10-Q

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, 2019

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

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

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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

As of June 28, 2019, there were 26,113,699 shares of the Registrant’s common stock outstanding.

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION
	Item 1. Financial Statements	3
	Unaudited Consolidated Balance Sheets at May 31, 2019 and February 28, 2019	3
	Unaudited Consolidated Statements of Operations for the three months ended May 31, 2019 and May 31, 2018	5
	Unaudited Consolidated Statements of Comprehensive Income for the three months ended May 31, 2019 and May 31, 2018	6
	Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the three months ended May 31, 2019 and May 31, 2018	7
	Unaudited Consolidated Statements of Cash Flows for the three months ended May 31, 2019 and May 31, 2018	8
	Notes to Unaudited Consolidated Financial Statements	9
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
	Item 4. Controls and Procedures	26
PART II: OTHER INFORMATION
	Item 1. Legal Proceedings	27
	Item 1A. Risk Factors	27
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
	Item 3. Defaults Upon Senior Securities	27
	Item 4. Mine Safety Disclosures	27
	Item 5. Other Information	27
	Item 6. Exhibits	28
SIGNATURES		29

2

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands)

	May 31,		February 28,
	2019		2019
Assets
Current assets
Cash	$	87,365	$	88,442
Accounts receivable, net of allowance for doubtful receivables of $1,041 at    May 31, 2019 and $1,020 at February 28, 2019		41,876		40,357
Prepaid expenses		1,241		1,760
Prepaid income taxes		—		195
Inventories		36,826		35,411
Total current assets		167,308		166,165
Property, plant and equipment
Plant, machinery and equipment		149,678		146,001
Land and buildings		57,013		56,394
Other		23,993		23,838
Total property, plant and equipment		230,684		226,233
Less accumulated depreciation		175,397		173,099
Net property, plant and equipment		55,287		53,134
Operating lease right-of-use assets		18,653		—
Goodwill		82,527		81,634
Intangible assets, net		61,185		61,272
Net pension asset		580		580
Other assets		303		300
Total assets	$	385,843	$	363,085

See accompanying notes to consolidated financial statements.

3

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS-Continued

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

	May 31,			February 28,
	2019			2019
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	15,029		$	13,728
Accrued expenses		18,125			17,895
Current portion of operating lease liabilities		5,005			—
Total current liabilities		38,159			31,623
Long-term debt		30,000			30,000
Deferred income taxes		10,959			10,898
Operating lease liabilities, net of current portion		13,362			—
Other liabilities		1,099			1,437
Total liabilities		93,579			73,958
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 May 31, 2019 and February 28, 2019		75,134			75,134
Additional paid-in capital		122,111			123,065
Retained earnings		182,760			179,003
Accumulated other comprehensive loss:
Minimum pension liability, net of taxes		(16,470	)		(16,704	)
Total accumulated other comprehensive loss		(16,470	)		(16,704	)
Treasury stock		(71,271	)		(71,371	)
Total shareholders’ equity		292,264			289,127
Total liabilities and shareholders' equity	$	385,843		$	363,085

See accompanying notes to consolidated financial statements.

4

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	Three months ended
	May 31,
	2019			2018
Net sales	$	108,033		$	93,419
Cost of goods sold		75,337			63,228
Gross profit margin		32,696			30,191
Selling, general and administrative		19,703			17,735
Gain from disposal of assets		—			(4	)
Income from operations		12,993			12,460
Other income (expense)
Interest expense		(317	)		(261	)
Other, net		340			130
Total other income (expense)		23			(131	)
Earnings before income taxes		13,016			12,329
Income tax expense		3,384			3,082
Net earnings	$	9,632		$	9,247
Weighted average common shares outstanding
Basic		26,028,337			25,333,673
Diluted		26,028,337			25,363,772
Earnings per share
Basic	$	0.37		$	0.37
Diluted	$	0.37		$	0.36
Cash dividends per share	$	0.225		$	0.200

See accompanying notes to consolidated financial statements.

5

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three months ended
	May 31,
	2019		2018
Net earnings	$	9,632	$	9,247
Adjustment to pension, net of taxes		234		261
Comprehensive income	$	9,866	$	9,508

See accompanying notes to consolidated financial statements.

6

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(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, 2019		30,053,443	$	75,134	$	123,065		$	179,003		$	(16,704	)		(4,097,099	)	$	(71,371	)	$	289,127
Net earnings		—		—		—			9,632			—			—			—			9,632
Adjustment to pension, net of deferred tax of $78		—		—		—			—			234			—			—			234
Dividends paid ($0.225 per share)		—		—		—			(5,875	)		—			—			—			(5,875	)
Stock based compensation		—		—		358			—			—			—			—			358
Exercise of stock options    and restricted stock		—		—		(1,312	)		—			—			83,095			1,312			—
Common stock repurchases		—		—		—			—			—			(62,038	)		(1,212	)		(1,212	)
Balance May 31, 2019		30,053,443	$	75,134	$	122,111		$	182,760		$	(16,470	)		(4,076,042	)	$	(71,271	)	$	292,264
Balance February 28, 2018		30,053,043	$	75,134	$	121,333		$	164,177		$	(16,428	)		(4,789,228	)	$	(82,512	)	$	261,704
Net earnings		—		—		—			9,247			—			—			—			9,247
Adjustment to pension, net of deferred tax of $87		—		—		—			—			261			—			—			261
Dividends paid ($0.20 per share)		—		—		—			(5,083	)		—			—			—			(5,083	)
Stock based compensation		—		—		327			—			—			—			—			327
Exercise of stock options    and restricted stock		—		—		(1,390	)		—			—			80,692			1,390			—
Common stock repurchases		—		—		—			—			—			(37,943	)		(680	)		(680	)
Balance May 31, 2018		30,053,043	$	75,134	$	120,270		$	168,341		$	(16,167	)		(4,746,479	)	$	(81,802	)	$	265,776

See accompanying notes to consolidated financial statements.

7

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three months ended
	May 31,
		2019			2018
Cash flows from operating activities:
Net earnings	$	9,632		$	9,247
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		2,477			2,035
Amortization of deferred finance charges		28			28
Amortization of intangible assets		1,904			1,415
Gain from disposal of assets		—			(4	)
Bad debt expense, net of recoveries		40			135
Stock based compensation		358			327
Net pension expense		295			329
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable		412			453
Prepaid expenses and income taxes		755			3,391
Inventories		(93	)		(3,505	)
Accounts payable and accrued expenses		487			(1,964	)
Other liabilities		(624	)		3
Net cash provided by operating activities		15,671			11,890
Cash flows from investing activities:
Capital expenditures		(802	)		(1,205	)
Purchase of businesses, net of cash acquired		(8,859	)		(4,736	)
Proceeds from disposal of plant and property		—			4
Net cash used in investing activities		(9,661	)		(5,937	)
Cash flows from financing activities:
Dividends paid		(5,875	)		(5,083	)
Common stock repurchases		(1,212	)		(680	)
Net cash used in financing activities		(7,087	)		(5,763	)
Net change in cash		(1,077	)		190
Cash at beginning of period		88,442			96,230
Cash at end of period	$	87,365		$	96,420

See accompanying notes to consolidated financial statements.

8

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

1. Significant Accounting Policies and General Matters

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2019 have been prepared in accordance with generally accepted accounting principles for interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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, 2019, from which the accompanying consolidated balance sheet at February 28, 2019 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. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”), which removes certain disclosures that are no longer cost beneficial and also includes additional disclosures to improve the overall usefulness of the disclosure requirements to financial statement users.  ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and earlier adoption is permitted.  We are currently evaluating the impact of ASU 2018-14 on the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modifies the lease recognition requirements and requires entities to recognize the assets and liabilities arising from leases on the balance sheet and to disclose key qualitative and quantitative information about the entity’s leasing arrangements.

Based on the original guidance in ASU 2016-02, lessees and lessors would have been required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including a number of practical expedients.  In July 2018, the FASB issued ASU No. 2018-11, Leases (“ASC 842”): Targeted Improvements, which provides entities with an option to apply the guidance prospectively, instead of retrospectively, and allows for other classification provisions.

The Company adopted this guidance as of March 1, 2019, using the optional transition method and elected the option to not apply ASC 842 to comparative periods, which continue to be presented under the accounting standards in effect for those periods.

The Company elected the ‘package of practical expedients’ as lessee, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.  Additionally, the Company elected to treat lease and non-lease components as a single lease component.

Adoption of the new standard resulted in the recording of operating lease right-of-use (“ROU”) assets of $18 million and operating lease liabilities of $18.2 million.  The difference between the leased assets and lease liabilities represents the existing deferred rent liabilities balance at adoption, resulting from historical straight line recognition of operating leases, which was reclassified upon adoption to reduce the measurement of the leased assets.  The adoption of the standard did not have an impact on the Company’s shareholders’ equity, statement of operations, or cash flows.

9

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

2. Revenue

On March 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the modified retrospective method applied to those contracts which were not completed as of March 1, 2018. Results for reporting periods beginning after March 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, and no adjustment has been recorded to beginning retained earnings due to there being no change in revenue recognition for prior periods.

The adoption did not have a significant effect on the Company’s consolidated results of operations, financial position or cash flows.

Nature of Revenues

Substantially all of the Company’s revenue from contracts with customers consist of the sale of commercial printing products in the continental United States and is primarily recognized at a point in time in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.  Revenue from the sale of commercial printing products, including shipping and handling fees billed to customers, is recognized 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.

In a small number of cases and upon customer request, the Company prints and stores commercial printing 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, which for certain customers may be recognized over time rather than at a point in time.  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 sales category consisting of commercial printed product revenue, which is reported as net sales on the consolidated statements of operations. The Company does not have material contract assets and contract liabilities as of May 31, 2019.

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.

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.

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 generally have a duration of one year or less.  Accordingly, the Company does not disclose the value of unsatisfied performance obligations nor the timing of revenue recognition.

10

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

3.Accounts Receivable and Allowance for Doubtful Receivables

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 the United States.  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 doubtful receivables 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 creditworthiness, and (iii) review of customer receivable aging and payment trends.

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.

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

	Three months ended
	May 31,
	2019			2018
Balance at beginning of period	$	1,020		$	1,194
Bad debt expense, net of recoveries		40			135
Accounts written off		(19	)		(31	)
Balance at end of period	$	1,041		$	1,298

4. Inventories

The Company uses the lower of last-in, first-out (“LIFO”) cost or market to value certain of its business forms inventories and the lower of first-in, first-out (“FIFO”) cost or market to value its remaining forms inventories.  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 following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):

	May 31,		February 28,
	2019		2019
Raw material	$	22,826	$	21,717
Work-in-process		4,414		4,172
Finished goods		9,586		9,522
	$	36,826	$	35,411

11

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

5. 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.  Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values.  Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets and liabilities assumed, is recorded as goodwill.  Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized.  Acquisition-related costs are expensed as incurred.

On March 16, 2019, the Company, through one of its subsidiaries, acquired the assets of Integrated Print & Graphics (“Integrated”) for $8.9 million in cash plus the assumption of trade payables, subject to certain adjustments.  Integrated is located in South Elgin, Illinois.  During the three months ended May 31, 2019, the Company incurred approximately $29,000 of costs (including legal and accounting fees) related to the acquisition.  Goodwill of $893,000 recognized as a part of the acquisition is deductible for tax purposes.  The Company also recorded intangible assets with definite lives of approximately $1.8 million in connection with the transaction.  The acquisition of Integrated, which generated approximately $20.0 million in sales for its fiscal year ended December 31, 2018, will create additional capabilities within the Company’s high color commercial print product line, which is consistent with the Company’s business model.  Management considers this acquisition to be immaterial.

On July 31, 2018, the Company issued an aggregate of 829,126 shares of common stock to the former stockholders of Wright Business Forms, Inc., d/b/a Wright Business Graphics (“Wright”), as partial consideration for the acquisition by the Company of all of the outstanding equity interests of Wright pursuant to the Agreement and Plan of Merger, dated July 16, 2018 (the “Merger Agreement”).  The Company shares issued to the former stockholders of Wright represent aggregate consideration under the Merger Agreement equal to approximately $16.2 million.  An additional $19.7 million was paid in cash to the stockholders of Wright, subject to a final working capital adjustment, and $2.6 million was paid to pay-off Wright’s outstanding debt.  Since the acquisition, the Company has incurred approximately $0.2 million of costs (including legal and accounting fees) related to the acquisition.  These costs were recorded in selling, general and administrative expenses.  The goodwill recognized as a part of this merger is not deductible for tax purposes.  Wright is a printing company which produces forms, pressure seal, packaging, direct mail, checks, statement processing and commercial printing and sells mainly through distributors and resellers.  Wright is headquartered in Portland, Oregon and has additional locations in Washington and California.  Wright, which generated approximately $58.0 million in sales for its fiscal year ended March 31, 2018, continues to operate under its brand names.

The purchase price of Wright was as follows (in thousands):

Ennis shares of common stock	$	16,218
Cash		22,653
Purchase price of Wright Business Graphics	$	38,871

The following is a summary of the preliminary purchase price allocation for Wright (in thousands):

Accounts receivable	$	5,220
Prepaid expenses		427
Inventories		4,365
Other assets		88
Property, plant & equipment		10,331
Non-compete		447
Customer lists		12,900
Trade names		3,830
Goodwill		11,031
Accounts payable and accrued liabilities		(4,226	)
Deferred income taxes		(5,542	)
	$	38,871

12

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

The results of operations for Wright are included in the Company’s consolidated financial statements from the date of acquisition.  The following table represents certain operating information on a pro forma basis as though all Wright operations had been acquired as of March 1, 2018, after the estimated impact of adjustments such as amortization of intangible assets, interest expense and related tax effects (in thousands, except per share amounts).

	Three months ended
	May 31,
	2019		2018
Pro forma net sales	$	108,033	$	107,321
Pro forma net earnings		9,632		9,810
Pro forma earnings per share - diluted		0.37		0.39

The pro forma results are not necessarily indicative of what would have occurred if the acquisition had been in effect for the period presented.

On April 30, 2018, the Company acquired the assets of Allen-Bailey Tag & Label, a tag and label operation located in New York for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment.  In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years.  Management considers this acquisition to be immaterial.

6. 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 variable lease costs for the three months ended May 31, 2019.

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 direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment.

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

Components of lease expense for the three months ended May 31, 2019 were as follows (in thousands):

Operating lease cost	$	1,577
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	$	1,569
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—

13

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

Weighted Average Remaining Lease Terms
Operating leases	5 Years
Weighted Average Discount Rate
Operating leases		4.50	%

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

	Operating
	Lease
	Commitments
2020 (remaining 9 months)	$	4,424
2021		4,689
2022		3,851
2023		3,196
2024		2,341
2025		1,646
Thereafter		1,196
Total lease payments	$	21,343
Less imputed interest		2,976
Total lease payments	$	18,367

7. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized.  Goodwill and other intangible assets are tested for impairment at a reporting unit level.  The annual impairment test of goodwill and intangible assets is performed as of November 30 of each fiscal year.

The Company considers 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.

14

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

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

	Weighted
	Average
	Remaining		Gross
	Life		Carrying		Accumulated
As of May 31, 2019	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		13.3	$	25,281	$	4,346	$	20,935
Customer lists		8.0		72,765		32,907		39,858
Non-compete		2.4		747		355		392
Patent		—		783		783		—
Total		9.8	$	99,576	$	38,391	$	61,185
As of February 28, 2019
Amortized intangible assets
Trademarks and trade names		13.8	$	24,385	$	3,906	$	20,479
Customer lists		8.2		71,869		31,498		40,371
Non-compete		2.5		722		300		422
Patent		—		783		783		—
Total		10.0	$	97,759	$	36,487	$	61,272

Aggregate amortization expense for the three months ended May 31, 2019 and May 31, 2018 was $1.9 million and $1.4 million, respectively.

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

2020	$	7,589
2021		7,472
2022		7,305
2023		6,459
2024		6,421

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

Balance as of March 1, 2018	$	70,603
Goodwill acquired		11,031
Goodwill impairment		—
Balance as of February 28, 2019		81,634
Goodwill acquired		893
Goodwill impairment		—
Balance as of May 31, 2019	$	82,527

During the three months ended May 31, 2019, $0.9 million was added to goodwill related to the acquisition of Integrated.

15

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

8. Accrued Expenses

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

	May 31,		February 28,
		2019		2019
Employee compensation and benefits	$	11,964	$	15,950
Taxes other than income		966		583
Income taxes payable		3,432		—
Accrued legal and professional fees		124		203
Accrued interest		187		188
Accrued utilities		90		90
Accrued acquisition related obligations		360		214
Accrued credit card fees		147		146
Other accrued expenses		855		521
	$	18,125	$	17,895

9. Long-Term Debt

Long-term debt consisted of the following as of the dates indicated (in thousands):

	May 31,		February 28,
	2019		2019
Revolving credit facility	$	30,000	$	30,000

The Company is party to a Second Amended and Restated Credit Agreement, as amended, restated, supplemented or modified from time to time, pursuant to which a credit facility has been extended to the Company until August 11, 2020 (the “Credit Facility”).  The Credit Facility provides the Company and its subsidiaries with up to $100.0 million in revolving credit, as well as a $20.0 million sublimit for the issuance of letters of credit and a $15.0 million sublimit for swing-line loans.  The Company or any of its subsidiaries also can request up to three increases in the aggregate commitments in an aggregate amount not to exceed $50.0 million.  Under the Credit Facility: (i) the Company’s consolidated net leverage ratio may not exceed 3.00:1.00, (ii) the Company’s consolidated fixed charge coverage ratio may not be less than 1.25:1.00, and (iii) the Company may make dividends or distributions to shareholders so long as (a) no event of default has occurred and is continuing and (b) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than 2.50:1.00.  All calculations are made based on GAAP existing at the time the Credit Facility was entered into.  As of May 31, 2019, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.5% (3 month LIBOR + 1.0%) at May 31, 2019 and 3.6% (3 month LIBOR + 1.0%) at February 28, 2019.  The rate is determined by the Company’s fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”).  As of May 31, 2019, the Company had $30.0 million of borrowings under the revolving credit line and $0.7 million outstanding under standby letters of credit arrangements, leaving approximately $69.3 million available in borrowing capacity.  The Credit Facility is secured by substantially all of the Company’s assets (other than real property), as well as all capital securities of each of the Company’s subsidiaries.

10. Shareholders’ Equity

The Company’s board of directors has authorized the repurchase of the Company’s outstanding common stock through a stock repurchase program, which authorized amount is currently up to $40.0 million.  Under the repurchase program, share purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors.  Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations.  These repurchases may be commenced or suspended at any time or from time to time without prior notice.

16

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

During the three months ended May 31, 2019 the Company, under the program, repurchased 62,038 shares of common stock at an average price of $19.54 per share.  Since the program’s inception in October 2008, there have been 1,752,062 common shares repurchased at an average price of $15.78 per share. As of May 31, 2019 there was $12.4 million available to repurchase shares of the Company’s common stock under the program.

11. Stock Option Plan and Stock Based Compensation

The Company grants stock options and restricted stock to key executives, managerial employees and non-employee directors.  At May 31, 2019, the Company had one stock option plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011 (the “Plan”). The Company has 582,853 shares of unissued common stock reserved under the Plan for issuance as of May 31, 2019.  The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants on a straight-line basis over the requisite service period.  For the three months ended May 31, 2019 and May 31, 2018, the Company included compensation expense related to share-based compensation of $0.4 million and $0.3 million, respectively, in selling, general, and administrative expenses.

Stock Options

As of May 31, 2019, the Company had no outstanding vested or unvested stock options.  The Company had the following stock option activity for the three months ended May 31, 2019:

						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life(inyears)		(inthousands)
Outstanding at March 1, 2019		61,590		$	15.88		1.8	$	327
Granted		—			—
Terminated		—			—
Exercised		(61,590	)	$	15.88
Outstanding at May 31, 2019		—			—		—		—
Exercisable at May 31, 2019		—			—		—		—

(a) Intrinsic value is measured as the excess of fair market value of the Company’s common stock as reported on the New York Stock Exchange over the applicable exercise price.

No stock options were granted during the three months ended May 31, 2019 and May 31, 2018.

A summary of the stock options exercised and tax benefits realized from stock based compensation is presented below (in thousands):

	Three months ended
	May 31,
	2019		2018
Total cash received	$	—	$	—
Income tax benefits		—		—
Total grant-date fair value		201		—
Intrinsic value		267		—

17

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

The Company had no unvested stock options outstanding at any time during the three months ended May 31, 2019.

Restricted Stock

The Company had the following restricted stock activity for the three months ended May 31, 2019:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2019		155,105		$	19.03
Granted		51,073			20.50
Terminated		—			—
Vested		(69,880	)		18.69
Outstanding at May 31, 2019		136,298		$	19.76

As of May 31, 2019, the total remaining unrecognized compensation cost related to unvested restricted stock granted under the Plan was approximately $2.4 million.  The weighted average remaining requisite service period of the unvested restricted stock awards was 2.1 years.

12. Pension Plan

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 17% of the Company’s aggregate employees.  Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination.

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

	Three months ended
	May 31,
	2019			2018
Components of net periodic benefit cost
Service cost	$	272		$	277
Interest cost		564			568
Expected return on plan assets		(1,050	)		(1,027	)
Amortization of:
Unrecognized net loss		509			511
Net periodic benefit cost	$	295		$	329

The Company is required to make contributions to the Pension Plan.  These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).  Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a 25-year average of interest rates plus or minus a corridor.  The Company’s minimum required contribution to the Pension Plan is zero for the Pension Plan year ending February 29, 2020.  Given current funding status, the Company expects to make a cash contribution to the Pension Plan of between $1.0 million and $1.5 million during fiscal year 2020.  The Company contributed $3.0 million to the Pension Plan during fiscal year 2019.

18

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2019

13.Earnings Per Share

Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding during the applicable period.  Diluted earnings per share reflect the potential dilution that could occur if stock options or other contracts to issue common shares were exercised or converted into common stock.

As of May 31, 2019, no options were outstanding.  For the three months ended May 31, 2018, all options were included in the diluted earnings per share computation because the average fair market value of the Company’s stock exceeded the exercise price of the options.The following table sets forth the computation for basic and diluted earnings (loss) per share for the periods indicated:

	Three months ended
	May 31,
	2019		2018
Basic weighted average common shares outstanding		26,028,337		25,333,673
Effect of dilutive options		—		30,099
Diluted weighted average common shares outstanding		26,028,337		25,363,772
Earnings per share
Net earnings - basic	$	0.37	$	0.37
Net earnings - diluted	$	0.37	$	0.36
Cash dividends	$	0.225	$	0.200

14. Concentrations of Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and trade receivables. Cash is placed with high-credit quality financial institutions. The Company believes its credit risk with respect to trade receivables is limited due to industry and geographic diversification. As disclosed on the consolidated balance sheets, the Company maintains an allowance for doubtful receivables to cover the Company’s estimate of credit losses associated with accounts receivable.

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

For the purposes of the consolidated statements of cash flows, the Company considers cash to include cash on hand and in bank accounts.  The Federal Deposit Insurance Corporation insures accounts up to $250,000.  At May 31, 2019, cash balances included $85.3 million that was not federally insured because it represented amounts in individual accounts above the federally insured limit for each such account.  This at-risk amount is subject to fluctuation on a daily basis.  While management does not believe there is significant risk with respect to such deposits, no assurance can be made that the Company will not experience losses on the Company’s deposits.

15. Subsequent Events

On June 21, 2019, the Company’s board of directors declared a quarterly dividend on the Company’s common stock of 22.5 cents per share, which will be paid on August 12, 2019 to shareholders of record as of July 12, 2019.

19

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

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

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. The Company and its subsidiaries print and manufacture a broad line of business forms and other business products.  We distribute business products and forms throughout the United States primarily through independent dealers.  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.

On March 16, 2019, the Company, through one of its subsidiaries, acquired the assets of Integrated Print & Graphics (“Integrated”) for $8.9 million in cash plus the assumption of trade payables, subject to certain adjustments.  Goodwill of $893,000 recognized as a part of the acquisition is deductible for tax purposes.  The Company also recorded intangible assets with definite lives of approximately $1.8 million in connection with the transaction.  Integrated is located in South Elgin, Illinois and generated approximately $20.0 million in sales for its fiscal year ended December 31, 2018.  The acquisition will create additional capabilities within the Company’s high color commercial print product line, which is consistent with the Company’s business model.  Management considers this acquisition to be immaterial.

On July 31, 2018, the Company issued an aggregate of 829,126 shares of common stock of the Company, par value $2.50 per share, to the former stockholders of Wright Business Forms, Inc., d/b/a Wright Business Graphics (“Wright”), as partial consideration for the acquisition by the Company of all of the outstanding equity interests of Wright pursuant to the Agreement and Plan of Merger, dated July 16, 2018 (the “Merger Agreement”).  The Company shares issued to the former stockholders of Wright represent aggregate consideration under the Merger Agreement equal to approximately $16.2 million.  An additional $19.7 million was paid in cash to the stockholders of Wright, subject to a final working capital adjustment, and $2.6 million was paid to pay-off outstanding debt.  The goodwill recognized as a part of this merger is not deductible for tax purposes.  Wright is a printing company that produces forms, pressure seal, packaging, direct mail, checks, statement processing and commercial printing and sells mainly through distributors and resellers. Wright is headquartered in Portland, Oregon and has additional locations in Washington and California.  Wright, which generated approximately $58.0 million in sales for its fiscal year ended March 31, 2018, continues to operate under its brand names.

On April 30, 2018, we acquired the assets of Allen-Bailey Tag & Label (“ABTL”), a tag and label operation located in New York, for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment.  In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years.  ABTL generated approximately $12.0 million in sales for the twelve months ended December 31, 2017.  Management considers this acquisition to be immaterial.

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 61 manufacturing plants throughout the United States in 21 strategically located states.  Approximately 95% 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 sold 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®, Specialized Printed Forms®, 360º Custom Labels^SM, ColorWorx®, Enfusion®, Uncompromised Check Solutions®, VersaSeal®, Ad Concepts^SM, FormSource Limited^SM, Star Award Ribbon Company®, Witt Printing®, B&D Litho®, Genforms®, PrintGraphics®, Calibrated Forms®, PrintXcel®, Printegra®, Falcon Business Forms^SM, Forms Manufacturers^SM, Mutual Graphics^SM, TRI-C Business Forms^SM, Major Business Systems^SM, Independent Printing^SM, Hoosier Data Forms®, Hayes Graphics®, Wright Business Graphics^SM, Wright 360^SM, and Integrated Print & Graphics^SM. We also sell the Adams McClure® brand (which provides Point of Purchase advertising for large franchise and fast food chains, as well as kitting and fulfillment); the Admore®, Folder Express®, and Independent Folders® brands (which provide presentation folders and document folders); Ennis Tag & Label^SM (which provides custom printed, high performance labels and custom and stock tags); Allen-Bailey Tag & Label^SM, Atlas Tag & Label®, Kay

20

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

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) and Northstar® and General Financial Supply® (which provide financial and security documents).

We sell predominantly through private printers and independent distributors, as well as to many of our competitors. Northstar Computer Forms, Inc., a wholly-owned subsidiary, 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 directly to end users, a market dominated by a few large manufacturers, such as R.R. Donnelley and Sons, Staples, Inc., Standard Register Co. (a subsidiary of Taylor Corporation), and Cenveo, Inc., 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 dealers.

There are a number of competitors that operate in this segment, ranging in size from single employee-owned operations to multi-plant organizations. 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 dealers, including business forms distributors, resellers, direct mail, commercial printers, payroll and accounts payable 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 the volume of business.

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.

Business Challenges

We are engaged in an industry experiencing consolidation of some of our traditional 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 due to the continued low interest rate environment.  We face highly competitive conditions throughout the supply chain in an already over-supplied, price-competitive print industry.  The 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.

Production capacity and price competition within our industry – The strong U.S. dollar during the first half of fiscal 2018 attracted cheaper material into the United States, notwithstanding the imposition of trade tariffs, which impaired the price advantage larger suppliers had over smaller competitors and helped to maintain pricing.  However, with the subsequent weakening of the U.S. dollar during the latter portion of fiscal 2018 and first half of fiscal 2019, the price advantage of foreign imports largely dissipated during most of fiscal 2019, which has led to lower volumes of imported paper and an increase in domestic exports.  Meanwhile,

21

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

significant capacity left the market during this period, whether planned or unplanned (as in the case of the bankruptcy of several mills).  In addition, some mills moved capacity formerly used for coated production to uncoated production due to their ability to obtain higher margins on these products.  Even with shrinking demand, this led to a supply/demand imbalance with most mills running in excess of 90% of capacity across all grades during fiscal 2019.  At this level, suppliers have historically raised prices in the marketplace, and fiscal year 2019 was no exception, with suppliers raising prices multiple times across all facets of the manufacturing process, from raw materials to supplies.  In the past, price increases have been less frequent, which allowed manufacturers to make pricing adjustments in a timely manner.  The size and number of increases during 2019 impacted the ability of manufacturers to timely pass along the required price adjustments to the end users. Additionally, some paper grades during 2019 were placed on allocations given the tight supply environment.

Given our long-term relationship with our major paper supplier, our financial strength and our size, we were able to avoid disruptions in our supply chain this past fiscal year.  Some of these challenges have evolved recently.  With the strengthening U.S. dollarand current pricing levels, imports have again begun to flow into the domestic marketplace.  This development, along with continued slowing domestic demand, has resulted in renewed marketing of certain paper grades that previously had been placed on allocation.  Historically, this would result in the normalization of pricing and costs in the marketplace.  However, with the change in ownership of several of the larger domestic paper mills, this historical swing in pricing may not occur and manufacturer’s margins may continue to be negatively impacted.  Regardless of these factors, many of which are cyclical, we intend to 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 domestic 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.

Continued consolidation of our customers – Our customers are distributors, many of which are consolidating or are being acquired by competitors.  Some customers may demand better pricing and services, and other customers may be forced to relocate their business to their new parent company’s manufacturing facilities.  We continue to maintain a majority of the historical business of these customers, but it is possible that these consolidations and acquisitions, which we expect to continue in the future, ultimately will impact our margins and sales.

Cautionary Statements Regarding Forward Looking Statements

You should read this discussion and analysis in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report. All of the statements in this report, 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, the Company notes that forward-looking statements are subject to known and unknown risks, uncertainties and other factors relating to its operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company.  These known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those matters expressed in, anticipated by or implied by such forward-looking statements.

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

We believe these forward-looking statements are based upon reasonable assumptions.  All such statements involve risks and uncertainties, and as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including but not limited to, general economic, business and labor conditions and the potential 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 (i.e., energy, freight, labor, benefit costs, etc.) in markets that are highly price competitive and volatile;  our ability to timely or adequately respond to technological changes in the industry; the impact of the Internet and other electronic media on the demand for forms and printed materials; the impact of foreign competition; changes in economic conditions; customer credit risk; competitors’ pricing strategies; a decline in business volume and profitability could result in an impairment in our reported goodwill negatively

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ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

impacting our operational results; our ability to retain key management personnel; our ability to identify, manage or integrate acquisitions; and changes in government regulations.  In addition to the factors indicated above, you should carefully consider the risks described in and incorporated by reference herein and in the risk factors in our Annual Report on Form 10-K for the fiscal year ended February 28, 2019 before making an investment in our common stock.

Critical Accounting Policies and 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 doubtful receivables, 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 our accounting policies related to the aforementioned items are the most critical due to their effect on our more significant estimates and judgments used in preparation of our consolidated financial statements.  For additional information, reference is made to the Critical Accounting Policies and Estimates section of our Annual Report on Form 10-K for the fiscal year ended February 28, 2019.

Results of Operations

The discussion that follows provides information which we believe is relevant to an understanding of our results of operations and financial condition.  The discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto, which are incorporated herein by reference.  The operating results of the Company for the three months ended May 31, 2019 and the comparative period for 2018 are set forth in the unaudited consolidated financial information included in the tables below.

Consolidated Summary

Unaudited Consolidated Statements of	Three Months Ended May 31,
Operations - Data (in thousands)	2019				2018
Net sales	$	108,033	100.0	%	$	93,419		100.0	%
Cost of goods sold		75,337	69.7			63,228		67.7
Gross profit margin		32,696	30.3			30,191		32.3
Selling, general and administrative		19,703	18.3			17,735		19.0
Gain from disposal of assets		—	—			(4	)	—
Income from operations		12,993	12.0			12,460		13.3
Other income (expense)		23	—			(131	)	(0.1	)
Earnings before income taxes		13,016	12.0			12,329		13.2
Provision for income taxes		3,384	3.1			3,082		3.3
Net earnings	$	9,632	8.9	%	$	9,247		9.9	%

Three months ended May 31, 2019 compared to three months ended May 31, 2018

Net Sales.  Our net sales were $108.0 million for the quarter ended May 31, 2019, compared to $93.4 million for the same quarter in the prior year, or an increase of $14.6 million, or 15.6%.  On a sequential quarter basis, our revenues increased from $100.7 million to $108.0 million, a $7.3 million increase, or 7.2%.  Recent increases in foreign imports due to the strengthening of the U.S. dollar and current domestic pricings levels continues to provide the elements for a challenging marketplace.  The acquisitions of ABTL (completed in April 2018), Wright (completed in July 2018), and Integrated (completed in March 2019) are integral parts of our strategy to offset on going technological disruption and other changes.  These three acquisitions contributed approximately $19.3 million in net sales during the three months ended May 31, 2019.

23

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

Cost of Goods Sold.  Our cost of goods sold increased $12.1 million from $63.2 million for the three months ended May 31, 2018 to $75.3 million for the three months ended May 31, 2019, or 19.1%. Our gross profit margin (“margin”) was $32.7 million for the quarter, or 30.3% of net sales, compared to $30.2 million, or 32.3% of net sales, for the same quarter in the prior year.  For the sequential quarter our margin increased from $29.1 million, or 28.9% of net sales, to $32.7 million, or 30.3% of net sales, an increase of $3.6 million.  While our margins as indicated improved 140 basis points over the sequential quarter, they continue to be impacted by the magnitude of raw material price increases and the dilutive impact of the acquisitions completed in the last year.    During the last year, tight supply conditions allowed for multiple price increases on raw materials, as well as other items in the manufacturing process.  Historical price increases were less frequent, which allowed manufacturers the ability to pass the required pricing adjustments through to the marketplace in a timely manner.  However, the size and number of increases have impacted manufacturers’ abilities to timely pass these price adjustments to the end-users.  These price increases will continue to have a negative impact on margins until they are able to be passed through to the marketplace, or costs decline.  Recently, due to current pricing levels and the strengthening of the U.S. dollar, the environment has once again been attractive for imports and they have more than filled any vacuum in the supply chain.  This historically has led to some normalization/stability in the marketplace.  However, with the recent ownership change in several larger domestic mills, this historical pendulum swing in pricing may not occur.  As mentioned earlier, the acquisitions completed during the past year have had a dilutive impact on our margins. We continue to believe once we have the opportunity to fully analyze the business cost structure and implement our costs systems, its margins will improve to more normalized levels.

Selling, general, and administrative expense.  For the three months ended May 31, 2019, our selling, general, and administrative (“SG&A”) expenses were $19.7 million compared to $17.7 million for the three months ended May 31, 2018, an increase of $2.0 million, or 11.3%.  As a percentage of net sales, the SG&A expenses were 18.3% and 19.0% for the three months ended May 31, 2019 and May 31, 2018, respectively.  The increase on our SG&A expenses related to the acquisitions completed during the prior twelve months, which added approximately $3.2 million to our expenses.

Gain from disposal of assets.  The $4,000 net gain from disposal of assets during the prior year’s quarter related primarily to the sale of manufacturing equipment.

Income from operations.  As a result of the above factors, our income from operations for the three months ended May 31, 2019 was $13.0 million, or 12.0% of net sales, as compared to $12.5 million, or 13.3% of net sales, for the three months ended May 31, 2018.  The acquisitions of ABTL, Wright and Integrated contributed approximately $0.3 million, $1.1 million and $0.1 million, respectively, of operating income during the quarter.

Other income (expense).  Other income was $23,000 for the three months ended May 31, 2019 compared to $131,000 expense for the three months ended May 31, 2018.  During the current quarter, due to our cash balance, our interest income was higher than our interest expense.

Provision for income taxes. Our effective tax rate was 26.0% for the three months ended May 31, 2019 as compared to 25.0% for the three months ended May 31, 2018.  The slight increase in our overall tax rate this year as compared to last is due to an increase in our overall expected state tax rate due to changes in state apportionment.

Net earnings.  Net earnings, due to the factors above, were $9.6 million for the three months ended May 31, 2019 as compared to $9.2 million for the comparable quarter in the prior year, an increase of 4.3%.  Net earnings per diluted share for the three months ended May 31, 2019 was $0.37, compared to $0.36 for the same quarter in the prior year.

24

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

Liquidity and Capital Resources

We rely on our cash flows generated from operations and the borrowing capacity under our credit facility extended pursuant to our Second Amended and Restated Credit Agreement, as amended from time to time (the “Credit Facility”), to meet cash requirements of our business.  The primary cash requirements of our business are payments to vendors in the normal course of business, capital expenditures, debt repayments and related interest payments, contributions to our noncontributory defined benefit retirement plan, which covers approximately 17% of our aggregate employees (the “Pension Plan”), and the payment of dividends to our shareholders.  We expect to generate sufficient cash flows from operations supplemented by our Credit Facility as required to cover our operating and capital requirements for the foreseeable future.

	May 31,		February 28,
(Dollars in thousands)	2019		2019
Working capital	$	129,149	$	134,542
Cash	$	87,365	$	88,442

Working Capital.  Our working capital decreased $5.4 million or 4.0%, from $134.5 million at February 28, 2019 to $129.1 million at May 31, 2019.  Our current ratio, calculated by dividing our current assets by our current liabilities, decreased from 5.3 to 1.0 at February 28, 2019 to 4.4 to 1.0 at May 31, 2019.  Our working capital and current ratio were negatively impacted by an increase in our income taxes payable of $3.4 million and the adoption of accounting pronouncement ASC 842 which increased our current liabilities by $5.0 million.

	Three months ended May 31,
(Dollars in thousands)	2019			2018
Net cash provided by operating activities	$	15,671		$	11,890
Net cash used in investing activities	$	(9,661	)	$	(5,937	)
Net cash used in financing activities	$	(7,087	)	$	(5,763	)

Cash flows from operating activities.  Cash provided by operating activities increased by $3.8 million from $11.9 million for the three months ended May 31, 2018 to $15.7 million for the three months ended May 31, 2019.  Our increased operational cash flows in comparison to the comparable period in the prior year was primarily the result of two factors: i) a $3.4 million decrease in our inventories, and ii) a $2.5 million increase in our accounts payable and accrued expenses.  This increase in our cash was offset by a $2.6 million increase in our prepaid expenses and income taxes.

Cash flows from investing activities. Cash used in investing activities increased $3.7 million from $5.9 million to $9.7 million used for the three months ended May 31, 2018 and May 31, 2019, respectively.  This was primarily due to our acquisition of Integrated in the current quarter of $8.9 million as compared to $4.7 million used for the acquisition of ABTL in the same quarter last fiscal year offset by $0.4 million less in cash used for capital expenditures.

Cash flows from financing activities.  We used $1.3 million more in cash from financing activities during the three months ended May 31, 2019 compared to the same period in the prior year.  We used $1.2 million to repurchase our common stock under our stock repurchase program during the three months ended May 31, 2019, whereas we used $0.7 million to repurchase shares of our common stock during the three months ended May 31, 2018.  In addition, $0.8 million more was used to pay dividends during the three months ended May 31, 2019 as compared to the three months ended May 31, 2018.

Credit Facility.  The Company’s Credit Facility, extended to the Company until August 11, 2020, provides the Company and its subsidiaries with up to $100.0 million in revolving credit, as well as a $20.0 million sublimit for the issuance of letters of credit and a $15.0 million sublimit for swing-line loans.  Under the Credit Facility, the Company or any of its subsidiaries can request up to three increases in the aggregate commitments in an aggregate amount not to exceed $50.0 million.  The terms and conditions of the Credit Facility impose certain restrictions on our ability to incur additional debt, make capital expenditures, acquisitions and asset dispositions, as well as impose other customary covenants, such as requiring that our fixed charge coverage ratio not be less than 1.25:1.00 and our total leverage ratio not exceed 3.00:1.00.  The Company may make dividends or distributions to shareholders so long as (a) no event of default has occurred and is continuing and (b) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than 2.50:1.00.  All calculations are made based on GAAP existing at the time the Credit Facility was entered into.  As of May 31, 2019, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.5% (3 month LIBOR + 1.0%) at May 31, 2019 and 3.6% (3 month LIBOR + 1.0%) at February 28, 2019.  The rate is determined by our fixed

25

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

charge coverage ratio of total funded debt to EBITDA.  As of May 31, 2019, we had $30.0 million of borrowings under the revolving credit line and $0.7 million outstanding under standby letters of credit arrangements, leaving approximately $69.3 million available in borrowing capacity.  The Credit Facility is secured by substantially all of our assets (other than real property), as well as all capital securities of each of our subsidiaries.

It is anticipated that the available line of credit is sufficient to cover the Company’s working capital requirements for the foreseeable future, should it be required.

Pension Plan – We are required to make contributions to our Pension Plan.  These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).  Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, which effectively raises the discount rates mandated for determining the value of a plan’s benefit liability and annual cost of accruals, our minimum required contribution to the Pension Plan is zero for the Pension Plan year ending February 29, 2020. Given our current funding status as of February 28, 2019 and absent any significant negative event, we anticipate that our future contributions will be in line with our service costs, which are expected to be between $1.0 million and $1.5 million per year.  We made contributions totaling $3.0 million to our Pension Plan during fiscal 2019. As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funding status, associated liabilities recorded and future required minimum contributions.  At May 31, 2019, we had a net pension asset recorded on our balance sheet of $0.6 million.

Inventories – We believe our inventory levels are sufficient to satisfy our customer demands and we anticipate having adequate sources of raw materials to meet future business requirements. We have long-term contracts in effect with paper suppliers that govern prices, but do not require minimum purchase commitments.  Certain of our rebate programs do, however, require minimum purchase volumes.  Management anticipates meeting the required volumes.

Capital Expenditures – We expect our capital requirements for our current fiscal year, exclusive of capital required for possible acquisitions, will be within our historical levels of between $3.0 million and $5.0 million.  To date we have spent approximately $0.8 million on capital expenditures.  We expect to fund these expenditures through existing cash flows.

Contractual Obligations & Off-Balance Sheet Arrangements – There have been no significant changes in our contractual obligations since February 28, 2019 that have, or are reasonably likely to have, a material impact on our results of operations or financial condition.  We had no off-balance sheet arrangements in place as of May 31, 2019.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Interest Rates

We are exposed to interest rate risk on short-term and long-term financial instruments carrying variable interest rates.  We may from time to time utilize interest rate swaps to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates.  We do not use derivative instruments for trading purposes.  Our variable rate financial instruments, consisting of the outstanding loans under the Credit Facility, totaled $30.0 million at May 31, 2019.  The annual impact on our results of operations of a one-point interest rate change on the outstanding balance of the variable rate financial instruments as of May 31, 2019 would be approximately $0.3 million.

This market risk discussion contains forward-looking statements.  Actual results may differ materially from this discussion based upon general market conditions and changes in domestic and global financial markets.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. A review and evaluation were carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q, pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that review and evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures as of May 31, 2019 are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive and financial officers as appropriate to allow timely decisions

26

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

regarding required disclosure. Due to the inherent limitations of control systems, not all misstatements may be detected. Those inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people. Our controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

In connection with the Company’s adoption of ASC 842 effective March 1, 2019, we have made appropriate design and implementation updates to our business processes, systems and internal controls to support recognition and disclosure under the new standard. The Company’s adoption and implementation of ASC 842 is discussed in Note 1 and Note 6 to the consolidated financial statements included in “Item 1. Financial Statements.”

There have been no changes, other than those discussed above, in our internal control over financial reporting (as defined in Rule 13a–15(f) or Rule 15d–15(f) of the Exchange Act) that occurred during the three months ended May 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject.

Item 1A. Risk Factors

There have been no material changes in our Risk Factors as previously discussed in our Annual Report on Form 10-K for the year ended February 28, 2019.

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

In the 2016 calendar year, the Company’s board of directors authorized the repurchase of up to an aggregate of $40.0 million of the Company’s stock through the Company’s stock repurchase program.  Under the repurchase program, share purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors.  Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations.  These repurchases may be commenced or suspended at any time or from time to time without prior notice.

During the three months ended May 31, 2019, the Company, under the program, repurchased 62,038 shares of common stock at an average price of $19.54 per share.  As of May 31, 2019 there was $12.4 million available to repurchase shares of the Company’s common stock under the program.

					Total Number
	Total				of Shares		Maximum Amount
	Number		Average		Purchased as		that May Yet Be Used
	of Shares		Price Paid		Part of Publicly		to Purchase Shares
Period	Purchased		per Share		Announced Programs		Under the Program
March 1, 2019 - March 31, 2019		—	$	—		—	$	13,566,172
April 1, 2019 - April 30, 2019		—	$	—		—	$	13,566,172
May 1, 2019 - May 31, 2019		62,038	$	19.54		62,038	$	12,353,929
Total		62,038	$	19.54		62,038	$	12,353,929

Items 3, 4 and 5 are not applicable and have been omitted

27

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

Item 6. Exhibits

The following exhibits are filed as part of this report.

Exhibit Number	Description
Exhibit 3.1(a)	Restated Articles of Incorporation, as amended through June 23, 1983 with attached amendments dated June 20, 1985, July 31, 1985, June 16, 1988 and November 4, 1998, incorporated herein by reference to Exhibit 3.1(a) to the Registrant’s Form 10-Q filed on October 6, 2017 (File No. 001-05807).
Exhibit 3.1(b)	Amendment to Articles of Incorporation, dated June 17, 2004, incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007 filed on May 9, 2007 (File No. 001-05807).
Exhibit 3.2	Fourth Amended and Restated Bylaws of Ennis, Inc., dated July 10, 2017, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 10, 2017 (File No. 001-05807).
Exhibit 31.1	Certification Pursuant to Rule 13a-14(a) of Chief Executive Officer.*
Exhibit 31.2	Certification Pursuant to Rule 13a-14(a) of Chief Financial Officer.*
Exhibit 32.1	Section 1350 Certification of Chief Executive Officer.**
Exhibit 32.2	Section 1350 Certification of Chief Financial Officer.**
Exhibit 101	The following information from Ennis, Inc.’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2019, filed on July 3, 2019, formatted in XBRL:  (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.*

* Filed herewith

** Furnished herewith

28

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2019

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 thereunto duly authorized.

	ENNIS, INC.
Date: July 3, 2019	/s/ Keith S. Walters
	Keith S. Walters
	Chairman, Chief Executive Officer and President
Date: July 3, 2019	/s/ Richard L. Travis, Jr.
	Richard L. Travis, Jr.
	Vice President — Finance and CFO, Treasurer and
	Principal Financial and Accounting Officer

29

EX-31.1

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Keith S. Walters, Chief Executive Officer of Ennis, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ennis, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s first fiscal quarter) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Keith S. Walters

Keith S. Walters

Chief Executive Officer

July 3, 2019

EX-31.2

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Richard L. Travis, Jr., Chief Financial Officer of Ennis, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ennis, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s first fiscal quarter) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Richard L. Travis, Jr.

Richard L. Travis, Jr.

Chief Financial Officer

July 3, 2019

EX-32.1

EXHIBIT 32.1

SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Keith S. Walters, Chairman of the Board and Chief Executive Officer of Ennis, Inc. (the “Company”), certify, that pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code:

(1) The Quarterly Report on Form 10-Q of the Company for the period ended May 31, 2019, as filed with the Securities Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Keith S. Walters

Keith S. Walters

Chairman of the Board and

Chief Executive Officer

Date:  July 3, 2019

The foregoing Certification is being furnished solely pursuant to 18 U.S.C. Section 1350; it is not being filed for purposes of Section 18 of the Securities Exchange Act, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation languages in such filing.

EX-32.2

EXHIBIT 32.2

SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Richard L. Travis, Jr., Chief Financial Officer of Ennis, Inc. (the “Company”), certify, that pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code:

(1) The Quarterly Report on Form 10-Q of the Company for the period ended May 31, 2019, as filed with the Securities Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Richard L. Travis, Jr.

Richard L. Travis, Jr.

Chief Financial Officer

Date:  July 3, 2019

The foregoing Certification is being furnished solely pursuant to 18 U.S.C. Section 1350; it is not being filed for purposes of Section 18 of the Securities Exchange Act, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation languages in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	May 31, 2019	Jun. 28, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 31, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Trading Symbol	EBF
Entity Registrant Name	ENNIS, INC.
Entity Central Index Key	0000033002
Current Fiscal Year End Date	--02-28
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		26,113,699
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	1-5807
Entity Tax Identification Number	750256410
Entity Address, Address Line One	2441 Presidential Pkwy
Entity Address, City or Town	Midlothian
Entity Address, State or Province	Texas
Entity Address, Country	US
Entity Address, Postal Zip Code	76065
City Area Code	972
Local Phone Number	775-9801

XML

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2019	Feb. 28, 2019
Current assets
Cash	$ 87,365	$ 88,442
Accounts receivable, net of allowance for doubtful receivables of $1,041 at May 31, 2019 and $1,020 at February 28, 2019	41,876	40,357
Prepaid expenses	1,241	1,760
Prepaid income taxes		195
Inventories	36,826	35,411
Total current assets	167,308	166,165
Property, plant and equipment
Plant, machinery and equipment	149,678	146,001
Land and buildings	57,013	56,394
Other	23,993	23,838
Total property, plant and equipment	230,684	226,233
Less accumulated depreciation	175,397	173,099
Net property, plant and equipment	55,287	53,134
Operating lease right-of-use assets	18,653
Goodwill	82,527	81,634
Intangible assets, net	61,185	61,272
Net pension asset	580	580
Other assets	303	300
Total assets	385,843	363,085
Current liabilities
Accounts payable	15,029	13,728
Accrued expenses	18,125	17,895
Current portion of operating lease liabilities	5,005
Total current liabilities	38,159	31,623
Long-term debt	30,000	30,000
Deferred income taxes	10,959	10,898
Operating lease liabilities, net of current portion	13,362
Other liabilities	1,099	1,437
Total liabilities	93,579	73,958
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 May 31, 2019 and February 28, 2019	75,134	75,134
Additional paid-in capital	122,111	123,065
Retained earnings	182,760	179,003
Accumulated other comprehensive loss:
Minimum pension liability, net of taxes	(16,470)	(16,704)
Total accumulated other comprehensive loss	(16,470)	(16,704)
Treasury stock	(71,271)	(71,371)
Total shareholders’ equity	292,264	289,127
Total liabilities and shareholders' equity	$ 385,843	$ 363,085

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Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May 31, 2019	Feb. 28, 2019
Statement Of Financial Position [Abstract]
Allowance for doubtful receivables	$ 1,041	$ 1,020
Preferred stock, par value	$ 10	$ 10
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 2.50	$ 2.50
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	30,053,443	30,053,443

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Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Income Statement [Abstract]
Net sales	$ 108,033	$ 93,419
Type of revenue [extensible list]	ebf:CommercialPrintedProductMember	ebf:CommercialPrintedProductMember
Cost of goods sold	$ 75,337	$ 63,228
Type of cost, good or service [extensible list]	ebf:CommercialPrintedProductMember	ebf:CommercialPrintedProductMember
Gross profit margin	$ 32,696	$ 30,191
Selling, general and administrative	19,703	17,735
Gain from disposal of assets		(4)
Income from operations	12,993	12,460
Other income (expense)
Interest expense	(317)	(261)
Other, net	340	130
Total other income (expense)	23	(131)
Earnings before income taxes	13,016	12,329
Income tax expense	3,384	3,082
Net earnings	$ 9,632	$ 9,247
Weighted average common shares outstanding
Basic	26,028,337	25,333,673
Diluted	26,028,337	25,363,772
Earnings per share
Basic	$ 0.37	$ 0.37
Diluted	0.37	0.36
Cash dividends per share	$ 0.225	$ 0.200

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Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 9,632	$ 9,247
Adjustment to pension, net of taxes	234	261
Comprehensive income	$ 9,866	$ 9,508

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Unaudited Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]
Beginning balance at Feb. 28, 2018	$ 261,704	$ 75,134	$ 121,333	$ 164,177	$ (16,428)	$ (82,512)
Beginning balance common stock, shares at Feb. 28, 2018		30,053,043
Beginning balance, treasury stock, shares at Feb. 28, 2018						(4,789,228)
Net earnings	9,247			9,247
Adjustment to pension, net of deferred tax of $78	261				261
Dividends paid ($0.225 per share)	(5,083)			(5,083)
Stock based compensation	327		327
Exercise of stock options and restricted stock			(1,390)			$ 1,390
Exercise of stock options and restricted stock, shares						80,692
Common stock repurchases	(680)					$ (680)
Common stock repurchases, shares						(37,943)
Ending balance at May. 31, 2018	265,776	$ 75,134	120,270	168,341	(16,167)	$ (81,802)
Ending balance common stock, shares at May. 31, 2018		30,053,043
Ending balance treasury stock, shares at May. 31, 2018						(4,746,479)
Beginning balance at Feb. 28, 2019	$ 289,127	$ 75,134	123,065	179,003	(16,704)	$ (71,371)
Beginning balance common stock, shares at Feb. 28, 2019	30,053,443	30,053,443
Beginning balance, treasury stock, shares at Feb. 28, 2019						(4,097,099)
Net earnings	$ 9,632			9,632
Adjustment to pension, net of deferred tax of $78	234				234
Dividends paid ($0.225 per share)	(5,875)			(5,875)
Stock based compensation	358		358
Exercise of stock options and restricted stock			(1,312)			$ 1,312
Exercise of stock options and restricted stock, shares						83,095
Common stock repurchases	$ (1,212)					$ (1,212)
Common stock repurchases, shares	(62,038)					(62,038)
Ending balance at May. 31, 2019	$ 292,264	$ 75,134	$ 122,111	$ 182,760	$ (16,470)	$ (71,271)
Ending balance common stock, shares at May. 31, 2019	30,053,443	30,053,443
Ending balance treasury stock, shares at May. 31, 2019						(4,076,042)

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Unaudited Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Statement Of Stockholders Equity [Abstract]
Deferred tax adjusted to pension	$ 78	$ 87
Dividends paid per share	$ 0.225	$ 0.200

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Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Cash flows from operating activities:
Net earnings	$ 9,632	$ 9,247
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	2,477	2,035
Amortization of deferred finance charges	28	28
Amortization of intangible assets	1,904	1,415
Gain from disposal of assets		(4)
Bad debt expense, net of recoveries	40	135
Stock based compensation	358	327
Net pension expense	295	329
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable	412	453
Prepaid expenses and income taxes	755	3,391
Inventories	(93)	(3,505)
Accounts payable and accrued expenses	487	(1,964)
Other liabilities	(624)	3
Net cash provided by operating activities	15,671	11,890
Cash flows from investing activities:
Capital expenditures	(802)	(1,205)
Purchase of businesses, net of cash acquired	(8,859)	(4,736)
Proceeds from disposal of plant and property		4
Net cash used in investing activities	(9,661)	(5,937)
Cash flows from financing activities:
Dividends paid	(5,875)	(5,083)
Common stock repurchases	(1,212)	(680)
Net cash used in financing activities	(7,087)	(5,763)
Net change in cash	(1,077)	190
Cash at beginning of period	88,442	96,230
Cash at end of period	$ 87,365	$ 96,420

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Significant Accounting Policies and General Matters

3 Months Ended

May 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies and General Matters

1. Significant Accounting Policies and General Matters

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2019 have been prepared in accordance with generally accepted accounting principles for interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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, 2019, from which the accompanying consolidated balance sheet at February 28, 2019 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. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”), which removes certain disclosures that are no longer cost beneficial and also includes additional disclosures to improve the overall usefulness of the disclosure requirements to financial statement users.  ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and earlier adoption is permitted.  We are currently evaluating the impact of ASU 2018-14 on the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modifies the lease recognition requirements and requires entities to recognize the assets and liabilities arising from leases on the balance sheet and to disclose key qualitative and quantitative information about the entity’s leasing arrangements.

Based on the original guidance in ASU 2016-02, lessees and lessors would have been required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including a number of practical expedients.  In July 2018, the FASB issued ASU No. 2018-11, Leases (“ASC 842”): Targeted Improvements, which provides entities with an option to apply the guidance prospectively, instead of retrospectively, and allows for other classification provisions.

The Company adopted this guidance as of March 1, 2019, using the optional transition method and elected the option to not apply ASC 842 to comparative periods, which continue to be presented under the accounting standards in effect for those periods.

The Company elected the ‘package of practical expedients’ as lessee, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.  Additionally, the Company elected to treat lease and non-lease components as a single lease component.

Adoption of the new standard resulted in the recording of operating lease right-of-use (“ROU”) assets of $18 million and operating lease liabilities of $18.2 million.  The difference between the leased assets and lease liabilities represents the existing deferred rent liabilities balance at adoption, resulting from historical straight line recognition of operating leases, which was reclassified upon adoption to reduce the measurement of the leased assets.  The adoption of the standard did not have an impact on the Company’s shareholders’ equity, statement of operations, or cash flows.

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Revenue

3 Months Ended

May 31, 2019

Revenue From Contract With Customer [Abstract]

Revenue

2. Revenue

On March 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the modified retrospective method applied to those contracts which were not completed as of March 1, 2018. Results for reporting periods beginning after March 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, and no adjustment has been recorded to beginning retained earnings due to there being no change in revenue recognition for prior periods.

The adoption did not have a significant effect on the Company’s consolidated results of operations, financial position or cash flows.

Nature of Revenues

Substantially all of the Company’s revenue from contracts with customers consist of the sale of commercial printing products in the continental United States and is primarily recognized at a point in time in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.  Revenue from the sale of commercial printing products, including shipping and handling fees billed to customers, is recognized 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.

In a small number of cases and upon customer request, the Company prints and stores commercial printing 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, which for certain customers may be recognized over time rather than at a point in time.  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 sales category consisting of commercial printed product revenue, which is reported as net sales on the consolidated statements of operations. The Company does not have material contract assets and contract liabilities as of May 31, 2019.

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.

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.

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 generally have a duration of one year or less.  Accordingly, the Company does not disclose the value of unsatisfied performance obligations nor the timing of revenue recognition.

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Accounts Receivable and Allowance for Doubtful Receivables

3 Months Ended

May 31, 2019

Receivables [Abstract]

Accounts Receivable and Allowance for Doubtful Receivables

3.Accounts Receivable and Allowance for Doubtful Receivables

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 the United States.  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 doubtful receivables 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 creditworthiness, and (iii) review of customer receivable aging and payment trends.

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.

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

	Three months ended
	May 31,
	2019			2018
Balance at beginning of period	$	1,020		$	1,194
Bad debt expense, net of recoveries		40			135
Accounts written off		(19	)		(31	)
Balance at end of period	$	1,041		$	1,298

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Inventories

3 Months Ended

May 31, 2019

Inventory Disclosure [Abstract]

Inventories

4. Inventories

The Company uses the lower of last-in, first-out (“LIFO”) cost or market to value certain of its business forms inventories and the lower of first-in, first-out (“FIFO”) cost or market to value its remaining forms inventories.  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 following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):

	May 31,		February 28,
	2019		2019
Raw material	$	22,826	$	21,717
Work-in-process		4,414		4,172
Finished goods		9,586		9,522
	$	36,826	$	35,411

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Acquisitions

3 Months Ended

May 31, 2019

Business Combinations [Abstract]

Acquisitions

5. 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.  Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values.  Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets and liabilities assumed, is recorded as goodwill.  Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized.  Acquisition-related costs are expensed as incurred.

On March 16, 2019, the Company, through one of its subsidiaries, acquired the assets of Integrated Print & Graphics (“Integrated”) for $8.9 million in cash plus the assumption of trade payables, subject to certain adjustments.  Integrated is located in South Elgin, Illinois.  During the three months ended May 31, 2019, the Company incurred approximately $29,000 of costs (including legal and accounting fees) related to the acquisition.  Goodwill of $893,000 recognized as a part of the acquisition is deductible for tax purposes.  The Company also recorded intangible assets with definite lives of approximately $1.8 million in connection with the transaction.  The acquisition of Integrated, which generated approximately $20.0 million in sales for its fiscal year ended December 31, 2018, will create additional capabilities within the Company’s high color commercial print product line, which is consistent with the Company’s business model.  Management considers this acquisition to be immaterial.

On July 31, 2018, the Company issued an aggregate of 829,126 shares of common stock to the former stockholders of Wright Business Forms, Inc., d/b/a Wright Business Graphics (“Wright”), as partial consideration for the acquisition by the Company of all of the outstanding equity interests of Wright pursuant to the Agreement and Plan of Merger, dated July 16, 2018 (the “Merger Agreement”).  The Company shares issued to the former stockholders of Wright represent aggregate consideration under the Merger Agreement equal to approximately $16.2 million.  An additional $19.7 million was paid in cash to the stockholders of Wright, subject to a final working capital adjustment, and $2.6 million was paid to pay-off Wright’s outstanding debt.  Since the acquisition, the Company has incurred approximately $0.2 million of costs (including legal and accounting fees) related to the acquisition.  These costs were recorded in selling, general and administrative expenses.  The goodwill recognized as a part of this merger is not deductible for tax purposes.  Wright is a printing company which produces forms, pressure seal, packaging, direct mail, checks, statement processing and commercial printing and sells mainly through distributors and resellers.  Wright is headquartered in Portland, Oregon and has additional locations in Washington and California.  Wright, which generated approximately $58.0 million in sales for its fiscal year ended March 31, 2018, continues to operate under its brand names.

The purchase price of Wright was as follows (in thousands):

Ennis shares of common stock	$	16,218
Cash		22,653
Purchase price of Wright Business Graphics	$	38,871

The following is a summary of the preliminary purchase price allocation for Wright (in thousands):

Accounts receivable	$	5,220
Prepaid expenses		427
Inventories		4,365
Other assets		88
Property, plant & equipment		10,331
Non-compete		447
Customer lists		12,900
Trade names		3,830
Goodwill		11,031
Accounts payable and accrued liabilities		(4,226	)
Deferred income taxes		(5,542	)
	$	38,871

The results of operations for Wright are included in the Company’s consolidated financial statements from the date of acquisition.  The following table represents certain operating information on a pro forma basis as though all Wright operations had been acquired as of March 1, 2018, after the estimated impact of adjustments such as amortization of intangible assets, interest expense and related tax effects (in thousands, except per share amounts).

	Three months ended
	May 31,
	2019		2018
Pro forma net sales	$	108,033	$	107,321
Pro forma net earnings		9,632		9,810
Pro forma earnings per share - diluted		0.37		0.39

The pro forma results are not necessarily indicative of what would have occurred if the acquisition had been in effect for the period presented.

On April 30, 2018, the Company acquired the assets of Allen-Bailey Tag & Label, a tag and label operation located in New York for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment.  In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years.  Management considers this acquisition to be immaterial.

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Leases

3 Months Ended

May 31, 2019

Leases [Abstract]

Leases

6. 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 variable lease costs for the three months ended May 31, 2019.

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 direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment.

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

Components of lease expense for the three months ended May 31, 2019 were as follows (in thousands):

Operating lease cost	$	1,577
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	$	1,569
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—

Weighted Average Remaining Lease Terms
Operating leases	5 Years
Weighted Average Discount Rate
Operating leases		4.50	%

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

	Operating
	Lease
	Commitments
2020 (remaining 9 months)	$	4,424
2021		4,689
2022		3,851
2023		3,196
2024		2,341
2025		1,646
Thereafter		1,196
Total lease payments	$	21,343
Less imputed interest		2,976
Total lease payments	$	18,367

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Goodwill and Intangible Assets

3 Months Ended

May 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized.  Goodwill and other intangible assets are tested for impairment at a reporting unit level.  The annual impairment test of goodwill and intangible assets is performed as of November 30 of each fiscal year.

The Company considers 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.

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

	Weighted
	Average
	Remaining		Gross
	Life		Carrying		Accumulated
As of May 31, 2019	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		13.3	$	25,281	$	4,346	$	20,935
Customer lists		8.0		72,765		32,907		39,858
Non-compete		2.4		747		355		392
Patent		—		783		783		—
Total		9.8	$	99,576	$	38,391	$	61,185
As of February 28, 2019
Amortized intangible assets
Trademarks and trade names		13.8	$	24,385	$	3,906	$	20,479
Customer lists		8.2		71,869		31,498		40,371
Non-compete		2.5		722		300		422
Patent		—		783		783		—
Total		10.0	$	97,759	$	36,487	$	61,272

Aggregate amortization expense for the three months ended May 31, 2019 and May 31, 2018 was $1.9 million and $1.4 million, respectively.

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

2020	$	7,589
2021		7,472
2022		7,305
2023		6,459
2024		6,421

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

Balance as of March 1, 2018	$	70,603
Goodwill acquired		11,031
Goodwill impairment		—
Balance as of February 28, 2019		81,634
Goodwill acquired		893
Goodwill impairment		—
Balance as of May 31, 2019	$	82,527

During the three months ended May 31, 2019, $0.9 million was added to goodwill related to the acquisition of Integrated.

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Accrued Expenses

3 Months Ended

May 31, 2019

Payables And Accruals [Abstract]

Accrued Expenses

8. Accrued Expenses

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

	May 31,		February 28,
		2019		2019
Employee compensation and benefits	$	11,964	$	15,950
Taxes other than income		966		583
Income taxes payable		3,432		—
Accrued legal and professional fees		124		203
Accrued interest		187		188
Accrued utilities		90		90
Accrued acquisition related obligations		360		214
Accrued credit card fees		147		146
Other accrued expenses		855		521
	$	18,125	$	17,895

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Long-Term Debt

3 Months Ended

May 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt

9. Long-Term Debt

Long-term debt consisted of the following as of the dates indicated (in thousands):

	May 31,		February 28,
	2019		2019
Revolving credit facility	$	30,000	$	30,000

The Company is party to a Second Amended and Restated Credit Agreement, as amended, restated, supplemented or modified from time to time, pursuant to which a credit facility has been extended to the Company until August 11, 2020 (the “Credit Facility”).  The Credit Facility provides the Company and its subsidiaries with up to $100.0 million in revolving credit, as well as a $20.0 million sublimit for the issuance of letters of credit and a $15.0 million sublimit for swing-line loans.  The Company or any of its subsidiaries also can request up to three increases in the aggregate commitments in an aggregate amount not to exceed $50.0 million.  Under the Credit Facility: (i) the Company’s consolidated net leverage ratio may not exceed 3.00:1.00, (ii) the Company’s consolidated fixed charge coverage ratio may not be less than 1.25:1.00, and (iii) the Company may make dividends or distributions to shareholders so long as (a) no event of default has occurred and is continuing and (b) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than 2.50:1.00.  All calculations are made based on GAAP existing at the time the Credit Facility was entered into.  As of May 31, 2019, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.5% (3 month LIBOR + 1.0%) at May 31, 2019 and 3.6% (3 month LIBOR + 1.0%) at February 28, 2019.  The rate is determined by the Company’s fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”).  As of May 31, 2019, the Company had $30.0 million of borrowings under the revolving credit line and $0.7 million outstanding under standby letters of credit arrangements, leaving approximately $69.3 million available in borrowing capacity.  The Credit Facility is secured by substantially all of the Company’s assets (other than real property), as well as all capital securities of each of the Company’s subsidiaries.

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Shareholders' Equity

3 Months Ended

May 31, 2019

Equity [Abstract]

Shareholders' Equity

10. Shareholders’ Equity

The Company’s board of directors has authorized the repurchase of the Company’s outstanding common stock through a stock repurchase program, which authorized amount is currently up to $40.0 million.  Under the repurchase program, share purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors.  Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations.  These repurchases may be commenced or suspended at any time or from time to time without prior notice.

During the three months ended May 31, 2019 the Company, under the program, repurchased 62,038 shares of common stock at an average price of $19.54 per share.  Since the program’s inception in October 2008, there have been 1,752,062 common shares repurchased at an average price of $15.78 per share. As of May 31, 2019 there was $12.4 million available to repurchase shares of the Company’s common stock under the program.

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Stock Option Plan and Stock Based Compensation

3 Months Ended

May 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option Plan and Stock Based Compensation

11. Stock Option Plan and Stock Based Compensation

The Company grants stock options and restricted stock to key executives, managerial employees and non-employee directors.  At May 31, 2019, the Company had one stock option plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011 (the “Plan”). The Company has 582,853 shares of unissued common stock reserved under the Plan for issuance as of May 31, 2019.  The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants on a straight-line basis over the requisite service period.  For the three months ended May 31, 2019 and May 31, 2018, the Company included compensation expense related to share-based compensation of $0.4 million and $0.3 million, respectively, in selling, general, and administrative expenses.

Stock Options

As of May 31, 2019, the Company had no outstanding vested or unvested stock options.  The Company had the following stock option activity for the three months ended May 31, 2019:

						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life(inyears)		(inthousands)
Outstanding at March 1, 2019		61,590		$	15.88		1.8	$	327
Granted		—			—
Terminated		—			—
Exercised		(61,590	)	$	15.88
Outstanding at May 31, 2019		—			—		—		—
Exercisable at May 31, 2019		—			—		—		—

(a) Intrinsic value is measured as the excess of fair market value of the Company’s common stock as reported on the New York Stock Exchange over the applicable exercise price.

No stock options were granted during the three months ended May 31, 2019 and May 31, 2018.

A summary of the stock options exercised and tax benefits realized from stock based compensation is presented below (in thousands):

	Three months ended
	May 31,
	2019		2018
Total cash received	$	—	$	—
Income tax benefits		—		—
Total grant-date fair value		201		—
Intrinsic value		267		—

The Company had no unvested stock options outstanding at any time during the three months ended May 31, 2019.

Restricted Stock

The Company had the following restricted stock activity for the three months ended May 31, 2019:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2019		155,105		$	19.03
Granted		51,073			20.50
Terminated		—			—
Vested		(69,880	)		18.69
Outstanding at May 31, 2019		136,298		$	19.76

As of May 31, 2019, the total remaining unrecognized compensation cost related to unvested restricted stock granted under the Plan was approximately $2.4 million.  The weighted average remaining requisite service period of the unvested restricted stock awards was 2.1 years.

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Pension Plan

3 Months Ended

May 31, 2019

Compensation And Retirement Disclosure [Abstract]

Pension Plan

12. Pension Plan

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 17% of the Company’s aggregate employees.  Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination.

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

	Three months ended
	May 31,
	2019			2018
Components of net periodic benefit cost
Service cost	$	272		$	277
Interest cost		564			568
Expected return on plan assets		(1,050	)		(1,027	)
Amortization of:
Unrecognized net loss		509			511
Net periodic benefit cost	$	295		$	329

The Company is required to make contributions to the Pension Plan.  These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).  Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a 25-year average of interest rates plus or minus a corridor.  The Company’s minimum required contribution to the Pension Plan is zero for the Pension Plan year ending February 29, 2020.  Given current funding status, the Company expects to make a cash contribution to the Pension Plan of between $1.0 million and $1.5 million during fiscal year 2020.  The Company contributed $3.0 million to the Pension Plan during fiscal year 2019.

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Earnings Per Share

3 Months Ended

May 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

13.Earnings Per Share

Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding during the applicable period.  Diluted earnings per share reflect the potential dilution that could occur if stock options or other contracts to issue common shares were exercised or converted into common stock.

As of May 31, 2019, no options were outstanding.  For the three months ended May 31, 2018, all options were included in the diluted earnings per share computation because the average fair market value of the Company’s stock exceeded the exercise price of the options.The following table sets forth the computation for basic and diluted earnings (loss) per share for the periods indicated:

	Three months ended
	May 31,
	2019		2018
Basic weighted average common shares outstanding		26,028,337		25,333,673
Effect of dilutive options		—		30,099
Diluted weighted average common shares outstanding		26,028,337		25,363,772
Earnings per share
Net earnings - basic	$	0.37	$	0.37
Net earnings - diluted	$	0.37	$	0.36
Cash dividends	$	0.225	$	0.200

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Concentrations of Risk

3 Months Ended

May 31, 2019

Risks And Uncertainties [Abstract]

Concentrations of Risk

14. Concentrations of Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and trade receivables. Cash is placed with high-credit quality financial institutions. The Company believes its credit risk with respect to trade receivables is limited due to industry and geographic diversification. As disclosed on the consolidated balance sheets, the Company maintains an allowance for doubtful receivables to cover the Company’s estimate of credit losses associated with accounts receivable.

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

For the purposes of the consolidated statements of cash flows, the Company considers cash to include cash on hand and in bank accounts.  The Federal Deposit Insurance Corporation insures accounts up to $250,000.  At May 31, 2019, cash balances included $85.3 million that was not federally insured because it represented amounts in individual accounts above the federally insured limit for each such account.  This at-risk amount is subject to fluctuation on a daily basis.  While management does not believe there is significant risk with respect to such deposits, no assurance can be made that the Company will not experience losses on the Company’s deposits.

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Subsequent Events

3 Months Ended

May 31, 2019

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

On June 21, 2019, the Company’s board of directors declared a quarterly dividend on the Company’s common stock of 22.5 cents per share, which will be paid on August 12, 2019 to shareholders of record as of July 12, 2019.

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Significant Accounting Policies and General Matters (Policies)

3 Months Ended

May 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2019 have been prepared in accordance with generally accepted accounting principles for interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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, 2019, from which the accompanying consolidated balance sheet at February 28, 2019 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. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”), which removes certain disclosures that are no longer cost beneficial and also includes additional disclosures to improve the overall usefulness of the disclosure requirements to financial statement users.  ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and earlier adoption is permitted.  We are currently evaluating the impact of ASU 2018-14 on the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modifies the lease recognition requirements and requires entities to recognize the assets and liabilities arising from leases on the balance sheet and to disclose key qualitative and quantitative information about the entity’s leasing arrangements.

Based on the original guidance in ASU 2016-02, lessees and lessors would have been required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including a number of practical expedients.  In July 2018, the FASB issued ASU No. 2018-11, Leases (“ASC 842”): Targeted Improvements, which provides entities with an option to apply the guidance prospectively, instead of retrospectively, and allows for other classification provisions.

The Company adopted this guidance as of March 1, 2019, using the optional transition method and elected the option to not apply ASC 842 to comparative periods, which continue to be presented under the accounting standards in effect for those periods.

The Company elected the ‘package of practical expedients’ as lessee, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.  Additionally, the Company elected to treat lease and non-lease components as a single lease component.

Adoption of the new standard resulted in the recording of operating lease right-of-use (“ROU”) assets of $18 million and operating lease liabilities of $18.2 million.  The difference between the leased assets and lease liabilities represents the existing deferred rent liabilities balance at adoption, resulting from historical straight line recognition of operating leases, which was reclassified upon adoption to reduce the measurement of the leased assets.  The adoption of the standard did not have an impact on the Company’s shareholders’ equity, statement of operations, or cash flows.

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Accounts Receivable and Allowance for Doubtful Receivables (Tables)

3 Months Ended

May 31, 2019

Receivables [Abstract]

Allowance for Doubtful Receivables

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

	Three months ended
	May 31,
	2019			2018
Balance at beginning of period	$	1,020		$	1,194
Bad debt expense, net of recoveries		40			135
Accounts written off		(19	)		(31	)
Balance at end of period	$	1,041		$	1,298

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Inventories (Tables)

3 Months Ended

May 31, 2019

Inventory Disclosure [Abstract]

Components of Inventories

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,
	2019		2019
Raw material	$	22,826	$	21,717
Work-in-process		4,414		4,172
Finished goods		9,586		9,522
	$	36,826	$	35,411

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Acquisitions (Tables)

3 Months Ended

May 31, 2019

Business Acquisition [Line Items]

Summary of Purchase Price

The purchase price of Wright was as follows (in thousands):

Ennis shares of common stock	$	16,218
Cash		22,653
Purchase price of Wright Business Graphics	$	38,871

Summary of Operating Information on a Pro Forma Basis

The following table represents certain operating information on a pro forma basis as though all Wright operations had been acquired as of March 1, 2018, after the estimated impact of adjustments such as amortization of intangible assets, interest expense and related tax effects (in thousands, except per share amounts).

	Three months ended
	May 31,
	2019		2018
Pro forma net sales	$	108,033	$	107,321
Pro forma net earnings		9,632		9,810
Pro forma earnings per share - diluted		0.37		0.39

Wright Business Graphics, Inc [Member]

Business Acquisition [Line Items]

Summary of Purchase Price Allocation

The following is a summary of the preliminary purchase price allocation for Wright (in thousands):

Accounts receivable	$	5,220
Prepaid expenses		427
Inventories		4,365
Other assets		88
Property, plant & equipment		10,331
Non-compete		447
Customer lists		12,900
Trade names		3,830
Goodwill		11,031
Accounts payable and accrued liabilities		(4,226	)
Deferred income taxes		(5,542	)
	$	38,871

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Leases (Tables)

3 Months Ended

May 31, 2019

Leases [Abstract]

Components of Lease Expense

Components of lease expense for the three months ended May 31, 2019 were as follows (in thousands):

Operating lease cost	$	1,577
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	$	1,569
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—

Weighted Average Remaining Lease Terms
Operating leases	5 Years
Weighted Average Discount Rate
Operating leases		4.50	%

Summary of Future Minimum Lease Commitments Under Non-cancelable Operating Leases

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

	Operating
	Lease
	Commitments
2020 (remaining 9 months)	$	4,424
2021		4,689
2022		3,851
2023		3,196
2024		2,341
2025		1,646
Thereafter		1,196
Total lease payments	$	21,343
Less imputed interest		2,976
Total lease payments	$	18,367

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Goodwill and Intangible Assets (Tables)

3 Months Ended

May 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Carrying Amount and Accumulated Amortization of Intangible Assets

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

	Weighted
	Average
	Remaining		Gross
	Life		Carrying		Accumulated
As of May 31, 2019	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		13.3	$	25,281	$	4,346	$	20,935
Customer lists		8.0		72,765		32,907		39,858
Non-compete		2.4		747		355		392
Patent		—		783		783		—
Total		9.8	$	99,576	$	38,391	$	61,185
As of February 28, 2019
Amortized intangible assets
Trademarks and trade names		13.8	$	24,385	$	3,906	$	20,479
Customer lists		8.2		71,869		31,498		40,371
Non-compete		2.5		722		300		422
Patent		—		783		783		—
Total		10.0	$	97,759	$	36,487	$	61,272

Estimated Amortization Expense

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

2020	$	7,589
2021		7,472
2022		7,305
2023		6,459
2024		6,421

Changes in Net Carrying Amount of Goodwill

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

Balance as of March 1, 2018	$	70,603
Goodwill acquired		11,031
Goodwill impairment		—
Balance as of February 28, 2019		81,634
Goodwill acquired		893
Goodwill impairment		—
Balance as of May 31, 2019	$	82,527

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Accrued Expenses (Tables)

3 Months Ended

May 31, 2019

Payables And Accruals [Abstract]

Components of Accrued Expenses

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

	May 31,		February 28,
		2019		2019
Employee compensation and benefits	$	11,964	$	15,950
Taxes other than income		966		583
Income taxes payable		3,432		—
Accrued legal and professional fees		124		203
Accrued interest		187		188
Accrued utilities		90		90
Accrued acquisition related obligations		360		214
Accrued credit card fees		147		146
Other accrued expenses		855		521
	$	18,125	$	17,895

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Long-Term Debt (Tables)

3 Months Ended

May 31, 2019

Debt Disclosure [Abstract]

Summary of Long-Term Debt

Long-term debt consisted of the following as of the dates indicated (in thousands):

	May 31,		February 28,
	2019		2019
Revolving credit facility	$	30,000	$	30,000

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Stock Option Plan and Stock Based Compensation (Tables)

3 Months Ended

May 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option Activity

As of May 31, 2019, the Company had no outstanding vested or unvested stock options.  The Company had the following stock option activity for the three months ended May 31, 2019:

						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life(inyears)		(inthousands)
Outstanding at March 1, 2019		61,590		$	15.88		1.8	$	327
Granted		—			—
Terminated		—			—
Exercised		(61,590	)	$	15.88
Outstanding at May 31, 2019		—			—		—		—
Exercisable at May 31, 2019		—			—		—		—

(a) Intrinsic value is measured as the excess of fair market value of the Company’s common stock as reported on the New York Stock Exchange over the applicable exercise price.

Summary of Stock Options Exercised and Tax Benefits Realized from Stock Based Compensation

A summary of the stock options exercised and tax benefits realized from stock based compensation is presented below (in thousands):

	Three months ended
	May 31,
	2019		2018
Total cash received	$	—	$	—
Income tax benefits		—		—
Total grant-date fair value		201		—
Intrinsic value		267		—

Restricted Stock Activity

The Company had the following restricted stock activity for the three months ended May 31, 2019:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2019		155,105		$	19.03
Granted		51,073			20.50
Terminated		—			—
Vested		(69,880	)		18.69
Outstanding at May 31, 2019		136,298		$	19.76

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Pension Plan (Tables)

3 Months Ended

May 31, 2019

Compensation And Retirement Disclosure [Abstract]

Summary of Pension Expense Composed of Components Included in Cost of Goods Sold and Selling, General and Administrative Expenses

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

	Three months ended
	May 31,
	2019			2018
Components of net periodic benefit cost
Service cost	$	272		$	277
Interest cost		564			568
Expected return on plan assets		(1,050	)		(1,027	)
Amortization of:
Unrecognized net loss		509			511
Net periodic benefit cost	$	295		$	329

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Earnings Per Share (Tables)

3 Months Ended

May 31, 2019

Earnings Per Share [Abstract]

Computation for Basic and Diluted Earnings (loss) Per Share

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

	Three months ended
	May 31,
	2019		2018
Basic weighted average common shares outstanding		26,028,337		25,333,673
Effect of dilutive options		—		30,099
Diluted weighted average common shares outstanding		26,028,337		25,363,772
Earnings per share
Net earnings - basic	$	0.37	$	0.37
Net earnings - diluted	$	0.37	$	0.36
Cash dividends	$	0.225	$	0.200

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Significant Accounting Policies and General Matters - Additional Information (Detail) - USD ($) $ in Thousands	May 31, 2019	Mar. 01, 2019
Accounting Policies [Abstract]
Operating lease right-of-use assets	$ 18,653	$ 18,000
Operating lease liability	$ 18,367	$ 18,200

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Revenue - Additional Information (Detail)	3 Months Ended
	May 31, 2019
Disaggregation Of Revenue [Line Items]
Revenue unsatisfied performance obligation, practical expedient	true
Minimum [Member]
Disaggregation Of Revenue [Line Items]
Contract with customer, customer payment terms	30 days
Maximum [Member]
Disaggregation Of Revenue [Line Items]
Contract with customer, customer payment terms	90 days

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Accounts Receivable and Allowance for Doubtful Receivables - Allowance for Doubtful Receivables (Detail) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Receivables [Abstract]
Balance at beginning of period	$ 1,020	$ 1,194
Bad debt expense, net of recoveries	40	135
Accounts written off	(19)	(31)
Balance at end of period	$ 1,041	$ 1,298

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Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands	May 31, 2019	Feb. 28, 2019
Inventory Disclosure [Abstract]
Raw material	$ 22,826	$ 21,717
Work-in-process	4,414	4,172
Finished goods	9,586	9,522
Inventories	$ 36,826	$ 35,411

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Acquisitions - Additional Information (Detail) - USD ($)				3 Months Ended	10 Months Ended
	Mar. 16, 2019	Jul. 31, 2018	Apr. 30, 2018	May 31, 2019	May 31, 2019	Feb. 28, 2019	Feb. 28, 2018
Business Acquisition [Line Items]
Percentage of assets acquired and liabilities assumed at their acquisition date fair values				100.00%	100.00%
Goodwill				$ 82,527,000	$ 82,527,000	$ 81,634,000	$ 70,603,000
Integrated Print & Graphics (Integrated) [Member]
Business Acquisition [Line Items]
Total purchase consideration	$ 8,900,000
Acquisition related costs incurred				$ 29,000
Goodwill	893,000
Intangible assets	1,800,000
Net sales	$ 20,000,000
Wright Business Graphics, Inc [Member]
Business Acquisition [Line Items]
Total purchase consideration		$ 38,871,000
Acquisition related costs incurred					$ 200,000
Goodwill		11,031,000
Net sales		$ 58,000,000
Issuance of common stock in connection with merger, shares		829,126
Business acquisition, date of acquisition		Jul. 16, 2018
Issuance of common stock in connection with merger, value		$ 16,218,000
Cash paid for final working capital adjustment in connection with merger		19,700,000
Business acquisition payment for outstanding debt		$ 2,600,000
Tag and Label Company [Member]
Business Acquisition [Line Items]
Total purchase consideration			$ 4,700,000
Contingent consideration payable, period			3 years
Tag and Label Company [Member] | Maximum [Member]
Business Acquisition [Line Items]
Contingent consideration payable			$ 500,000

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Acquisitions - Summary of Purchase Price (Detail) - Wright Business Graphics, Inc [Member] $ in Thousands	Jul. 31, 2018 USD ($)
Business Acquisition [Line Items]
Ennis shares of common stock	$ 16,218
Cash	22,653
Purchase price of Wright Business Graphics	$ 38,871

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Acquisitions - Summary of Preliminary Purchase Price Allocation (Detail) - USD ($) $ in Thousands	May 31, 2019	Feb. 28, 2019	Jul. 31, 2018	Feb. 28, 2018
Business Acquisition [Line Items]
Goodwill	$ 82,527	$ 81,634		$ 70,603
Wright Business Graphics, Inc [Member]
Business Acquisition [Line Items]
Accounts receivable			$ 5,220
Prepaid expenses			427
Inventories			4,365
Other assets			88
Property, plant & equipment			10,331
Goodwill			11,031
Accounts payable and accrued liabilities			(4,226)
Deferred income taxes			(5,542)
Total purchase consideration			38,871
Non-Compete [Member] | Wright Business Graphics, Inc [Member]
Business Acquisition [Line Items]
Non-compete, Customer lists, Trade names and Trademark			447
Customer Lists [Member] | Wright Business Graphics, Inc [Member]
Business Acquisition [Line Items]
Non-compete, Customer lists, Trade names and Trademark			12,900
Trade Names [Member] | Wright Business Graphics, Inc [Member]
Business Acquisition [Line Items]
Non-compete, Customer lists, Trade names and Trademark			$ 3,830

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Acquisitions - Summary of Operating Information on Pro Forma Basis (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Business Combinations [Abstract]
Pro forma net sales	$ 108,033	$ 107,321
Pro forma net earnings	$ 9,632	$ 9,810
Pro forma earnings per share - diluted	$ 0.37	$ 0.39

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Leases - Additional Information (Detail)	3 Months Ended
	May 31, 2019 USD ($)
Lessee Lease Description [Line Items]
Leases description	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.
Leases, renewal options, description	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.
Lessee operating lease, existence of option to extend	true
Variable lease cost	$ 0
Minimum [Member]
Lessee Lease Description [Line Items]
Leases terms	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Leases terms	5 years

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Leases - Components of Lease Expense (Detail) $ in Thousands	3 Months Ended
	May 31, 2019 USD ($)
Lease Cost [Abstract]
Operating lease cost	$ 1,577
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	$ 1,569
Weighted Average Remaining Lease Terms, Operating leases	5 years
Weighted Average Discount Rate, Operating leases	4.50%

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Leases - Summary of Future Minimum Lease Commitments Under Non-cancelable Operating Leases (Detail) - USD ($) $ in Thousands	May 31, 2019	Mar. 01, 2019
Operating Lease Liabilities Payments Due [Abstract]
2020 (remaining 9 months)	$ 4,424
2021	4,689
2022	3,851
2023	3,196
2024	2,341
2025	1,646
Thereafter	1,196
Total lease payments	21,343
Less imputed interest	2,976
Total lease payments	$ 18,367	$ 18,200

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Goodwill and Intangible Assets - Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	May 31, 2019	Feb. 28, 2019
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	9 years 9 months 18 days	10 years
Gross Carrying Amount	$ 99,576	$ 97,759
Accumulated Amortization	38,391	36,487
Amortized intangible assets, Net	$ 61,185	$ 61,272
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	13 years 3 months 18 days	13 years 9 months 18 days
Gross Carrying Amount	$ 25,281	$ 24,385
Accumulated Amortization	4,346	3,906
Amortized intangible assets, Net	$ 20,935	$ 20,479
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	8 years	8 years 2 months 12 days
Gross Carrying Amount	$ 72,765	$ 71,869
Accumulated Amortization	32,907	31,498
Amortized intangible assets, Net	$ 39,858	$ 40,371
Non-Compete [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	2 years 4 months 24 days	2 years 6 months
Gross Carrying Amount	$ 747	$ 722
Accumulated Amortization	355	300
Amortized intangible assets, Net	392	422
Patent [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	783	783
Accumulated Amortization	$ 783	$ 783

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	May 31, 2019	May 31, 2018	Feb. 28, 2019
Finite-Lived Intangible Assets [Line Items]
Amortization of trade names, customer lists, and patent	$ 1,904	$ 1,415
Goodwill acquired	893		$ 11,031
Integrated Print & Graphics (Integrated) [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill acquired	$ 900

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Goodwill and Intangible Assets - Estimated Amortization Expense (Detail) $ in Thousands	May 31, 2019 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2020	$ 7,589
2021	7,472
2022	7,305
2023	6,459
2024	$ 6,421

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Goodwill and Intangible Assets - Changes in Net Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	May 31, 2019	Feb. 28, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Beginning balance	$ 81,634	$ 70,603
Goodwill acquired	893	11,031
Goodwill, Ending balance	$ 82,527	$ 81,634

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Accrued Expenses - Components of Accrued Expenses (Detail) - USD ($) $ in Thousands	May 31, 2019	Feb. 28, 2019
Payables And Accruals [Abstract]
Employee compensation and benefits	$ 11,964	$ 15,950
Taxes other than income	966	583
Income taxes payable	3,432
Accrued legal and professional fees	124	203
Accrued interest	187	188
Accrued utilities	90	90
Accrued acquisition related obligations	360	214
Accrued credit card fees	147	146
Other accrued expenses	855	521
Accrued expenses, Total	$ 18,125	$ 17,895

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Long-Term Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands	May 31, 2019	Feb. 28, 2019
Line of Credit Facility [Line Items]
Revolving credit facility	$ 30,000	$ 30,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility	$ 30,000	$ 30,000

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Long-Term Debt - Additional Information (Detail)	3 Months Ended	12 Months Ended
	May 31, 2019 USD ($)	Feb. 28, 2019
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Long-term debt	$ 30,000,000
Second Amendment [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility maturity date	Aug. 11, 2020
Revolving credit facility, maximum borrowing capacity	$ 100,000,000
Revolving credit facility, additional borrowing capacity	$ 50,000,000
Fixed charge coverage ratio, minimum	1.25
Line of credit facility, borrowing capacity description	(i) the Company’s consolidated net leverage ratio may not exceed 3.00:1.00, (ii) the Company’s consolidated fixed charge coverage ratio may not be less than 1.25:1.00, and (iii) the Company may make dividends or distributions to shareholders so long as (a) no event of default has occurred and is continuing and (b) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than 2.50:1.00.
Revolving credit facility, interest rate description	LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.5% (3 month LIBOR + 1.0%) at May 31, 2019 and 3.6% (3 month LIBOR + 1.0%) at February 28, 2019.
Revolving credit facility, variable basis spread	1.00%	1.00%
Revolving credit facility, interest rate	3.50%	3.60%
Second Amendment [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Net leverage ratio	3.00
Revolving credit facility, variable basis spread	2.00%
Second Amendment [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Revolving credit facility, variable basis spread	1.00%
Second Amendment [Member] | Revolving Credit Facility [Member] | Dividends or Distributions Effect [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Net leverage ratio	2.50
Second Amendment [Member] | Letter of Credit [Member]
Line of Credit Facility [Line Items]
Long-term debt	$ 20,000,000
Second Amendment [Member] | Swing-line Loans [Member]
Line of Credit Facility [Line Items]
Long-term debt	15,000,000
Third Amendment [Member] | Standby Letters of Credit [Member]
Line of Credit Facility [Line Items]
Long-term debt	700,000
Revolving credit facility, remaining borrowing capacity	$ 69,300,000

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Shareholders' Equity - Additional Information (Detail)	3 Months Ended	127 Months Ended
	May 31, 2019 USD ($) $ / shares shares	May 31, 2019 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchase of common stock | shares	62,038	1,752,062
Repurchase of common stock, average cost per share | $ / shares	$ 19.54	$ 15.78
Total amount available to repurchase of shares	$ 12,400,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program, authorized amount	$ 40,000,000	$ 40,000,000

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Stock Option Plan and Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	May 31, 2019	May 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unissued common stock reserved	582,853
Stock option award maximum term	10 years
Share based compensation arrangements by share based payment award vesting period maximum	5 years
Number of outstanding vested and unvested stock options	0
Number of stock options granted	0	0
Number of unvested stock options outstanding	0
Remaining unrecognized compensation cost related to unvested restricted stock	$ 2.4
Weighted average remaining requisite service period of the unvested restricted stock awards	2 years 1 month 6 days
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense related share based compensation before tax	$ 0.4	$ 0.3

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Stock Option Plan and Stock Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	May 31, 2019	May 31, 2018	Feb. 28, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Shares, Options Outstanding, Beginning Balance	61,590
Number of Shares, Granted	0	0
Number of Shares, Exercised	(61,590)
Number of Shares, Options Outstanding, Ending Balance	0		61,590
Weighted Average Exercise Price, Beginning Balance	$ 15.88
Weighted Average Exercise Price, Exercised	$ 15.88
Weighted Average Exercise Price, Ending Balance			$ 15.88
Weighted Average Remaining Contractual Life (in years)			1 year 9 months 18 days
Aggregate Intrinsic Value			$ 327

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Stock Option Plan and Stock Based Compensation - Summary of Stock Options Exercised and Tax Benefits Realized from Stock Based Compensation (Detail) $ in Thousands	3 Months Ended
	May 31, 2019 USD ($)
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Total grant-date fair value	$ 201
Intrinsic value	$ 267

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Stock Option Plan and Stock Based Compensation - Restricted Stock Activity (Detail) - Restricted Stock [Member]	3 Months Ended
	May 31, 2019 $ / shares shares
Restricted stock activity
Outstanding at Beginning, Number of Shares | shares	155,105
Number of Shares, Granted | shares	51,073
Number of Shares, Vested | shares	(69,880)
Outstanding at Ending, Number of Shares | shares	136,298
Outstanding at Beginning, Weighted Average Grant Date Fair value | $ / shares	$ 19.03
Weighted Average Grant Date Fair Value, Granted | $ / shares	20.50
Weighted Average Grant Date Fair Value, Vested | $ / shares	18.69
Outstanding at Ending, Weighted Average Grant Date Fair value | $ / shares	$ 19.76

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Pension Plan - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	May 31, 2019	Feb. 28, 2019	Feb. 29, 2020
Defined Benefit Plan Disclosure [Line Items]
Employees covered under noncontributory Pension Plan	17.00%
Compensation period preceding retirement and termination	5 years
Period used for calculating Pension Plan liability	25 years
Company contributions		$ 3,000,000
Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected contributions	$ 1,000,000
Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected contributions	$ 1,500,000
Scenario Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Minimum required contribution to the plan			$ 0

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Pension Plan - Summary of Pension Expense Composed of Components Included in Cost of Goods Sold and Selling, General and Administrative Expenses (Detail) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2019	May 31, 2018
Components of net periodic benefit cost
Service cost	$ 272	$ 277
Interest cost	564	568
Expected return on plan assets	(1,050)	(1,027)
Amortization of:
Unrecognized net loss	509	511
Net periodic benefit cost	$ 295	$ 329

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Earnings Per Share - Additional Information (Detail) - shares	May 31, 2019	Feb. 28, 2019
Earnings Per Share [Abstract]
Options outstanding	0	61,590

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Earnings Per Share - Computation for Basic and Diluted Earnings (loss) Per Share (Detail) - $ / shares	3 Months Ended
	May 31, 2019	May 31, 2018
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	26,028,337	25,333,673
Effect of dilutive options		30,099
Diluted weighted average common shares outstanding	26,028,337	25,363,772
Earnings per share
Net earnings - basic	$ 0.37	$ 0.37
Net earnings - diluted	0.37	0.36
Cash dividends	$ 0.225	$ 0.200

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Concentrations of Risk - Additional Information (Detail)	May 31, 2019 USD ($)
Concentration Risk [Line Items]
Cash balances not federally insured	$ 85,300,000
Maximum [Member]
Concentration Risk [Line Items]
Maximum insurance available to depositors under the FDIC's general deposit insurance rules	$ 250,000

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Subsequent Events - Additional Information (Detail) - Subsequent Event [Member]	Jun. 21, 2019 $ / shares
Subsequent Event [Line Items]
Dividends payable, date declared	Jun. 21, 2019
Dividend payable date	Aug. 12, 2019
Dividend payable, date of record	Jul. 12, 2019
Common Stock [Member]
Subsequent Event [Line Items]
Dividend payable per share	$ 0.225