8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15 (D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): June 1, 2016 (May 25, 2016)

Ennis, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Texas	1-5807	75-0256410
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS 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

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Item 2.01 Completion of Acquisition or Disposition of Assets.

Ennis, Inc. (the “Company”) today announced that it has completed its previously announced sale of Alstyle Apparel, LLC and its subsidiaries, which constitute the Company’s apparel division (the “Apparel Division”), to Gildan Activewear Inc. (“Gildan”) for an all-cash purchase price of $109,354,066 (after giving effect to an adjustment for estimated working capital as of April 30, 2016 and which is subject to closing date calculation and post-closing confirmation), subject to customary indemnification arrangements and the other terms of such agreement (the “Alstyle Transaction”). Following the closing, the Company will provide transition assistance to Gildan for certain administrative, financial, human resource and information technology matters and will sublease from Gildan a portion of a certain property located in Anaheim, California that is leased by the Apparel Division.

The description of the Alstyle Transaction set forth above is qualified in its entirety by reference to the full text of the Unit Purchase Agreement, dated May 4, 2016, by and between the Company and Gildan, which is filed as Exhibit 10.1 to the Company’s Form 8-K filed on May 4, 2016, and which is deemed incorporated by reference herein.

On May 26, 2016, the Company issued a press release announcing the completion of the Alstyle Transaction, which is included as Exhibit 99.1 hereto. The portions of the press release describing the Alstyle Transaction under the heading “Sale of Apparel Division” is deemed filed pursuant to the rules and regulations of the Securities and Exchange Commission.

Item 2.02 Results of Operations and Financial Condition.

The Company previously announced its financial results for the quarter and fiscal year ended February 29, 2016 in the Company’s Form 10-K filed on May 11, 2016. Based on presently available information, on a preliminary and unaudited basis, the Company anticipates that it will incur a pre-tax loss on the sale of the Apparel Division to Gildan of between $25 million and $35 million. Based on certain tax elections expected to be made, the Company is expecting to be able to treat the loss as an operating loss for tax purposes.

The information set forth above in this Item 2.02 and the portions of the Company’s above-referenced press release describing certain preliminary and unaudited financial information under the heading “Financial Information” is deemed furnished and not filed pursuant to the rules and regulations of the Securities and Exchange Commission.

Item 9.01 Financial Statements and Exhibits.

(b) Exhibits

In connection with the sale of the Apparel Division to Gildan, the Company is required to provide in this Form 8-K certain proforma financial statements in order to give effect to such sale. Accordingly, furnished as Exhibit 99.2 are the Company’s Unaudited Pro Forma Condensed Balance Sheet as of February 29, 2016 and the Unaudited Pro Forma Condensed Statement of Operations for the fiscal year ended February 29, 2016 (collectively, the “Unaudited Pro Forma Financial Statements”). The Unaudited Pro Forma Condensed Balance Sheet as of February 29, 2016 has been prepared to present the Company’s financial condition as if the Alstyle Transaction had occurred on February 29, 2016. The Unaudited Pro Forma Condensed Statement of Operations for the fiscal year ended February 29, 2016 has been prepared to present the Company’s results of operations as if the Alstyle Transaction had occurred on March 1, 2015.

The Unaudited Pro Forma Financial Statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the fiscal year ended February 29, 2016, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2016 filed on May 11, 2016.

(d) Exhibits

Exhibit No.	Description
99.1	Ennis, Inc. press release dated May 26, 2016 announcing the Alstyle Transaction.
99.2	Unaudited Pro Forma Financial Statements and accompanying notes.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Ennis, Inc.
By:	/s/ Richard L. Travis Jr.
	Richard L. Travis, Jr.
	Chief Financial Officer

Date: June 1, 2016

EXHIBIT INDEX

Exhibit No.	Description
99.1	Ennis, Inc. press release dated May 26, 2016 announcing the Alstyle Transaction.
99.2	Unaudited Pro Forma Financial Statements and accompanying notes.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

ENNIS, INC. ANNOUNCES CLOSING OF THE SALE OF ITS APPAREL DIVISION

Midlothian, TX. May 26, 2016 — Ennis, Inc. (the “Company”), (NYSE: EBF), today announced that it has completed the previously announced sale of Alstyle Apparel, LLC and its subsidiaries, which constituted the Company’s apparel division (the “Apparel Division”), to Gildan Activewear SRL (“Gildan”), on May 25, 2016, all as more fully described below.

Sale of Apparel Division

As previously announced, the Company and Gildan Activewear Inc. (“Parent”) entered into a Unit Purchase Agreement (the “Purchase Agreement”), dated May 4, 2016 (which agreement was assigned by Parent to Gildan pursuant to Section 10.07 thereof) pursuant to which Gildan agreed to acquire the Apparel Division from the Company (the “Alstyle Transaction”). On May 25, 2016, the Alstyle Transaction was completed for an all-cash purchase price of $109,354,066 (after giving effect to an adjustment for estimated working capital as of April 30 , 2016, which is subject to post-closing adjustment as of the closing date), subject to customary indemnification arrangements and the other terms of such agreement. Concurrently with the closing, the Company and Gildan entered into a transition services agreement, pursuant to which the Company will provide transition assistance to Gildan for certain administrative, financial, human resource and information technology matters, and a sublease agreement, pursuant to which the Company will sublease from Gildan a portion of certain property located in Anaheim, California that is leased by the Apparel Division.

Keith Walters, the Company’s President, Chief Executive Officer and Chairman of the Board, commented by stating, “We are pleased that we have been able to close this transaction so quickly after its announcement in early May. Beginning in the summer of 2015, it has been a time consuming process to affect the sale of this asset, and its completion will allow management to focus on the Print segment and our stated goal of acquiring other printing businesses that meet our criteria. As we indicated in our earlier press release, the Board may consider several options such as, paying down debt, additional share repurchases of our Company stock, and the return of capital to our stockholders in the form of a one-time special dividend. We are pleased that we have been able to conclude this transaction quickly, and continue our focus on our core business. The amount of liquidity generated by this sale will mean a lot to our shareholders. It not only strengthens our balance sheet, but allows us to proceed aggressively with our strategic direction for the Company.”

The description of the Purchase Agreement and the Alstyle Transaction set forth above is qualified in its entirety by reference to the full text of the Purchase Agreement, which was included as part of the Company’s Form 8-K filed with the Securities and Exchange Commission on May 4, 2016.

Financial Information

The Company previously announced its financial results for the quarter and fiscal year ended February 29, 2016 in the Company’s Form 10-K filed on May 11, 2016. Based on presently available information, on a preliminary and unaudited basis, the Company anticipates that it will incur a pre-tax loss on the sale of the Apparel Division to Gildan of between $25 million and $35 million. Based on certain tax elections expected to be made, the Company is expecting to be able to treat the loss as an operating loss for tax purposes.

The Company has provided certain pro forma information concerning the sale of the Apparel Division to Gildan as part of its Form 8-K filed with the Securities and Exchange Commission in connection with the issuance of this press release.

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About Ennis

Since 1909, Ennis, Inc. has primarily engaged in the production and sale of business forms and other business products. The Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, the Company has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. The Company manufactures and sells business forms, other printed business and commercial products, printed and electronic media, presentation products, flexographic printing, internal bank forms, secure and negotiable documents, envelopes, tags and labels, advertising specialties, adhesive notes, plastic cards and other custom products. For more information, visit www.ennis.com.

Safe Harbor under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These statements are subject to numerous uncertainties, which include, but are not limited to, the Company’s ability to effectively manage its business functions while growing its business in a competitive environment, the Company’s ability to adapt and expand its services in such an environment and the variability in the prices of cotton, paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending February 29, 2016. The Company does not undertake, and hereby disclaims, any duty or obligation to update or otherwise revise any forward-looking statements to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, although its situation and circumstances may change in the future. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

For Further Information Contact:

Mr. Keith S. Walters, Chairman, Chief Executive Officer and President

Mr. Richard L. Travis, Jr., CFO, Treasurer and Principal Financial and Accounting Officer

Mr. Michael D. Magill, Executive Vice President and Secretary

Ennis, Inc.

2441 Presidential Parkway

Midlothian, Texas 76065

Phone: (972) 775-9801

Fax: (972) 775-9820

www.ennis.com

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EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Effective as of May 25, 2016, Ennis, Inc. (“Ennis,” “we” or “our”) completed its previously announced sale of Alstyle Apparel, LLC and its subsidiaries, which constitute the Company’s apparel division (the “Apparel Division”), to Gildan Activewear Inc. (“Gildan”) for an all-cash purchase price of $109,354,066 (after giving effect to an adjustment for estimated working capital as of April 30, 2016 and which is subject to closing date calculation and post-closing confirmation), subject to customary indemnification arrangements and the other terms of such agreement (the “Alstyle Transaction”).

Following the closing of the Alstyle Transaction, Ennis does not own any equity interest in Alstyle and Ennis will no longer consolidate Alstyle within its financial results. The following Unaudited Pro Forma Consolidated Financial Statements of Ennis reflect the impact of the Alstyle Transaction.

The Unaudited Pro Forma Consolidated Statements of Operations for the fiscal year ended February 29, 2016 is presented as if the Alstyle Transaction occurred on March 1, 2015 and excludes results from discontinued operations. The Unaudited Pro Forma Consolidated Balance Sheet of Ennis as of February 29, 2016 is presented as if the Alstyle Transaction occurred on February 29, 2016.

The Unaudited Pro Forma Consolidated Financial Statements are presented for illustrative purposes only and are not intended to represent or be indicative of our consolidated results of operations or financial position that would have been reported had the Alstyle Transaction been completed as of the dates presented, and should not be taken as representation of our future consolidated results of operations or financial condition. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances; however, actual amounts could differ.

The Unaudited Pro Forma Consolidated Financial Statements are based upon, and should be read in conjunction with, our historical Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended February 29, 2016 filed on May 11, 2016.

The Unaudited Pro Forma Consolidated Financial Statements have been prepared to remove Alstyle’s assets, liabilities and results of operations. In connection with the Alstyle Transaction, Ennis received net proceeds of approximately $106.4 million, after payment of $3.0 million termination fee to Alstyle Operations, LLC. The sale of this asset allows us to fully focus on our core business segment and to be able to utilize the cash from the sale of Alstyle Apparel to further expand this business segment through strategic acquisitions. In addition, given our current leverage position, our Board may also consider other uses of these funds such as, paying down debt, additional share repurchases of our Company stock, and the return of capital to our stockholders in the form of a one-time special dividend. None of foregoing possible uses of the net proceeds from the sale are reflected in these Unaudited Pro Forma Consolidated Financial Statements. A full description of all pro forma adjustments is included herein.

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

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

	Fiscal Year Ended February 29, 2016
	Historical			Pro Forma			Pro Forma
	Ennis, Inc.			Adjustments (a)			Ennis, Inc.
Net sales	$	568,973		$	183,027		$	385,946
Cost of goods sold		416,234			146,598			269,636
Gross profit margin		152,739			36,429			116,310
Selling, general and administrative		92,792			27,050	(b)		65,742
Impairment of goodwill and trademarks		4,130			4,130	(c)		—
Gain from disposal of assets		(479	)		—			(479	)
Income from operations		56,296			5,249			51,047
Other income (expense)
Interest expense		(1,358	)		(1,347	) (d)		(11	)
Other, net		1,634			1,642	(e)		(8	)
		276			295			(19	)
Earnings before income taxes		56,572			5,544			51,028
Provision for income taxes		20,818			2,040			18,778
Net earnings	$	35,754		$	3,504		$	32,250
Weighted average common shares outstanding
Basic		25,688,273			25,688,273			25,688,273
Diluted		25,722,367			25,722,367			25,722,367
Per share amounts
Net earnings - basic	$	1.39		$	0.14		$	1.25
Net earnings - diluted	$	1.39		$	0.14		$	1.25
Cash dividends per share	$	0.70		$	—		$	0.70

See Accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

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

	Fiscal Year Ended February 29, 2016
	Historical		Pro Forma			Pro Forma
	Ennis, Inc.		Adjustments (f)			Ennis, Inc.
ASSETS
Current Assets
Cash	$	10,425	$	65,546	(g)	$	75,971
Accounts receivable, net of allowance for doubtful receivables ($3.6 million-historical and $2.0 million-pro forma)		54,871		(18,325	)		36,546
Prepaid expenses		6,620		(3,859	)		2,761
Inventories		100,310		(72,691	)		27,619
Other current assets		6,749		(3,151	)		3,598
Total Current Assets		178,975		(32,480	)		146,495
Property, Plant and Equipment, Net
Plant, machinery and equipment		168,918		(37,572	)		131,346
Land and buildings		78,912		(23,927	)		54,985
Other		23,810		(1,124	)		22,686
Total property, plant and equipment		271,640		(62,623	)		209,017
Less accumulated depreciation		190,306		(32,080	)		158,226
Net property, plant and equipment		81,334		(30,543	)		50,791
Goodwill		64,537		—			64,537
Trademarks and trade names		24,461		(9,170	)		15,291
Other intangible assets, net		42,472		(5,499	)		36,973
Other assets		409		(135	)		274
Total Assets	$	392,188	$	(77,827	)	$	314,361

See Accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

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

	Fiscal Year Ended February 29, 2016
	Historical			Pro Forma			Pro Forma
	Ennis, Inc.			Adjustments (f)			Ennis, Inc.
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	21,788		$	(8,050	)	$	13,738
Accrued expenses
Employee compensation and benefits		15,863			(4,065	)		11,798
Other current liabilities		2,749			(380	)		2,369
Total Current Liabilities		40,400			(12,495	)		27,905
Long-term debt		40,000			(40,000	) (h)		—
Liability for pension benefits		8,696			—			8,696
Other long-term liabilities		4,546			989			5,535
Total Liabilities		93,642			(51,506	)		42,136
Commitments and contingencies
Shareholders’ Equity
Preferred stock $10 par value, authorized 1,000,000 shares; none issued		—			—			—
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at February 29, 2016		75,134			—			75,134
Additional paid-in capital		121,597			—			121,597
Retained earnings		206,105			(36,261	) (i)		169,844
Accumulated other comprehensive loss
Foreign currency translation, net of taxes		(9,940	)		9,940	(i)		—
Minimum pension liability, net of taxes		(17,345	)		—			(17,345	)
Total accumulated other comprehensive loss		(27,285	)		9,940			(17,345	)
Treasury stock		(77,005	)		—			(77,005	)
Total shareholders’ equity		298,546			(26,321	) (i)		272,225
Total liabilities and shareholders’ equity	$	392,188		$	(77,827	)	$	314,361

See Accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.

ENNIS, INC.

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Pro Forma Adjustments

(a) This adjustment reflects the elimination of revenues and expenses of the Apparel Segment.

(b) This adjustment reflects the elimination of operating and administrative expenses directly related to the Apparel Segment. Not included in the pro forma results are any anticipated savings that may ultimately be reduced or eliminated.

(c) This adjustment represents the adjustment to interest expense assuming the proceeds were used to pay-off the outstanding long-term debt.

(d) This adjustment represents the elimination of the impairment charge associated with the Apparel Segment’s intangible assets taken during fiscal year ending February 29, 2016.

(e) This adjustment represents the elimination of principally the foreign currency gain and interest income associated with the Apparel Segment.

(f) This adjustment reflects the elimination of assets and liabilities attributable to the Apparel Segment.

(g) This adjustment includes the receipt of $106.4 million cash consideration at the closing of the transaction ($2.0 million of which is held in escrow), plus $1.7 million of Alstyle cash retained by the Seller, less $40.0 million used to pay-off outstanding debt.

(h) This adjustment represents the assumed pay-off of the outstanding long-term debt.

(i) This adjustment reflects the loss of approximately $26.3 million arising from the transaction of May 25, 2016. This estimated loss has not been reflected in the pro forma consolidated statement of operations as it is considered to be nonrecurring in nature.