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 July 15, 2019, the Company acquired all the outstanding stock of The Flesh Company (“Flesh”) for approximately $9.9 million (which includes potential earn-out consideration of up to $500,000) plus the assumption of trade payables, subject to final working capital and certain other adjustments. The earn-out consideration is capped at $500,000 and is payable over the four years following the closing if certain minimum operating income levels are achieved. The Company recorded intangible assets with definite lives of approximately $1.2 million in connection with the transaction. Flesh, together with its wholly owned subsidiary, Impressions Direct, Inc. (“Impressions Direct”), is a printing company with two locations, with the St. Louis location containing Flesh’s corporate office and the direct mail operations of Impressions Direct, and the Parsons, Kansas location containing Flesh’s main manufacturing facility and warehouse. The acquisition of Flesh expands the Company’s operations with respect to business forms, checks, direct mail services, integrated products and labels.

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

Accounts receivable	$	2,480
Inventories		1,343
Other assets		191
Right-of-use asset		715
Property, plant & equipment		7,065
Customer lists		337
Trademarks		880
Non-compete		20
Accounts payable and accrued liabilities		(2,251	)
Operating lease liability		(700	)
Deferred income taxes		(206	)
	$	9,874

On March 16, 2019, the Company acquired the assets of Integrated Print & Graphics (“Integrated”), which is based in South Elgin, Illinois, for $8.9 million in cash plus the assumption of trade payables, subject to certain adjustments. During the fiscal year ended February 29, 2020, 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 prior to the acquisition generated approximately $20.0 million in sales for its fiscal year ended December 31, 2018, creates additional capabilities within our high color commercial print product line.

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

Accounts receivable	$	1,971
Inventories		1,322
Other assets		72
Property, plant & equipment		3,828
Right-of-use asset		2,041
Customer lists		896
Trademarks		896
Non-compete		25
Goodwill		893
Accounts payable and accrued liabilities		(1,044	)
Operating lease liability		(2,041	)
	$	8,859

On July 31, 2018, the Company acquired, by way of a merger, all of the outstanding equity interests of Wright Business Forms, Inc., d/b/a Wright Business Graphics (“Wright”), a printing company headquartered in Portland, Oregon with additional locations in Washington and California. As partial consideration for the acquisition, the Company issued an aggregate of 829,126 shares of its common stock to the stockholders of Wright, valued at approximately $16.2 million at the time of issuance under the merger agreement. An additional $19.7 million in cash was paid to the stockholders of Wright, subject to a final working capital adjustment, and $2.6 million was paid to extinguish outstanding debt. The goodwill recognized as a part of the transaction is not deductible for tax purposes. 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. Wright produces forms, pressure seal, packaging, direct mail, checks, statement processing and commercial printing and sells mainly through distributors and resellers.

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

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 following the closing. Prior to the acquisition, ABTL generated approximately $12.0 million in sales for the twelve months ended December 31, 2017. On July 7, 2017, the Company acquired the assets of a separate tag operation located in Ohio for $1.4 million in cash plus the assumption of certain accrued liabilities. Management considers both of these acquisitions immaterial.

The results of operations for Wright, Integrated and Flesh are included in the Company’s consolidated financial statements from the respective dates of acquisition. The following table sets forth certain operating information on a pro forma basis as though the respective acquisition had occurred as of the beginning of the comparable prior period. The following pro forma information for fiscal year 2020 includes Flesh and Integrated, fiscal year 2019 includes Flesh, Wright and Integrated, and fiscal year 2018 includes Wright. The pro forma information includes the estimated impact of adjustments such as amortization of intangible assets, depreciation expense and interest expense and related tax effects (in thousands, except per share amounts).

	Unaudited		Unaudited		Unaudited
	2020		2019		2018
Pro forma net sales	$	449,841	$	474,124	$	427,174
Pro forma net earnings		37,379		38,474		35,694
Pro forma earnings per share - diluted		1.44		1.49		1.40

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