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 26, 2017 (June 26, 2017)

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
(Address of Principal Executive Offices)	76065 (Zip Code)

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

N/A

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.  ☐

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 (see General Instructions A.2. below):

☐ 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 2.02. Results of Operations and Financial Condition.*

On June 26, 2017, Ennis, Inc. issued a press release announcing its financial results for the three months ended May 31, 2017. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.	Description
99.1	Ennis, Inc. press release dated June 26, 2017 announcing its financial results for the three months ended May 31, 2017 (furnished pursuant to Item 2.02 of Form 8-K).

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.
Date: June 26, 2017	By:	/s/ Richard L. Travis, Jr.
		Richard L. Travis, Jr.
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Ennis, Inc. press release dated June 26, 2017 announcing its financial results for the three months ended May 31, 2017 (furnished pursuant to Item 2.02 of Form 8-K).

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

ENNIS, INC. REPORTS RESULTS

FOR THE FIRST QUARTER ENDED MAY 31, 2017

Midlothian, TX. June 26, 2017 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2017. Highlights include:

• Print sales increased $4.2 million, or 4.6% on a comparative quarter basis.

• Print’s gross profit margin increased from 29.5% to 31.6% on a comparative quarter basis.

• Diluted earnings per share from print operations increased from $0.26 to $0.31.

Financial Overview

This financial overview includes the Company’s continuing print operations and its discontinued apparel operations on a separate and combined basis. The Company sold Alstyle Apparel on May 25, 2016, resulting in the print division becoming the on-going continuing operations of the Company thereafter.

The Company’s net print sales for the first quarter ended May 31, 2017 were $94.6 million compared to $90.4 million for the same quarter last year, an increase of 4.6%. Gross profit margin (“margin”) for continuing operations was $29.9 million for the quarter, or 31.6%, as compared to $26.7 million, or 29.5% for the same quarter last year. The Company’s margin in the first quarter last year was negatively impacted by approximately $1.3 million in connection with the move of one of its folder operations. Diluted earnings per share for the print operations were $0.31, compared to $0.26 for the same quarter last year.

Last year’s May 31, 2016 first quarter earnings from the apparel discontinued operations was $0.10 per diluted share, and the combined earnings for continued and discontinued operations was $0.36 per diluted share for the quarter. The net loss from the sale of the Company’s apparel operations during the quarter, net of tax, was $26.0 million, or ($1.01) per diluted share. The net loss included a $16.0 million, or $10.3 million net of taxes, write-off of the Company’s balance of foreign currency translation adjustments recorded in accumulated other comprehensive income. As a result, for the quarter ended May 31, 2016, the Company realized a net loss of ($16.9) million, or ($0.65) per diluted share.

Non-GAAP Reconciliations

The Company believes the non-GAAP financial measure of EBITDA (EBITDA is calculated as net earnings from continuing operations before interest, taxes, depreciation, and amortization) provides important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations. The Company believes adding back the specified items to net earnings provides a more meaningful comparison to the corresponding reported periods and internal budgets and forecasts, provides management with a more relevant measurement of operating performance and yields metrics which are more useful in assessing management performance. In addition, EBITDA is a component of the financial covenants and an interest rate metric in the Company’s credit facility. While management believes this non-GAAP financial measure is useful in evaluating Ennis, this information should be considered as supplemental in nature and not as a substitute for, or superior to, the related financial information prepared in accordance with GAAP.

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During the first quarter ending May 31, 2017, the Company generated EBITDA from print operations of $16.1 million compared to $13.8 million for the comparable quarter last year.

The following table reconciles EBITDA from print operations, a non-GAAP financial measure, to the most comparable GAAP measure, net earnings from continuing operations (dollars in thousands).

	Three months ended
	May 31,			May 31,
	2017			2016
Net earnings from continuing operations	$	7,784		$	6,683
Income tax expense		4,571			3,925
Interest expense		190			2
Depreciation and amortization		3,521			3,142
EBITDA from continuing operations (non-GAAP)	$	16,066		$	13,752
% of sales		17.0	%		15.2	%

Keith Walters, Chairman, Chief Executive Officer and President, commented on continuing operations by stating, “We are pleased with the operational performance during the first quarter. The integration of our most recent acquisition, Independent Printing Company, is coming along nicely. Its operations for the quarter added approximately $9.7 million in sales and $0.03 to our diluted earnings per share. On March 1, 2017, we changed the remaining useful lives of the Company’s trade names from indefinite-life to definite-life, which negatively impacted our financial results by approximately $0.01 per diluted share. Also, as recently announced, our Board, after considering our cash position, debt level, and anticipated cash flows, along with our focus on opportunities for share repurchases and acquisitions, increased our quarterly dividend rate from $0.175 per share to $0.20 per share, an increase of 14.3%. In connection with our share repurchase program, during the quarter we repurchased 191,033 shares of our common stock at an average price of $17.33 per share and have $18.4 million still available under our program. Finally, I would like to remind our shareholders that our annual shareholders’ meeting is scheduled for July 20, 2017 and we hope to see you there.”

About Ennis

Since 1909, Ennis, Inc. is 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. Ennis manufactures and sells business forms, other printed business products, printed and electronic media, presentation products, flex-o-graphic printing, advertising specialties and Post-it^® Notes, internal bank forms, plastic cards, secure and negotiable documents, envelopes, tags and labels 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

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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 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 28, 2017. 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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Ennis, Inc.

Condensed Consolidated Financial Information

(In thousands, except share and per share amounts)

	Three months ended
	May 31,			May 31,
	2017			2016
Condensed Consolidated Operating Results
Revenues	$	94,590		$	90,410
Cost of goods sold		64,671			63,716
Gross profit margin		29,919			26,694
Operating expenses		17,387			16,077
Operating income		12,532			10,617
Other expense		177			9
Earnings from continuing operations before income taxes		12,355			10,608
Income tax expense		4,571			3,925
Earnings from continuing operations		7,784			6,683
Income from discontinued operations, net of tax		—			2,481
Loss on sale of discontinued operations, net of tax		—			(26,042	)
Net earnings (loss)	$	7,784		$	(16,878	)
Weighted average common shares outstanding
Basic		25,422,856			25,783,770
Diluted		25,436,787			25,810,735
Earnings (loss) per share—basic and diluted
Earnings per share on continuing operations	$	0.31		$	0.26
Earnings per share on discontinued operations		—			0.10
		0.31			0.36
Loss per share on sale of discontinued operations		—			(1.01	)
Net earnings (loss)	$	0.31		$	(0.65	)
	May 31,			February 28,
	2017			2017
Condensed Consolidated Balance Sheet Information
Assets
Current assets
Cash	$	84,323		$	80,466
Accounts receivable, net		36,359			37,368
Inventories, net		29,249			27,965
Other		2,355			3,451
		152,286			149,250
Property, plant & equipment		48,626			49,995
Other		123,486			125,040
	$	324,398		$	324,285
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	11,661		$	14,202
Accrued expenses		17,764			15,766
		29,425			29,968
Long-term debt		30,000			30,000
Other non-current liabilities		13,031			12,962
Total liabilities		72,456			72,930
Shareholders’ equity		251,942			251,355
	$	324,398		$	324,285
	Three months ended
	May 31,
	2017			2016
Condensed Consolidated Cash Flow Information
Cash provided by operating activities	$	12,346		$	15,047
Cash provided by (used in) investing activities		(711	)		106,037
Cash used in financing activities		(7,778	)		(6,620	)
Change in cash		3,857			114,464
Cash at beginning of period		80,466			7,957
Cash at end of period	$	84,323		$	122,421

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