10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended February 28, 2018

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	Name of each exchange on which registered
Common Stock, par value $2.50 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes ☐   No ☒

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒   No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (Check one).

Large accelerated Filer	☐		Accelerated filer	☒
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	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 ☒

The aggregate market value of voting stock held by non-affiliates of the Registrant as of August 31, 2017 was approximately $467 million. Shares of voting stock held by executive officers, directors and holders of more than 10% of the outstanding voting stock have been excluded from this calculation because such persons may be deemed to be affiliates. Exclusion of such shares should not be construed to indicate that any of such persons possesses the power, direct or indirect, to control the Registrant, or that any such person is controlled by or under common control with the Registrant.

The number of shares of the Registrant’s Common Stock, par value $2.50, outstanding at April 30, 2018 was 25,489,502.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for the 2018 Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.

ENNIS, INC. AND SUBSIDIARIES

FORM 10-K

FOR THE PERIOD ENDED FEBRUARY 28, 2018

TABLE OF CONTENTS

PART I:
Item 1	Business	4
Item 1A	Risk Factors	7
Item 1B	Unresolved Staff Comments	12
Item 2	Properties	12
Item 3	Legal Proceedings	13
Item 4	Mine Safety Disclosures	13
PART II:
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6	Selected Financial Data	17
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	27
Item 8	Consolidated Financial Statements and Supplementary Data	27
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	27
Item 9A	Controls and Procedures	27
Item 9B	Other Information	28
PART III:
Item 10	Directors, Executive Officers and Corporate Governance	29
Item 11	Executive Compensation	29
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
Item 13	Certain Relationships and Related Transactions, and Director Independence	29
Item 14	Principal Accountant Fees and Services	29
PART IV:
Item 15	Exhibits and Financial Statement Schedules	30
	Signatures	32

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Cautionary Statements Regarding Forward-Looking Statements

All of the statements in this Annual Report on Form 10-K, 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, Ennis, Inc. 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 Ennis, Inc.  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.  Ennis, Inc. 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 Ennis, Inc. 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, tariffs, trade regulations and import restrictions; customer credit risk; competitors’ pricing strategies; a decline in business volume and profitability could result in an impairment in our reported goodwill negatively impacting our operational results; our ability to retain key management personnel; our ability to identify, manage or integrate acquisitions; and changes in government regulations.  

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PART I

ITEM 1.  BUSINESS

Overview

Ennis, Inc. (“we” or the “Company”) 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 April 30, 2018, we acquired the assets of a tag and label operation located in New York for $4.75 million in cash plus the assumption of trade payables.  On July 7, 2017, we acquired the assets of a 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.

On January 27, 2017, we completed the acquisition of Independent Printing Company, Inc. and its related entities (collectively “Independent”) for $17.7 million in cash consideration, in a stock purchase transaction.  Independent’s main facility located in DePere, Wisconsin. The business produces presentation folders, checks, wide format and commercial print. Independent operates under its brand name and generated approximately $37.0 million in sales during the 2016 calendar year.  Independent sells mainly through distributors and resellers. We now have four folder facilities located in Michigan, Kansas, California and Wisconsin, as well as wide format capabilities in Colorado and Wisconsin.

On May 25, 2016 the Company sold its apparel business, consisting of Alstyle Apparel, LLC and its subsidiaries (the “Apparel Segment”) to Gildan Activewear Inc. (“Gildan”) for an all-cash purchase price of $110.0 million, subject to a working capital adjustment, customary indemnification arrangements, and the other terms of the Unit Purchase Agreement dated May 4, 2016.  In connection with the sale of the Apparel Segment to Gildan, the Company was required to place $2.0 million of the purchase price in escrow as a source of funds to pay any liabilities that arose post-closing from an employment contract with a former officer of the Company.  The Company believed in good faith, based on consultation with its advisors, that no liability existed with respect to the employment contract, and as such, recorded a receivable for the full amount of the funds held in escrow.  In January 2017, the purchaser, without notice to the Company, voluntarily paid $2.0 million to the former officer of the Company and requested that all of the escrowed funds be released to it as reimbursement.  The Company denied the request, due in part because of the purchaser’s failure to provide the Company prior notice and a right to defend as the Company believes was contractually required.  In February 2018 an arbitrator ruled in favor of Gildan but did not authorize the release of the escrow funds, as his opinion was appealable.  Although the Company has filed a complaint to vacate the arbitrator’s opinion, in the fourth quarter of fiscal year 2018 the Company wrote off the full amount of the receivable.

During the fourth quarter of fiscal year 2016, we moved our folder operations from Omaha, Nebraska to Columbus, Kansas, due to the landlord’s desire to sell the facility.  The move and inefficiencies associated with starting-up and training new employees had a negative impact on revenues and operational margins over the first half of fiscal year 2017.  However, during the second half of fiscal year 2017 we saw a turnaround and the operations were marginally profitable.  This momentum largely carried over into the 2018 fiscal year.  In addition, our medical claims during fiscal year 2017 exceeded historical levels, which resulted in us incurring an additional $4.3 million in increased medical charges that had a negative impact on our earnings.  To mitigate further medical charges, we implemented a new cost reimbursement program, as well as other changes to our health plan, as of the start of the calendar year 2017.  At the completion of the first year of this program, we are encouraged with the results.

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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 56 manufacturing plants throughout the United States in 20 strategically located states. Approximately 95% of the business products manufactured 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^SM, Calibrated Forms®, PrintXcel^SM, Printegra®, Curtis Business Forms^SM, 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®, and Hayes Graphics®.  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); Atlas Tag & Label®, Kay 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., our 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 predominantly 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 from generally 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.

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Patents, Licenses, Franchises and Concessions

Outside of the patent for our VersaSeal® product, we do not have any significant patents, licenses, franchises, or concessions.

Intellectual Property

We market our products under a number of trademarks and trade names. The protection of our trademarks is important to our business.  We believe that our registered and common law trademarks have significant value and these trademarks are important to our ability to create and sustain demand for our products. We have registered trademarks in the United States for Ennis®, EnnisOnline^SM, B&D Litho of AZ®, B&D Litho®, ACR®, Block Graphics®, Enfusion®, 360º Custom Labels^SM, Admore®, CashManagementSupply.com^SM, Securestar®, Northstar®, MICRLink®, MICR Connection^TM, Ennisstores.com^TM, General Financial Supply®, Calibrated Forms®, PrintXcel^SM, Printegra®, Trade Envelopes®, Witt Printing®, Genforms®, Royal Business Forms®, Crabar/GBF^SM, BF&S^SM, Adams McClure®, Advertising Concepts^TM, ColorWorx®, Atlas Tag & Label®, Printgraphics^SM, Uncompromised Check Solutions®, VersaSeal®, VersaSeal SecureX®, Folder Express®, Wisco®, National Imprint Corporation®, Star Award Ribbon®, Kay Toledo Tag®, Curtis Business Forms^SM, Falcon Business Forms^SM, Forms Manufacturers^SM, Mutual Graphics^SM, TRI-C Business Forms^SM, SSP®, EOSTouchpoint®, Printersmall®, Check Guard®, Envirofolder®, Independent®, Independent Checks®, Independent Folders®, Independent Large Format Solutions®, and variations of these brands as well as other trademarks. We have similar trademark registrations internationally.

Customers

No single customer accounts for as much as five percent of our consolidated net sales or accounts receivable.

Backlog

At February 28, 2018, our backlog of orders was approximately $17.4 million, as compared to approximately $14.9 million at February 28, 2017.

Research and Development

While we seek new products to sell through our distribution channel, there have been no material amounts spent on research and development in fiscal years 2018, 2017 or 2016.

Environment

We are subject to various federal, state, and local environmental laws and regulations concerning, among other things, wastewater discharges, air emissions and solid waste disposal. Our manufacturing processes do not emit substantial foreign substances into the environment. We do not believe that our compliance with federal, state, or local statutes or regulations relating to the protection of the environment has any material effect upon capital expenditures, earnings or our competitive position. There can be no assurance, however, that future changes in federal, state, or local regulations, interpretations of existing regulations or the discovery of currently unknown problems or conditions will not require substantial additional expenditures. Similarly, the extent of our liability, if any, for past failures to comply with laws, regulations, and permits applicable to our operations cannot be determined.

Employees

At February 28, 2018, we had 2,183 employees.  210 employees are represented by labor unions under collective bargaining agreements, which are subject to periodic negotiations.

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Available Information

We make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 available free of charge under the Investors Relations page on our website, www.ennis.com, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).  Information on our website is not included as a part of, or incorporated by reference into, this report. Our SEC filings are also available through the SEC’s website, www.sec.gov. In addition, the public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. Information regarding the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

ITEM 1A.  RISK FACTORS

You should carefully consider the risks described below, as well as the other information included or incorporated by reference in this Annual Report on Form 10-K, before making an investment in our common stock. The risks described below are not the only ones we face in our business. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. If any of the following risks occur, our business, financial condition or operating results could be materially harmed. In such an event, our common stock could decline in price and you may lose all or part of your investment.

Our results and financial condition are affected by global and local market conditions, and competitors’ pricing strategies, which can adversely affect our sales, margins, and net income.

Our results of operations can be affected by local, national and worldwide market conditions.  The consequences of domestic and international economic uncertainty or instability, volatility in commodity markets, and domestic or international policy uncertainty, all of which we have seen in the past, can all impact economic activity.   Unfavorable conditions can depress the demand for our products and thus sales in a given market and may prompt competitor’s pricing strategies that adversely affect our margins or constrain our operating flexibility.  Certain macroeconomic events, such as the past crisis in the financial markets, could have a more wide-ranging and prolonged impact on the general business environment, which could also adversely affect us.  Whether we can manage these risks effectively depends mainly on the following:

• Our ability to manage movements in commodity prices and the impact of government actions to manage national economic conditions such as consumer spending, inflation rates and unemployment levels, particularly given the past volatility in the global financial markets; and

• The impact on our margins of labor costs given our labor-intensive business model, the trend toward higher wages in both mature and developing markets and the potential impact of union organizing efforts on day-to-day operations of our manufacturing facilities.

The terms and conditions of our credit facility impose certain restrictions on our operations.  We may not be able to raise additional capital, if needed, for proposed expansion projects.

The terms and conditions of our 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.  Our ability to comply with the covenants may be affected by events beyond our control, such as distressed and volatile financial and/or consumer markets, etc.  A breach of any of these covenants could result in a default under our credit facility.  In the event of a default, the bank could elect to declare the outstanding principal amount of our credit facility, all interest thereon, and all other amounts payable under our credit facility to be immediately due and payable.  As of February 28, 2018, we were in compliance with all terms and conditions of our credit facility, which matures on August 11, 2020, and have cash on hand in excess of 3.2 times our current outstanding debt level.

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Declining financial market conditions and continued decline in long-term interest rates could adversely impact the funded status of our pension plan.

We maintain a noncontributory defined benefit retirement plan (the “Pension Plan”) covering approximately 20% of our employees.  Included in our financial results are Pension Plan costs that are measured using actuarial valuations.  The actuarial assumptions used may differ from actual results.  In addition, as our Pension Plan assets are invested in marketable securities, severe fluctuations in market values could potentially negatively impact our funded status, recorded pension liability, and future required minimum contribution levels.  A decline in long-term debt interest rates puts downward pressure on the discount rate used by plan sponsors to determine their pension liabilities.  Each 10 basis point change in the discount rate impacts our computed liability by about $900,000.  Similar to fluctuations in market values, a drop in the discount rate could potentially negatively impact our funded status, recorded pension liability and future contribution levels.  Also, continued changes in the mortality tables could potentially impact our funded status.  As of February 28, 2018, our pension plan was 98.7% funded on a projected benefit obligation (PBO) basis and 106.8% on an accumulated benefit obligation (ABO) basis.

We may be unable to identify or to complete acquisitions or to successfully integrate the businesses we acquire.

We have evaluated, and may continue to evaluate, potential acquisition transactions.  We attempt to address the potential risks inherent in assessing the attractiveness of acquisition candidates, as well as other challenges such as retaining the employees and integrating the operations of the businesses we acquire.  Integrating acquired operations, such as our acquisition of Independent, involves significant risks and uncertainties, including maintenance of uniform standards, controls, policies and procedures; diversion of management’s attention from normal business operations during the integration process; unplanned expenses associated with integration efforts; and unidentified issues not discovered in due diligence, including legal contingencies.  Due to these risks and others, there can be no guarantee that the businesses we acquire will lead to the cost savings or increases in net sales that we expect or desire.  Additionally, there can be no assurance that suitable acquisition opportunities will be available in the future, which could harm our business plan.

We may be required to write down goodwill and other intangible assets, which could cause our financial condition and results of operations tobe negatively affected in the future.

When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets.  The amount of the purchase price which is allocated to goodwill and other intangible assets is the excess of the purchase price over the net identifiable tangible assets acquired.  The annual impairment test is based on several factors requiring judgment.  An impairment may be caused by any number of factors outside our control, such as a decline in market conditions caused by a recession, or protracted recovery there-from, or other factors like competitor’s pricing strategies, which may be tied to such economic events.  Though to date, we have not been required to take an impairment charge relating to our print business, continued sale-side pressures due to technology transference, competitor pricing pressures, and economic uncertainties could result in a determination that a portion of the recorded value of goodwill and intangible assets may be required to be written down. Although such a charge would be a non-cash expense, it would impact our reported operating results and financial position. At February 28, 2018, our consolidated goodwill and other intangible assets were approximately $70.6 million and $49.3 million, respectively.

Digital technologies will continue to erode the demand for our printed business documents.

The increasing sophistication of software, internet technologies, and digital equipment combined with our customers’ general preference, as well as governmental influences for paperless business environments will continue to reduce the number of traditional printed documents sold.  Moreover, the documents that will continue to coexist with software applications will likely contain less value-added print content.

Many of our custom-printed documents help companies control their internal business processes and facilitate the flow of information.  These applications will increasingly be conducted over the internet or through other

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electronic payment systems.  The predominant method of our customers’ communication to their customers is by printed information.  As their customers become more accepting of internet communications, our clients may increasingly opt for what is perceived to be less costly electronic option, which would reduce our revenue.  The pace of these trends is difficult to predict.  These factors will tend to reduce the industry-wide demand for printed documents and require us to gain market share to maintain or increase our current level of print-based revenue which could place pressure on our operating margins.  

In response to the gradual obsolescence of our standardized forms business, we continue to develop our capability to provide custom and full-color products. If new printing capabilities and new product introductions do not continue to offset the obsolescence of our standardized business forms products, and we aren’t able to increase our market share, our sales and profits will be affected.  Decreases in sales of our standardized business forms and products due to obsolescence could also reduce our gross margins or impact the value of our recorded goodwill and intangible assets. This reduction could in turn adversely impact our profits, unless we are able to offset the reduction through the introduction of new high margin products and services or realize cost savings in other areas.

Our distributor customers may be acquired by other manufacturers who redirect business within their plants.

Some of our customers are being absorbed by the distribution channels of some of our manufacturing competitors.  However, we do not believe this will significantly impact our business model.  We have continued to sell to some of these customers even after they were absorbed by our competition because of the breadth of our product line and our geographic diversity.  

Our distributors face increased competition from various sources, such asoffice supply superstores. Increased competition may require us to reduceprices or to offer other incentives in order to enable our distributors toattract new customers and retain existing customers.

Low price, high value office supply chain stores offer standardized business forms, checks and related products. Because of their size, these superstores have the buying power to offer many of these products at competitive prices. These superstores also offer the convenience of “one-stop” shopping for a broad array of office supplies that our distributors do not offer. In addition, superstores have the financial strength to reduce prices or increase promotional discounts to expand market share. This could result in us reducing our prices or offering incentives in order to enable our distributors to attract new customers and retain existing customers, which could reduce our profits.

Technological improvements may reduce our competitive advantage over some ofour competitors, which could reduce our profits.

Improvements in the cost and quality of printing technology are enabling some of our competitors to gain access to products of complex design and functionality at competitive costs. Increased competition from these competitors could force us to reduce our prices in order to attract and retain customers, which could reduce our profits.

We could experience labor disputes that could disrupt our business in thefuture.

As of February 28, 2018, approximately 10% of our employees are represented by labor unions under collective bargaining agreements, which are subject to periodic negotiations.  While we feel we have a good working relationship with all of the unions, there can be no assurance that any future labor negotiations will prove successful, which may result in a significant increase in the cost of labor, or may break down and result in the disruption of our business or operations.

We obtain our raw materials from a limited number of suppliers, and anydisruption in our relationships with these suppliers, or any substantialincrease in the price of raw materials or material shortages could have a material adverse effect onus.

We purchase our paper products from a limited number of sources, which meet stringent quality and on-time delivery standards under long-term contracts.  However, fluctuations in the quality of our paper, unexpected price changes or other factors that relate to our paper products could have a material adverse effect on our operating results.

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Paper is a commodity that is subject to periodic increases or decreases in price, which are sometimes quite significant. There is no effective market of derivative instruments to cost-effectively insulate us against unexpected changes in price of paper, and corporate negotiated purchase contracts provide only limited protection against price increases.  Generally, when paper prices are increased, we attempt to recover the higher costs by raising the prices of our products to our customers.  In the price-competitive marketplaces in which we operate, we may not always be able to pass through any or all of the higher costs.  As such, any significant increase in the price of paper or shortages in its availability, could have a material adverse effect on our results of operations.  Lately, paper pricing has been increasing due to higher pulp prices and reduced domestic capacity, which has been caused by capacity being taken off-line (planned or unplanned) or transferred to different paper types coupled with the impact of a cheaper dollar on foreign imports.  Fewer imports and less domestic capacity may cause higher prices and in some cases imposed allocations, which tends to put pressure on our selling prices and operating margins.

We face intense competition to gain market share, which may lead somecompetitors to sell substantial amounts of goods at prices against which wecannot profitably compete.

Our marketing strategy is to differentiate ourselves by providing quality service and quality products to our customers.  Even if this strategy is successful, the results may be offset by reductions in demand or price declines due to competitors’ pricing strategies or other micro or macro-economic factors.  We face the risk of our competition following a strategy of selling its products at or below cost in order to cover some amount of fixed costs, especially in stressed economic times.

Environmental regulations may impact our future operating results.

We are subject to extensive and changing federal, state and foreign laws and regulations establishing health and environmental quality standards, concerning, among other things, wastewater discharges, air emissions and solid waste disposal, and may be subject to liability or penalties for violations of those standards. We are also subject to laws and regulations governing remediation of contamination at facilities currently or formerly owned or operated by us or to which we have sent hazardous substances or wastes for treatment, recycling or disposal. We may be subject to future liabilities or obligations as a result of new or more stringent interpretations of existing laws and regulations. In addition, we may have liabilities or obligations in the future if we discover any environmental contamination or liability at any of our facilities, or at facilities we may acquire.

We are subject to taxation related risks.

Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are applied.  On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the "TaxAct"). The TaxAct includes significant changes to the U.S. corporate income tax system including, among other things, a federal corporate rate reduction from 35% to 21%; limitations on the deductibility of interest expense and executive compensation and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system.  In the future, we may be subject to increased taxes under the Tax Act, including possible significant limitations on deductions for certain items, such as interest on debt, executive compensation, etc.  Also, we may be required to make material adjustments to provisional items recorded.  In addition, there can be no assurance that U.S. tax laws, including the corporate income tax rate, which the Tax Act lowered to 21%, would not undergo additional changes in the future.  The final impact of the Tax Act on the Company may differ from the estimates reported, possibly materially, due to such factors as changes in interpretations and assumptions made, additional guidance that may be issued, and actions taken by the Company as a result of the Tax Act, among others.  All of these factors and uncertainties may adversely affect our results of operations, financial position and cash flows.

We are exposed to the risk of non-payment by our customers on a significant amount of our sales.

Our extension of credit involves considerable judgment and is based on an evaluation of each customer’s financial condition and payment history.  We monitor our credit risk exposure by periodically obtaining credit reports and updated financials on our customers.  We generally see a heightened amount of bankruptcies by our customers during economic downturns.  While we maintain an allowance for doubtful receivables for potential credit losses based upon our historical trends and other available information, in times of economic turmoil, there is heightened risk that our historical indicators may prove to be inaccurate.  The inability to collect on sales to significant customers or a group of customers could have a material adverse effect on our results of operations.

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Our business incurs significant freight and transportation costs.

We incur transportation expenses to ship our products to our customers.  Significant increases in the costs of freight and transportation could have a material adverse effect on our results of operations, as there can be no assurance that we could pass on these increased costs to our customers.  Recently, due to imposed government regulations, the availability of drivers has become a significant challenge in the industry.  Costs to employ drivers have increased and transportation shortages have become more prevalent.

We depend upon the talents and contributions of a limited number ofindividuals, many of whom would be difficult to replace.

The loss or interruption of the services of our Chief Executive Officer, Executive Vice President or Chief Financial Officer could have a material adverse effect on our business, financial condition or results of operations. Although we maintain employment agreements with these individuals, it cannot be assured that the services of such individuals will continue.

If our internal controls are found to be ineffective, our financial results or our stock price could be adversely affected.

We believe that we currently have adequate internal control procedures in place.  However, increased risk of internal control breakdowns generally exists in a business environment that is decentralized.  In addition, if our internal control over financial reporting is found to be ineffective, investors may lose confidence in the reliability of our financial statements, which may adversely affect our stock price.

Our services depend on the reliability of computer systems we and our vendors maintain.  If these systems fail, our operations may be adversely affected.

We depend on information technology and data processing systems to operate our business, and a significant malfunction or disruption in the operation of our systems may disrupt our business and adversely affect our ability to operate and compete in the markets we serve.  These systems include systems that we own and operate, as well as systems of our vendors.  Such systems are susceptible to malfunctions and interruptions.  We also periodically upgrade and install new systems, which if installed or programmed incorrectly, may cause significant disruptions.  The disruptions could interrupt our operations and adversely affect our results of operations, financial condition and cash flows.

We may suffer a data breach of sensitive information, which may result in significant costs to investigate and remediate the breach, litigation expenses and government enforcement actions and penalties, all of which could have an adverse effect on our operations and reputation.

It is critically important for us to maintain the confidentiality, integrity and availability of our systems, software and solutions.  Many of our clients provide us with information they consider confidential or sensitive, and many of our client’s industries have established standards for safeguarding the confidentiality, integrity and availability of information relating to their businesses and customers.  Confidential and sensitive information stored in our systems or available through web portals are susceptible to cybercrime or intentional disruption, which generally have increased across all industries in terms of sophistication and frequency.  Disclosure of confidential information maintained on our systems or available through web portals due to human error, breach of our systems through cybercrime, a leak of confidential information due to employee misconduct or similar events may damage our reputation, subject us to regulatory enforcement action and cause significant reputational harm for our clients.  Any of these outcomes may adversely affect our results of operations, financial condition and cash flows.

Increases in the cost of employee benefits could impact our financial results and cash flow.

Our expenses relating to employee health benefits are significant.  Unfavorable changes in the cost of such benefits could impact our financial results and cash flow.  Healthcare costs have risen significantly in recent years,

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and recent legislative and private sector initiatives regarding healthcare reform could result in significant changes to the U.S. healthcare system.  While the Company has various cost controls measures in place and employs outsight and outside cost reviews on larger claims, this has been and is expected to continue to be a significant cost to the Company.  As seen during the fiscal year 2017, the Company incurred significant additional medical costs in excess of what we anticipated.  As such, effective with the start of calendar year 2017, the Company made changes to its medical reimbursement program.  Indications through the current fiscal year were positive with medical claims now trending more in line with historical levels.  Even so, medical costs are and will continue to be a significant expense to the Company.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

There are no unresolved SEC staff comments.

ITEM 2.  PROPERTIES

Our corporate headquarters are located in Midlothian, Texas. We operate manufacturing facilities throughout the United States. See the table below for additional information on our locations.

All of the properties are used for the production, warehousing and shipping of the following: business forms, flexographic printing, advertising specialties and Post-it^® Notes (Wolfe City, Texas); presentation products (Macomb, Michigan and Anaheim, California); printed and electronic promotional media (Denver, Colorado); envelopes (Portland, Oregon; Columbus, Kansas and Tullahoma, Tennessee); financial forms (Minneapolis/St. Paul, Minnesota; Nevada, Iowa and Bridgewater, Virginia) and other business products.

Our plants are operated at production levels required to meet our forecasted customer demands.  Production levels fluctuate with market demands and depend upon the product mix at any given point in time. Equipment is added as existing machinery becomes obsolete or not repairable, and as new equipment becomes necessary to meet market demands; however, at any given time, these additions and replacements are not considered to be material additions to property, plant and equipment, although such additions or replacements may increase a plant’s efficiency or capacity.

All of the foregoing facilities are considered to be in good condition. We do not anticipate that substantial expansion, refurbishing, or re-equipping will be required in the near future.

All of the rented property is held under leases with original terms of one or more years, expiring at various times through October 2024. No difficulties are presently foreseen in maintaining or renewing leases as they expire.

The accompanying list contains each of our owned and leased locations:

		Approximate Square Footage
Location	General Use	Owned		Leased
Ennis, Texas	Three Manufacturing Facilities *		325,118		—
Chatham, Virginia	Two Manufacturing Facilities		127,956		—
Paso Robles, California	Manufacturing		94,120		—
DeWitt, Iowa	Two Manufacturing Facilities		95,000		—
Ft. Scott, Kansas	Manufacturing		86,660		—
Portland, Oregon	Manufacturing		—		103,402
Wolfe City, Texas	Two Manufacturing Facilities		119,259		—
Moultrie, Georgia	Held for Sale		25,000		—
Coshocton, Ohio	Manufacturing		24,750		—
Macomb, Michigan	Manufacturing		56,350		—
Denver, Colorado	Four Manufacturing Facilities		60,000		117,575
Brooklyn Park, Minnesota	Manufacturing		94,800		—
Coon Rapids, Minnesota	Warehouse		—		4,800
Roseville, Minnesota	Manufacturing		—		41,300
Nevada, Iowa	Two Manufacturing Facilities		232,000		—
Nevada, Iowa	Held for Sale		58,752		—
Bridgewater, Virginia	Manufacturing		—		27,000

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		Approximate Square Footage
Location	General Use	Owned		Leased
Columbus, Kansas	Two Manufacturing Facilities and Warehouse		174,089		—
Leipsic, Ohio	Manufacturing		83,216		—
El Dorado Springs, Missouri	Manufacturing		70,894		—
Princeton, Illinois	Manufacturing		—		44,190
Arlington, Texas	Two Manufacturing Facilities		69,935		—
Tullahoma, Tennessee	Two Manufacturing Facilities		142,061		—
Caledonia, New York	Manufacturing		138,730		—
Sun City, California	Manufacturing		52,617		—
Livermore, California	Sales Office		—		650
Perris, California	Warehouse		—		6,788
Phoenix, Arizona	Manufacturing and Warehouse		—		59,000
Neenah, Wisconsin	Two Manufacturing Facilities & One Warehouse		72,354		97,161
West Chester, Pennsylvania	Sales Office		—		1,150
Claysburg, Pennsylvania	Manufacturing		—		69,000
Vandalia, Ohio	Held for Sale		47,820		—
Fairport, New York	Two Manufacturing Facilities		—		40,800
Indianapolis,  Indiana	Two Manufacturing Facilities		—		38,000
Smyrna, Georgia	Manufacturing		—		65,000
Clarksville, Tennessee	Manufacturing		51,900		—
Fairhope, Alabama	Manufacturing		65,000		—
Toledo, Ohio	Three Manufacturing Facilities		120,947		—
Visalia, California	Manufacturing		—		56,000
Corsicana, Texas	Manufacturing		39,685		—
Girard, Kansas	Manufacturing		69,474		—
Powell, Tennessee	Manufacturing		43,968		—
Houston, Texas	Manufacturing		—		29,668
DePere, Wisconsin	Manufacturing & Two Warehouses		—		171,847
Mosinee, Wisconsin	Manufacturing & Warehouse		—		20,940
			2,642,455		994,271
Corporate Offices
Ennis, Texas	Administrative Offices		9,300		—
Midlothian, Texas	Executive and Administrative Offices		28,000		—
			37,300		—
	Totals		2,679,755		994,271

* 7,000 square feet of Ennis, Texas location leased

ITEM 3.  LEGAL PROCEEDINGS

From time to time we are involved in various litigation matters arising in the ordinary course of our business. We do not believe the disposition of any current matter will have a material adverse effect on our consolidated financial position or results of operations.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the trading symbol “EBF”. The following table sets forth the high and low sales prices, the common stock trading volume as reported by the New York Stock Exchange and dividends per share paid by the Company for the periods indicated:

					Common Stock		Dividends
					Trading Volume		per share of
	Common Stock Price Range				(number of shares		Common
	High		Low		in thousands)		Stock
Fiscal Year Ended February 28, 2018
First Quarter	$	17.90	$	15.20		1,514	$	0.175
Second Quarter		19.80		15.95		1,420	$	0.200
Third Quarter		21.45		18.70		1,188	$	0.200
Fourth Quarter		21.30		19.15		1,265	$	0.300
Fiscal Year Ended February 28, 2017
First Quarter	$	21.53	$	17.25		3,081	$	0.175
Second Quarter		20.40		15.99		3,438	$	1.675
Third Quarter		17.53		14.45		2,293	$	0.175
Fourth Quarter		18.05		16.10		1,827	$	0.175

Dividends paid in the fourth quarter of fiscal year 2018 included a special one-time cash dividend of $0.10 per share of common stock in response to the signing of the Tax Act.  Dividends paid in the second quarter of 2017 included a  special one-time cash dividend of $1.50 per share of common stock as a result of the Company’s sale of the Apparel Segment.

The last reported sale price of our common stock on NYSE on April 30, 2018 was $17.90. As of that date, there were approximately 716 shareholders of record of our common stock. Cash dividends may be paid or repurchases of our common stock may be made from time to time, as our Board of Directors deems appropriate, after considering our growth rate, operating results, financial condition, cash requirements, restrictive lending covenants, and such other factors as the Board of Directors may deem appropriate.

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In the 2016 calendar year, the Board 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 our fiscal year ended February 28, 2018, the Company, under the program, repurchased 191,033 shares of common stock at an average price of $17.33 per share.  Since the program’s inception in October 2008, there have been 1,442,236 common shares repurchased at an average price of $14.99 per share. As of February 28, 2018 there was $18.4 million available to repurchase shares of the Company’s common stock under the program.  Unrelated to the stock repurchase program, the Company purchased 145 shares of its common stock during the fiscal year ended February 28, 2018.

The following table details shares of stock repurchased during the three months ended February 28, 2018 and the remaining amount available to repurchase additional shares of the Company’s 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
December 1, 2017 - December 31, 2017		—	$	—		—	$	18,377,146
January 1, 2018 - January 27, 2018		—	$	—		—	$	18,377,146
January 28, 2018 - February 28, 2018		—	$	—		—	$	18,377,146
Total		—	$	—		—	$	18,377,146

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Stock Performance Graph

The graph below matches our cumulative 5-year total shareholder return on common stock with the cumulative total returns of the S&P 500 Index and the Russell 2000 Index. The graph tracks the performance of a $100 investment in our common stock and in each of the indexes (with the reinvestment of all dividends) from February 28, 2013 to February 28, 2018.

		2013	2014		2015		2016		2017		2018
Ennis, Inc.	$	100.00	$	103.90	$	96.30	$	142.02	$	132.59	$	165.54
S&P 500		100.00		125.37		144.81		135.85		169.78		198.81
Russell 2000		100.00		131.56		138.97		118.16		160.83		177.74

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

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ITEM 6.  SELECTED FINANCIAL DATA

The following tables set forth key operating metrics as of and for the periods indicated and have been derived from our audited historical consolidated financial statements for the four years ended February 28, 2018.  The selected financial data for the year ended February 28, 2014, was derived from audited financial statements with certain adjustments to reflect discontinued operations. Our consolidated financial statements and notes thereto as of February 28, 2018, February 28, 2017, and for the three years in the period ended February 28, 2018, and the reports of Grant Thornton LLP are included in Item 15 of this Report. The selected financial data should be read in conjunction with Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included in Item 15 of this Report.

	Fiscal Years Ended
	2018			2017				2016		2015			2014
	(Dollars and shares in thousands, except per share and ratio amounts)
Operating results:
Net sales	$	370,171		$	356,888			$	385,946	$	380,379		$	339,347
Gross profit margin		116,914			103,950				116,310		115,071			101,040
Selling, general and administrative expenses		69,451			63,147				65,743		60,661			57,032
Earnings from continuing operations		32,758			26,417				32,258		34,470			29,005
Earnings (loss) from discontinued    operations, net of tax		147			(24,637	)			3,478		(79,003	)		(15,816	)
Net earnings (loss)	$	32,905		$	1,780			$	35,736	$	(44,533	)	$	13,189
Earnings (loss) and dividends per share:
Basic and Diluted
Continuing operations	$	1.29		$	1.03			$	1.25	$	1.33		$	1.11
Discontinued operations		0.01			(0.96	)			0.14		(3.05	)		(0.61	)
Net earnings (loss)	$	1.30		$	0.07			$	1.39	$	(1.72	)	$	0.50
Dividends	$	0.875	(1)	$	2.20		(1)	$	0.70	$	0.70		$	0.53
Weighted average shares outstanding:
Basic		25,392			25,735				25,688		25,864			26,125
Diluted		25,417			25,749				25,722		25,864			26,146
Financial Position:
Working capital	$	133,773		$	119,282			$	135,441	$	170,023		$	166,004
Current assets		163,344			149,250				175,841		210,270			207,881
Total assets		329,439			324,285				390,044		446,990			530,085
Current liabilities		29,571			29,968				40,400		40,247			41,877
Long-term debt		30,000			30,000				40,000		106,500			105,500
Total liabilities		67,735			72,930				91,498		162,310			167,150
Shareholders' equity		261,704			251,355				298,546		284,680			362,935
Current ratio	5.52 to 1.0			4.98 to 1.0				4.35 to 1.0		5.22 to 1.0			4.96 to 1.0
Long-term debt to equity ratio	0.11 to 1.0			0.12 to 1.0				0.13 to 1.0		0.37 to 1.0			0.29 to 1.0

(1) Fiscal year 2018 included a special one-time cash dividend of $0.10 per share of common stock in response to the signing of the Tax Act.  Fiscal year 2017 included a special one-time cash dividend of $1.50 per share of common stock as a result of the Company’s sale of the Apparel Segment.

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ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

This Management’s Discussion and Analysis provides material historical and prospective disclosures intended to enable investors and other users to assess our financial condition and results of operations.  Statements that are not historical are forward-looking and involve risk and uncertainties, including those discussed under the caption “Risk Factors” in Item 1A starting on page 7 of this Annual Report on Form 10-K and elsewhere in this Report.  You should read this discussion and analysis in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Report. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. 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.  

In view of such uncertainties, investors should not place undue reliance on our forward-looking statements since such statements may prove to be inaccurate and speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This Management’s Discussion and Analysis includes the following sections and is for the continuing operations of the Company, which is comprised of the production and sale of business forms and other business products, and excludes the discontinued operations of the Apparel Segment:

• Overview – An overall discussion on our Company, the business challenges and opportunities we believe are key to our success, and our plans for facing these challenges relating to our continuing operations.

• Critical Accounting Policies and Estimates – A discussion of the accounting policies that require our most critical judgments and estimates relating to our continuing operations.  This discussion provides insight into the level of subjectivity, quality, and variability involved in these judgments and estimates.  This section also provides a summary of recently adopted and recently issued accounting pronouncements that have or may materially affect our business.

• Results of Operations – An analysis of our consolidated results of operations and segment results for the three years presented in our consolidated financial statements. This analysis discusses material trends within our continuing business and provides important information necessary for an understanding of our continuing operating results.

• Liquidity and Capital Resources -An analysis of our cash flows and a discussion of our financial condition and contractual obligations.  This section provides information necessary to evaluate our ability to generate cash and to meet existing and known future cash requirements over both the short and long term.

References to 2018, 2017 and 2016 refer to the fiscal years ended February 28, 2018, February 28, 2017 and February 29, 2016, respectively.

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Overview

The Company – 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.

Our 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, 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 dollar during the first half of fiscal year 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 dollar, the price advantage of foreign imports has for the most part dissipated which has led to lower volumes of imported paper and an increase in domestic exports.  Meanwhile, a significant amount of capacity has come out of the market this past year, either planned or unplanned, as through the bankruptcy filing of several mills.  In addition, some mills moved capacity formerly used for coated production to uncoated production due to their ability to get higher margins on these products.  Even with shrinking demand, this has led to a supply/demand imbalance with most mills running in excess of 90% of capacity across all grades.  At this level historically, suppliers have raised prices in the marketplace and recently several increases have been announced across all paper grades. It is too early to tell whether all or some of these announced increases will be implemented.  In the past, the Company has been fairly successful in passing cost increases through to the marketplace over time.  We will continue to focus our efforts on effectively managing and controlling our product costs to minimize these effects on our operational results, primarily through the use of forecasting, production and costing models, as well as working closely with our domestic suppliers to reduce our procurement costs.  We will continue to look for ways to reduce as well as leverage our fixed costs.  As always, some of these negative factors are cyclical and we will continue to focus on maintaining our margins when these negative factors swing the other way.

Continued consolidation of our customers – Our customers, who are distributors, are consolidating or are being acquired by competitors.  As such, they demand better pricing and services, or they are required to relocate their business to their new parent company’s manufacturing facilities.  While we continue to maintain a majority of this business, it is possible that these consolidations and acquisitions will impact our margins and our sales.

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

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we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We believe the following accounting policies are the most critical due to their effect on our more significant estimates and judgments used in preparation of our consolidated financial statements.

We maintain the Pension Plan for employees. Included in our financial results are Pension Plan costs that are measured using actuarial valuations. The actuarial assumptions used may differ from actual results.  As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funding status and associated liability recorded.

Amounts allocated to intangibles and goodwill are determined based on valuation analysis for our acquisitions. Amortizable intangibles are amortized over their expected useful lives. We evaluate these amounts periodically (at least once a year) to determine whether a triggering event has occurred during the year that would indicate potential impairment.

We exercise judgment in evaluating our goodwill for impairment.  We assess the impairment of goodwill as of November 30 of each fiscal year or earlier if events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.

If qualitative factors are not deemed sufficient to conclude that it is more likely than not that the fair value of the reporting unit exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded.  A goodwill impairment charge was not required for the fiscal year ended February 28, 2018 and 2017.

We recognize revenues from product sales upon shipment to the customer if the terms of the sale are freight on board (“FOB”) shipping point (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon shipping) or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon delivery).  Net sales consist of gross sales invoiced to customers, less certain related charges, including discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant. In some cases and upon customer request, we print and store custom print product for customer specified future delivery, generally within twelve months. In this case, risk of loss from obsolescence passes to the customer, the customer is invoiced under normal credit terms and revenue is recognized when manufacturing is complete. Approximately $9.7 million, $10.7 million, and $12.9 million of revenue were recognized under these agreements during fiscal years ended February 28, 2018, February 28, 2017, and February 29, 2016, respectively.

We maintain an allowance for doubtful receivables to reflect estimated losses resulting from the inability of customers to make required payments. On an on-going basis, we evaluate the collectability of accounts receivable based upon historical collection trends, current economic factors, and the assessment of the collectability of specific accounts. We evaluate the collectability of specific accounts using a combination of factors, including the age of the outstanding balances, evaluation of customers’ current and past financial condition and credit scores, recent payment history, current economic environment, discussions with our sales managers, and discussions with the customers directly.

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Our inventories are valued at the lower of cost or net realizable value. We regularly review inventory values on hand, using specific aging categories, and write down inventory deemed obsolete and/or slow-moving based on historical usage and estimated future usage to its estimated net realizable value. As actual future demand or market conditions may vary from those projected by management, adjustments to inventory valuations may be required.

As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each jurisdiction in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and financial reporting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered based on our history of earnings expectations for future taxable income including taxable income in prior carry-back years, as well as future taxable income.  To the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance, we must include an expense within the tax provision in the consolidated statements of operations. In the event that actual results differ from these estimates, our provision for income taxes could be materially impacted.

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the "TaxAct"). The Tax Act includes significant changes to the U.S. corporate income tax system including, among other things, a federal corporate rate reduction from 35% to 21%; limitations on the deductibility of interest expense and executive compensation and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system.  A majority of the provisions in the Tax Act are effective January 1, 2018. In response to the Tax Act, the SEC staff issued guidance on accounting for the tax effects of the Tax Act. The guidance provides a one-year measurement period for companies to complete the accounting. We reflected the income tax effects of those aspects of the Tax Act for which the accounting is complete. To the extent our accounting for certain income tax effects of the Tax Act is incomplete but we are able to determine a reasonable estimate, we recorded a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.  As a result of the reduction of the corporate tax rate to 21%, we re-valued our deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment. This change in the statutory tax rate resulted in reduction in income tax expense being recognized of $3.6 million due to the adjustment of deferred tax liabilities based on the expected prevailing tax rate at the expected time of their realization.

In addition to the above, we also have to make assessments as to the adequacy of our accrued liabilities, more specifically our liabilities recorded in connection with our workers compensation and health insurance, as these plans are self-funded. To help us in this evaluation process, we routinely get outside third-party assessments of our potential liabilities under each plan.

In view of such uncertainties, investors should not place undue reliance on our forward-looking statements since such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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.  Unless otherwise indicated, this financial overview is for the continuing operations of the Company, which are comprised of the production and sales of business forms and other business products, and exclude the discontinued operations of the Apparel Segment, which we sold in May 2016.  The operating results of the Company for fiscal year 2018 and the comparative fiscal years 2017 and 2016 are included in the tables below.

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Consolidated Summary

Consolidated Statements of	Fiscal years ended
Operations - Data (in thousands,	2018					2017					2016
except per share amounts)
Net sales	$	370,171		100.0	%	$	356,888		100.0	%	$	385,946		100.0	%
Cost of goods sold		253,257		68.4			252,938		70.9			269,636		69.9
Gross profit margin		116,914		31.6			103,950		29.1			116,310		30.1
Selling, general and administrative		69,451		18.8			63,147		17.6			65,743		17.0
(Gain) loss from disposal of assets		162		-			278		0.1			(479	)	(0.1	)
Income from operations		47,301		12.8			40,525		11.4			51,046		13.2
Other expense		(392	)	(0.1	)		(492	)	(0.2	)		(5	)	—
Earnings from continuing operations before income taxes		46,909		12.7			40,033		11.2			51,041		13.2
Provision for income taxes		14,151		3.8			13,616		3.8			18,783		4.9
Earnings from continuing operations		32,758		8.9	%		26,417		7.4	%		32,258		8.3	%
Earnings (loss) from discontinued operations, net of tax		147		—			(24,637	)	(6.9	)		3,478		1.0
Net earnings	$	32,905		8.9	%	$	1,780		0.5	%	$	35,736		9.3	%
Earnings (loss) per share - diluted
Continuing operations	$	1.29				$	1.03				$	1.25
Discontinued operations		0.01					(0.96	)				0.14
Net earnings	$	1.30				$	0.07				$	1.39

Net Sales.  Our net sales increased from $356.9 million for the fiscal year ended February 28, 2017 to $370.2 million for the fiscal year ended February 28, 2018, an increase of 3.7%.  The market continues to be fairly soft with competitive pricing pressures.  However, the current reversal of some of the dollar’s strength has made domestic paper production more attractive.  This factor, along with the shrinking of some domestic mill capacity, has resulted in the announcement of some recent paper price increases.  It is still too early to tell whether or not these developments will remain and be passed through to the marketplace.  If so, this may offset some of the normal industry sales attrition expected in the marketplace.   The acquisition of Independent, which was completed in January 2017 and is an integral part of our strategy to offset normal industry print attrition and other changes, had a comparative impact of approximately $36.0 million on our net sales during the current fiscal year.

Our net sales decreased from $385.9 million for the fiscal year ended February 29, 2016 to $356.9 million for the fiscal year ended February 28, 2017, a decrease of 7.5%.  Management has estimated that the move of our folder operations from Omaha, Nebraska to Columbus, Kansas negatively impacted sales by approximately $5.8 million during the fiscal year 2017.  In previous years, acquisitions have been an integral part of our strategy to offset industry revenue declines that result from normal print attrition and general economic conditions.  We were able to complete the acquisition of Independent on January 27, 2017, which contributed $3.0 million in net sales during fiscal year 2017.

Cost of Goods Sold. Our manufacturing costs increased slightly from $252.9 million for the fiscal year 2017 to $253.3 million for the fiscal year 2018, or 0.2%.  Our gross profit margin (“margin”) increased from 29.1% for the fiscal year 2017 to 31.6% for the fiscal year 2018. In fiscal year 2017, our margin was negatively impacted by increased medical expenses due to our medical claims exceeding historical levels.  We implemented a new cost reimbursement program, as well as other changes to our health plan, at the start of calendar year 2017.    While the program is still relatively new, we were encouraged by our medical claims trend line and feel the program positively impacted our margin by over $4.0 million during fiscal year 2018.  

Our manufacturing costs decreased by $16.7 million from $269.6 million for the fiscal year 2016 to $252.9 million for the fiscal year 2017, or 6.2%.  Our margin decreased from 30.1% for the fiscal year 2016 to 29.1% for the fiscal year 2017. Our margin was negatively impacted by increased medical expenses due to our medical claims

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exceeding historical levels, impacting our margin for the fiscal year 2017 by approximately $2.9 million.  To mitigate the increase in medical expenses, we implemented a new cost reimbursement program, as well as other changes to our health plan, at the start of calendar year 2017.

Selling, general, and administrative expenses. For fiscal year 2018, our selling, general, and administrative (“SG&A”) expenses increased approximately $6.4 million, or 10.1%, from $63.1 million for the fiscal year 2017 to $69.5 million for the fiscal year 2018.  As a percentage of sales, SG&A expenses were 18.8% and 17.6% for the fiscal years 2018 and 2017, respectively. The acquisition of Independent added approximately $8.0 million in SG&A expenses during fiscal year 2018, or 20.3% of its respective net sales.  As we continue to integrate this acquisition into our culture and systems, we will continue to look for ways to reduce these expenses to be more in line with our historical SG&A percentage.  In addition, the Company (i) changed its accounting practice for handling its trademarks/trade names from an indefinite life to a finite life method on March 1, 2017 which added approximately $0.8 million to SG&A expense during the period, (ii) paid a special bonus to our non-management level employees of $500 per employee in December 2017 in connection with the enactment of the Tax Cuts and Jobs Act of 2017 which impacted our SG&A expense by $1.2 million, and (iii) paid approximately $1.8 million more in performance related bonuses in fiscal year 2108 in connection with its operating performance.

For fiscal year 2017, our SG&A expenses decreased approximately $2.6 million, or 4.0%, from $65.7 million for the fiscal year 2016 to $63.1 million for the fiscal year 2017.  As a percentage of sales, SG&A expenses were 17.6% and 17.0% for the fiscal years 2017 and 2016, respectively, which increased as compared to the prior fiscal year due to lower sales volumes and the impact of the acquisition of Independent Printing.  The transition services provided to the buyer of our Apparel Segment concluded during the last quarter of fiscal year 2017. Also, our SG&A expense line was further impacted during the 2017 fiscal year by the approximately $1.3 million associated with the additional medical expenses.

(Gain) loss from disposal of assets. The $0.2 million loss from disposal of assets for fiscal year 2018 related primarily to the sale of manufacturing equipment as well as the closing and consolidation of manufacturing facilities.  The $0.3 million loss from disposal of assets for the fiscal year 2017 related primarily to the $0.5 million loss on the sale of an unused manufacturing facility and its associated property offset by the $0.2 million gain on the sale of a second unused manufacturing facility and manufacturing equipment.  The gain from disposal of assets of $0.5 million for the fiscal year 2016 related primarily to the sale of an unused manufacturing facility, as well as manufacturing equipment.

Income from operations. As a result of the above factors, our income from continuing operations for fiscal year 2018 was $47.3 million, or 12.8% of net sales, as compared to $40.5 million, or 11.4% of net sales, for fiscal year 2017.  The acquisition of Independent positively impacted our operational results for fiscal year 2018 by  approximately $4.9 million.

Our income from continuing operations for fiscal year 2017 was $40.5 million or 11.4% of sales, as compared to $51.0 million, or 13.2% of sales for fiscal year 2016.  The negative impact of the additional charge to our medical reserve during fiscal year 2017 was $4.3 million.

Other expense.  Other expense was $0.4 million for fiscal year 2018 as compared to $0.5 million for fiscal year 2017.  This decrease related primarily to the increase of investment income in fiscal year 2018.  Other expense increased by approximately $0.5 million for the fiscal year 2017 as compared to the fiscal year 2016.  This related primarily to the reallocation of interest expense from the Print Segment to our former Apparel Segment as part of discontinued operations for last fiscal year.

Provision for income taxes. Our effective tax rates for fiscal years 2018, 2017 and 2016 were 30.2%, 34.0%, and 36.8%, respectively.  The lower effective tax rate for fiscal year 2018 was primarily due to the enactment of the Tax Cuts and Jobs Act of 2017.  The lower effective tax rate for fiscal year 2017 as compared to fiscal year 2016 was due to the reversal of the valuation allowance relating to certain foreign tax credits.  During fiscal year 2017, the Company also filed amended tax returns to fully utilize all remaining foreign tax credits.

Net earnings (loss). Our net earnings from continuing operations were $32.3 million, or $1.25 per diluted share for fiscal year 2016, $26.4 million, or $1.03 per diluted share for fiscal year 2017 and $32.8 million, or $1.29 per diluted share for fiscal year 2018.  Net earnings from discontinued operations for fiscal year 2018 was $0.01 per

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diluted share, which consisted of a write-off of a $2.0 million receivable ($1.4 million, net of tax) relating to the escrowed purchase price from the sale of our Apparel Segment and a $1.6 million tax benefit related to the determination of the final tax basis on assets sold in the sale of the Apparel Segment.  Net loss from discontinued operations for fiscal year 2017 was ($0.96) per diluted share, which consisted of the net earnings prior to the sale of the Apparel Segment of $0.09 per diluted share and the net loss from the sale of $27.1 million, net of tax, or ($1.05) per diluted share.  The loss from the sale included the write-off of the balance of foreign currency translation adjustments of $16.1 million, or $10.7 million, net of taxes.  Net earnings from discontinued operations for fiscal year 2016 was $3.5 million, or $0.14 per diluted share.  Overall, the Company realized net earnings of $32.9 million, or $1.30 per diluted share for fiscal year 2018, $1.8 million, or $0.07 per diluted share for fiscal year 2017 and $35.7 million, or $1.39 per diluted share for fiscal year 2016.

Liquidity and Capital Resources

	Fiscal Years Ended
(Dollars in thousands)	2018		2017		2016
Working Capital	$	133,773	$	119,282	$	135,441
Cash	$	96,230	$	80,466	$	7,957

Working Capital. Our working capital increased by approximately $14.5 million, or 12.1%, from $119.3 million at February 28, 2017 to $133.8 million at February 28, 2018.  Our working capital increased primarily due to the increase in our cash.  Our current ratio, calculated by dividing our current assets by our current liabilities, increased from 5.0-to-1.0 for the fiscal year 2017 to 5.5-to-1.0 for the fiscal year 2018.  Our current ratio increased primarily as a result of the increase in our cash.

Our working capital decreased by approximately $16.2 million, or 11.9%, from $135.4 million at February 29, 2016 to $119.3 million at February 28, 2017.  Our working capital decreased primarily due to the acquisition of Independent as well as the special one-time dividend of $1.50 per share paid in connection with the sale of the Apparel Segment.  Our current ratio, calculated by dividing our current assets by our current liabilities, increased from 4.4-to-1.0 for the fiscal year 2016 to 5.0-to-1.0 for the fiscal year 2017.  Our current ratio increased primarily as a result of the impact associated with the cash sale of the Apparel Segment offset by the acquisition of Independent.

Cash Flow Components

	Fiscal years ended
(Dollars in thousands)	2018			2017			2016
Net cash provided by operating activities	$	45,290		$	58,887		$	86,684
Net cash provided by (used in) investing activities	$	(3,953	)	$	86,090		$	(4,116	)
Net cash used in financing activities	$	(25,573	)	$	(72,468	)	$	(84,590	)

Cash flows from operating activities.  Cash provided by operating activities was $45.3 million for the fiscal year 2018 compared to $58.9 million for the fiscal year 2017 and $86.7 million for the fiscal year 2016, or a decrease of $13.6 million in 2018 over 2017 and a decrease of $27.8 million in 2017 over 2016.  

Our decreased operational cash flows in fiscal year 2018 in comparison to fiscal year 2017 was primarily the result of four factors: (i) a decrease in operating cash flows related to our Apparel Segment of $34.8 million, (ii) a decrease in our deferred taxes of $6.2 million, (iii) an increase in our prepaid income taxes of $2.7 million, and (iv) increased earnings of $31.1 million.  

Our decreased operational cash flows in fiscal year 2017 in comparison to fiscal year 2016 was primarily the result of two factors: (i) a decrease in operating cash flows from the Apparel Segment that was sold on May 25, 2016, and (ii) decreased operational earnings.

Cash flows from investing activities. Cash provided by (used in) investing activities decreased $90.1 million from $86.1 million provided in fiscal year 2018 compared to $4.0 million used for each of the fiscal years 2017 and 2018, respectively, and increased $90.2 million from $4.1 million used in fiscal year 2018 to $86.1 million provided

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for each of the fiscal years 2016 and 2017, respectively.  The decrease in cash in fiscal year 2018 was primarily due to the net proceeds of $107.4 million from the sale of the Apparel Segment which took place on May 25, 2016, offset by a decrease of $17.2 million in cash used for the acquisition of businesses.  The increase in cash provided from investing activities in fiscal year 2017 over fiscal year 2016 was as a result of the net proceeds from the sale of the Apparel Segment and a decrease $1.2 million in capital expenditures offset by $18.6 million in cash consideration used for acquisitions.

Cash flows from financing activities. Cash used in financing activities was $25.6 million in the fiscal year 2018 compared to $72.5 million used in fiscal year 2017 and $84.6 million used in fiscal year 2016.

The decrease in our cash used in the fiscal year 2018 as compared to the fiscal year 2017 resulted from three factors: (i) no debt was paid down in the fiscal year 2018 compared to $10.0 million paid down in 2017, (ii) $34.9 million less in dividends were paid in the fiscal year 2018 compared to 2017, which included a special one-time dividend of $1.50 per share that was paid as a result of the sale of the Apparel Segment, and (iii) $5.1 million less was used to repurchase our common stock under the board-approved repurchase program in the fiscal year 2018 as compared to 2017.

The decrease in our cash used in fiscal year 2017 as compared to fiscal year 2016 resulted from four factors: (i) we paid down our debt by $10.0 million in fiscal year 2017 compared to $59.0 million paid down in fiscal year 2016, (ii) we used $57.2 million to pay dividends in fiscal year 2017 compared to $18.0 million paid in 2016, (iii) we repurchased $8.4 million of our common stock in fiscal year 2017, whereas we did not repurchase any of our common stock in fiscal year 2016, and (iv) we received $2.9 million from the exercise of stock options in fiscal year 2017, whereas in fiscal year 2016 no stock options were exercised.  

Stock Repurchase – In the 2016 calendar year, the Board authorized the repurchase of up to an aggregate of $40.0 million of the Company’s stock through the Company’s existing 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 are 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 our fiscal year ended February 28, 2018, the Company, under the program, repurchased 191,033 shares of common stock at an average price of $17.33 per share.  Since the program’s inception in October 2008, there have been 1,442,236 common shares repurchased at an average price of $14.99 per share. As of February 28, 2018 there was $18.4 million available to repurchase shares of the Company’s common stock under the program.  Unrelated to the stock repurchase program, the Company purchased 145 shares of its common stock during the fiscal year ended February 28, 2018.  The Company expects to continue to repurchase its shares under its repurchase program during fiscal year 2019 as it determines such repurchases to be in its and its shareholders best interest.

Credit Facility – The Company has entered into a Second Amended and Restated Credit Agreement, which has been amended from time to time, pursuant to which a credit facility has been extended to the Company ( the “Credit Facility”) until August 11, 2020 that 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 also 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 imposing 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.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.0% (3 month LIBOR + 1.0%) at February 28, 2018 and 1.86% (2 month LIBOR + 1.0%) at February 28, 2017.  The rate is determined by our fixed charge coverage ratio of total funded debt to EBITDA.  As of February 28, 2018, we had $30.0 million of borrowings under the revolving credit line and $1.2 million outstanding under standby letters of credit arrangements, leaving approximately $68.8 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.

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We did not pay any additional amounts on the revolving credit line for fiscal year 2018.  It is anticipated that the available line of credit is sufficient to cover, should it be required, our working capital needs for the foreseeable future.

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 recent enactment of the Moving Ahead for Progress in the 21^st Century (“MAP-21”) in July 2012, 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.  Prior to MAP-21, the discount rate used in measuring the pension liability was based on the 24-month average of interest rates.  We anticipate that we will contribute from $2.0 million to $3.0 million during fiscal year 2019. We made contributions of $3.0 million to our Pension Plan during each of our last three fiscal years.  As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funded status, associated liabilities recorded, and future required minimum contributions.  At February 28, 2018, we had an unfunded pension liability recorded on our balance sheet of $0.7 million. During fiscal year 2018, we decreased the discount rate we used to calculate our pension liability to 4.05% from 4.1% used in fiscal year 2017, which increased our recorded pension liability by approximately $0.4 million (each 10 basis point change in the discount rate potentially impacts our computed pension liability by approximately $900,000).  In addition, we adopted the new MP-2017 mortality improvement scale associated with the RP-2014 mortality tables (which were adopted two years ago), which reduced our recorded pension liability by approximately $0.4 million.  The updated mortality improvement scale MP-2017 reflects slightly lower projected mortality experience improvement in the future compared to the previous scale MP-2016 utilized in fiscal year 2017’s valuation of liabilities.  The projected return on our pension assets remained at 7.5% for fiscal year 2018.

Inventories – We believe our current 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 expenditure requirements for fiscal year 2019, exclusive of capital required for possible acquisitions, will be in line with our historical levels of between $3.0 million and $5.0 million.  We expect to fund these expenditures through existing cash flows.  We expect to generate sufficient cash flows from our operating activities to cover our operating and other normal capital requirements for the foreseeable future.

Contractual Obligations & Off-Balance Sheet Arrangements – There have been no significant changes in our contractual obligations since February 28, 2017 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 February 28, 2018.  The following table represents our contractual commitments as of February 28, 2018 (in thousands).

			Due in less		Due in		Due in		Due in more
	Total		than 1 year		1-3 years		4-5 years		than 5 years
Debt:
Revolving credit facility	$	30,000	$	—	$	30,000	$	—	$	—
Interest rate swap		—		—		—		—		—
Other		—		—		—		—		—
Debt subtotal		30,000		—		30,000		—		—
Other contractual commitments:
Estimated pension benefit payments		40,000		4,200		8,500		8,300		19,000
Letters of credit		1,231		1,231		—		—		—
Operating leases		12,938		4,277		5,438		1,973		1,250
Total other contractual commitments		54,169		9,708		13,938		10,273		20,250
Total	$	84,169	$	9,708	$	43,938	$	10,273	$	20,250

We expect future interest payments of $0.8 million for fiscal years February 28, 2019 and February 29, 2020 and $0.4 million for fiscal year February 28, 2021, assuming interest rates and debt levels remain the same throughout the remaining term of the facility.

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ITEM 7A.  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 totaled $30.0 million at February 28, 2018 and is subject to fluctuations in the LIBOR rate.  The 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 February 28, 2018 would be approximately $0.3 million.

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our Consolidated Financial Statements and Supplementary Data required by this Item 8 are set forth following the signature page of this report and are incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE

No matter requires disclosure.

ITEM 9A.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures  

A review and evaluation was 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 Rules 13a-15(e) and 15d-15(e) of the Exchange Act of 1934, as amended (the “Exchange Act”)) as of February 28, 2018.  Based upon that review and evaluation, we have concluded that our disclosure controls and procedures were effective as of February 28, 2018.

Management’s Report on Internal Control over Financial Reporting

The financial statements, financial analysis and all other information in this Annual Report on Form 10-K were prepared by management, who is responsible for their integrity and objectivity and for establishing and maintaining adequate internal controls over financial reporting.

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that:

i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company;

ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or dispositions of the Company’s assets that could have a material effect on the financial statements.

There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only

27

reasonable assurances with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal controls may vary over time.

Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of February 28, 2018. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control—Integrated Framework (“2013 COSO framework”).  Based on management’s assessment using those criteria, we believe that, as of February 28, 2018, the Company’s internal control over financial reporting is effective.

Changes in Internal Controls

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Grant Thornton LLP, an independent registered public accounting firm, has audited the consolidated financial statements of the Company for the fiscal year ended February 28, 2018 and has attested to the effectiveness of the Company’s internal control over financial reporting as of February 28, 2018. Their report on the effectiveness of internal control over financial reporting is presented on page F-3 of this Annual Report on Form 10-K.

ITEM 9B.  OTHER INFORMATION

No matter requires disclosure.

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PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Except as set forth below, the information required by Item 10 is incorporated herein by reference to the definitive Proxy Statement for our 2018 Annual Meeting of Shareholders.

The Securities and Exchange Commission and the New York Stock Exchange have issued multiple regulations requiring policies and procedures in the corporate governance area. In complying with these regulations, it has been the goal of the Company’s Board of Directors and senior leadership to do so in a way which does not inhibit or constrain the Company’s unique culture, and which does not unduly impose a bureaucracy of forms and checklists.  Accordingly, formal, written policies and procedures have been adopted in the simplest possible way, consistent with legal requirements, including a Code of Ethics applicable to the Company’s principal executive officer, principal financial officer, and principal accounting officer or controller.  The Company’s Corporate Governance Guidelines, its charters for each of its Audit, Compensation, Nominating and Corporate Governance Committees and its Code of Ethics covering all Employees are available on the Company’s website, www.ennis.com, and a copy will be mailed upon request to Investor Relations at 2441 Presidential Parkway, Midlothian, TX 76065.  If we make any substantive amendments to the Code, or grant any waivers to the Code for any of our senior officers or directors, we will disclose such amendment or waiver on our website and in a report on Form 8-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is hereby incorporated herein by reference to the definitive Proxy Statement for our 2018 Annual Meeting of Shareholders.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS

The information required by Item 12, as to certain beneficial owners and management, is hereby incorporated by reference to the definitive Proxy Statement for our 2018 Annual Meeting of Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 is hereby incorporated herein by reference to the definitive Proxy Statement for our 2018 Annual Meeting of Shareholders.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is hereby incorporated herein by reference to the definitive Proxy Statement for our 2018 Annual Meeting of Shareholders.

29

PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report.

1. Index to Consolidated Financial Statements of the Company

An “Index to Consolidated Financial Statements” has been filed as a part of this Report beginning on page F-1 hereof.

2. All schedules for which provision is made in the applicable accounting regulation of the SEC have been omitted because of the absence of the conditions under which they would be required or because the information required is included in the consolidated financial statements of the Registrant or the notes thereto.

3. Exhibits

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 10.1	Unit Purchase Agreement, dated May 4, 2016, by and between Ennis, Inc. and Gildan Activewear Inc., incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 4, 2016 (File No. 001-05807).
Exhibit 10.2	Fourth Amendment and Consent to Second Amended and Restated Credit Agreement, effective as of May 25, 2016, by and among Ennis, Inc., each of the co-borrowers party thereto, each of the lenders party thereto, and Bank of America, N.A., in its capacity as administrative agent for the Lenders incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on June 24, 2016 (File No. 001-05807).
Exhibit 10.3	Fifth Amendment to Second Amended and Restated Credit Agreement, dated June 20, 2016, by and among Ennis, Inc., each of the co-borrowers party thereto, each of the lenders party thereto, and Bank of America, N.A., in its capacity as administrative agent for the Lenders incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 24, 2016 (File No. 001-05807).
Exhibit 10.4	Sixth Amendment to Second Amended and Restated Credit Agreement, dated August 11, 2016, by and among Ennis, Inc., each of the co-borrowers party thereto, each of the lenders party thereto, and Bank of America, N.A., in its capacity as administrative agent for the Lenders incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on August 17, 2016 (File No. 001-05807).
Exhibit 10.5	2004 Long-Term Incentive Plan, as amended and restated effective June 30, 2011, incorporated herein by reference to Appendix A of the Registrant’s Form DEF 14A filed on May 26, 2011.+
Exhibit 10.6	Amended and Restated Chief Executive Officer Employment Agreement between Ennis, Inc. and Keith S. Walters, effective as of December 19, 2008, herein incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 20, 2009 (File No. 001-05807).+

30

Exhibit Number	Description
Exhibit 10.7	Amended and Restated Executive Employment Agreement between Ennis, Inc. and Michael D. Magill, effective as of July 31, 2017, herein incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on August 3, 2017 (File No. 001-05807).+
Exhibit 10.8	Amended and Restated Executive Employment Agreement between Ennis, Inc. and Ronald M. Graham, effective as of July 31, 2017, herein incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on August 3, 2017 (File No. 001-05807).+
Exhibit 10.9	Amended and Restated Executive Employment Agreement between Ennis, Inc. and Richard L. Travis, Jr., effective as of July 31, 2017, herein incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on August 3, 2017 (File No. 001-05807).+
Exhibit 10.10	Stock Purchase Agreement, dated January 27, 2017, by and between Ennis, Inc., Independent Printing Company, Inc. and the related entities signatory thereto, herein incorporated by reference to Exhibit 10.8 to the Registrant’s Form 10-K files on May 5, 2017 (File No. 001-05807).
Exhibit 21	Subsidiaries of Registrant*
Exhibit 23	Consent of Independent Registered Public Accounting Firm*
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 Annual Report on Form 10-K for the year ended February 28, 2018, filed on May 11, 2018, 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.

+ Represents a management contract or a compensatory plan or arrangement.

31

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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: May 11, 2018		/s/ KEITH S. WALTERS
		Keith S. Walters, Chairman of the Board,
		Chief Executive Officer and President
Date: May 11, 2018		/s/ RICHARD L. TRAVIS, JR.
		Richard L. Travis, Jr.
		Vice President — Finance and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: May 11, 2018	/s/ KEITH S. WALTERS
	Keith S. Walters, Chairman of the Board, Chief Executive Officer and President
Date: May 11, 2018	/s/ MICHAEL D. MAGILL
	Michael D. Magill, Executive Vice President, Secretary and Director
Date: May 11, 2018	/s/ JOHN R. BLIND
	John R. Blind, Director
Date: May 11, 2018	/s/ FRANK D. BRACKEN
	Frank D. Bracken, Director
Date: May 11, 2018	/s/ GODFREY M. LONG, JR.
	Godfrey M. Long, Jr., Director
Date: May 11, 2018	/s/ THOMAS R. PRICE
	Thomas R. Price, Director
Date: May 11, 2018	/s/ ALEJANDRO QUIROZ
	Alejandro Quiroz, Director
Date: May 11, 2018	/s/ MICHAEL J. SCHAEFER
	Michael J. Schaefer, Director
Date: May 11, 2018	/s/ JAMES C. TAYLOR
	James C. Taylor, Director
Date: May 11, 2018	/s/ RICHARD L. TRAVIS, JR.
	Richard L. Travis, Jr., Principal Financial and Accounting Officer

32

ENNIS, INC. AND SUBSIDIARIES

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets — February 28, 2018 and February 28, 2017	F-4
Consolidated Statements of Operations — Fiscal years ended 2018, 2017 and 2016	F-6
Consolidated Statements of Comprehensive Income — Fiscal years ended 2018, 2017 and 2016	F-7
Consolidated Statements of Changes in Shareholders’ Equity — Fiscal years ended 2018, 2017 and 2016	F-8
Consolidated Statements of Cash Flows — Fiscal years ended 2018, 2017 and 2016	F-9
Notes to Consolidated Financial Statements	F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Ennis, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Ennis, Inc. (a Texas corporation) and subsidiaries (the “Company”) as of February 28, 2018 and February 28, 2017, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended February 28, 2018, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2018 and February 28, 2017, and the results of its operations and its cash flows for each of the three years in the period ended February 28, 2018, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of February 28, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”),and our report dated May 11, 2018 expressed an unqualified opinion thereon.

Basis for opinion

These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on the Company’s financial statements based on our audits.  We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2005.

Dallas, Texas

May 11, 2018

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Ennis, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Ennis, Inc. (a Texas corporation) and subsidiaries (the “Company”) as of February 28, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 28, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended February 28, 2018, and our report dated May 11, 2018 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.  We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Dallas, Texas

May 11, 2018

F-3

ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	February 28,		February 28,
	2018		2017
Assets
Current assets
Cash	$	96,230	$	80,466
Accounts receivable, net of allowance for doubtful receivables of $1,194 at February 28, 2018 and $1,674 at February 28, 2017		35,654		37,368
Prepaid expenses		1,305		1,351
Prepaid income taxes		3,600		855
Inventories		26,480		27,965
Assets held for sale		75		1,245
Total current assets		163,344		149,250
Property, plant and equipment
Plant, machinery and equipment		133,222		136,584
Land and buildings		54,318		53,821
Other		23,208		23,644
Total property, plant and equipment		210,748		214,049
Less accumulated depreciation		164,840		164,054
Net property, plant and equipment		45,908		49,995
Goodwill		70,603		70,603
Intangible assets, net		49,254		53,927
Other assets		330		510
Total assets	$	329,439	$	324,285

See accompanying notes to consolidated financial statements.

F-4

ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS-continued

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

	February 28,			February 28,
	2018			2017
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	12,168		$	14,202
Accrued expenses
Employee compensation and benefits		15,597			13,515
Taxes other than income		135			225
Other		1,671			2,026
Total current liabilities		29,571			29,968
Long-term debt		30,000			30,000
Liability for pension benefits		735			4,846
Deferred income taxes		6,189			6,953
Other liabilities		1,240			1,163
Total liabilities		67,735			72,930
Commitments and contingencies
Shareholders’ equity
Preferred stock $10 par value, authorized 1,000,000 shares; none issued		—			—
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at February 28, 2018 and 2017		75,134			75,134
Additional paid-in capital		121,333			121,525
Retained earnings		164,177			150,685
Accumulated other comprehensive income (loss):
Minimum pension liability, net of taxes		(16,428	)		(15,261	)
Total accumulated other comprehensive income (loss)		(16,428	)		(15,261	)
Treasury stock		(82,512	)		(80,728	)
Total shareholders’ equity		261,704			251,355
Total liabilities and shareholders' equity	$	329,439		$	324,285

See accompanying notes to consolidated financial statements.

F-5

ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	Fiscal Years Ended
	2018			2017			2016
Net sales	$	370,171		$	356,888		$	385,946
Cost of goods sold		253,257			252,938			269,636
Gross profit margin		116,914			103,950			116,310
Selling, general and administrative		69,451			63,147			65,743
(Gain) loss from disposal of assets		162			278			(479	)
Income from operations		47,301			40,525			51,046
Other income (expense)
Interest expense		(777	)		(613	)		—
Other, net		385			121			(5	)
Total other income (expense)		(392	)		(492	)		(5	)
Earnings from continuing operations before income taxes		46,909			40,033			51,041
Income tax expense		14,151			13,616			18,783
Earnings from continuing operations		32,758			26,417			32,258
Earnings (loss) from discontinued operations, net of tax		147			(24,637	)		3,478
Net earnings	$	32,905		$	1,780		$	35,736
Weighted average common shares outstanding
Basic		25,391,998			25,734,667			25,688,273
Diluted		25,417,244			25,749,185			25,722,367
Earnings (loss) per share - basic and diluted
Continuing operations	$	1.29		$	1.03		$	1.25
Discontinued operations	$	0.01		$	(0.96	)	$	0.14
Net earnings	$	1.30		$	0.07		$	1.39
Cash dividends per share	$	0.875		$	2.20		$	0.70

See accompanying notes to consolidated financial statements.

F-6

ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Fiscal Years Ended
	2018		2017		2016
Net earnings	$	32,905	$	1,780	$	35,736
Foreign currency translation adjustment,  net of deferred taxes		—		9,940		(5,313	)
Adjustment to pension, net of deferred taxes		1,680		2,084		225
Comprehensive income	$	34,585	$	13,804	$	30,648

See accompanying notes to consolidated financial statements.

F-7

ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE FISCAL YEARS ENDED 2016, 2017, AND 2018

(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 March 1, 2015		30,053,443	$	75,134	$	121,687		$	188,413		$	(22,197	)		(4,514,905	)	$	(78,357	)	$	284,680
Net earnings		—		—		—			35,736			—			—			—			35,736
Foreign currency translation, net of    deferred tax of $3,254		—		—		—			—			(5,313	)		—			—			(5,313	)
Adjustment to pension, net of deferred tax of $138		—		—		—			—			225			—			—			225
Dividends paid ($0.70 per share)		—		—		—			(18,044	)		—			—			—			(18,044	)
Excess tax benefit of stock option    exercises and restricted stock grants		—		—		(46	)		—			—			—			—			(46	)
Stock based compensation		—		—		1,308			—			—			—			—			1,308
Exercise of stock options and    restricted stock		—		—		(1,352	)		—			—			77,900			1,352			—
Balance February 29, 2016		30,053,443	$	75,134	$	121,597		$	206,105		$	(27,285	)		(4,437,005	)	$	(77,005	)	$	298,546
Net earnings		—		—		—			1,780			—			—			—			1,780
Foreign currency translation, net of    deferred tax of $6,087		—		—		—			—			9,940			—			—			9,940
Adjustment to pension, net of    deferred tax of $1,276		—		—		—			—			2,084			—			—			2,084
Dividends paid ($2.20 per share)		—		—		—			(57,200	)		—			—			—			(57,200	)
Excess tax benefit of stock option   exercises and restricted stock grants		—		—		265			—			—			—			—			265
Stock based compensation		—		—		1,361			—			—			—			—			1,361
Stock based compensation allocated to    loss on sale of discontinued operations		—		—		112			—			—			—			—			112
Exercise of stock options and    restricted stock		—		—		(1,810	)		—			—			282,988			4,720			2,910
Common stock repurchases		—		—		—			—			—			(532,804	)		(8,443	)		(8,443	)
Balance February 28, 2017		30,053,443	$	75,134	$	121,525		$	150,685		$	(15,261	)		(4,686,821	)	$	(80,728	)	$	251,355
Net earnings		—		—		—			32,905			—			—			—			32,905
Adjustment to pension (net of deferred tax of $1,030) and reclassification of the income tax effects of the US Tax Cuts and Jobs Act		—		—		—			2,847			(1,167	)		—			—			1,680
Dividends paid ($0.875 per share)		—		—		—			(22,260	)		—			—			—			(22,260	)
Stock based compensation		—		—		1,337			—			—			—			—			1,337
Exercise of stock options    and restricted stock		—		—		(1,529	)		—			—			88,771			1,529			—
Common stock repurchases		—		—		—			—			—			(191,178	)		(3,313	)		(3,313	)
Balance February 28, 2018		30,053,443	$	75,134	$	121,333		$	164,177		$	(16,428	)		(4,789,228	)	$	(82,512	)	$	261,704

See accompanying notes to consolidated financial statements.

F-8

ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Fiscal Years Ended
		2018			2017			2016
Cash flows from operating activities:
Net earnings	$	32,905		$	1,780		$	35,736
Adjustments to reconcile net earnings to net    cash provided by operating activities:
Depreciation		8,033			7,934			7,798
Amortization of deferred finance charges		114			65			—
Amortization of intangible assets		6,058			4,673			4,555
Pre-tax loss from discontinued operations		2,000			36,775			—
Operating cash flows of discontinued operations		—			538			38,508
(Gain) loss from disposal of assets		162			278			(479	)
Bad debt expense, net of recoveries		(265	)		263			253
Stock based compensation		1,337			1,361			1,308
Excess tax benefit of stock based compensation		—			(265	)		46
Deferred income taxes		(1,794	)		4,359			(5,457	)
Changes in operating assets and liabilities, net of the effects    of acquisitions:
Accounts receivable		(21	)		3,315			4,166
Prepaid expenses and income taxes		(2,699	)		1,134			1,887
Inventories		1,566			1,428			318
Other current assets		—			—			228
Other assets		65			(589	)		—
Accounts payable and accrued expenses		(847	)		(140	)		(701	)
Other liabilities		76			(3,579	)		(689	)
Liability for pension benefits		(1,400	)		(443	)		(793	)
Net cash provided by operating activities		45,290			58,887			86,684
Cash flows from investing activities:
Capital expenditures		(2,667	)		(3,065	)		(4,227	)
Purchase of businesses, net of cash acquired		(1,350	)		(18,584	)		(331	)
Proceeds from sale of discontinued operations		—			107,354			—
Investing cash flows of discontinued operations		—			(279	)		(596	)
Proceeds from disposal of plant and property		64			664			1,038
Net cash provided by (used in) investing activities		(3,953	)		86,090			(4,116	)
Cash flows from financing activities:
Repayment of debt		—			(10,000	)		(59,010	)
Dividends paid		(22,260	)		(57,200	)		(18,044	)
Financing cash flows of discontinued operations		—			—			(7,490	)
Common stock repurchases		(3,313	)		(8,443	)		—
Proceeds from exercise of stock options		—			2,910			—
Excess tax benefit of stock based compensation		—			265			(46	)
Net cash used in financing activities		(25,573	)		(72,468	)		(84,590	)
Effect of exchange rate changes on cash		—			—			(3,378	)
Net change in cash		15,764			72,509			(5,400	)
Cash at beginning of period		80,466			7,957			13,357
Cash at end of period	$	96,230		$	80,466		$	7,957

See accompanying notes to consolidated financial statements.

F-9

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)Significant Accounting Policies and General Matters

Nature of Operations. Ennis, Inc. and its wholly owned subsidiaries (collectively, the “Company”) are principally engaged in the production of and sale of business forms and other business products to customers primarily located in the United States.

Basis of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company’s last three fiscal years ended on the following days: February 28, 2018, February 28, 2017 and February 29, 2016 (fiscal years ended 2018, 2017 and 2016, respectively).

Accounts Receivable. Trade receivables are uncollateralized customer obligations due under normal trade terms requiring payment generally within 30 days from the invoice date. The Company’s allowance for doubtful receivables reserve is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible. This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends.

Inventories. With the exception of approximately 12.9% and 12.8% of its inventories valued at the lower of last-in, first-out (LIFO) for fiscal years 2018 and 2017, respectively, the Company values its inventories at the lower of first-in, first-out (FIFO) cost or net realizable value.  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 Company provides reserves for excess and obsolete inventory when necessary based upon analysis of quantities on hand, recent sales volumes and reference to market prices. Reserves for excess and obsolete inventory at fiscal years ended 2018 and 2017 were $0.8 million and $0.8 million, respectively.

Property, Plant and Equipment. Depreciation of property, plant and equipment is calculated using the straight-line method over a period considered adequate to amortize the total cost over the useful lives of the assets, which range from 3 to 11 years for machinery and equipment and 10 to 33 years for buildings and improvements. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Repairs and maintenance are expensed as incurred. Renewals and betterments are capitalized and depreciated over the remaining life of the specific property unit. The Company capitalizes all leases that are in substance acquisitions of property.  As of February 28, 2018, the Company had building and improvements of approximately $0.1 million classified as assets held for sale on the consolidated balance sheet.

Goodwill and Other Intangible Assets. Goodwill is the excess of the purchase price paid over the value of net assets of businesses acquired and is not amortized. Intangible assets are amortized on a straight-line basis over their estimated useful lives.  Goodwill is evaluated for impairment on an annual basis, or more frequently if impairment indicators arise, using a fair-value-based test that compares the fair value of the related business unit to its carrying value.

Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is based upon the fair value of assets.

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments. The carrying amounts of cash, accounts receivables, and accounts payable approximate fair value because of the short maturity and/or variable rates associated with these instruments.  Long-term debt as of fiscal years ended 2018 and 2017 approximates its fair value as the interest rate is tied to market rates.  

Treasury Stock. The Company accounts for repurchases of common stock using the cost method with common stock in treasury classified in the Consolidated Balance Sheets as a reduction of shareholders’ equity.

Deferred Finance Charges. Deferred finance charges in connection with the Company’s revolving credit facility are amortized to interest expense over the term of the facility using the straight-line method. If the facility is extinguished before the end of the term, the remaining balance of the deferred finance charges will be amortized fully in such year.

Revenue Recognition. We recognize revenues from product sales upon shipment to the customer if the terms of the sale are freight on board (“FOB”) shipping point (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon shipping) or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon delivery).  Net sales represent gross sales invoiced to customers, less certain related charges, including sales tax, discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant. In some cases and upon customer request, the Company prints and stores custom print product for customer specified future delivery, generally within twelve months. In this case, risk of loss passes to the customer, the customer is invoiced under normal credit terms, and revenue is recognized when manufacturing is complete. Approximately $9.7 million, $10.7 million and $12.9 million of revenue was recognized under these arrangements during fiscal years 2018, 2017 and 2016, respectively.

Advertising Expenses. The Company expenses advertising costs as incurred. Catalog and brochure preparation and printing costs, which are considered direct response advertising, are amortized to expense over the life of the catalog, which typically ranges from three to twelve months. Advertising expense was approximately $0.9 million, $0.6 million and $0.6 million during the fiscal years ended 2018, 2017 and 2016, respectively, and is included in selling, general and administrative expenses in the Consolidated Statements of Operations.  Included in this advertising expense is amortization related to direct response advertising of approximately $0.2 million, $0.1 million, and $0.2 million for the fiscal years ended 2018, 2017 and 2016, respectively.  Unamortized direct advertising costs included in prepaid expenses at fiscal years ended 2018, 2017 and 2016 were approximately $0.1 million, $0.2 million, and $0.3 million, respectively.

Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings Per Share. Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding, and then adding the number of additional shares that would have been outstanding if potentially dilutive securities had been issued.  This is calculated using the treasury stock method.  At year-end 2017 and 2016, there were 42,500 and 145,243 options, respectively, not included in the diluted earnings per share computation because their effect was anti-dilutive.  For fiscal year 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.

Accumulated Other Comprehensive Loss. Accumulated other comprehensive loss is defined as the change in equity resulting from transactions from non-owner sources.  Other comprehensive income consisted of changes in the following:  changes in the funded status of the Company’s pension plan and the election to reclassify the stranded income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

Foreign Currency Translation. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations in

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

other expense, net as incurred. Transaction losses totaled approximately $7,000, $22,000, and $7,000 for fiscal years ended 2018, 2017 and 2016, respectively.

Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Shipping and Handling Costs. The Company records amounts billed to customers for shipping and handling costs in net sales and related costs are included in cost of goods sold.

Stock Based Compensation. The Company recognizes stock based compensation expense net of estimated forfeitures over the requisite service period of the individual grants, which generally equals the vesting period.  Estimated forfeiture rates are derived from our historical forfeitures of similar awards.  The fair value of all share based awards is estimated on the date of grant.  

Recent Accounting Pronouncements

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which permits the reclassification of tax effects stranded in accumulated other comprehensive income to retained earnings as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).  ASU 2018-02 is effective in the first quarter of fiscal year 2019, however, early adoption is permitted for annual periods, including the reporting period in which the Tax Act was enacted.  The Company early adopted this standard in fiscal year 2018, which resulted in $2.8 million reclassified from other comprehensive income to retained earnings.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).  The update requires the service cost component of net benefit costs to be reported in the same line of the income statement as other compensation costs and the other components of net benefit costs (non-service costs) to be presented separately from the service cost component, outside a subtotal of operating income.  Additionally, only the service cost component of net benefit costs will be eligible for capitalization.  The update is required to be adopted the first quarter of fiscal year 2019 and is required to be retrospectively adopted.  The Company is currently evaluating the impact the adoption of ASU 2017-07 will have on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies how an entity is required to measure goodwill impairment.  The amendments in ASU 2017-04 require that goodwill impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit and the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.  The amendments in ASU 2017-04 should be applied on a prospective basis and are effective for annual or any interim goodwill impairment tests in annual reporting periods beginning after December 15, 2019.  The Company adopted ASU 2017-04 on June 1, 2017, which had no impact on the Company’s consolidated financial statements at the time of adoption.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) (“ASU 2016-09”), which makes several modifications to the accounting for employee share-based payment transactions, including the requirement to recognize the income tax effects of awards that vest or settle as income tax expense.  The amendments in ASU 2016-09 also clarify the presentation of certain components of share-based awards in the statement of cash flows.  ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016.  The Company adopted ASU 2016-09 in fiscal year 2018 beginning in March of 2017.  The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting.  For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

direct financing leases.  The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of fiscal year 2020. Early adoption of ASU 2016-02 is permitted.  The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which institutes a number of modifications to the reporting of financial assets and liabilities. These modifications include: (i) measurement of non-equity method assets and liabilities at fair value, with changes to fair value recognized through net income, (ii) performance of qualitative impairment assessments of equity investments without readily determinable fair values at each reporting period, (iii) elimination of the requirement to disclose methods and significant assumptions used in calculating the fair value of financial instruments measured at amortized cost, (iv) measurement of the fair value of financial instruments measured at amortized cost using the exit price notion consistent with Topic 820, Fair Value Measurement, (v) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk, (vi) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and (vii) evaluation of the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This ASU is effective for financial statements issued with fiscal years beginning after December 15, 2017, including interim periods within that reporting period.  The Company is currently evaluating the impact the adoption of ASU 2016-01 will have on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.  The standard will be effective for us in the first quarter of fiscal 2019.  The Company has completed its evaluation of the impact of this standard and has concluded that it did not have a material impact on its consolidated financial statements on the date of adoption, nor is it expected to going forward given the Company’s sales contracts.  The Company adopted the standard on March 1, 2018 and applied the modified retrospective approach.  The adoption of the guidance will result in additional disclosures regarding the Company’s revenue recognition policies beginning with the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2018.

(2) 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 North America. The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution). The Company does not typically require its customers to post a deposit or supply collateral. The Company’s allowance for 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 credit worthiness, 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. Credit losses from continuing operations have consistently been within management’s expectations.

The following table represents the activity in the Company’s allowance for doubtful receivables for the fiscal years ended (in thousands):

	2018			2017			2016
Balance at beginning of period	$	1,674		$	2,041		$	2,158
Bad debt expense, net of recoveries		(265	)		263			253
Accounts written off		(215	)		(630	)		(370	)
Balance at end of period	$	1,194		$	1,674		$	2,041

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) Inventories

The following table summarizes the components of inventories at the different stages of production as of February 28, 2018 and February 28, 2017 (in thousands):

	2018		2017
Raw material	$	15,854	$	16,130
Work-in-process		3,114		3,199
Finished goods		7,512		8,636
	$	26,480	$	27,965

The excess of current costs at FIFO over LIFO stated values was approximately $4.9 million and $4.7 million as of fiscal years ended 2018 and 2017, respectively.  During both fiscal year 2018 and 2017, as inventory quantities were reduced, this resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of fiscal year 2017 and 2016.  The effect decreased cost of sales by approximately $0.3 million, $0.2 million and $0.0 million for fiscal years 2018, 2017 and 2016, respectively.  Cost includes materials, labor and overhead related to the purchase and production of inventories.

(4) Acquisitions

On July 7, 2017, the Company acquired the assets of a tag operation located in Ohio, for $1.4 million in cash plus the assumption of certain accrued liabilities.  Management considers this acquisition immaterial.

On January 27, 2017, the Company completed the acquisition of Independent Printing Company, Inc. and its related entities (collectively “Independent”) for $17.7 million in cash consideration, in a stock purchase transaction.  The goodwill recognized as a part of this acquisition is not deductible for tax purposes.  Independent has four locations in Wisconsin, with its main facility located in DePere, Wisconsin. The business produces presentation folders, checks, wide format and commercial print. Independent, which generated approximately $37.0 million in unaudited sales during calendar year 2016, will continue to operate under its respective brand names.  Independent sells mainly through distributors and resellers. The Company now has four folder facilities in Michigan, Kansas, California and Wisconsin, as well as wide format capabilities in Colorado and Wisconsin.

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

Accounts receivable	$	4,252
Inventories		1,539
Other assets		575
Property, plant & equipment		5,526
Customer lists		3,390
Trademarks		2,408
Goodwill		6,066
Accounts payable and accrued liabilities		(6,079	)
	$	17,677

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The results of operations for Independent 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 Independent operations had been acquired as of March 1, 2016, after the estimated impact of adjustments such as amortization of intangible assets, interest expense, interest income, and related tax effects (in thousands, except per share amount):

	Unaudited
	2017
Pro forma net sales	$	390,169
Pro forma net earnings		27,249
Pro forma earnings per share from continuing operations - diluted		1.06

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

(5) Discontinued Operations

On May 25, 2016 the Company sold its Apparel Segment to Gildan Activewear Inc. for an all-cash purchase price of $110.0 million, subject to a working capital adjustment, customary indemnification arrangements, and the other terms of the Unit Purchase Agreement dated May 4, 2016.

At the time of the sale of the Company’s former apparel operations, $2.0 million of the purchase price was placed in escrow as a source of funds to pay any liabilities that arose post-closing from an employment contract with a former officer of the Company.  The Company believed in good faith, based on consultation with its advisors, that no liability existed with respect to the employment contract, and as such, recorded a receivable for the full amount of the funds held in escrow.  In January 2017, the purchaser, without notice to the Company, voluntarily paid $2.0 million to the former officer of the Company and requested that all of the escrowed funds be released to it as reimbursement.  The Company denied the request, due in part because of the purchaser’s failure to provide the Company prior notice and a right to defend as the Company believes was contractually required.  In February 2018 an arbitrator ruled that the escrow funds be released to the purchaser.  Although the Company has filed a complaint to vacate the arbitrator’s opinion, in the fourth quarter of fiscal year 2018 the Company wrote off the full amount of the receivable.

The Company recognized a tax benefit in the amount of $2.1 million related to discontinued operations during fiscal year 2018.  This includes a $0.5 million tax benefit from the write-off of the $2.0 million receivable described in the previous paragraph as well as a $1.6 million tax benefit related to the determination of the final tax basis on assets sold in the sale of the Apparel Segment in fiscal year 2017.

The operating results of these discontinued operations only reflect revenues and expenses that are directly attributable to the Apparel Segment and that have been eliminated from ongoing operations.  The following tables show the key components of the sale and discontinued operations related to the Apparel Segment that was completed on May 25, 2016 (in thousands):

Sales price	$	110,000
Carrying value of disposed		(130,174	)
Expenses related to sales (1)		(4,365	)
Loss on sale before write-off of foreign currency    translation adjustment		(24,539	)
Write-off of foreign currency translation adjustments
recorded in other comprehensive income		(16,109	)
Loss on sale of sale of discontinued operations	$	(40,648	)

(1) Includes the termination fee, in the amount of $3.0 million, paid as a result of the termination of a prior purchase agreement for the sale of the Apparel Segment to Alstyle Operations, LLC.

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	2018			2017			2016
Net sales	$	—		$	41,038		$	183,027
Income from discontinued operations before income taxes		—			3,873			5,531
Loss on sale of discontinued operations before income taxes		(2,000	)		(40,648	)		—
Income (loss) on discontinued operations before income taxes		(2,000	)		(36,775	)		5,531
Income tax (benefit) expense		(2,147	)		(12,138	)		2,053
Net income (loss) from discontinued operations	$	147		$	(24,637	)	$	3,478

(6) Goodwill and Other 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 uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.

If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded.  A goodwill impairment charge was not required for the fiscal years ended February 28, 2018 and 2017.

Beginning March 1, 2017, given the general declining trend line of print sales, and its expected continuance into the foreseeable future, the Company elected to treat the recorded value of trademarks/trade names as no longer being an indefinite-lived asset. As such, as of March 1, 2017, the Company began amortizing the carrying value of these assets over their estimated remaining useful life, approximately 17 - 19 years.  The amortization expense associated with this election increased the Company’s selling, general and administrative expense line by approximately $830,000 during fiscal year 2018.

F-16

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 February 28, 2018	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		16.0	$	19,625	$	2,408	$	17,217
Customer lists		8.1		58,040		26,039		32,001
Noncompete		1.1		175		140		35
Patent		0.4		783		782		1
Total		10.8	$	78,623	$	29,369	$	49,254
As of February 28, 2017
Amortized intangible assets
Trademarks and trade names		8.0	$	3,642	$	1,234	$	2,408
Customer lists		8.9		57,347		21,336		36,011
Noncompete		0.8		175		86		89
Patent		1.0		783		655		128
Total		8.8	$	61,947	$	23,311	$	38,636

	February 28,		February 28,
	2018		2017
Non-amortizing intangible assets
Trademarks and trade names	$	—	$	15,291

Aggregate amortization expense for each of the fiscal years 2018, 2017 and 2016 was approximately $6.1 million, $4.7 million and $4.6 million, respectively.  

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

2019	$	5,557
2020		5,475
2021		5,406
2022		5,362
2023		4,574

Changes in the net carrying amount of goodwill for fiscal years 2017 and 2018 are as follows (in thousands):

Balance as of March 1, 2016	$	64,537
Goodwill acquired		6,066
Goodwill impairment		—
Balance as of February 28, 2017		70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of February 28, 2018	$	70,603

During the fiscal year ended February 28, 2017, $6.1 million was added to goodwill related to the acquisition of Independent.  

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Other Accrued Expenses

The following table summarizes the components of other accrued expenses for the fiscal years ended (in thousands):

	February 28,		February 28,
		2018		2017
Accrued taxes	$	161	$	329
Accrued legal and professional fees		282		414
Accrued interest		143		98
Accrued utilities		148		90
Accrued acquisition related obligations		654		789
Accrued credit card fees		115		119
Other accrued expenses		168		187
	$	1,671	$	2,026

(8) Long-Term Debt

Long-term debt consisted of the following at fiscal years ended (in thousands):

	February 28, 2018		February 28, 2017
Revolving credit facility	$	30,000	$	30,000

The Company has entered into a Second Amended and Restated Credit Agreement, which has been amended from time to time, pursuant to which a credit facility has been extended to the Company ( the “Credit Facility”) until August 11, 2020 that 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 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 net leverage ratio may not exceed 3.00:1.00, (ii) the Company’s 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.  As of February 28, 2018, the Company was in compliance with all terms and conditions of its Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.0% (3 month LIBOR + 1.0%) at February 28, 2018 and 1.86% (2 month LIBOR + 1.0%) at February 28, 2017.  The rate is determined by our fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”).  As of February 28, 2018, we had $30.0 million of borrowings under the revolving credit line and $1.2 million outstanding under standby letters of credit arrangements, leaving approximately $68.8 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.

(9) Shareholders’ Equity

The Board has authorized the repurchase of up to an aggregate of $40.0 million of the Company’s outstanding common stock through a 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 fiscal year ended February 28, 2018 the Company, under the program, repurchased 191,033 shares of common stock at an average price of $17.33 per share.  Since the program’s inception in October 2008, there have been 1,442,236 common shares repurchased at an average price of $14.99 per share. As of February 28, 2018 there was $18.4 million available to repurchase shares of the Company’s common stock under the program.  Unrelated to

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ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the stock repurchase program, the Company purchased 145 shares of its common stock during the fiscal year ended February 28, 2018.

The Company’s revolving credit facility maintains certain restrictions on the amount of treasury shares that may be purchased and distributions to its shareholders.

(10) Stock Option Plan and Stock Based Compensation

The Company grants stock options and restricted stock to key executives and managerial employees and non-employee directors. At fiscal year ended 2018, the Company has one stock option plan: the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011, formerly the 1998 Option and Restricted Stock Plan amended and restated as of May 14, 2008 (the “Plan”). The Company has 529,408 shares of unissued common stock reserved under the plan for issuance. 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 years ended 2018, 2017 and 2016, the Company included in selling, general and administrative expenses, compensation expense related to share based compensation of $1.3 million, $1.4 million and $1.3 million, respectively.

Stock Options

The Company had the following stock option activity for the three years ended February 28, 2018:

						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life(inyears)		(inthousands)
Outstanding at March 1, 2015		374,823		$	15.95		5.7	$	210
Granted		43,426			13.69
Terminated		(47,300	)		18.31
Exercised		—			—
Outstanding at February 29, 2016		370,949		$	15.38		5.9	$	1,616
Granted		—			—
Terminated		(5,000	)		8.94
Exercised		(193,453	)		15.04
Outstanding at February 28, 2017		172,496		$	15.95		4.2	$	223
Granted		—			—
Terminated		—			—
Exercised		—			—
Outstanding at February 28, 2018		172,496		$	15.95		3.2	$	612
Exercisable at February 28, 2018		170,880		$	15.97		3.2	$	602

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

F-19

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

No stock options were granted during fiscal years 2018 and 2017.  The following is a summary of the assumptions used and the weighted average grant-date fair value of the stock options granted during fiscal year 2016:

	2016
Expected volatility		24.06	%
Expected term (years)	3
Risk free interest rate		0.89	%
Dividend yield		4.92	%
Weighted average grant-date fair value	$	2.24

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

	Fiscal years ended
	2018		2017		2016
Total cash received	$	—	$	2,910	$	—
Income tax benefits		—		265		(46	)
Total grant-date fair value		—		532		—
Intrinsic value		—		969		—

A summary of the status of the Company’s unvested stock options at February 28, 2017, and changes during the fiscal year ended February 28, 2018 is presented below:

				Weighted
				Average
	Number			Grant Date
	of Options			Fair Value
Unvested at March 1, 2017		5,073		$	2.41
New grants		—			—
Vested		(3,457	)		2.48
Forfeited		—			—
Unvested at February 28, 2018		1,616		$	2.24

As of February 28, 2018, there was $287 of unrecognized compensation cost related to unvested stock options granted under the Plan. The weighted average remaining requisite service period of the unvested stock options was 0.1 years. The total fair value of shares underlying the options vested during the fiscal year ended February 28, 2018 was $0.1 million.

The following table summarizes information about stock options outstanding at the end of fiscal year 2018:

	Options Outstanding						Options Exercisable
			Weighted Average		Weighted				Weighted
	Number		Remaining Contractual		Average		Number		Average
Exercise Prices	Outstanding		Life (in Years)		Exercise Price		Exercisable		Exercise Price
$8.94 to $13.69		24,848		2.3	$	9.87		23,232	$	9.60
$14.05 to $15.78		51,956		4.6		15.16		51,956		15.16
$17.57 to $18.46		95,692		2.7		17.97		95,692		17.97
		172,496		3.2		15.95		170,880		15.97

F-20

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock

The Company had the following restricted stock grants activity for each of the three fiscal years ended February 28, 2018:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2015		153,648		$	15.30
Granted		113,648			13.69
Terminated		—			—
Vested		(77,900	)		15.24
Outstanding at February 29, 2016		189,396		$	14.36
Granted		66,685			19.49
Terminated		—			—
Vested		(89,535	)		14.46
Outstanding at February 28, 2017		166,546		$	16.35
Granted		74,900			16.30
Terminated		—			—
Vested		(88,771	)		15.90
Outstanding at February 28, 2018		152,675		$	16.59

As of February 28, 2018, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.4 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.4 years.  As of February 28, 2018, the Company’s outstanding restricted stock had an underlying fair value of $2.5 million at date of grant.

(11) Pension Plan and Other Employee Benefits

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 20% of 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. The Company’s funding policy is to contribute annually an amount in accordance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).

The Company’s pension plan asset allocation, by asset category, is as follows for the fiscal years ended:

	2018			2017
Equity securities		57	%		56	%
Debt securities		42	%		38	%
Cash and cash equivalents		1	%		6	%
Total		100	%		100	%

The current asset allocation is being managed to meet the Company’s stated objective of asset growth and capital preservation.  The factor is based upon the combined judgments of the Company’s Administrative Committee and its investment advisors to meet the Company’s investment needs, objectives, and risk tolerance. The Company’s target asset allocation percentage, by asset class, for the year ended February 28, 2018 is as follows:

Asset Class	Target Allocation Percentage
Cash	1 - 5%
Fixed Income	35 - 55%
Equity	45 - 60%

F-21

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company estimates the long-term rate of return on plan assets will be 7.5% based upon target asset allocation. Expected returns are developed based upon the information obtained from the Company’s investment advisors. The advisors provide ten-year historical and five-year expected returns on the fund in the target asset allocation. The return information is weighted based upon the asset allocation at the end of the fiscal year. The expected rate of return at the beginning of the fiscal year ended 2018 was 7.5%, the rate used in the calculation of the fiscal year 2018 pension expense.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market.  The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.  These levels are:

Level 1 - Inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Inputs utilize data points that are observable such as quoted prices, interest rates and yield curves.  

Level 3 - Inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

The following tables present the Plan’s fair value hierarchy for those assets measured at fair value as of February 28, 2018 and February 28, 2017 (in thousands):

	Assets
	Measured at
	Fair Value		Fair Value Measurements
Description	at 2/28/18		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	893	$	893	$	—	$	—
Government bonds		14,005		—		14,005		—
Corporate bonds		9,609		—		9,609		—
Domestic equities		25,558		25,558		—		—
Foreign equities		6,819		6,819		—		—
	$	56,884	$	33,270	$	23,614	$	—

	Assets
	Measured at
	Fair Value		Fair Value Measurements
Description	at 2/28/17		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3,105	$	3,105	$	—	$	—
Government bonds		11,861		—		11,861		—
Corporate bonds		8,037		—		8,037		—
Domestic equities		24,777		24,777		—		—
Foreign equities		5,032		5,032		—		—
	$	52,812	$	32,914	$	19,898	$	—

Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset, including estimates of timing, amount of expected future cash flows, and the credit standing of the issuer.  In some cases, the fair value estimates cannot be substantiated by comparison to independent markets.  The disclosed fair value may not be realized in the immediate settlement of the financial asset.  In addition, the disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset.  Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed.

F-22

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 operations for fiscal years ended (in thousands):

	2018			2017			2016
Components of net periodic benefit cost
Service cost	$	1,083		$	1,166		$	1,301
Interest cost		2,270			2,372			2,369
Expected return on plan assets		(3,794	)		(3,665	)		(3,928	)
Amortization of:
Prior service cost		—			—			(86	)
Unrecognized net loss		2,041			2,683			2,551
Net periodic benefit cost		1,600			2,556			2,207
Other changes in Plan Assets and Projected    Benefit Obligation
Recognized in Other comprehensive Income
Net actuarial loss (gain)		(669	)		(723	)		2,102
Amortization of net actuarial loss		(2,041	)		(2,683	)		(2,551	)
Amortization of prior service credit		—			—			86
		(2,710	)		(3,406	)		(363	)
Total recognized in net periodic pension cost and    other comprehensive income	$	(1,110	)	$	(850	)	$	1,844

The following table represents the assumptions used to determine benefit obligations and net periodic pension cost for fiscal years ended:

	2018			2017			2016
Weighted average discount rate (net periodic    pension cost)		4.10	%		4.30	%		4.00	%
Earnings progression (net periodic pension cost)		3.00	%		3.00	%		3.00	%
Expected long-term rate of return on plan assets    (net periodic pension cost)		7.50	%		7.50	%		8.00	%
Weighted average discount rate (benefit    obligations)		4.05	%		4.10	%		4.30	%
Earnings progression (benefit obligations)		3.00	%		3.00	%		3.00	%

F-23

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the current fiscal year, the Company adopted the new MP-2017 improvement scale to determine their benefit obligations under the plan.  The accumulated benefit obligation (“ABO”), change in projected benefit obligation (“PBO”), change in plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows (in thousands):

	2018			2017
Change in benefit obligation
Projected benefit obligation at beginning of year	$	57,658		$	56,243
Service cost		1,083			1,166
Interest cost		2,270			2,372
Actuarial loss		978			2,479
Other assumption change		(423	)		(730	)
Benefits paid		(3,947	)		(3,872	)
Projected benefit obligation at end of year	$	57,619		$	57,658
Change in plan assets:
Fair value of plan assets at beginning of year	$	52,812		$	47,547
Company contributions		3,000			3,000
Gain on plan assets		5,019			6,137
Benefits paid		(3,947	)		(3,872	)
Fair value of plan assets at end of year	$	56,884		$	52,812
Unfunded status	$	(735	)	$	(4,846	)
Accumulated benefit obligation at end of year	$	53,244		$	53,590

The measurement dates used to determine pension and other postretirement benefits is the Company’s fiscal year end. The Company contributed $3.0 million during fiscal year 2018 and would expect to contribute a similar amount during fiscal year 2019.

Estimated future benefit payments which reflect expected future service, as appropriate, are expected to be paid in the fiscal years ended (in thousands):

Year	Projected Payments
2019	$	4,200
2020		4,200
2021		4,300
2022		4,200
2023		4,100
2024 - 2028		19,000

Effective February 1, 1994, the Company adopted a Defined Contribution 401(k) Plan (the “401(k) Plan”) for its United States employees. The 401(k) Plan covers substantially all full-time employees who have completed sixty days of service and attained the age of eighteen. United States employees can contribute up to 100 percent of their annual compensation, but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) Plan provides for employer matching contributions or discretionary employer contributions for certain employees not enrolled in the Pension Plan for employees of the Company. Eligibility for employer contributions, matching percentage, and limitations depends on the participant’s employment location and whether the employees are covered by the Company’s pension plan, etc. The Company’s matching contributions are immediately vested. The Company made matching 401(k) contributions in the amount of $1.2 million in each of the fiscal years ended 2018, 2017 and 2016.

In addition, the Northstar Computer Forms, Inc. 401(k) Profit Sharing Plan was merged into the 401(k) Plan on February 1, 2001. The Company declared profit sharing contributions on behalf of the former employees of Northstar Computer Forms, Inc. in accordance with its original plan in the amounts of $203,000, $228,000, and $229,000, in fiscal years ended 2018, 2017 and 2016, respectively.

F-24

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(12) Income Taxes

The following table represents components of the provision for income taxes for fiscal years ended (in thousands):

	2018			2017			2016
Current:
Federal	$	14,001		$	10,543		$	16,086
State and local		1,944			2,254			2,502
Total current		15,945			12,797			18,588
Deferred:
Federal		(1,811	)		932			342
State and local		17			(113	)		(147	)
Total deferred		(1,794	)		819			195
Total provision for income taxes	$	14,151		$	13,616		$	18,783

The Company’s effective tax rate on earnings from operations for the year ended February 28, 2018, was 30.2%, as compared to 34.0% and 36.8% in 2017 and 2016, respectively.  The following summary reconciles the statutory U.S. Federal income tax rate to the Company’s effective tax rate for the fiscal years ended:

	2018				2017				2016
Statutory rate		32.7		%		35.0		%		35.0		%
Provision for state income taxes, net of federal    income tax benefit		2.8				3.5				3.1
Domestic production activities deduction		(2.8	)			(2.5	)			(2.5	)
Valuation allowance		—				(3.4	)			0.7
Federal true-up		4.1				0.6				—
Tax Cuts and Jobs Act		(7.6	)			-				—
Other		1.0				0.8				0.5
		30.2		%		34.0		%		36.8		%

On December 22, 2017, H.R. 1, known as the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law.  Among other things, the Tax Act permanently lowers the corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018.  As a result of the reduction of the corporate tax rate to 21%, the Company has re-valued its deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment.  This change in the statutory tax rate resulted in reduction in income tax expense being recognized of $3.6 million due to the adjustment of deferred tax liabilities based on the expected prevailing tax rate at the expected time of their realization.

F-25

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred taxes are recorded to give recognition to temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements.  The tax effects of these temporary differences are recorded as deferred tax assets and deferred tax liabilities.  Deferred tax assets generally represent items that can be used as a tax deduction or credit in future years.  Deferred tax liabilities generally represent items that have been deducted for tax purposes, but have not yet been recorded in the consolidated statements of operations.  To the extent there are deferred tax assets that are more likely than not to be realized, a valuation allowance would not be recorded.  The components of deferred income tax assets and liabilities are summarized as follows (in thousands) for fiscal years ended:

Deferred tax assets	2018		2017
Allowance for doubtful receivables	$	255	$	512
Inventories		738		1,124
Employee compensation and benefits		703		1,448
Pension and noncurrent employee compensation    benefits		2,888		5,786
Net operating loss and foreign tax credits		429		438
Stock options		285		552
Total deferred tax assets	$	5,298	$	9,860
Deferred tax liabilities
Property, plant and equipment	$	4,140	$	6,979
Goodwill and other intangible assets		7,158		9,371
Property tax		158		440
Other		31		23
Total deferred tax liabilities	$	11,487	$	16,813
Net deferred income tax liabilities	$	6,189	$	6,953

As of the fiscal year ended 2018, the Company has federal net operating loss carry forwards of approximately $84,000 expiring in fiscal years 2024 through 2025.  Based on historical earnings and expected sufficient future taxable income, management believes it will be able to fully utilize the net operating loss carry forwards.

Accounting standards require a two-step approach to determine how to recognize tax benefits in the financial statements where recognition and measurement of a tax benefit must be evaluated separately.  A tax benefit will be recognized only if it meets a “more-likely-than-not” recognition threshold.  For tax positions that meet this threshold, the tax benefit recognized is based on the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the taxing authority.

At fiscal year-end 2018 and 2017, unrecognized tax benefits related to uncertain tax positions, including accrued interest and penalties of $141,000 and $249,000, respectively, are included in other liabilities on the consolidated balance sheets and would impact the effective rate if recognized. For fiscal year 2018, the unrecognized tax benefit includes an aggregate of $2,000 of interest expense.  Approximately $2,000 of unrecognized tax benefits relate to items that are affected by expiring statutes of limitations within the next 12 months.  A reconciliation of the change in the unrecognized tax benefits for fiscal years ended 2018 and 2017 is as follows (in thousands):

	2018			2017
Balance at March 1, 2017	$	249		$	225
Additions based on tax positions		(25	)		99
Reductions due to lapses of statues of limitations		(83	)		(75	)
Balance at February 28, 2018	$	141		$	249

The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions and foreign tax jurisdictions.  The Company has concluded all U.S. Federal income tax matters for years through 2013.All material state and local income tax matters have been concluded for years through 2013 and foreign tax jurisdictions through 2013.

F-26

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recognizes interest expense on underpayments of income taxes and accrued penalties related to unrecognized non-current tax benefits as part of the income tax provision.  Other than amounts included in the unrecognized tax benefits, the Company did not recognize any interest or penalties for the fiscal years ended 2018, 2017 and 2016.

(13) Earnings per Share

Basic earnings (loss) per share have been computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the applicable period. Diluted earnings (loss) 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.  

The following table sets forth the computation for basic and diluted earnings (loss) per share for the fiscal years ended:

	2018		2017			2016
Basic weighted average common shares outstanding		25,391,998		25,734,667			25,688,273
Effect of dilutive options		25,246		14,518			34,094
Diluted weighted average common shares outstanding		25,417,244		25,749,185			25,722,367
Earnings (loss) per share - basic and diluted
Earnings per share on continuing operations	$	1.29	$	1.03		$	1.25
Earnings (loss) per share on discontinued operations		0.01		(0.96	)		0.14
Net earnings	$	1.30	$	0.07		$	1.39
Cash dividends	$	0.875	$	2.20		$	0.70

The Company treats unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share.  Our unvested restricted shares participate on an equal basis with common shares; therefore, there is no difference in undistributed earnings allocated to each participating security.  Accordingly, the presentation above is prepared on a combined basis.  At fiscal year-end 2017 and 2016, 42,500 and 145,243 stock options, respectively,  were excluded from the calculation above, as their effect would be anti-dilutive.  For fiscal year 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.

(14) Commitments and Contingencies

The Company leases certain of its facilities under operating leases that expire on various dates through fiscal year ended 2023. Future minimum lease commitments under non-cancelable operating leases for each of the fiscal years ending are as follows (in thousands):

	Operating
	Lease
	Commitments
2019	$	4,277
2020		3,459
2021		1,979
2022		1,116
2023		857
Thereafter		1,250
	$	12,938

Rent expense attributable to such leases totaled $5.3 million, $4.3 million, and $4.8 million for the fiscal years ended 2018, 2017 and 2016, respectively.

F-27

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the ordinary course of business, the Company also enters into real property leases, which require the Company as lessee to indemnify the lessor from liabilities arising out of the Company’s occupancy of the properties. The Company’s indemnification obligations are generally covered under the Company’s general insurance policies.

From time to time, the Company is involved in various litigation matters arising in the ordinary course of business. The Company does not believe the disposition of any current matter will have a material adverse effect on its consolidated financial position or results of operations.

(15) Supplemental Cash Flow Information

Net cash flows from operating activities reflect cash payments for interest and income taxes as follows for the three fiscal years ended (in thousands):

		2018		2017		2016
Interest paid	$	731	$	853	$	1,623
Income taxes paid	$	15,468	$	975	$	18,980
Reclassification of the income tax effects of the Tax Act for the pension plan	$	2,847	$	—	$	—

(16) Quarterly Consolidated Financial Information (Unaudited)

The following table represents the unaudited quarterly financial data of the Company for fiscal years ended 2018 and 2017 (in thousands, except per share amounts and quarter over quarter comparison):

For the three months ended	May 31		August 31		November 30		February 28
Fiscal year ended 2018:
Net sales	$	94,590	$	94,887	$	93,606	$	87,088
Gross profit margin		29,919		30,787		29,884		26,324
Net earnings		7,784		8,540		8,274		8,160
Dividends paid		4,468		5,084		5,083		7,625
Per share of common stock:
Basic net earnings	$	0.31	$	0.34	$	0.33	$	0.32
Diluted net earnings	$	0.31	$	0.34	$	0.33	$	0.32
Dividends	$	0.175	$	0.200	$	0.200	$	0.300
Fiscal year ended 2017:
Net sales	$	90,410	$	91,246	$	88,660	$	86,572
Gross profit margin		26,694		27,038		25,292		24,926
Net earnings		6,683		6,784		5,740		7,210
Dividends paid		4,530		43,657		4,537		4,476
Per share of common stock:
Basic net earnings	$	0.26	$	0.26	$	0.22	$	0.28
Diluted net earnings	$	0.26	$	0.26	$	0.22	$	0.28
Dividends	$	0.175	$	1.675	$	0.175	$	0.175

(17) 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.

No single customer accounts for as much as five percent of the Company’s consolidated net sales or accounts receivable.

F-28

ENNIS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 (“FDIC”) insures accounts up to $250,000.  At February 28, 2018, cash balances included $95.3 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, we cannot be assured that we will not experience losses on our deposits.

(18) Subsequent Events

On April 30, 2018, the Company, through one of its subsidiaries, acquired the assets of Allen-Bailey Tag and Label of Caledonia, New York, for $4.75 million in cash plus the assumption of trade payables.  Allen-Bailey produces tags and labels for the fire safety and agriculture industries.  This will enable the Company to expand its geographic presence of tags and labels into the eastern seaboard of the United States.

F-29

EX-21

Exhibit 21

Subsidiaries of the Registrant

The Registrant directly or indirectly owns 100 percent of the outstanding voting securities of the following subsidiary companies.

Name of Company	Jurisdiction
Ennis, Inc.	Texas
Ennis Business Forms of Kansas, Inc.	Kansas
Calibrated Forms Co., Inc.	Kansas
Platinum Canoe, Inc.	Delaware
Admore, Inc.	Texas
PFC Products, Inc.(1)	Delaware
Ennis Acquisitions, Inc.	Nevada
Texas EBF, LP	Texas
Ennis Sales, LP	Texas
Ennis Management, LP	Texas
Adams McClure, LP	Texas
American Forms I, LP	Texas
Northstar Computer Forms, Inc.	Minnesota
General Financial Supply, Inc. (2)	Iowa
Crabar/GBF, Inc.	Delaware
Royal Business Forms, Inc.	Texas
Tennessee Business Forms Company	Tennessee
TBF Realty, LLC (3)	Delaware
Specialized Printed Forms, Inc.	New York
SPF Realty, LLC (4)	Delaware
Block Graphics, Inc.	Oregon
B&D Litho of Arizona, Inc.	Delaware
Skyline Business Forms, Inc.	Delaware
Skyline Business Properties, LLC (5)	Delaware
PrintGraphics, LLC (6)	Ohio
Kay Toledo Tag	Ohio
Specialized Service Partners	Wisconsin
American Paper Converting LLC	Ohio
Independent Printing Company, Inc.	Delaware

(1) A wholly-owned subsidiary of Admore, Inc.

(2) A wholly-owned subsidiary of Northstar Computer Forms, Inc.

(3) A wholly-owned subsidiary of Tennessee Business Forms, Inc.

(4) A wholly-owned subsidiary of Specialized Printed Forms, Inc.

(5) A wholly-owned subsidiary of Skyline Business Forms, Inc.

(6) A wholly-owned subsidiary of Crabar/GBF, Inc.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated May 11, 2018, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of Ennis, Inc. on Form 10-K for the year ended February 28, 2018.  We consent to the incorporation by reference of said reports in the Registration Statements of Ennis, Inc. on Form S-3 (File No. 333-120752), on Form S-4 (File No. 333-118786), and on Forms S-8 (File No. 333-58963, File No. 333-38100, File No. 333-44624, File No. 333‑119845 and File No. 333-175261).

/s/ GRANT THORNTON LLP

Dallas, Texas

May 11, 2018

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Keith S. Walters, certify that:

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

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4. The Registrant's other certifying officers 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 13-15(f) and 15d-15(f) for the Registrant and we 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 annual 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 the 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 annual report based on such evaluation; and

d) Disclosed in this annual 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 fourth fiscal quarter in the case of an annual report) 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 officers 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

Chairman of the Board, Chief Executive Officer and President

May 11, 2018

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Richard L. Travis, Jr., certify that:

1) I have reviewed this annual report on Form 10-K of Ennis, Inc.;

2) Based on my knowledge, this annual 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 annual report;

3) Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4) The Registrant's other certifying officers 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 13-15(f) and 15d-15(f) for the Registrant and we 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 annual 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 the 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 annual report based on such evaluation; and

d) Disclosed in this annual 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 fourth fiscal quarter in the case of an annual report) 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 officers 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.

Vice President - Finance and Chief Financial Officer

May 11, 2018

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 Company’s Annual Report on Form 10-K for the year ended February 28, 2018, as filed with the Securities Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and result 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, Chief Executive Officer and President

May 11, 2018

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 Company’s Annual Report on Form 10-K for the year ended February 28, 2018, as filed with the Securities Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and result 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.

Vice President – Finance and Chief Financial Officer

May 11, 2018

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 - USD ($) $ in Millions	12 Months Ended
	Feb. 28, 2018	Apr. 30, 2018	Aug. 31, 2017
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Feb. 28, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	EBF
Entity Registrant Name	ENNIS, INC.
Entity Central Index Key	0000033002
Current Fiscal Year End Date	--02-28
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,489,502
Entity Public Float			$ 467

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017
Current assets
Cash	$ 96,230	$ 80,466
Accounts receivable, net of allowance for doubtful receivables of $1,194 at February 28, 2018 and $1,674 at February 28, 2017	35,654	37,368
Prepaid expenses	1,305	1,351
Prepaid income taxes	3,600	855
Inventories	26,480	27,965
Assets held for sale	75	1,245
Total current assets	163,344	149,250
Property, plant and equipment
Plant, machinery and equipment	133,222	136,584
Land and buildings	54,318	53,821
Other	23,208	23,644
Total property, plant and equipment	210,748	214,049
Less accumulated depreciation	164,840	164,054
Net property, plant and equipment	45,908	49,995
Goodwill	70,603	70,603
Intangible assets, net	49,254	53,927
Other assets	330	510
Total assets	329,439	324,285
Current liabilities
Accounts payable	12,168	14,202
Accrued expenses
Employee compensation and benefits	15,597	13,515
Taxes other than income	135	225
Other	1,671	2,026
Total current liabilities	29,571	29,968
Long-term debt	30,000	30,000
Liability for pension benefits	735	4,846
Deferred income taxes	6,189	6,953
Other liabilities	1,240	1,163
Total liabilities	67,735	72,930
Commitments and contingencies
Shareholders’ equity
Preferred stock $10 par value, authorized 1,000,000 shares; none issued
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at February 28, 2018 and 2017	75,134	75,134
Additional paid-in capital	121,333	121,525
Retained earnings	164,177	150,685
Accumulated other comprehensive income (loss):
Minimum pension liability, net of taxes	(16,428)	(15,261)
Total accumulated other comprehensive income (loss)	(16,428)	(15,261)
Treasury stock	(82,512)	(80,728)
Total shareholders’ equity	261,704	251,355
Total liabilities and shareholders' equity	$ 329,439	$ 324,285

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017
Statement Of Financial Position [Abstract]
Allowance for doubtful receivables	$ 1,194	$ 1,674
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

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Income Statement [Abstract]
Net sales	$ 370,171	$ 356,888	$ 385,946
Cost of goods sold	253,257	252,938	269,636
Gross profit margin	116,914	103,950	116,310
Selling, general and administrative	69,451	63,147	65,743
(Gain) loss from disposal of assets	162	278	(479)
Income from operations	47,301	40,525	51,046
Other income (expense)
Interest expense	(777)	(613)
Other, net	385	121	(5)
Total other income (expense)	(392)	(492)	(5)
Earnings from continuing operations before income taxes	46,909	40,033	51,041
Income tax expense	14,151	13,616	18,783
Earnings from continuing operations	32,758	26,417	32,258
Earnings (loss) from discontinued operations, net of tax	147	(24,637)	3,478
Net earnings	$ 32,905	$ 1,780	$ 35,736
Weighted average common shares outstanding
Basic	25,391,998	25,734,667	25,688,273
Diluted	25,417,244	25,749,185	25,722,367
Earnings (loss) per share - basic and diluted
Continuing operations	$ 1.29	$ 1.03	$ 1.25
Discontinued operations	0.01	(0.96)	0.14
Net earnings	1.30	0.07	1.39
Cash dividends per share	$ 0.875	$ 2.20	$ 0.70

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 32,905	$ 1,780	$ 35,736
Foreign currency translation adjustment, net of deferred taxes		9,940	(5,313)
Adjustment to pension, net of deferred taxes	1,680	2,084	225
Comprehensive income	$ 34,585	$ 13,804	$ 30,648

XML

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, 2015	$ 284,680	$ 75,134	$ 121,687	$ 188,413	$ (22,197)	$ (78,357)
Beginning balance common stock, shares at Feb. 28, 2015		30,053,443
Beginning balance, treasury stock, shares at Feb. 28, 2015						(4,514,905)
Net earnings	35,736			35,736
Foreign currency translation, net of deferred tax of $3,254 and $6,087 respectively	(5,313)				(5,313)
Adjustment to pension, net of deferred tax of $138 and $1,276 respectively	225				225
Dividends paid ($0.70, $2.20 and $0.875 per share respectively)	(18,044)			(18,044)
Excess tax benefit of stock option exercises and restricted stock grants	(46)		(46)
Stock based compensation	1,308		1,308
Exercise of stock options and restricted stock			(1,352)			$ 1,352
Exercise of stock options and restricted stock, shares						77,900
Ending balance at Feb. 29, 2016	298,546	$ 75,134	121,597	206,105	(27,285)	$ (77,005)
Ending balance common stock, shares at Feb. 29, 2016		30,053,443
Ending balance treasury stock, shares at Feb. 29, 2016						(4,437,005)
Net earnings	1,780			1,780
Foreign currency translation, net of deferred tax of $3,254 and $6,087 respectively	9,940				9,940
Adjustment to pension, net of deferred tax of $138 and $1,276 respectively	2,084				2,084
Dividends paid ($0.70, $2.20 and $0.875 per share respectively)	(57,200)			(57,200)
Excess tax benefit of stock option exercises and restricted stock grants	265		265
Stock based compensation	1,361		1,361
Stock based compensation allocated to loss on sale of discontinued operations	112		112
Exercise of stock options and restricted stock	2,910		(1,810)			$ 4,720
Exercise of stock options and restricted stock, shares						282,988
Common stock repurchases	(8,443)					$ (8,443)
Common stock repurchases, shares						(532,804)
Ending balance at Feb. 28, 2017	$ 251,355	$ 75,134	121,525	150,685	(15,261)	$ (80,728)
Ending balance common stock, shares at Feb. 28, 2017	30,053,443	30,053,443
Ending balance treasury stock, shares at Feb. 28, 2017						(4,686,821)
Net earnings	$ 32,905			32,905
Adjustment to pension, net of deferred tax of $138 and $1,276 respectively	1,680
Adjustment to pension (net of deferred tax of $715) and reclassification of the income tax effects of the US Tax Cuts and Jobs Act	1,680			2,847	(1,167)
Dividends paid ($0.70, $2.20 and $0.875 per share respectively)	(22,260)			(22,260)
Stock based compensation	1,337		1,337
Exercise of stock options and restricted stock			(1,529)			$ 1,529
Exercise of stock options and restricted stock, shares						88,771
Common stock repurchases	$ (3,313)					$ (3,313)
Common stock repurchases, shares	(191,033)					(191,178)
Ending balance at Feb. 28, 2018	$ 261,704	$ 75,134	$ 121,333	$ 164,177	$ (16,428)	$ (82,512)
Ending balance common stock, shares at Feb. 28, 2018	30,053,443	30,053,443
Ending balance treasury stock, shares at Feb. 28, 2018						(4,789,228)

XML

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Statement Of Stockholders Equity [Abstract]
Deferred tax adjusted to foreign currency translation		$ 6,087	$ 3,254
Deferred tax adjusted to pension	$ 1,030	$ 1,276	$ 138
Dividends paid per share	$ 0.875	$ 2.20	$ 0.70

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Cash flows from operating activities:
Net earnings	$ 32,905	$ 1,780	$ 35,736
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	8,033	7,934	7,798
Amortization of deferred finance charges	114	65
Amortization of intangible assets	6,058	4,673	4,555
Pre-tax loss from discontinued operations	2,000	36,775
Operating cash flows of discontinued operations		538	38,508
(Gain) loss from disposal of assets	162	278	(479)
Bad debt expense, net of recoveries	(265)	263	253
Stock based compensation	1,337	1,361	1,308
Excess tax benefit of stock based compensation		(265)	46
Deferred income taxes	(1,794)	4,359	(5,457)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable	(21)	3,315	4,166
Prepaid expenses and income taxes	(2,699)	1,134	1,887
Inventories	1,566	1,428	318
Other current assets			228
Other assets	65	(589)
Accounts payable and accrued expenses	(847)	(140)	(701)
Other liabilities	76	(3,579)	(689)
Liability for pension benefits	(1,400)	(443)	(793)
Net cash provided by operating activities	45,290	58,887	86,684
Cash flows from investing activities:
Capital expenditures	(2,667)	(3,065)	(4,227)
Purchase of businesses, net of cash acquired	(1,350)	(18,584)	(331)
Proceeds from sale of discontinued operations		107,354
Investing cash flows of discontinued operations		(279)	(596)
Proceeds from disposal of plant and property	64	664	1,038
Net cash provided by (used in) investing activities	(3,953)	86,090	(4,116)
Cash flows from financing activities:
Repayment of debt		(10,000)	(59,010)
Dividends paid	(22,260)	(57,200)	(18,044)
Financing cash flows of discontinued operations			(7,490)
Common stock repurchases	(3,313)	(8,443)
Proceeds from exercise of stock options		2,910
Excess tax benefit of stock based compensation		265	(46)
Net cash used in financing activities	(25,573)	(72,468)	(84,590)
Effect of exchange rate changes on cash			(3,378)
Net change in cash	15,764	72,509	(5,400)
Cash at beginning of period	80,466	7,957	13,357
Cash at end of period	$ 96,230	$ 80,466	$ 7,957

XML

Significant Accounting Policies and General Matters

12 Months Ended

Feb. 28, 2018

Accounting Policies [Abstract]

Significant Accounting Policies and General Matters

(1)Significant Accounting Policies and General Matters

Nature of Operations. Ennis, Inc. and its wholly owned subsidiaries (collectively, the “Company”) are principally engaged in the production of and sale of business forms and other business products to customers primarily located in the United States.

Basis of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company’s last three fiscal years ended on the following days: February 28, 2018, February 28, 2017 and February 29, 2016 (fiscal years ended 2018, 2017 and 2016, respectively).

Accounts Receivable. Trade receivables are uncollateralized customer obligations due under normal trade terms requiring payment generally within 30 days from the invoice date. The Company’s allowance for doubtful receivables reserve is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible. This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends.

Inventories. With the exception of approximately 12.9% and 12.8% of its inventories valued at the lower of last-in, first-out (LIFO) for fiscal years 2018 and 2017, respectively, the Company values its inventories at the lower of first-in, first-out (FIFO) cost or net realizable value.  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 Company provides reserves for excess and obsolete inventory when necessary based upon analysis of quantities on hand, recent sales volumes and reference to market prices. Reserves for excess and obsolete inventory at fiscal years ended 2018 and 2017 were $0.8 million and $0.8 million, respectively.

Property, Plant and Equipment. Depreciation of property, plant and equipment is calculated using the straight-line method over a period considered adequate to amortize the total cost over the useful lives of the assets, which range from 3 to 11 years for machinery and equipment and 10 to 33 years for buildings and improvements. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Repairs and maintenance are expensed as incurred. Renewals and betterments are capitalized and depreciated over the remaining life of the specific property unit. The Company capitalizes all leases that are in substance acquisitions of property.  As of February 28, 2018, the Company had building and improvements of approximately $0.1 million classified as assets held for sale on the consolidated balance sheet.

Goodwill and Other Intangible Assets. Goodwill is the excess of the purchase price paid over the value of net assets of businesses acquired and is not amortized. Intangible assets are amortized on a straight-line basis over their estimated useful lives.  Goodwill is evaluated for impairment on an annual basis, or more frequently if impairment indicators arise, using a fair-value-based test that compares the fair value of the related business unit to its carrying value.

Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is based upon the fair value of assets.

Fair Value of Financial Instruments. The carrying amounts of cash, accounts receivables, and accounts payable approximate fair value because of the short maturity and/or variable rates associated with these instruments.  Long-term debt as of fiscal years ended 2018 and 2017 approximates its fair value as the interest rate is tied to market rates.  

Treasury Stock. The Company accounts for repurchases of common stock using the cost method with common stock in treasury classified in the Consolidated Balance Sheets as a reduction of shareholders’ equity.

Deferred Finance Charges. Deferred finance charges in connection with the Company’s revolving credit facility are amortized to interest expense over the term of the facility using the straight-line method. If the facility is extinguished before the end of the term, the remaining balance of the deferred finance charges will be amortized fully in such year.

Revenue Recognition. We recognize revenues from product sales upon shipment to the customer if the terms of the sale are freight on board (“FOB”) shipping point (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon shipping) or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon delivery).  Net sales represent gross sales invoiced to customers, less certain related charges, including sales tax, discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant. In some cases and upon customer request, the Company prints and stores custom print product for customer specified future delivery, generally within twelve months. In this case, risk of loss passes to the customer, the customer is invoiced under normal credit terms, and revenue is recognized when manufacturing is complete. Approximately $9.7 million, $10.7 million and $12.9 million of revenue was recognized under these arrangements during fiscal years 2018, 2017 and 2016, respectively.

Advertising Expenses. The Company expenses advertising costs as incurred. Catalog and brochure preparation and printing costs, which are considered direct response advertising, are amortized to expense over the life of the catalog, which typically ranges from three to twelve months. Advertising expense was approximately $0.9 million, $0.6 million and $0.6 million during the fiscal years ended 2018, 2017 and 2016, respectively, and is included in selling, general and administrative expenses in the Consolidated Statements of Operations.  Included in this advertising expense is amortization related to direct response advertising of approximately $0.2 million, $0.1 million, and $0.2 million for the fiscal years ended 2018, 2017 and 2016, respectively.  Unamortized direct advertising costs included in prepaid expenses at fiscal years ended 2018, 2017 and 2016 were approximately $0.1 million, $0.2 million, and $0.3 million, respectively.

Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings Per Share. Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding, and then adding the number of additional shares that would have been outstanding if potentially dilutive securities had been issued.  This is calculated using the treasury stock method.  At year-end 2017 and 2016, there were 42,500 and 145,243 options, respectively, not included in the diluted earnings per share computation because their effect was anti-dilutive.  For fiscal year 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.

Accumulated Other Comprehensive Loss. Accumulated other comprehensive loss is defined as the change in equity resulting from transactions from non-owner sources.  Other comprehensive income consisted of changes in the following:  changes in the funded status of the Company’s pension plan and the election to reclassify the stranded income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

Foreign Currency Translation. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations in other expense, net as incurred. Transaction losses totaled approximately $7,000, $22,000, and $7,000 for fiscal years ended 2018, 2017 and 2016, respectively.

Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Shipping and Handling Costs. The Company records amounts billed to customers for shipping and handling costs in net sales and related costs are included in cost of goods sold.

Stock Based Compensation. The Company recognizes stock based compensation expense net of estimated forfeitures over the requisite service period of the individual grants, which generally equals the vesting period.  Estimated forfeiture rates are derived from our historical forfeitures of similar awards.  The fair value of all share based awards is estimated on the date of grant.  

Recent Accounting Pronouncements

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which permits the reclassification of tax effects stranded in accumulated other comprehensive income to retained earnings as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).  ASU 2018-02 is effective in the first quarter of fiscal year 2019, however, early adoption is permitted for annual periods, including the reporting period in which the Tax Act was enacted.  The Company early adopted this standard in fiscal year 2018, which resulted in $2.8 million reclassified from other comprehensive income to retained earnings.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).  The update requires the service cost component of net benefit costs to be reported in the same line of the income statement as other compensation costs and the other components of net benefit costs (non-service costs) to be presented separately from the service cost component, outside a subtotal of operating income.  Additionally, only the service cost component of net benefit costs will be eligible for capitalization.  The update is required to be adopted the first quarter of fiscal year 2019 and is required to be retrospectively adopted.  The Company is currently evaluating the impact the adoption of ASU 2017-07 will have on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies how an entity is required to measure goodwill impairment.  The amendments in ASU 2017-04 require that goodwill impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit and the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.  The amendments in ASU 2017-04 should be applied on a prospective basis and are effective for annual or any interim goodwill impairment tests in annual reporting periods beginning after December 15, 2019.  The Company adopted ASU 2017-04 on June 1, 2017, which had no impact on the Company’s consolidated financial statements at the time of adoption.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) (“ASU 2016-09”), which makes several modifications to the accounting for employee share-based payment transactions, including the requirement to recognize the income tax effects of awards that vest or settle as income tax expense.  The amendments in ASU 2016-09 also clarify the presentation of certain components of share-based awards in the statement of cash flows.  ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016.  The Company adopted ASU 2016-09 in fiscal year 2018 beginning in March of 2017.  The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting.  For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases.  The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of fiscal year 2020.  Early adoption of ASU 2016-02 is permitted.  The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which institutes a number of modifications to the reporting of financial assets and liabilities. These modifications include: (i) measurement of non-equity method assets and liabilities at fair value, with changes to fair value recognized through net income, (ii) performance of qualitative impairment assessments of equity investments without readily determinable fair values at each reporting period, (iii) elimination of the requirement to disclose methods and significant assumptions used in calculating the fair value of financial instruments measured at amortized cost, (iv) measurement of the fair value of financial instruments measured at amortized cost using the exit price notion consistent with Topic 820, Fair Value Measurement, (v) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk, (vi) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and (vii) evaluation of the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This ASU is effective for financial statements issued with fiscal years beginning after December 15, 2017, including interim periods within that reporting period.  The Company is currently evaluating the impact the adoption of ASU 2016-01 will have on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.  The standard will be effective for us in the first quarter of fiscal 2019.  The Company has completed its evaluation of the impact of this standard and has concluded that it did not have a material impact on its consolidated financial statements on the date of adoption, nor is it expected to going forward given the Company’s sales contracts.  The Company adopted the standard on March 1, 2018 and applied the modified retrospective approach.  The adoption of the guidance will result in additional disclosures regarding the Company’s revenue recognition policies beginning with the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2018.

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Accounts Receivable and Allowance for Doubtful Receivables

12 Months Ended

Feb. 28, 2018

Receivables [Abstract]

Accounts Receivable and Allowance for Doubtful Receivables

(2) 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 North America. The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution). The Company does not typically require its customers to post a deposit or supply collateral. The Company’s allowance for 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 credit worthiness, 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. Credit losses from continuing operations have consistently been within management’s expectations.

The following table represents the activity in the Company’s allowance for doubtful receivables for the fiscal years ended (in thousands):

	2018			2017			2016
Balance at beginning of period	$	1,674		$	2,041		$	2,158
Bad debt expense, net of recoveries		(265	)		263			253
Accounts written off		(215	)		(630	)		(370	)
Balance at end of period	$	1,194		$	1,674		$	2,041

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Inventories

12 Months Ended

Feb. 28, 2018

Inventory Disclosure [Abstract]

Inventories

(3) Inventories

The following table summarizes the components of inventories at the different stages of production as of February 28, 2018 and February 28, 2017 (in thousands):

	2018		2017
Raw material	$	15,854	$	16,130
Work-in-process		3,114		3,199
Finished goods		7,512		8,636
	$	26,480	$	27,965

The excess of current costs at FIFO over LIFO stated values was approximately $4.9 million and $4.7 million as of fiscal years ended 2018 and 2017, respectively.  During both fiscal year 2018 and 2017, as inventory quantities were reduced, this resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of fiscal year 2017 and 2016.  The effect decreased cost of sales by approximately $0.3 million, $0.2 million and $0.0 million for fiscal years 2018, 2017 and 2016, respectively.  Cost includes materials, labor and overhead related to the purchase and production of inventories.

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Acquisitions

12 Months Ended

Feb. 28, 2018

Business Combinations [Abstract]

Acquisitions

(4) Acquisitions

On July 7, 2017, the Company acquired the assets of a tag operation located in Ohio, for $1.4 million in cash plus the assumption of certain accrued liabilities.  Management considers this acquisition immaterial.

On January 27, 2017, the Company completed the acquisition of Independent Printing Company, Inc. and its related entities (collectively “Independent”) for $17.7 million in cash consideration, in a stock purchase transaction.  The goodwill recognized as a part of this acquisition is not deductible for tax purposes.  Independent has four locations in Wisconsin, with its main facility located in DePere, Wisconsin. The business produces presentation folders, checks, wide format and commercial print. Independent, which generated approximately $37.0 million in unaudited sales during calendar year 2016, will continue to operate under its respective brand names.  Independent sells mainly through distributors and resellers. The Company now has four folder facilities in Michigan, Kansas, California and Wisconsin, as well as wide format capabilities in Colorado and Wisconsin.

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

Accounts receivable	$	4,252
Inventories		1,539
Other assets		575
Property, plant & equipment		5,526
Customer lists		3,390
Trademarks		2,408
Goodwill		6,066
Accounts payable and accrued liabilities		(6,079	)
	$	17,677

The results of operations for Independent 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 Independent operations had been acquired as of March 1, 2016, after the estimated impact of adjustments such as amortization of intangible assets, interest expense, interest income, and related tax effects (in thousands, except per share amount):

	Unaudited
	2017
Pro forma net sales	$	390,169
Pro forma net earnings		27,249
Pro forma earnings per share from continuing operations - diluted		1.06

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

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Discontinued Operations

12 Months Ended

Feb. 28, 2018

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

(5) Discontinued Operations

On May 25, 2016 the Company sold its Apparel Segment to Gildan Activewear Inc. for an all-cash purchase price of $110.0 million, subject to a working capital adjustment, customary indemnification arrangements, and the other terms of the Unit Purchase Agreement dated May 4, 2016.

At the time of the sale of the Company’s former apparel operations, $2.0 million of the purchase price was placed in escrow as a source of funds to pay any liabilities that arose post-closing from an employment contract with a former officer of the Company.  The Company believed in good faith, based on consultation with its advisors, that no liability existed with respect to the employment contract, and as such, recorded a receivable for the full amount of the funds held in escrow.  In January 2017, the purchaser, without notice to the Company, voluntarily paid $2.0 million to the former officer of the Company and requested that all of the escrowed funds be released to it as reimbursement.  The Company denied the request, due in part because of the purchaser’s failure to provide the Company prior notice and a right to defend as the Company believes was contractually required.  In February 2018 an arbitrator ruled that the escrow funds be released to the purchaser.  Although the Company has filed a complaint to vacate the arbitrator’s opinion, in the fourth quarter of fiscal year 2018 the Company wrote off the full amount of the receivable.

The Company recognized a tax benefit in the amount of $2.1 million related to discontinued operations during fiscal year 2018.  This includes a $0.5 million tax benefit from the write-off of the $2.0 million receivable described in the previous paragraph as well as a $1.6 million tax benefit related to the determination of the final tax basis on assets sold in the sale of the Apparel Segment in fiscal year 2017.

The operating results of these discontinued operations only reflect revenues and expenses that are directly attributable to the Apparel Segment and that have been eliminated from ongoing operations.  The following tables show the key components of the sale and discontinued operations related to the Apparel Segment that was completed on May 25, 2016 (in thousands):

Sales price	$	110,000
Carrying value of disposed		(130,174	)
Expenses related to sales (1)		(4,365	)
Loss on sale before write-off of foreign currency    translation adjustment		(24,539	)
Write-off of foreign currency translation adjustments
recorded in other comprehensive income		(16,109	)
Loss on sale of sale of discontinued operations	$	(40,648	)

(1) Includes the termination fee, in the amount of $3.0 million, paid as a result of the termination of a prior purchase agreement for the sale of the Apparel Segment to Alstyle Operations, LLC.

	2018			2017			2016
Net sales	$	—		$	41,038		$	183,027
Income from discontinued operations before income taxes		—			3,873			5,531
Loss on sale of discontinued operations before income taxes		(2,000	)		(40,648	)		—
Income (loss) on discontinued operations before income taxes		(2,000	)		(36,775	)		5,531
Income tax (benefit) expense		(2,147	)		(12,138	)		2,053
Net income (loss) from discontinued operations	$	147		$	(24,637	)	$	3,478

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Goodwill and Other Intangible Assets

12 Months Ended

Feb. 28, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

(6) Goodwill and Other 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 uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.

If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded.  A goodwill impairment charge was not required for the fiscal years ended February 28, 2018 and 2017.

Beginning March 1, 2017, given the general declining trend line of print sales, and its expected continuance into the foreseeable future, the Company elected to treat the recorded value of trademarks/trade names as no longer being an indefinite-lived asset. As such, as of March 1, 2017, the Company began amortizing the carrying value of these assets over their estimated remaining useful life, approximately 17 - 19 years.  The amortization expense associated with this election increased the Company’s selling, general and administrative expense line by approximately $830,000 during fiscal year 2018.

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 February 28, 2018	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		16.0	$	19,625	$	2,408	$	17,217
Customer lists		8.1		58,040		26,039		32,001
Noncompete		1.1		175		140		35
Patent		0.4		783		782		1
Total		10.8	$	78,623	$	29,369	$	49,254
As of February 28, 2017
Amortized intangible assets
Trademarks and trade names		8.0	$	3,642	$	1,234	$	2,408
Customer lists		8.9		57,347		21,336		36,011
Noncompete		0.8		175		86		89
Patent		1.0		783		655		128
Total		8.8	$	61,947	$	23,311	$	38,636

	February 28,		February 28,
	2018		2017
Non-amortizing intangible assets
Trademarks and trade names	$	—	$	15,291

Aggregate amortization expense for each of the fiscal years 2018, 2017 and 2016 was approximately $6.1 million, $4.7 million and $4.6 million, respectively.  

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

2019	$	5,557
2020		5,475
2021		5,406
2022		5,362
2023		4,574

Changes in the net carrying amount of goodwill for fiscal years 2017 and 2018 are as follows (in thousands):

Balance as of March 1, 2016	$	64,537
Goodwill acquired		6,066
Goodwill impairment		—
Balance as of February 28, 2017		70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of February 28, 2018	$	70,603

During the fiscal year ended February 28, 2017, $6.1 million was added to goodwill related to the acquisition of Independent.  

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Other Accrued Expenses

12 Months Ended

Feb. 28, 2018

Payables And Accruals [Abstract]

Other Accrued Expenses

(7) Other Accrued Expenses

The following table summarizes the components of other accrued expenses for the fiscal years ended (in thousands):

	February 28,		February 28,
		2018		2017
Accrued taxes	$	161	$	329
Accrued legal and professional fees		282		414
Accrued interest		143		98
Accrued utilities		148		90
Accrued acquisition related obligations		654		789
Accrued credit card fees		115		119
Other accrued expenses		168		187
	$	1,671	$	2,026

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Long-Term Debt

12 Months Ended

Feb. 28, 2018

Debt Disclosure [Abstract]

Long-Term Debt

(8) Long-Term Debt

Long-term debt consisted of the following at fiscal years ended (in thousands):

	February 28, 2018		February 28, 2017
Revolving credit facility	$	30,000	$	30,000

The Company has entered into a Second Amended and Restated Credit Agreement, which has been amended from time to time, pursuant to which a credit facility has been extended to the Company ( the “Credit Facility”) until August 11, 2020 that 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 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 net leverage ratio may not exceed 3.00:1.00, (ii) the Company’s 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.  As of February 28, 2018, the Company was in compliance with all terms and conditions of its Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.0% (3 month LIBOR + 1.0%) at February 28, 2018 and 1.86% (2 month LIBOR + 1.0%) at February 28, 2017.  The rate is determined by our fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”).  As of February 28, 2018, we had $30.0 million of borrowings under the revolving credit line and $1.2 million outstanding under standby letters of credit arrangements, leaving approximately $68.8 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.

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Shareholders' Equity

12 Months Ended

Feb. 28, 2018

Equity [Abstract]

Shareholders' Equity

(9) Shareholders’ Equity

The Board has authorized the repurchase of up to an aggregate of $40.0 million of the Company’s outstanding common stock through a 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 fiscal year ended February 28, 2018 the Company, under the program, repurchased 191,033 shares of common stock at an average price of $17.33 per share.  Since the program’s inception in October 2008, there have been 1,442,236 common shares repurchased at an average price of $14.99 per share. As of February 28, 2018 there was $18.4 million available to repurchase shares of the Company’s common stock under the program.  Unrelated to the stock repurchase program, the Company purchased 145 shares of its common stock during the fiscal year ended February 28, 2018.

The Company’s revolving credit facility maintains certain restrictions on the amount of treasury shares that may be purchased and distributions to its shareholders.

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Stock Option Plan and Stock Based Compensation

12 Months Ended

Feb. 28, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option Plan and Stock Based Compensation

(10) Stock Option Plan and Stock Based Compensation

The Company grants stock options and restricted stock to key executives and managerial employees and non-employee directors. At fiscal year ended 2018, the Company has one stock option plan: the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011, formerly the 1998 Option and Restricted Stock Plan amended and restated as of May 14, 2008 (the “Plan”). The Company has 529,408 shares of unissued common stock reserved under the plan for issuance. 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 years ended 2018, 2017 and 2016, the Company included in selling, general and administrative expenses, compensation expense related to share based compensation of $1.3 million, $1.4 million and $1.3 million, respectively.

Stock Options

The Company had the following stock option activity for the three years ended February 28, 2018:

						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life(inyears)		(inthousands)
Outstanding at March 1, 2015		374,823		$	15.95		5.7	$	210
Granted		43,426			13.69
Terminated		(47,300	)		18.31
Exercised		—			—
Outstanding at February 29, 2016		370,949		$	15.38		5.9	$	1,616
Granted		—			—
Terminated		(5,000	)		8.94
Exercised		(193,453	)		15.04
Outstanding at February 28, 2017		172,496		$	15.95		4.2	$	223
Granted		—			—
Terminated		—			—
Exercised		—			—
Outstanding at February 28, 2018		172,496		$	15.95		3.2	$	612
Exercisable at February 28, 2018		170,880		$	15.97		3.2	$	602

(a) Intrinsic value is measured as the excess 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 fiscal years 2018 and 2017.  The following is a summary of the assumptions used and the weighted average grant-date fair value of the stock options granted during fiscal year 2016:

	2016
Expected volatility		24.06	%
Expected term (years)	3
Risk free interest rate		0.89	%
Dividend yield		4.92	%
Weighted average grant-date fair value	$	2.24

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

	Fiscal years ended
	2018		2017		2016
Total cash received	$	—	$	2,910	$	—
Income tax benefits		—		265		(46	)
Total grant-date fair value		—		532		—
Intrinsic value		—		969		—

A summary of the status of the Company’s unvested stock options at February 28, 2017, and changes during the fiscal year ended February 28, 2018 is presented below:

				Weighted
				Average
	Number			Grant Date
	of Options			Fair Value
Unvested at March 1, 2017		5,073		$	2.41
New grants		—			—
Vested		(3,457	)		2.48
Forfeited		—			—
Unvested at February 28, 2018		1,616		$	2.24

As of February 28, 2018, there was $287 of unrecognized compensation cost related to unvested stock options granted under the Plan. The weighted average remaining requisite service period of the unvested stock options was 0.1 years. The total fair value of shares underlying the options vested during the fiscal year ended February 28, 2018 was $0.1 million.

The following table summarizes information about stock options outstanding at the end of fiscal year 2018:

	Options Outstanding						Options Exercisable
			Weighted Average		Weighted				Weighted
	Number		Remaining Contractual		Average		Number		Average
Exercise Prices	Outstanding		Life (in Years)		Exercise Price		Exercisable		Exercise Price
$8.94 to $13.69		24,848		2.3	$	9.87		23,232	$	9.60
$14.05 to $15.78		51,956		4.6		15.16		51,956		15.16
$17.57 to $18.46		95,692		2.7		17.97		95,692		17.97
		172,496		3.2		15.95		170,880		15.97

Restricted Stock

The Company had the following restricted stock grants activity for each of the three fiscal years ended February 28, 2018:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2015		153,648		$	15.30
Granted		113,648			13.69
Terminated		—			—
Vested		(77,900	)		15.24
Outstanding at February 29, 2016		189,396		$	14.36
Granted		66,685			19.49
Terminated		—			—
Vested		(89,535	)		14.46
Outstanding at February 28, 2017		166,546		$	16.35
Granted		74,900			16.30
Terminated		—			—
Vested		(88,771	)		15.90
Outstanding at February 28, 2018		152,675		$	16.59

As of February 28, 2018, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.4 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.4 years.  As of February 28, 2018, the Company’s outstanding restricted stock had an underlying fair value of $2.5 million at date of grant.

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Pension Plan and Other Employee Benefits

12 Months Ended

Feb. 28, 2018

Compensation And Retirement Disclosure [Abstract]

Pension Plan and Other Employee Benefits

(11) Pension Plan and Other Employee Benefits

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 20% of 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. The Company’s funding policy is to contribute annually an amount in accordance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).

The Company’s pension plan asset allocation, by asset category, is as follows for the fiscal years ended:

	2018			2017
Equity securities		57	%		56	%
Debt securities		42	%		38	%
Cash and cash equivalents		1	%		6	%
Total		100	%		100	%

The current asset allocation is being managed to meet the Company’s stated objective of asset growth and capital preservation.  The factor is based upon the combined judgments of the Company’s Administrative Committee and its investment advisors to meet the Company’s investment needs, objectives, and risk tolerance. The Company’s target asset allocation percentage, by asset class, for the year ended February 28, 2018 is as follows:

Asset Class	Target Allocation Percentage
Cash	1 - 5%
Fixed Income	35 - 55%
Equity	45 - 60%

The Company estimates the long-term rate of return on plan assets will be 7.5% based upon target asset allocation. Expected returns are developed based upon the information obtained from the Company’s investment advisors. The advisors provide ten-year historical and five-year expected returns on the fund in the target asset allocation. The return information is weighted based upon the asset allocation at the end of the fiscal year. The expected rate of return at the beginning of the fiscal year ended 2018 was 7.5%, the rate used in the calculation of the fiscal year 2018 pension expense.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market.  The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.  These levels are:

Level 1 - Inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Inputs utilize data points that are observable such as quoted prices, interest rates and yield curves.  

Level 3 - Inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

The following tables present the Plan’s fair value hierarchy for those assets measured at fair value as of February 28, 2018 and February 28, 2017 (in thousands):

	Assets
	Measured at
	Fair Value		Fair Value Measurements
Description	at 2/28/18		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	893	$	893	$	—	$	—
Government bonds		14,005		—		14,005		—
Corporate bonds		9,609		—		9,609		—
Domestic equities		25,558		25,558		—		—
Foreign equities		6,819		6,819		—		—
	$	56,884	$	33,270	$	23,614	$	—

	Assets
	Measured at
	Fair Value		Fair Value Measurements
Description	at 2/28/17		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3,105	$	3,105	$	—	$	—
Government bonds		11,861		—		11,861		—
Corporate bonds		8,037		—		8,037		—
Domestic equities		24,777		24,777		—		—
Foreign equities		5,032		5,032		—		—
	$	52,812	$	32,914	$	19,898	$	—

Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset, including estimates of timing, amount of expected future cash flows, and the credit standing of the issuer.  In some cases, the fair value estimates cannot be substantiated by comparison to independent markets.  The disclosed fair value may not be realized in the immediate settlement of the financial asset.  In addition, the disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset.  Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed.

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 operations for fiscal years ended (in thousands):

	2018			2017			2016
Components of net periodic benefit cost
Service cost	$	1,083		$	1,166		$	1,301
Interest cost		2,270			2,372			2,369
Expected return on plan assets		(3,794	)		(3,665	)		(3,928	)
Amortization of:
Prior service cost		—			—			(86	)
Unrecognized net loss		2,041			2,683			2,551
Net periodic benefit cost		1,600			2,556			2,207
Other changes in Plan Assets and Projected    Benefit Obligation
Recognized in Other comprehensive Income
Net actuarial loss (gain)		(669	)		(723	)		2,102
Amortization of net actuarial loss		(2,041	)		(2,683	)		(2,551	)
Amortization of prior service credit		—			—			86
		(2,710	)		(3,406	)		(363	)
Total recognized in net periodic pension cost and    other comprehensive income	$	(1,110	)	$	(850	)	$	1,844

The following table represents the assumptions used to determine benefit obligations and net periodic pension cost for fiscal years ended:

	2018			2017			2016
Weighted average discount rate (net periodic    pension cost)		4.10	%		4.30	%		4.00	%
Earnings progression (net periodic pension cost)		3.00	%		3.00	%		3.00	%
Expected long-term rate of return on plan assets    (net periodic pension cost)		7.50	%		7.50	%		8.00	%
Weighted average discount rate (benefit    obligations)		4.05	%		4.10	%		4.30	%
Earnings progression (benefit obligations)		3.00	%		3.00	%		3.00	%

During the current fiscal year, the Company adopted the new MP-2017 improvement scale to determine their benefit obligations under the plan.  The accumulated benefit obligation (“ABO”), change in projected benefit obligation (“PBO”), change in plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows (in thousands):

	2018			2017
Change in benefit obligation
Projected benefit obligation at beginning of year	$	57,658		$	56,243
Service cost		1,083			1,166
Interest cost		2,270			2,372
Actuarial loss		978			2,479
Other assumption change		(423	)		(730	)
Benefits paid		(3,947	)		(3,872	)
Projected benefit obligation at end of year	$	57,619		$	57,658
Change in plan assets:
Fair value of plan assets at beginning of year	$	52,812		$	47,547
Company contributions		3,000			3,000
Gain on plan assets		5,019			6,137
Benefits paid		(3,947	)		(3,872	)
Fair value of plan assets at end of year	$	56,884		$	52,812
Unfunded status	$	(735	)	$	(4,846	)
Accumulated benefit obligation at end of year	$	53,244		$	53,590

The measurement dates used to determine pension and other postretirement benefits is the Company’s fiscal year end. The Company contributed $3.0 million during fiscal year 2018 and would expect to contribute a similar amount during fiscal year 2019.

Estimated future benefit payments which reflect expected future service, as appropriate, are expected to be paid in the fiscal years ended (in thousands):

Year	Projected Payments
2019	$	4,200
2020		4,200
2021		4,300
2022		4,200
2023		4,100
2024 - 2028		19,000

Effective February 1, 1994, the Company adopted a Defined Contribution 401(k) Plan (the “401(k) Plan”) for its United States employees. The 401(k) Plan covers substantially all full-time employees who have completed sixty days of service and attained the age of eighteen. United States employees can contribute up to 100 percent of their annual compensation, but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) Plan provides for employer matching contributions or discretionary employer contributions for certain employees not enrolled in the Pension Plan for employees of the Company. Eligibility for employer contributions, matching percentage, and limitations depends on the participant’s employment location and whether the employees are covered by the Company’s pension plan, etc. The Company’s matching contributions are immediately vested. The Company made matching 401(k) contributions in the amount of $1.2 million in each of the fiscal years ended 2018, 2017 and 2016.

In addition, the Northstar Computer Forms, Inc. 401(k) Profit Sharing Plan was merged into the 401(k) Plan on February 1, 2001. The Company declared profit sharing contributions on behalf of the former employees of Northstar Computer Forms, Inc. in accordance with its original plan in the amounts of $203,000, $228,000, and $229,000, in fiscal years ended 2018, 2017 and 2016, respectively.

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Income Taxes

12 Months Ended

Feb. 28, 2018

Income Tax Disclosure [Abstract]

Income Taxes

(12) Income Taxes

The following table represents components of the provision for income taxes for fiscal years ended (in thousands):

	2018			2017			2016
Current:
Federal	$	14,001		$	10,543		$	16,086
State and local		1,944			2,254			2,502
Total current		15,945			12,797			18,588
Deferred:
Federal		(1,811	)		932			342
State and local		17			(113	)		(147	)
Total deferred		(1,794	)		819			195
Total provision for income taxes	$	14,151		$	13,616		$	18,783

The Company’s effective tax rate on earnings from operations for the year ended February 28, 2018, was 30.2%, as compared to 34.0% and 36.8% in 2017 and 2016, respectively.  The following summary reconciles the statutory U.S. Federal income tax rate to the Company’s effective tax rate for the fiscal years ended:

	2018				2017				2016
Statutory rate		32.7		%		35.0		%		35.0		%
Provision for state income taxes, net of federal    income tax benefit		2.8				3.5				3.1
Domestic production activities deduction		(2.8	)			(2.5	)			(2.5	)
Valuation allowance		—				(3.4	)			0.7
Federal true-up		4.1				0.6				—
Tax Cuts and Jobs Act		(7.6	)			-				—
Other		1.0				0.8				0.5
		30.2		%		34.0		%		36.8		%

On December 22, 2017, H.R. 1, known as the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law.  Among other things, the Tax Act permanently lowers the corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018.  As a result of the reduction of the corporate tax rate to 21%, the Company has re-valued its deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment.  This change in the statutory tax rate resulted in reduction in income tax expense being recognized of $3.6 million due to the adjustment of deferred tax liabilities based on the expected prevailing tax rate at the expected time of their realization.

Deferred taxes are recorded to give recognition to temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements.  The tax effects of these temporary differences are recorded as deferred tax assets and deferred tax liabilities.  Deferred tax assets generally represent items that can be used as a tax deduction or credit in future years.  Deferred tax liabilities generally represent items that have been deducted for tax purposes, but have not yet been recorded in the consolidated statements of operations.  To the extent there are deferred tax assets that are more likely than not to be realized, a valuation allowance would not be recorded.  The components of deferred income tax assets and liabilities are summarized as follows (in thousands) for fiscal years ended:

Deferred tax assets	2018		2017
Allowance for doubtful receivables	$	255	$	512
Inventories		738		1,124
Employee compensation and benefits		703		1,448
Pension and noncurrent employee compensation    benefits		2,888		5,786
Net operating loss and foreign tax credits		429		438
Stock options		285		552
Total deferred tax assets	$	5,298	$	9,860
Deferred tax liabilities
Property, plant and equipment	$	4,140	$	6,979
Goodwill and other intangible assets		7,158		9,371
Property tax		158		440
Other		31		23
Total deferred tax liabilities	$	11,487	$	16,813
Net deferred income tax liabilities	$	6,189	$	6,953

As of the fiscal year ended 2018, the Company has federal net operating loss carry forwards of approximately $84,000 expiring in fiscal years 2024 through 2025.  Based on historical earnings and expected sufficient future taxable income, management believes it will be able to fully utilize the net operating loss carry forwards.

Accounting standards require a two-step approach to determine how to recognize tax benefits in the financial statements where recognition and measurement of a tax benefit must be evaluated separately.  A tax benefit will be recognized only if it meets a “more-likely-than-not” recognition threshold.  For tax positions that meet this threshold, the tax benefit recognized is based on the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the taxing authority.

At fiscal year-end 2018 and 2017, unrecognized tax benefits related to uncertain tax positions, including accrued interest and penalties of $141,000 and $249,000, respectively, are included in other liabilities on the consolidated balance sheets and would impact the effective rate if recognized. For fiscal year 2018, the unrecognized tax benefit includes an aggregate of $2,000 of interest expense.  Approximately $2,000 of unrecognized tax benefits relate to items that are affected by expiring statutes of limitations within the next 12 months.  A reconciliation of the change in the unrecognized tax benefits for fiscal years ended 2018 and 2017 is as follows (in thousands):

	2018			2017
Balance at March 1, 2017	$	249		$	225
Additions based on tax positions		(25	)		99
Reductions due to lapses of statues of limitations		(83	)		(75	)
Balance at February 28, 2018	$	141		$	249

The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions and foreign tax jurisdictions.  The Company has concluded all U.S. Federal income tax matters for years through 2013.All material state and local income tax matters have been concluded for years through 2013 and foreign tax jurisdictions through 2013.

The Company recognizes interest expense on underpayments of income taxes and accrued penalties related to unrecognized non-current tax benefits as part of the income tax provision.  Other than amounts included in the unrecognized tax benefits, the Company did not recognize any interest or penalties for the fiscal years ended 2018, 2017 and 2016.

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Earnings per Share

12 Months Ended

Feb. 28, 2018

Earnings Per Share [Abstract]

Earnings per Share

(13) Earnings per Share

Basic earnings (loss) per share have been computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the applicable period. Diluted earnings (loss) 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.  

The following table sets forth the computation for basic and diluted earnings (loss) per share for the fiscal years ended:

	2018		2017			2016
Basic weighted average common shares outstanding		25,391,998		25,734,667			25,688,273
Effect of dilutive options		25,246		14,518			34,094
Diluted weighted average common shares outstanding		25,417,244		25,749,185			25,722,367
Earnings (loss) per share - basic and diluted
Earnings per share on continuing operations	$	1.29	$	1.03		$	1.25
Earnings (loss) per share on discontinued operations		0.01		(0.96	)		0.14
Net earnings	$	1.30	$	0.07		$	1.39
Cash dividends	$	0.875	$	2.20		$	0.70

The Company treats unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share.  Our unvested restricted shares participate on an equal basis with common shares; therefore, there is no difference in undistributed earnings allocated to each participating security.  Accordingly, the presentation above is prepared on a combined basis.  At fiscal year-end 2017 and 2016, 42,500 and 145,243 stock options, respectively,  were excluded from the calculation above, as their effect would be anti-dilutive.  For fiscal year 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.

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Commitments and Contingencies

12 Months Ended

Feb. 28, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

(14) Commitments and Contingencies

The Company leases certain of its facilities under operating leases that expire on various dates through fiscal year ended 2023. Future minimum lease commitments under non-cancelable operating leases for each of the fiscal years ending are as follows (in thousands):

	Operating
	Lease
	Commitments
2019	$	4,277
2020		3,459
2021		1,979
2022		1,116
2023		857
Thereafter		1,250
	$	12,938

Rent expense attributable to such leases totaled $5.3 million, $4.3 million, and $4.8 million for the fiscal years ended 2018, 2017 and 2016, respectively.

In the ordinary course of business, the Company also enters into real property leases, which require the Company as lessee to indemnify the lessor from liabilities arising out of the Company’s occupancy of the properties. The Company’s indemnification obligations are generally covered under the Company’s general insurance policies.

From time to time, the Company is involved in various litigation matters arising in the ordinary course of business. The Company does not believe the disposition of any current matter will have a material adverse effect on its consolidated financial position or results of operations.

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Supplemental Cash Flow Information

12 Months Ended

Feb. 28, 2018

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

(15) Supplemental Cash Flow Information

Net cash flows from operating activities reflect cash payments for interest and income taxes as follows for the three fiscal years ended (in thousands):

		2018		2017		2016
Interest paid	$	731	$	853	$	1,623
Income taxes paid	$	15,468	$	975	$	18,980
Reclassification of the income tax effects of the Tax Act for the pension plan	$	2,847	$	—	$	—

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Quarterly Consolidated Financial Information (Unaudited)

12 Months Ended

Feb. 28, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Consolidated Financial Information (Unaudited)

(16) Quarterly Consolidated Financial Information (Unaudited)

The following table represents the unaudited quarterly financial data of the Company for fiscal years ended 2018 and 2017 (in thousands, except per share amounts and quarter over quarter comparison):

For the three months ended	May 31		August 31		November 30		February 28
Fiscal year ended 2018:
Net sales	$	94,590	$	94,887	$	93,606	$	87,088
Gross profit margin		29,919		30,787		29,884		26,324
Net earnings		7,784		8,540		8,274		8,160
Dividends paid		4,468		5,084		5,083		7,625
Per share of common stock:
Basic net earnings	$	0.31	$	0.34	$	0.33	$	0.32
Diluted net earnings	$	0.31	$	0.34	$	0.33	$	0.32
Dividends	$	0.175	$	0.200	$	0.200	$	0.300
Fiscal year ended 2017:
Net sales	$	90,410	$	91,246	$	88,660	$	86,572
Gross profit margin		26,694		27,038		25,292		24,926
Net earnings		6,683		6,784		5,740		7,210
Dividends paid		4,530		43,657		4,537		4,476
Per share of common stock:
Basic net earnings	$	0.26	$	0.26	$	0.22	$	0.28
Diluted net earnings	$	0.26	$	0.26	$	0.22	$	0.28
Dividends	$	0.175	$	1.675	$	0.175	$	0.175

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Concentrations of Risk

12 Months Ended

Feb. 28, 2018

Risks And Uncertainties [Abstract]

Concentrations of Risk

(17) 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.

No single customer accounts for as much as five percent of the Company’s consolidated net sales or 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 (“FDIC”) insures accounts up to $250,000.  At February 28, 2018, cash balances included $95.3 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, we cannot be assured that we will not experience losses on our deposits.

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Subsequent Events

12 Months Ended

Feb. 28, 2018

Subsequent Events [Abstract]

Subsequent Events

(18) Subsequent Events

On April 30, 2018, the Company, through one of its subsidiaries, acquired the assets of Allen-Bailey Tag and Label of Caledonia, New York, for $4.75 million in cash plus the assumption of trade payables.  Allen-Bailey produces tags and labels for the fire safety and agriculture industries.  This will enable the Company to expand its geographic presence of tags and labels into the eastern seaboard of the United States.

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Significant Accounting Policies and General Matters (Policies)

12 Months Ended

Feb. 28, 2018

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations. Ennis, Inc. and its wholly owned subsidiaries (collectively, the “Company”) are principally engaged in the production of and sale of business forms and other business products to customers primarily located in the United States.

Basis of Consolidation

Basis of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company’s last three fiscal years ended on the following days: February 28, 2018, February 28, 2017 and February 29, 2016 (fiscal years ended 2018, 2017 and 2016, respectively).

Accounts Receivable

Accounts Receivable. Trade receivables are uncollateralized customer obligations due under normal trade terms requiring payment generally within 30 days from the invoice date. The Company’s allowance for doubtful receivables reserve is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible. This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends.

Inventories

Inventories. With the exception of approximately 12.9% and 12.8% of its inventories valued at the lower of last-in, first-out (LIFO) for fiscal years 2018 and 2017, respectively, the Company values its inventories at the lower of first-in, first-out (FIFO) cost or net realizable value.  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 Company provides reserves for excess and obsolete inventory when necessary based upon analysis of quantities on hand, recent sales volumes and reference to market prices. Reserves for excess and obsolete inventory at fiscal years ended 2018 and 2017 were $0.8 million and $0.8 million, respectively.

Property, Plant and Equipment

Property, Plant and Equipment. Depreciation of property, plant and equipment is calculated using the straight-line method over a period considered adequate to amortize the total cost over the useful lives of the assets, which range from 3 to 11 years for machinery and equipment and 10 to 33 years for buildings and improvements. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Repairs and maintenance are expensed as incurred. Renewals and betterments are capitalized and depreciated over the remaining life of the specific property unit. The Company capitalizes all leases that are in substance acquisitions of property.  As of February 28, 2018, the Company had building and improvements of approximately $0.1 million classified as assets held for sale on the consolidated balance sheet.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets. Goodwill is the excess of the purchase price paid over the value of net assets of businesses acquired and is not amortized. Intangible assets are amortized on a straight-line basis over their estimated useful lives.  Goodwill is evaluated for impairment on an annual basis, or more frequently if impairment indicators arise, using a fair-value-based test that compares the fair value of the related business unit to its carrying value.

Long-Lived Assets

Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is based upon the fair value of assets.

Fair Value of Financial Instruments

Fair Value of Financial Instruments. The carrying amounts of cash, accounts receivables, and accounts payable approximate fair value because of the short maturity and/or variable rates associated with these instruments.  Long-term debt as of fiscal years ended 2018 and 2017 approximates its fair value as the interest rate is tied to market rates.  

Treasury Stock

Treasury Stock. The Company accounts for repurchases of common stock using the cost method with common stock in treasury classified in the Consolidated Balance Sheets as a reduction of shareholders’ equity.

Deferred Finance Charges

Deferred Finance Charges. Deferred finance charges in connection with the Company’s revolving credit facility are amortized to interest expense over the term of the facility using the straight-line method. If the facility is extinguished before the end of the term, the remaining balance of the deferred finance charges will be amortized fully in such year.

Revenue Recognition

Revenue Recognition. We recognize revenues from product sales upon shipment to the customer if the terms of the sale are freight on board (“FOB”) shipping point (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon shipping) or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon delivery).  Net sales represent gross sales invoiced to customers, less certain related charges, including sales tax, discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant. In some cases and upon customer request, the Company prints and stores custom print product for customer specified future delivery, generally within twelve months. In this case, risk of loss passes to the customer, the customer is invoiced under normal credit terms, and revenue is recognized when manufacturing is complete. Approximately $9.7 million, $10.7 million and $12.9 million of revenue was recognized under these arrangements during fiscal years 2018, 2017 and 2016, respectively.

Advertising Expenses

Advertising Expenses. The Company expenses advertising costs as incurred. Catalog and brochure preparation and printing costs, which are considered direct response advertising, are amortized to expense over the life of the catalog, which typically ranges from three to twelve months. Advertising expense was approximately $0.9 million, $0.6 million and $0.6 million during the fiscal years ended 2018, 2017 and 2016, respectively, and is included in selling, general and administrative expenses in the Consolidated Statements of Operations.  Included in this advertising expense is amortization related to direct response advertising of approximately $0.2 million, $0.1 million, and $0.2 million for the fiscal years ended 2018, 2017 and 2016, respectively.  Unamortized direct advertising costs included in prepaid expenses at fiscal years ended 2018, 2017 and 2016 were approximately $0.1 million, $0.2 million, and $0.3 million, respectively.

Income Taxes

Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings Per Share

Earnings Per Share. Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding, and then adding the number of additional shares that would have been outstanding if potentially dilutive securities had been issued.  This is calculated using the treasury stock method.  At year-end 2017 and 2016, there were 42,500 and 145,243 options, respectively, not included in the diluted earnings per share computation because their effect was anti-dilutive.  For fiscal year 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.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss. Accumulated other comprehensive loss is defined as the change in equity resulting from transactions from non-owner sources.  Other comprehensive income consisted of changes in the following:  changes in the funded status of the Company’s pension plan and the election to reclassify the stranded income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

Foreign Currency Translation

Foreign Currency Translation. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations in other expense, net as incurred. Transaction losses totaled approximately $7,000, $22,000, and $7,000 for fiscal years ended 2018, 2017 and 2016, respectively.

Estimates

Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Shipping and Handling Costs

Shipping and Handling Costs. The Company records amounts billed to customers for shipping and handling costs in net sales and related costs are included in cost of goods sold.

Stock Based Compensation

Stock Based Compensation. The Company recognizes stock based compensation expense net of estimated forfeitures over the requisite service period of the individual grants, which generally equals the vesting period.  Estimated forfeiture rates are derived from our historical forfeitures of similar awards.  The fair value of all share based awards is estimated on the date of grant.  

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which permits the reclassification of tax effects stranded in accumulated other comprehensive income to retained earnings as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).  ASU 2018-02 is effective in the first quarter of fiscal year 2019, however, early adoption is permitted for annual periods, including the reporting period in which the Tax Act was enacted.  The Company early adopted this standard in fiscal year 2018, which resulted in $2.8 million reclassified from other comprehensive income to retained earnings.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).  The update requires the service cost component of net benefit costs to be reported in the same line of the income statement as other compensation costs and the other components of net benefit costs (non-service costs) to be presented separately from the service cost component, outside a subtotal of operating income.  Additionally, only the service cost component of net benefit costs will be eligible for capitalization.  The update is required to be adopted the first quarter of fiscal year 2019 and is required to be retrospectively adopted.  The Company is currently evaluating the impact the adoption of ASU 2017-07 will have on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies how an entity is required to measure goodwill impairment.  The amendments in ASU 2017-04 require that goodwill impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit and the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.  The amendments in ASU 2017-04 should be applied on a prospective basis and are effective for annual or any interim goodwill impairment tests in annual reporting periods beginning after December 15, 2019.  The Company adopted ASU 2017-04 on June 1, 2017, which had no impact on the Company’s consolidated financial statements at the time of adoption.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) (“ASU 2016-09”), which makes several modifications to the accounting for employee share-based payment transactions, including the requirement to recognize the income tax effects of awards that vest or settle as income tax expense.  The amendments in ASU 2016-09 also clarify the presentation of certain components of share-based awards in the statement of cash flows.  ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016.  The Company adopted ASU 2016-09 in fiscal year 2018 beginning in March of 2017.  The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting.  For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases.  The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of fiscal year 2020.  Early adoption of ASU 2016-02 is permitted.  The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which institutes a number of modifications to the reporting of financial assets and liabilities. These modifications include: (i) measurement of non-equity method assets and liabilities at fair value, with changes to fair value recognized through net income, (ii) performance of qualitative impairment assessments of equity investments without readily determinable fair values at each reporting period, (iii) elimination of the requirement to disclose methods and significant assumptions used in calculating the fair value of financial instruments measured at amortized cost, (iv) measurement of the fair value of financial instruments measured at amortized cost using the exit price notion consistent with Topic 820, Fair Value Measurement, (v) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk, (vi) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and (vii) evaluation of the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This ASU is effective for financial statements issued with fiscal years beginning after December 15, 2017, including interim periods within that reporting period.  The Company is currently evaluating the impact the adoption of ASU 2016-01 will have on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.  The standard will be effective for us in the first quarter of fiscal 2019.  The Company has completed its evaluation of the impact of this standard and has concluded that it did not have a material impact on its consolidated financial statements on the date of adoption, nor is it expected to going forward given the Company’s sales contracts.  The Company adopted the standard on March 1, 2018 and applied the modified retrospective approach.  The adoption of the guidance will result in additional disclosures regarding the Company’s revenue recognition policies beginning with the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2018.

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Accounts Receivable and Allowance for Doubtful Receivables (Tables)

12 Months Ended

Feb. 28, 2018

Receivables [Abstract]

Allowance for Doubtful Receivables

The following table represents the activity in the Company’s allowance for doubtful receivables for the fiscal years ended (in thousands):

	2018			2017			2016
Balance at beginning of period	$	1,674		$	2,041		$	2,158
Bad debt expense, net of recoveries		(265	)		263			253
Accounts written off		(215	)		(630	)		(370	)
Balance at end of period	$	1,194		$	1,674		$	2,041

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Inventories (Tables)

12 Months Ended

Feb. 28, 2018

Inventory Disclosure [Abstract]

Components of Inventories

The following table summarizes the components of inventories at the different stages of production as of February 28, 2018 and February 28, 2017 (in thousands):

	2018		2017
Raw material	$	15,854	$	16,130
Work-in-process		3,114		3,199
Finished goods		7,512		8,636
	$	26,480	$	27,965

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Acquisitions (Tables)

12 Months Ended

Feb. 28, 2018

Business Combinations [Abstract]

Purchase Price Allocation Of Business Combination

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

Accounts receivable	$	4,252
Inventories		1,539
Other assets		575
Property, plant & equipment		5,526
Customer lists		3,390
Trademarks		2,408
Goodwill		6,066
Accounts payable and accrued liabilities		(6,079	)
	$	17,677

Summary of Operating Information on a Pro Forma Basis

The following table represents certain operating information on a pro forma basis as though all Independent operations had been acquired as of March 1, 2016, after the estimated impact of adjustments such as amortization of intangible assets, interest expense, interest income, and related tax effects (in thousands, except per share amount):

	Unaudited
	2017
Pro forma net sales	$	390,169
Pro forma net earnings		27,249
Pro forma earnings per share from continuing operations - diluted		1.06

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Discontinued Operations (Tables)

12 Months Ended

Feb. 28, 2018

Discontinued Operations And Disposal Groups [Abstract]

Schedule of Discontinued Operations Related to Apparel Segment

The operating results of these discontinued operations only reflect revenues and expenses that are directly attributable to the Apparel Segment and that have been eliminated from ongoing operations.  The following tables show the key components of the sale and discontinued operations related to the Apparel Segment that was completed on May 25, 2016 (in thousands):

Sales price	$	110,000
Carrying value of disposed		(130,174	)
Expenses related to sales (1)		(4,365	)
Loss on sale before write-off of foreign currency    translation adjustment		(24,539	)
Write-off of foreign currency translation adjustments
recorded in other comprehensive income		(16,109	)
Loss on sale of sale of discontinued operations	$	(40,648	)

(1) Includes the termination fee, in the amount of $3.0 million, paid as a result of the termination of a prior purchase agreement for the sale of the Apparel Segment to Alstyle Operations, LLC.

	2018			2017			2016
Net sales	$	—		$	41,038		$	183,027
Income from discontinued operations before income taxes		—			3,873			5,531
Loss on sale of discontinued operations before income taxes		(2,000	)		(40,648	)		—
Income (loss) on discontinued operations before income taxes		(2,000	)		(36,775	)		5,531
Income tax (benefit) expense		(2,147	)		(12,138	)		2,053
Net income (loss) from discontinued operations	$	147		$	(24,637	)	$	3,478

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Feb. 28, 2018

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 February 28, 2018	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		16.0	$	19,625	$	2,408	$	17,217
Customer lists		8.1		58,040		26,039		32,001
Noncompete		1.1		175		140		35
Patent		0.4		783		782		1
Total		10.8	$	78,623	$	29,369	$	49,254
As of February 28, 2017
Amortized intangible assets
Trademarks and trade names		8.0	$	3,642	$	1,234	$	2,408
Customer lists		8.9		57,347		21,336		36,011
Noncompete		0.8		175		86		89
Patent		1.0		783		655		128
Total		8.8	$	61,947	$	23,311	$	38,636

Non-amortizing Intangible Assets

	February 28,		February 28,
	2018		2017
Non-amortizing intangible assets
Trademarks and trade names	$	—	$	15,291

Estimated Amortization Expense

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

2019	$	5,557
2020		5,475
2021		5,406
2022		5,362
2023		4,574

Changes in Net Carrying Amount of Goodwill

Changes in the net carrying amount of goodwill for fiscal years 2017 and 2018 are as follows (in thousands):

Balance as of March 1, 2016	$	64,537
Goodwill acquired		6,066
Goodwill impairment		—
Balance as of February 28, 2017		70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of February 28, 2018	$	70,603

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Other Accrued Expenses (Tables)

12 Months Ended

Feb. 28, 2018

Payables And Accruals [Abstract]

Components of Other Accrued Expenses

The following table summarizes the components of other accrued expenses for the fiscal years ended (in thousands):

	February 28,		February 28,
		2018		2017
Accrued taxes	$	161	$	329
Accrued legal and professional fees		282		414
Accrued interest		143		98
Accrued utilities		148		90
Accrued acquisition related obligations		654		789
Accrued credit card fees		115		119
Other accrued expenses		168		187
	$	1,671	$	2,026

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Long-Term Debt (Tables)

12 Months Ended

Feb. 28, 2018

Debt Disclosure [Abstract]

Summary of Long-Term Debt

Long-term debt consisted of the following at fiscal years ended (in thousands):

	February 28, 2018		February 28, 2017
Revolving credit facility	$	30,000	$	30,000

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Stock Option Plan and Stock Based Compensation (Tables)

12 Months Ended

Feb. 28, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option Activity

The Company had the following stock option activity for the three years ended February 28, 2018:

						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life(inyears)		(inthousands)
Outstanding at March 1, 2015		374,823		$	15.95		5.7	$	210
Granted		43,426			13.69
Terminated		(47,300	)		18.31
Exercised		—			—
Outstanding at February 29, 2016		370,949		$	15.38		5.9	$	1,616
Granted		—			—
Terminated		(5,000	)		8.94
Exercised		(193,453	)		15.04
Outstanding at February 28, 2017		172,496		$	15.95		4.2	$	223
Granted		—			—
Terminated		—			—
Exercised		—			—
Outstanding at February 28, 2018		172,496		$	15.95		3.2	$	612
Exercisable at February 28, 2018		170,880		$	15.97		3.2	$	602

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

Summary of Assumptions Used and Weighted Average Grant-Date Fair Value of Stock Options Granted

The following is a summary of the assumptions used and the weighted average grant-date fair value of the stock options granted during fiscal year 2016:

	2016
Expected volatility		24.06	%
Expected term (years)	3
Risk free interest rate		0.89	%
Dividend yield		4.92	%
Weighted average grant-date fair value	$	2.24

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 for the three fiscal years ended (in thousands):

	Fiscal years ended
	2018		2017		2016
Total cash received	$	—	$	2,910	$	—
Income tax benefits		—		265		(46	)
Total grant-date fair value		—		532		—
Intrinsic value		—		969		—

Summary of Unvested Stock Options

A summary of the status of the Company’s unvested stock options at February 28, 2017, and changes during the fiscal year ended February 28, 2018 is presented below:

				Weighted
				Average
	Number			Grant Date
	of Options			Fair Value
Unvested at March 1, 2017		5,073		$	2.41
New grants		—			—
Vested		(3,457	)		2.48
Forfeited		—			—
Unvested at February 28, 2018		1,616		$	2.24

Summary of Stock Options Outstanding

The following table summarizes information about stock options outstanding at the end of fiscal year 2018:

	Options Outstanding						Options Exercisable
			Weighted Average		Weighted				Weighted
	Number		Remaining Contractual		Average		Number		Average
Exercise Prices	Outstanding		Life (in Years)		Exercise Price		Exercisable		Exercise Price
$8.94 to $13.69		24,848		2.3	$	9.87		23,232	$	9.60
$14.05 to $15.78		51,956		4.6		15.16		51,956		15.16
$17.57 to $18.46		95,692		2.7		17.97		95,692		17.97
		172,496		3.2		15.95		170,880		15.97

Restricted Stock Grants Activity

The Company had the following restricted stock grants activity for each of the three fiscal years ended February 28, 2018:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2015		153,648		$	15.30
Granted		113,648			13.69
Terminated		—			—
Vested		(77,900	)		15.24
Outstanding at February 29, 2016		189,396		$	14.36
Granted		66,685			19.49
Terminated		—			—
Vested		(89,535	)		14.46
Outstanding at February 28, 2017		166,546		$	16.35
Granted		74,900			16.30
Terminated		—			—
Vested		(88,771	)		15.90
Outstanding at February 28, 2018		152,675		$	16.59

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Pension Plan and Other Employee Benefits (Tables)

12 Months Ended

Feb. 28, 2018

Compensation And Retirement Disclosure [Abstract]

Company's Pension Plan Asset Allocation, by Asset Category

The Company’s pension plan asset allocation, by asset category, is as follows for the fiscal years ended:

	2018			2017
Equity securities		57	%		56	%
Debt securities		42	%		38	%
Cash and cash equivalents		1	%		6	%
Total		100	%		100	%

Company's Target Asset Allocation Percentage, by Asset Class

The Company’s target asset allocation percentage, by asset class, for the year ended February 28, 2018 is as follows:

Asset Class	Target Allocation Percentage
Cash	1 - 5%
Fixed Income	35 - 55%
Equity	45 - 60%

Plan's Fair Value Hierarchy for Assets Measured at Fair Value

The following tables present the Plan’s fair value hierarchy for those assets measured at fair value as of February 28, 2018 and February 28, 2017 (in thousands):

	Assets
	Measured at
	Fair Value		Fair Value Measurements
Description	at 2/28/18		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	893	$	893	$	—	$	—
Government bonds		14,005		—		14,005		—
Corporate bonds		9,609		—		9,609		—
Domestic equities		25,558		25,558		—		—
Foreign equities		6,819		6,819		—		—
	$	56,884	$	33,270	$	23,614	$	—

	Assets
	Measured at
	Fair Value		Fair Value Measurements
Description	at 2/28/17		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3,105	$	3,105	$	—	$	—
Government bonds		11,861		—		11,861		—
Corporate bonds		8,037		—		8,037		—
Domestic equities		24,777		24,777		—		—
Foreign equities		5,032		5,032		—		—
	$	52,812	$	32,914	$	19,898	$	—

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 operations for fiscal years ended (in thousands):

	2018			2017			2016
Components of net periodic benefit cost
Service cost	$	1,083		$	1,166		$	1,301
Interest cost		2,270			2,372			2,369
Expected return on plan assets		(3,794	)		(3,665	)		(3,928	)
Amortization of:
Prior service cost		—			—			(86	)
Unrecognized net loss		2,041			2,683			2,551
Net periodic benefit cost		1,600			2,556			2,207
Other changes in Plan Assets and Projected    Benefit Obligation
Recognized in Other comprehensive Income
Net actuarial loss (gain)		(669	)		(723	)		2,102
Amortization of net actuarial loss		(2,041	)		(2,683	)		(2,551	)
Amortization of prior service credit		—			—			86
		(2,710	)		(3,406	)		(363	)
Total recognized in net periodic pension cost and    other comprehensive income	$	(1,110	)	$	(850	)	$	1,844

Schedule of Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost

The following table represents the assumptions used to determine benefit obligations and net periodic pension cost for fiscal years ended:

	2018			2017			2016
Weighted average discount rate (net periodic    pension cost)		4.10	%		4.30	%		4.00	%
Earnings progression (net periodic pension cost)		3.00	%		3.00	%		3.00	%
Expected long-term rate of return on plan assets    (net periodic pension cost)		7.50	%		7.50	%		8.00	%
Weighted average discount rate (benefit    obligations)		4.05	%		4.10	%		4.30	%
Earnings progression (benefit obligations)		3.00	%		3.00	%		3.00	%

Schedule of Accumulated Benefit Obligation, Change in Projected Benefit Obligation, Change in Plan Assets, Funded Status, and Reconciliation to Amounts Recognized in Consolidated Balance Sheets

The accumulated benefit obligation (“ABO”), change in projected benefit obligation (“PBO”), change in plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows (in thousands):

	2018			2017
Change in benefit obligation
Projected benefit obligation at beginning of year	$	57,658		$	56,243
Service cost		1,083			1,166
Interest cost		2,270			2,372
Actuarial loss		978			2,479
Other assumption change		(423	)		(730	)
Benefits paid		(3,947	)		(3,872	)
Projected benefit obligation at end of year	$	57,619		$	57,658
Change in plan assets:
Fair value of plan assets at beginning of year	$	52,812		$	47,547
Company contributions		3,000			3,000
Gain on plan assets		5,019			6,137
Benefits paid		(3,947	)		(3,872	)
Fair value of plan assets at end of year	$	56,884		$	52,812
Unfunded status	$	(735	)	$	(4,846	)
Accumulated benefit obligation at end of year	$	53,244		$	53,590

Schedule of Estimated Future Benefit Payments which Reflect Expected Future Service

Estimated future benefit payments which reflect expected future service, as appropriate, are expected to be paid in the fiscal years ended (in thousands):

Year	Projected Payments
2019	$	4,200
2020		4,200
2021		4,300
2022		4,200
2023		4,100
2024 - 2028		19,000

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Income Taxes (Tables)

12 Months Ended

Feb. 28, 2018

Income Tax Disclosure [Abstract]

Components of Provision for Income Taxes

The following table represents components of the provision for income taxes for fiscal years ended (in thousands):

	2018			2017			2016
Current:
Federal	$	14,001		$	10,543		$	16,086
State and local		1,944			2,254			2,502
Total current		15,945			12,797			18,588
Deferred:
Federal		(1,811	)		932			342
State and local		17			(113	)		(147	)
Total deferred		(1,794	)		819			195
Total provision for income taxes	$	14,151		$	13,616		$	18,783

Statutory U.S. Federal Income Tax Rate to Company's Effective Tax Rate

The following summary reconciles the statutory U.S. Federal income tax rate to the Company’s effective tax rate for the fiscal years ended:

	2018				2017				2016
Statutory rate		32.7		%		35.0		%		35.0		%
Provision for state income taxes, net of federal    income tax benefit		2.8				3.5				3.1
Domestic production activities deduction		(2.8	)			(2.5	)			(2.5	)
Valuation allowance		—				(3.4	)			0.7
Federal true-up		4.1				0.6				—
Tax Cuts and Jobs Act		(7.6	)			-				—
Other		1.0				0.8				0.5
		30.2		%		34.0		%		36.8		%

On December 22, 2017, H.R. 1, known as the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law.  Among other things, the Tax Act permanently lowers the corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018.  As a result of the reduction of the corporate tax rate to 21%, the Company has re-valued its deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment.  This change in the statutory tax rate resulted in reduction in income tax expense being recognized of $3.6 million due to the adjustment of deferred tax liabilities based on the expected prevailing tax rate at the expected time of their realization.

Components of Deferred Income Tax Assets and Liabilities

The components of deferred income tax assets and liabilities are summarized as follows (in thousands) for fiscal years ended:

Deferred tax assets	2018		2017
Allowance for doubtful receivables	$	255	$	512
Inventories		738		1,124
Employee compensation and benefits		703		1,448
Pension and noncurrent employee compensation    benefits		2,888		5,786
Net operating loss and foreign tax credits		429		438
Stock options		285		552
Total deferred tax assets	$	5,298	$	9,860
Deferred tax liabilities
Property, plant and equipment	$	4,140	$	6,979
Goodwill and other intangible assets		7,158		9,371
Property tax		158		440
Other		31		23
Total deferred tax liabilities	$	11,487	$	16,813
Net deferred income tax liabilities	$	6,189	$	6,953

Reconciliation of Change in Unrecognized Tax Benefits

A reconciliation of the change in the unrecognized tax benefits for fiscal years ended 2018 and 2017 is as follows (in thousands):

	2018			2017
Balance at March 1, 2017	$	249		$	225
Additions based on tax positions		(25	)		99
Reductions due to lapses of statues of limitations		(83	)		(75	)
Balance at February 28, 2018	$	141		$	249

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Earnings per Share (Tables)

12 Months Ended

Feb. 28, 2018

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 fiscal years ended:

	2018		2017			2016
Basic weighted average common shares outstanding		25,391,998		25,734,667			25,688,273
Effect of dilutive options		25,246		14,518			34,094
Diluted weighted average common shares outstanding		25,417,244		25,749,185			25,722,367
Earnings (loss) per share - basic and diluted
Earnings per share on continuing operations	$	1.29	$	1.03		$	1.25
Earnings (loss) per share on discontinued operations		0.01		(0.96	)		0.14
Net earnings	$	1.30	$	0.07		$	1.39
Cash dividends	$	0.875	$	2.20		$	0.70

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Commitments and Contingencies (Tables)

12 Months Ended

Feb. 28, 2018

Commitments And Contingencies Disclosure [Abstract]

Schedule 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
2019	$	4,277
2020		3,459
2021		1,979
2022		1,116
2023		857
Thereafter		1,250
	$	12,938

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Feb. 28, 2018

Supplemental Cash Flow Elements [Abstract]

Net Cash Flows from Operating Activities Reflect Cash Payments for Interest and Income Taxes

Net cash flows from operating activities reflect cash payments for interest and income taxes as follows for the three fiscal years ended (in thousands):

		2018		2017		2016
Interest paid	$	731	$	853	$	1,623
Income taxes paid	$	15,468	$	975	$	18,980
Reclassification of the income tax effects of the Tax Act for the pension plan	$	2,847	$	—	$	—

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Quarterly Consolidated Financial Information (Unaudited) (Tables)

12 Months Ended

Feb. 28, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of Unaudited Quarterly Financial Data of Company

The following table represents the unaudited quarterly financial data of the Company for fiscal years ended 2018 and 2017 (in thousands, except per share amounts and quarter over quarter comparison):

For the three months ended	May 31		August 31		November 30		February 28
Fiscal year ended 2018:
Net sales	$	94,590	$	94,887	$	93,606	$	87,088
Gross profit margin		29,919		30,787		29,884		26,324
Net earnings		7,784		8,540		8,274		8,160
Dividends paid		4,468		5,084		5,083		7,625
Per share of common stock:
Basic net earnings	$	0.31	$	0.34	$	0.33	$	0.32
Diluted net earnings	$	0.31	$	0.34	$	0.33	$	0.32
Dividends	$	0.175	$	0.200	$	0.200	$	0.300
Fiscal year ended 2017:
Net sales	$	90,410	$	91,246	$	88,660	$	86,572
Gross profit margin		26,694		27,038		25,292		24,926
Net earnings		6,683		6,784		5,740		7,210
Dividends paid		4,530		43,657		4,537		4,476
Per share of common stock:
Basic net earnings	$	0.26	$	0.26	$	0.22	$	0.28
Diluted net earnings	$	0.26	$	0.26	$	0.22	$	0.28
Dividends	$	0.175	$	1.675	$	0.175	$	0.175

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Significant Accounting Policies and General Matters - Additional Information (Detail) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Basis Of Presentation And Significant Accounting Policies [Line Items]
Trade receivable maturity period	30 days
Percentage of Inventories valued at LIFO	12.90%	12.80%
Reserves for excess and obsolete inventory	$ 800,000	$ 800,000
Assets held for sale	$ 75,000	1,245,000
Period within which company prints and stores custom print product for customer specified future delivery	12 months
Revenue recognized	$ 9,700,000	10,700,000	$ 12,900,000
Advertising expense	900,000	600,000	600,000
Amortization of advertising expense	200,000	100,000	200,000
Unamortized direct advertising costs included in prepaid expenses	100,000	$ 200,000	$ 300,000
Stock options not included in the diluted earnings per share computation		42,500	145,243
Transaction losses	7,000	$ 22,000	$ 7,000
Accounting Standards Update 2018-02 [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Tax cuts and jobs act of 2017 reclassification from Aoci to retained earnings tax effect	$ 2,800,000
Minimum [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Amortization period for advertising expense	3 months
Maximum [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Amortization period for advertising expense	12 months
Machinery and Equipment [Member] | Minimum [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Machinery and Equipment [Member] | Maximum [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	11 years
Buildings and Improvements [Member] | Minimum [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Buildings and Improvements [Member] | Maximum [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	33 years

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Accounts Receivable and Allowance for Doubtful Receivables - Allowance for Doubtful Receivables (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Receivables [Abstract]
Balance at beginning of period	$ 1,674	$ 2,041	$ 2,158
Bad debt expense, net of recoveries	(265)	263	253
Accounts written off	(215)	(630)	(370)
Balance at end of period	$ 1,194	$ 1,674	$ 2,041

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Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017
Inventory Disclosure [Abstract]
Raw material	$ 15,854	$ 16,130
Work-in-process	3,114	3,199
Finished goods	7,512	8,636
Inventories	$ 26,480	$ 27,965

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Inventories - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Inventory Disclosure [Abstract]
Excess of current costs at FIFO over LIFO stated values	$ 4.9	$ 4.7
Decrease in cost of sales	$ 0.3	$ 0.2	$ 0.0

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Acquisitions - Additional Information (Detail) $ in Thousands	3 Months Ended								12 Months Ended
	Feb. 28, 2018 USD ($)	Nov. 30, 2017 USD ($)	Aug. 31, 2017 USD ($)	May 31, 2017 USD ($)	Feb. 28, 2017 USD ($)	Nov. 30, 2016 USD ($)	Aug. 31, 2016 USD ($)	May 31, 2016 USD ($)	Feb. 28, 2018 USD ($)	Feb. 28, 2017 USD ($)	Dec. 31, 2016 USD ($)	Feb. 29, 2016 USD ($)	Jul. 07, 2017 USD ($)	Jan. 27, 2017 USD ($) Location Facility
Business Acquisition [Line Items]
Net sales	$ 87,088	$ 93,606	$ 94,887	$ 94,590	$ 86,572	$ 88,660	$ 91,246	$ 90,410	$ 370,171	$ 356,888		$ 385,946
Tag Company [Member]
Business Acquisition [Line Items]
Total purchase consideration													$ 1,400
Independent Printing Company, Inc. [Member]
Business Acquisition [Line Items]
Total purchase consideration														$ 17,677
Number of location | Location														4
Number of folder facilities | Facility														4
Net sales											$ 37,000

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Acquisitions - Summary of Final Purchase Price Allocation (Detail) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017	Jan. 27, 2017	Feb. 29, 2016
Business Acquisition [Line Items]
Goodwill	$ 70,603	$ 70,603		$ 64,537
Independent Printing Company, Inc. [Member]
Business Acquisition [Line Items]
Accounts receivable			$ 4,252
Inventories			1,539
Other assets			575
Property, plant & equipment			5,526
Goodwill			6,066
Accounts payable and accrued liabilities			(6,079)
Total purchase consideration			17,677
Independent Printing Company, Inc. [Member] | Customer Lists [Member]
Business Acquisition [Line Items]
Customer lists and Trademarks			3,390
Independent Printing Company, Inc. [Member] | Trademarks [Member]
Business Acquisition [Line Items]
Customer lists and Trademarks			$ 2,408

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Acquisitions - Summary of Operating Information on Pro Forma Basis (Detail) $ / shares in Units, $ in Thousands	12 Months Ended
	Feb. 28, 2017 USD ($) $ / shares
Business Combinations [Abstract]
Pro forma net sales	$ 390,169
Pro forma net earnings	$ 27,249
Pro forma earnings per share from continuing operations - diluted | $ / shares	$ 1.06

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Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	May 25, 2016	Jan. 31, 2017	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Apparel Segment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase price, cash to be received	$ 110,000
Tax benefit related to discontinued operation			$ (2,147)	$ (12,138)	$ 2,053
Gildan Activewear Inc. [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Tax benefit related to discontinued operation			$ 2,100
Tax benefit related to discontinued operation including receivables	500
Receivable discontinued operation	2,000
Gildan Activewear Inc. [Member] | Apparel Segment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase price, escrow funds to any liabilities	2,000
Purchase price, voluntarily payable funds		$ 2,000
Tax benefit related to discontinued operation				$ 1,600
Gildan Activewear Inc. [Member] | Unit Purchase Agreement [Member] | Apparel Segment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase price, cash to be received	$ 110,000

XML

Discontinued Operations - Schedule of Discontinued Operations Related to the Apparel Segment (Detail) - USD ($) $ in Thousands			12 Months Ended
		May 25, 2016	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income (loss) on discontinued operations before income taxes			$ (2,000)	$ (36,775)
Net income (loss) from discontinued operations			147	(24,637)	$ 3,478
Apparel Segment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sales price		$ 110,000
Carrying value of disposed		(130,174)
Expenses related to sales	[1]	(4,365)
Loss on sale before write-off of foreign currency translation adjustment		(24,539)
Write-off of foreign currency translation adjustments recorded in other comprehensive income		(16,109)
Loss on sale of sale of discontinued operations		(40,648)	(2,000)	(40,648)
Net sales				41,038	183,027
Income from discontinued operations before income taxes				3,873	5,531
Loss on sale of discontinued operations before income taxes		$ (40,648)	(2,000)	(40,648)
Income (loss) on discontinued operations before income taxes			(2,000)	(36,775)	5,531
Income tax (benefit) expense			(2,147)	(12,138)	2,053
Net income (loss) from discontinued operations			$ 147	$ (24,637)	$ 3,478

[1] Includes the termination fee, in the amount of $3.0 million, paid as a result of the termination of a prior purchase agreement for the sale of the Apparel Segment to Alstyle Operations, LLC.

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Discontinued Operations - Schedule of Discontinued Operations Related to the Apparel Segment (Parenthetical) (Detail) $ in Millions	May 25, 2016 USD ($)
Apparel Segment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Termination fee paid	$ 3.0

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($)		12 Months Ended
	Mar. 01, 2017	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Finite-Lived Intangible Assets [Line Items]
Goodwill Impairment charge		$ 0	$ 0
Remaining estimated useful life		10 years 9 months 18 days	8 years 9 months 18 days
Amortization of trade names, customer lists, and patent		$ 6,058,000	$ 4,673,000	$ 4,555,000
Goodwill acquired			6,066,000
Independent Printing Company, Inc. [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill acquired			$ 6,100,000
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining estimated useful life		16 years	8 years
Selling, General and Administrative [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of trade names, customer lists, and patent		$ 830,000
Minimum [Member] | Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining estimated useful life	17 years
Maximum [Member] | Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining estimated useful life	19 years

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Goodwill and Other Intangible Assets - Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	10 years 9 months 18 days	8 years 9 months 18 days
Gross Carrying Amount	$ 78,623	$ 61,947
Accumulated Amortization	29,369	23,311
Amortized intangible assets, Net	$ 49,254	$ 38,636
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	16 years	8 years
Gross Carrying Amount	$ 19,625	$ 3,642
Accumulated Amortization	2,408	1,234
Amortized intangible assets, Net	$ 17,217	$ 2,408
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	8 years 1 month 6 days	8 years 10 months 24 days
Gross Carrying Amount	$ 58,040	$ 57,347
Accumulated Amortization	26,039	21,336
Amortized intangible assets, Net	$ 32,001	$ 36,011
Noncompete [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	1 year 1 month 6 days	9 months 18 days
Gross Carrying Amount	$ 175	$ 175
Accumulated Amortization	140	86
Amortized intangible assets, Net	$ 35	$ 89
Patent [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	4 months 24 days	1 year
Gross Carrying Amount	$ 783	$ 783
Accumulated Amortization	782	655
Amortized intangible assets, Net	$ 1	$ 128

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Goodwill and Other Intangible Assets - Non-amortizing Intangible Assets (Detail) $ in Thousands	Feb. 28, 2017 USD ($)
Non-amortizing intangible assets
Non-amortizing intangible assets, Trademarks and trade names	$ 15,291

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Goodwill and Other Intangible Assets - Estimated Amortization Expense (Detail) $ in Thousands	Feb. 28, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2019	$ 5,557
2020	5,475
2021	5,406
2022	5,362
2023	$ 4,574

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Goodwill and Other Intangible Assets - Changes in Net Carrying Amount of Goodwill (Detail) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Beginning balance	$ 70,603,000	$ 64,537,000
Goodwill acquired		6,066,000
Goodwill impairment	0	0
Goodwill, Ending balance	$ 70,603,000	$ 70,603,000

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Other Accrued Expenses - Components of Other Accrued Expenses (Detail) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017
Payables And Accruals [Abstract]
Accrued taxes	$ 161	$ 329
Accrued legal and professional fees	282	414
Accrued interest	143	98
Accrued utilities	148	90
Accrued acquisition related obligations	654	789
Accrued credit card fees	115	119
Other accrued expenses	168	187
Other accrued expenses, Total	$ 1,671	$ 2,026

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Long-Term Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017
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)	12 Months Ended
	Feb. 28, 2018 USD ($)	Feb. 28, 2017
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 net leverage ratio may not exceed 3.00:1.00, (ii) the Company’s 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 3.0% (3 month LIBOR + 1.0%) at February 28, 2018 and 1.86% (2 month LIBOR + 1.0%) at February 28, 2017.
Revolving credit facility, variable basis spread	1.00%	1.00%
Revolving credit facility, interest rate	3.00%	1.86%
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	1,200,000
Revolving credit facility, remaining borrowing capacity	$ 68,800,000

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Shareholders' Equity - Additional Information (Detail)		12 Months Ended	112 Months Ended
	Feb. 28, 2018 USD ($)	Feb. 28, 2018 USD ($) $ / shares shares	Feb. 28, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchase of common stock through a stock repurchase program | $	$ 40,000,000	$ 40,000,000	$ 40,000,000
Repurchase of common stock | shares		191,033	1,442,236
Repurchase of common stock, average cost per share | $ / shares		$ 17.33	$ 14.99
Total amount available to repurchase of shares | $	$ 18,400,000
Unrelated to Stock Repurchase Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchase of common stock | shares		145

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Stock Option Plan and Stock Based Compensation - Additional Information (Detail) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unissued common stock reserved	529,408
Stock option award maximum term	10 years
Share based compensation arrangements by share based payment award vesting period maximum	5 years
Number of stock options granted	0	0	43,426
Unrecognized compensation cost related to unvested stock options granted	$ 287
Fair value of shares underlying the options vested	100,000
Remaining unrecognized compensation cost related to unvested restricted stock	$ 1,400,000
Weighted average remaining requisite service period of the unvested restricted stock awards	1 year 4 months 24 days
Outstanding restricted stock underlying fair value at grant date	$ 2,500,000
Unvested Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining requisite service period of the unvested stock options	1 month 6 days
Selling, General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense related share based compensation before tax	$ 1,300,000	$ 1,400,000	$ 1,300,000

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Stock Option Plan and Stock Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Shares, Options Outstanding, Beginning Balance	172,496	370,949	374,823
Number of Shares, Granted	0	0	43,426
Number of Shares, Terminated		(5,000)	(47,300)
Number of Shares, Exercised		(193,453)
Number of Shares, Options Outstanding, Ending Balance	172,496	172,496	370,949	374,823
Number of Shares, Exercisable	170,880
Weighted Average Exercise Price, Beginning Balance	$ 15.95	$ 15.38	$ 15.95
Weighted Average Exercise Price, Granted			13.69
Weighted Average Exercise Price, Terminated		8.94	18.31
Weighted Average Exercise Price, Exercised		15.04
Weighted Average Exercise Price, Ending Balance	15.95	$ 15.95	$ 15.38	$ 15.95
Weighted Average Exercise Price, Exercisable	$ 15.97
Weighted Average Remaining Contractual Life (in years)	3 years 2 months 12 days	4 years 2 months 12 days	5 years 10 months 24 days	5 years 8 months 12 days
Weighted Average Remaining Contractual Life, Exercisable	3 years 2 months 12 days
Aggregate Intrinsic Value	$ 612	$ 223	$ 1,616	$ 210
Aggregate Intrinsic Value, Exercisable	$ 602

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Stock Option Plan and Stock Based Compensation - Summary of Assumptions Used and Weighted Average Grant-Date Fair Value of Stock Options Granted (Detail) - $ / shares	12 Months Ended
	Feb. 28, 2018	Feb. 29, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Expected volatility		24.06%
Expected term (years)		3 years
Risk free interest rate		0.89%
Dividend yield		4.92%
Weighted average grant-date fair value	$ 0	$ 2.24

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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) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Total cash received	$ 2,910
Income tax benefits	265	$ (46)
Total grant-date fair value	532
Intrinsic value	$ 969

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Stock Option Plan and Stock Based Compensation - Summary of Unvested Stock Options (Detail) - $ / shares	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Unvested Beginning Balance, Number of Options	5,073
New grants, Number of Options	0	0	43,426
Vested, Number of Options	(3,457)
Forfeited, Number of Options	0
Unvested Ending Balance, Number of Options	1,616	5,073
Unvested Beginning Balance, Weighted Average Grant Date Fair Value	$ 2.41
New grants, Weighted Average Grant Date Fair Value	0		$ 2.24
Vested, Weighted Average Grant Date Fair Value	2.48
Forfeited, Weighted Average Grant Date Fair Value	0
Unvested Ending Balance, Weighted Average Grant Date Fair Value	$ 2.24	$ 2.41

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Stock Option Plan and Stock Based Compensation - Summary of Stock Options Outstanding (Detail)	12 Months Ended
	Feb. 28, 2018 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number Outstanding, Options Outstanding | shares	172,496
Weighted Average Remaining Contractual Life (in Years), Options Outstanding	3 years 2 months 12 days
Weight Average Exercise Price, Options Outstanding	$ 15.95
Number Exercisable, Options Exercisable | shares	170,880
Weight Average Exercise Price, Options Exercisable	$ 15.97
Range One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower range	8.94
Exercise Prices, Upper range	$ 13.69
Number Outstanding, Options Outstanding | shares	24,848
Weighted Average Remaining Contractual Life (in Years), Options Outstanding	2 years 3 months 18 days
Weight Average Exercise Price, Options Outstanding	$ 9.87
Number Exercisable, Options Exercisable | shares	23,232
Weight Average Exercise Price, Options Exercisable	$ 9.60
Range Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower range	14.05
Exercise Prices, Upper range	$ 15.78
Number Outstanding, Options Outstanding | shares	51,956
Weighted Average Remaining Contractual Life (in Years), Options Outstanding	4 years 7 months 6 days
Weight Average Exercise Price, Options Outstanding	$ 15.16
Number Exercisable, Options Exercisable | shares	51,956
Weight Average Exercise Price, Options Exercisable	$ 15.16
Range Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower range	17.57
Exercise Prices, Upper range	$ 18.46
Number Outstanding, Options Outstanding | shares	95,692
Weighted Average Remaining Contractual Life (in Years), Options Outstanding	2 years 8 months 12 days
Weight Average Exercise Price, Options Outstanding	$ 17.97
Number Exercisable, Options Exercisable | shares	95,692
Weight Average Exercise Price, Options Exercisable	$ 17.97

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Stock Option Plan and Stock Based Compensation - Restricted Stock Grants Activity (Detail) - Restricted Stock [Member] - $ / shares	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Restricted stock grant activity
Outstanding at Beginning, Number of Shares	166,546	189,396	153,648
Number of Shares, Granted	74,900	66,685	113,648
Number of Shares, Terminated	0	0	0
Number of Shares, Vested	(88,771)	(89,535)	(77,900)
Outstanding at Ending, Number of Shares	152,675	166,546	189,396
Outstanding at Beginning, Weighted Average Grant Date Fair value	$ 16.35	$ 14.36	$ 15.30
Weighted Average Grant Date Fair Value, Granted	16.30	19.49	13.69
Weighted Average Grant Date Fair Value, Terminated	0	0	0
Weighted Average Grant Date Fair Value, Vested	15.90	14.46	15.24
Outstanding at Ending, Weighted Average Grant Date Fair value	$ 16.59	$ 16.35	$ 14.36

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Pension Plan and Other Employee Benefits - Additional Information (Detail) - USD ($)	12 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Defined Benefit Plan Disclosure [Line Items]
Employees covered under noncontributory Pension Plan		20.00%
Compensation period preceding retirement and termination		5 years
Expected rate of return		7.50%	7.50%	8.00%
Target asset allocation, historical period		10 years
Target asset allocation, expected returns		5 years
Expected contributions		$ 3,000,000	$ 3,000,000
Matching contributions		$ 1,200,000	1,200,000	$ 1,200,000
United States employees contribution		100.00%
Profit sharing contributions		$ 203,000	$ 228,000	$ 229,000
Scenario Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected contributions	$ 3,000,000

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Pension Plan and Other Employee Benefits - Company's Pension Plan Asset Allocation, by Asset Category (Detail)	Feb. 28, 2018	Feb. 28, 2017
Defined Benefit Plan Disclosure [Line Items]
Pension plan asset allocation by asset category	100.00%	100.00%
Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension plan asset allocation by asset category	57.00%	56.00%
Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension plan asset allocation by asset category	42.00%	38.00%
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension plan asset allocation by asset category	1.00%	6.00%

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Pension Plan and Other Employee Benefits - Company's Target Asset Allocation Percentage, by Asset Class (Detail)	Feb. 28, 2018
Cash [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation Percentage	1.00%
Cash [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation Percentage	5.00%
Fixed Income [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation Percentage	35.00%
Fixed Income [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation Percentage	55.00%
Equity Securities [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation Percentage	45.00%
Equity Securities [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Allocation Percentage	60.00%

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Pension Plan and Other Employee Benefits - Plan's Fair Value Hierarchy for Assets Measured at Fair Value (Detail) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	$ 56,884	$ 52,812	$ 47,547
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	893	3,105
Government Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	14,005	11,861
Corporate Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	9,609	8,037
Domestic Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	25,558	24,777
Foreign Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	6,819	5,032
Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	33,270	32,914
Level 1 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	893	3,105
Level 1 [Member] | Domestic Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	25,558	24,777
Level 1 [Member] | Foreign Equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	6,819	5,032
Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	23,614	19,898
Level 2 [Member] | Government Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	14,005	11,861
Level 2 [Member] | Corporate Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value Measurements	$ 9,609	$ 8,037

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Pension Plan and Other Employee Benefits - Summary of Pension Expense Composed of Components Included in Cost of Goods Sold and Selling, General and Administrative Expenses (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Components of net periodic benefit cost
Service cost	$ 1,083	$ 1,166	$ 1,301
Interest cost	2,270	2,372	2,369
Expected return on plan assets	(3,794)	(3,665)	(3,928)
Amortization of:
Prior service cost			(86)
Unrecognized net loss	2,041	2,683	2,551
Net periodic benefit cost	1,600	2,556	2,207
Other changes in Plan Assets and Projected Benefit Obligation Recognized in Other comprehensive Income
Net actuarial loss (gain)	(669)	(723)	2,102
Amortization of net actuarial loss	(2,041)	(2,683)	(2,551)
Amortization of prior service credit			86
Net of recognized in Other comprehensive Income	(2,710)	(3,406)	(363)
Total recognized in net periodic pension cost and other comprehensive income	$ (1,110)	$ (850)	$ 1,844

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Pension Plan and Other Employee Benefits - Schedule of Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost (Detail)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Compensation And Retirement Disclosure [Abstract]
Weighted average discount rate (net periodic pension cost)	4.10%	4.30%	4.00%
Earnings progression (net periodic pension cost)	3.00%	3.00%	3.00%
Expected long-term rate of return on plan assets (net periodic pension cost)	7.50%	7.50%	8.00%
Weighted average discount rate (benefit obligations)	4.05%	4.10%	4.30%
Earnings progression (benefit obligations)	3.00%	3.00%	3.00%

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Pension Plan and Other Employee Benefits - Schedule of Accumulated Benefit Obligation, Change in PBO, Change in Plan Assets, Funded Status, and Reconciliation to Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Change in benefit obligation
Projected benefit obligation at beginning of year	$ 57,658	$ 56,243
Service cost	1,083	1,166	$ 1,301
Interest cost	2,270	2,372	2,369
Actuarial loss	978	2,479
Other assumption change	(423)	(730)
Benefits paid	(3,947)	(3,872)
Projected benefit obligation at end of year	57,619	57,658	56,243
Change in plan assets:
Fair value of plan assets at beginning of year	52,812	47,547
Company contributions	3,000	3,000
Gain on plan assets	5,019	6,137
Benefits paid	(3,947)	(3,872)
Fair value of plan assets at end of year	56,884	52,812	$ 47,547
Unfunded status	(735)	(4,846)
Accumulated benefit obligation at end of year	$ 53,244	$ 53,590

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Pension Plan and Other Employee Benefits - Schedule of Estimated Future Benefit Payments which Reflect Expected Future Service (Detail) $ in Thousands	Feb. 28, 2018 USD ($)
Schedule Of Sale Of Subsidiary [Abstract]
2019	$ 4,200
2020	4,200
2021	4,300
2022	4,200
2023	4,100
2024 - 2028	$ 19,000

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Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Current:
Federal	$ 14,001	$ 10,543	$ 16,086
State and local	1,944	2,254	2,502
Total current	15,945	12,797	18,588
Deferred:
Federal	(1,811)	932	342
State and local	17	(113)	(147)
Total deferred	(1,794)	819	195
Total provision for income taxes	$ 14,151	$ 13,616	$ 18,783

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Income Taxes - Additional Information (Detail) - USD ($)	2 Months Ended	10 Months Ended	12 Months Ended
	Feb. 28, 2018	Dec. 31, 2017	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Income Tax [Line Items]
Effective tax rate on earnings from operations			30.20%	34.00%	36.80%
Corporate tax rate	21.00%	35.00%	32.70%	35.00%	35.00%
Reduction in income tax expense recognized to adjustment of deferred tax liabilities			$ 3,600,000
Tax benefit recognized			50.00%
Unrecognized tax benefits, including accrued interest and penalties	$ 141,000		$ 141,000	$ 249,000
Unrecognized tax benefit includes an aggregate of interest expense			$ 2,000
Unrecognized tax benefits expiring			12 months
Unrecognized interest or penalties other than tax benefits			$ 0	$ 0	$ 0
Internal Revenue Service (IRS) [Member]
Income Tax [Line Items]
Operating Loss Carryforwards	$ 84,000		$ 84,000
Internal Revenue Service (IRS) [Member] | Minimum [Member]
Income Tax [Line Items]
Net operating loss carry forwards expiring			2024
Internal Revenue Service (IRS) [Member] | Maximum [Member]
Income Tax [Line Items]
Net operating loss carry forwards expiring			2025

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Income Taxes - Statutory U.S. Federal Income Tax Rate to Company's Effective Tax Rate (Detail)	2 Months Ended	10 Months Ended	12 Months Ended
	Feb. 28, 2018	Dec. 31, 2017	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Income Tax Disclosure [Abstract]
Statutory rate	21.00%	35.00%	32.70%	35.00%	35.00%
Provision for state income taxes, net of federal income tax benefit			2.80%	3.50%	3.10%
Domestic production activities deduction			(2.80%)	(2.50%)	(2.50%)
Valuation allowance				(3.40%)	0.70%
Federal true-up			4.10%	0.60%
Tax Cuts and Jobs Act			(7.60%)
Other			1.00%	0.80%	0.50%
Total			30.20%	34.00%	36.80%

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Income Taxes - Components of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Feb. 28, 2018	Feb. 28, 2017
Deferred tax assets
Allowance for doubtful receivables	$ 255	$ 512
Inventories	738	1,124
Employee compensation and benefits	703	1,448
Pension and noncurrent employee compensation benefits	2,888	5,786
Net operating loss and foreign tax credits	429	438
Stock options	285	552
Total deferred tax assets	5,298	9,860
Deferred tax liabilities
Property, plant and equipment	4,140	6,979
Goodwill and other intangible assets	7,158	9,371
Property tax	158	440
Other	31	23
Total deferred tax liabilities	11,487	16,813
Net deferred income tax liabilities	$ 6,189	$ 6,953

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Income Taxes - Reconciliation of Change in Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Income Tax Disclosure [Abstract]
Beginning Balance	$ 249	$ 225
Additions based on tax positions	(25)	99
Reductions due to lapses of statues of limitations	(83)	(75)
Ending Balance	$ 141	$ 249

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Earnings per Share - Computation for Basic and Diluted Earnings (loss) per Share (Detail) - $ / shares	3 Months Ended								12 Months Ended
	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2016	May 31, 2016	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding									25,391,998	25,734,667	25,688,273
Effect of dilutive options									25,246	14,518	34,094
Diluted weighted average common shares outstanding									25,417,244	25,749,185	25,722,367
Earnings (loss) per share - basic and diluted
Earnings per share on continuing operations									$ 1.29	$ 1.03	$ 1.25
Earnings (loss) per share on discontinued operations									0.01	(0.96)	0.14
Net earnings									1.30	0.07	1.39
Cash dividends	$ 0.300	$ 0.200	$ 0.200	$ 0.175	$ 0.175	$ 0.175	$ 1.675	$ 0.175	$ 0.875	$ 2.20	$ 0.70

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Earnings per Share - Additional Information (Detail) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Earnings Per Share [Abstract]
Undistributed earnings	$ 0
Stock options not included in the diluted earnings per share computation		42,500	145,243

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Commitments and Contingencies - Schedule of Future Minimum Lease Commitments Under Non-cancelable Operating Leases (Detail) $ in Thousands	Feb. 28, 2018 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2019	$ 4,277
2020	3,459
2021	1,979
2022	1,116
2023	857
Thereafter	1,250
Total	$ 12,938

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Commitments And Contingencies Disclosure [Abstract]
Rent expense attributable to operating leases	$ 5.3	$ 4.3	$ 4.8

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Supplemental Cash Flow Information - Net Cash Flows from Operating Activities Reflect Cash Payments for Interest and Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Supplemental Cash Flow Elements [Abstract]
Interest paid	$ 731	$ 853	$ 1,623
Income taxes paid	15,468	$ 975	$ 18,980
Reclassification of the income tax effects of the Tax Act for the pension plan	$ 2,847

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Quarterly Consolidated Financial Information (Unaudited) - Schedule of Unaudited Quarterly Financial Data of Company (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2016	May 31, 2016	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 87,088	$ 93,606	$ 94,887	$ 94,590	$ 86,572	$ 88,660	$ 91,246	$ 90,410	$ 370,171	$ 356,888	$ 385,946
Gross profit margin	26,324	29,884	30,787	29,919	24,926	25,292	27,038	26,694	116,914	103,950	116,310
Net earnings	8,160	8,274	8,540	7,784	7,210	5,740	6,784	6,683	32,905	1,780	35,736
Dividends paid	$ 7,625	$ 5,083	$ 5,084	$ 4,468	$ 4,476	$ 4,537	$ 43,657	$ 4,530	$ 22,260	$ 57,200	$ 18,044
Per share of common stock:
Basic net earnings	$ 0.32	$ 0.33	$ 0.34	$ 0.31	$ 0.28	$ 0.22	$ 0.26	$ 0.26
Diluted net earnings	0.32	0.33	0.34	0.31	0.28	0.22	0.26	0.26
Dividends	$ 0.300	$ 0.200	$ 0.200	$ 0.175	$ 0.175	$ 0.175	$ 1.675	$ 0.175	$ 0.875	$ 2.20	$ 0.70

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Concentrations of Risk - Additional Information (Detail)	12 Months Ended
	Feb. 28, 2018 USD ($)
Concentration Risk [Line Items]
Maximum insurance available to depositors under the FDIC's general deposit insurance rules	$ 250,000
Cash balances not federally insured	$ 95,300,000
Customer Concentration Risk [Member] | Net Sales [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	5.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	5.00%

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Subsequent Events - Additional Information (Detail) $ in Thousands	Apr. 30, 2018 USD ($)
Allen-Bailey Tag and Label [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Total purchase consideration	$ 4,750