076

  

 

 
 2028

  

  

 2,648

  

 

 
 2029

  

  

 1,631

  

 

 
 2030

  

  

 718

  

 

 
 2031

  

  

 252

  

 

 
 2032

  

  

 140

  

 

 
 Total future minimum lease payments

  

 $

 8,465

  

 

 
 Less imputed interest

  

  

 411

  

 

 
 Present value of lease liabilities

  

 $

 8,054

  

 

 

 
8. Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized. Goodwill and other intangible assets are tested for impairment at the reporting unit level. The annual impairment test of goodwill and intangible assets is performed as of December 1 of each fiscal year.
The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.
If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded. A goodwill impairment charge was not required during the three months ended May 31, 2026 and 2025.
Definite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances indicate that the asset may be impaired.
 

 14

 
 ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2026
(unaudited)
 

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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Weighted

  

  

  

  

  

  

  

  

  

  

 

 
  

  

 Average