10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended May 31, 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)

(972) 775-9801

(Registrant’s Telephone Number, Including Area Code)

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

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐	(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 ☒

As of June 29, 2018, there were 25,456,559 shares of the Registrant’s common stock outstanding.

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION
	Item 1. Financial Statements	3
	Unaudited Consolidated Balance Sheets at May 31, 2018 and February 28, 2018	3
	Unaudited Consolidated Statements of Operations for the three months ended May 31, 2018 and May 31, 2017	5
	Unaudited Consolidated Statements of Comprehensive Income for the three months ended May 31, 2018 and May 31, 2017	6
	Unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three months ended  May 31, 2018	7
	Unaudited Consolidated Statements of Cash Flows for the three months ended May 31, 2018 and May 31, 2017	8
	Notes to Unaudited Consolidated Financial Statements	9
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
	Item 4. Controls and Procedures	24
PART II: OTHER INFORMATION
	Item 1. Legal Proceedings	25
	Item 1A. Risk Factors	25
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25
	Item 3. Defaults Upon Senior Securities	25
	Item 4. Mine Safety Disclosures	25
	Item 5. Other Information	25
	Item 6. Exhibits	26
SIGNATURES		27

2

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands)

	May 31,		February 28,
	2018		2018
Assets
Current assets
Cash	$	96,420	$	96,230
Accounts receivable, net of allowance for doubtful receivables of $1,298 at May 31, 2018 and $1,194 at February 28, 2018		36,241		35,654
Prepaid expenses		1,227		1,305
Prepaid income taxes		312		3,600
Inventories		30,971		26,480
Assets held for sale		75		75
Total current assets		165,246		163,344
Property, plant and equipment
Plant, machinery and equipment		134,678		133,222
Land and buildings		55,164		54,318
Other		23,299		23,208
Total property, plant and equipment		213,141		210,748
Less accumulated depreciation		166,770		164,840
Net property, plant and equipment		46,371		45,908
Goodwill		70,603		70,603
Intangible assets, net		49,805		49,254
Other assets		302		330
Total assets	$	332,327	$	329,439

See accompanying notes to consolidated financial statements.

3

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

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

	May 31,			February 28,
	2018			2018
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	11,290		$	12,168
Accrued expenses		16,622			17,403
Total current liabilities		27,912			29,571
Long-term debt		30,000			30,000
Liability for pension benefits		735			735
Deferred income taxes		6,257			6,189
Other liabilities		1,647			1,240
Total liabilities		66,551			67,735
Commitments and contingencies
Shareholders’ equity
Preferred stock $10 par value, authorized 1,000,000 shares; none issued		—			—
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at May 31, 2018 and February 28, 2018		75,134			75,134
Additional paid-in capital		120,270			121,333
Retained earnings		168,341			164,177
Accumulated other comprehensive income (loss):
Minimum pension liability, net of taxes		(16,167	)		(16,428	)
Total accumulated other comprehensive income (loss)		(16,167	)		(16,428	)
Treasury stock		(81,802	)		(82,512	)
Total shareholders’ equity		265,776			261,704
Total liabilities and shareholders' equity	$	332,327		$	329,439

See accompanying notes to consolidated financial statements.

4

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	Three months ended
	May 31,
	2018			2017
Net sales	$	93,419		$	94,590
Cost of goods sold		63,228			64,598
Gross profit margin		30,191			29,992
Selling, general and administrative		17,735			17,316
(Gain) loss from disposal of assets		(4	)		15
Income from operations		12,460			12,661
Other income (expense)
Interest expense		(261	)		(190	)
Other, net		130			(116	)
Total other income (expense)		(131	)		(306	)
Earnings before income taxes		12,329			12,355
Income tax expense		3,082			4,571
Net earnings	$	9,247		$	7,784
Weighted average common shares outstanding
Basic		25,333,673			25,422,856
Diluted		25,363,772			25,436,787
Earnings per share
Basic	$	0.37		$	0.31
Diluted	$	0.36		$	0.31
Cash dividends per share	$	0.200		$	0.175

See accompanying notes to consolidated financial statements.

5

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three months ended
	May 31,
	2018		2017
Net earnings	$	9,247	$	7,784
Adjustment to pension, net of deferred taxes		261		248
Comprehensive income	$	9,508	$	8,032

See accompanying notes to consolidated financial statements.

6

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share and per share amounts)

											Accumulated
					Additional						Other
	Common Stock				Paid-in			Retained			Comprehensive			Treasury Stock
	Shares		Amount		Capital			Earnings			Income (Loss)			Shares			Amount			Total
Balance March 1, 2018		30,053,443	$	75,134	$	121,333		$	164,177		$	(16,428	)		(4,789,228	)	$	(82,512	)	$	261,704
Net earnings		—		—		—			9,247			—			—			—			9,247
Adjustment to pension, net of deferred tax of $87		—		—		—			—			261			—			—			261
Dividends paid ($0.20 per share)		—		—		—			(5,083	)		—			—			—			(5,083	)
Stock based compensation		—		—		327			—			—			—			—			327
Exercise of stock options    and restricted stock		—		—		(1,390	)		—			—			80,692			1,390			—
Common stock repurchases		—		—		—			—			—			(37,943	)		(680	)		(680	)
Balance May 31, 2018		30,053,443	$	75,134	$	120,270		$	168,341		$	(16,167	)		(4,746,479	)	$	(81,802	)	$	265,776

See accompanying notes to consolidated financial statements.

7

ENNIS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three months ended
	May 31,
		2018			2017
Cash flows from operating activities:
Net earnings	$	9,247		$	7,784
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		2,035			1,996
Amortization of deferred finance charges		28			28
Amortization of intangible assets		1,415			1,525
(Gain) loss from disposal of assets		(4	)		15
Bad debt expense, net of recoveries		135			(166	)
Stock based compensation		327			333
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable		453			1,175
Prepaid expenses and income taxes		3,391			1,165
Inventories		(3,505	)		(1,284	)
Other assets		—			1
Accounts payable and accrued expenses		(1,964	)		(543	)
Other liabilities		3			(83	)
Liability for pension benefits		329			400
Net cash provided by operating activities		11,890			12,346
Cash flows from investing activities:
Capital expenditures		(1,205	)		(731	)
Purchase of businesses, net of cash acquired		(4,736	)		—
Proceeds from disposal of plant and property		4			20
Net cash used in investing activities		(5,937	)		(711	)
Cash flows from financing activities:
Dividends paid		(5,083	)		(4,468	)
Common stock repurchases		(680	)		(3,310	)
Net cash used in financing activities		(5,763	)		(7,778	)
Net change in cash		190			3,857
Cash at beginning of period		96,230			80,466
Cash at end of period	$	96,420		$	84,323

See accompanying notes to consolidated financial statements.

8

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

1. Significant Accounting Policies and General Matters

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2018 have been prepared in accordance with generally accepted accounting principles for interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2018, from which the accompanying consolidated balance sheet at February 28, 2018 was derived.  All intercompany balances and transactions have been eliminated in consolidation.  In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included and are of a normal recurring nature. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

In 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 Company retrospectively adopted this guidance as of March 1, 2018.  See Note 11, Pension Plan, for further discussion.  The impact of adoption was a $73,000 decrease in cost of sales, $56,000 decrease in selling, general and administrative expenses and $129,000 increase in other expense-net for the three months ended May 31, 2017 compared to the amount previously reported.

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 adopted this standard on March 1, 2018.  The adoption of ASU 2016-01 did not have a material impact on the Company’s consolidated financial statements.

9

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

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.  Our conclusion is that the timing of revenue recognition for our various revenue streams is not materially impacted by the adoption of this standard.  The Company adopted this standard on March 1, 2018 using the modified retrospective approach.  The adoption did not have, and is not expected to have, a significant impact on the consolidated operating results, financial position or cash flows of the Company.  See Note 2, Revenue, below for further disclosures associated with the adoption of this pronouncement.

2. Revenue

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

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

Nature of Revenues

Substantially all of the Company’s revenue from contracts with customers consist of the sale of commercial printing products in the continental United States and is primarily recognized at a point in time in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.  Revenue from the sale of commercial printing products, including shipping and handling fees billed to customers, is recognized upon the transfer of control to the customer, which is generally upon shipment to the customer when the terms of the sale are freight on board (“FOB”) shipping point, or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination.

In some cases and upon customer request, the Company prints and stores commercial printing product for customer specified future delivery, generally within the same year as the product is manufactured. In this case, revenue is recognized upon the transfer of control when manufacturing is complete and title and risk of ownership is passed to the customer, which for certain customers may be recognized over time rather than at a point in time.  As the output method for measure of progress is determined to be appropriate, the Company recognizes revenue in the amount for which it has the right to invoice for revenue that is recognized over time and for which it demonstrates that the invoiced amount corresponds directly with the value to the customer for the performance completed to date.

The Company does not disaggregate revenue and operates in one sales category consisting of commercial printed product revenue, which is reported as net sales on the consolidated statements of operations. The Company does not have material contract assets and contract liabilities as of May 31, 2018.

Significant Judgments

Generally, the Company’s contracts with customers are comprised of a written quote and customer purchase order or statement of work, and governed by the Company’s trade terms and conditions.  In certain instances, it may be further supplemented by separate pricing agreements and customer incentive arrangements, which typically only affect the contract’s transaction price. Contracts do not contain a significant financing component as payment terms on invoiced amounts are typically between 30 to 90 days, based on the Company’s credit assessment of individual customers, as well as industry expectations.  Product returns are not significant.

From time to time, the Company may offer incentives to its customers considered to be variable consideration including volume-based rebates or early payment discounts.   Customer incentives considered to be variable consideration are recorded as a reduction to revenue as part of the transaction price at contract inception when there is a basis to reasonably estimate the amount of the incentive and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur.  Customer incentives are allocated entirely to the single performance obligation of transferring printed product to the customer.

10

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

For customers with terms of FOB shipping point, the Company accounts for shipping and handling activities performed after the control of the printed product has been transferred to the customer as a fulfillment cost. The Company accrues for the costs of shipping and handling activities if revenue is recognized before contractually agreed shipping and handling activities occur.

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

3.Accounts Receivable and Allowance for Doubtful Receivables

Accounts receivable are reduced by an allowance for an estimate of amounts that are uncollectible. Substantially all of the Company’s receivables are due from customers in the United States.  The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution).  The Company does not typically require its customers to post a deposit or supply collateral.  The Company’s allowance for doubtful receivables is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible.  This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer creditworthiness, and (iii) review of customer receivable aging and payment trends.

The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance in the period the payment is received.

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

	Three months ended
	May 31,
	2018			2017
Balance at beginning of period	$	1,194		$	1,674
Bad debt expense, net of recoveries		135			(166	)
Accounts written off		(31	)		(66	)
Balance at end of period	$	1,298		$	1,442

4. Inventories

The Company uses the lower of last-in, first-out (“LIFO”) cost or market to value certain of its business forms inventories and the lower of first-in, first-out (“FIFO”) cost or market to value its remaining forms inventories.  The Company regularly reviews inventories on hand, using specific aging categories, and writes down the carrying value of its inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage.  In assessing the ultimate realization of its inventories, the Company is required to make judgments as to future demand requirements.  As actual future demand or market conditions may vary from those projected by the Company, adjustments to inventories may be required.

The following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):

	May 31,		February 28,
	2018		2018
Raw material	$	19,264	$	15,854
Work-in-process		3,381		3,114
Finished goods		8,326		7,512
	$	30,971	$	26,480

11

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

5. Acquisitions

On April 30, 2018, the Company acquired the assets of a tag and label operation located in New York for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment.  In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years.  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 both of these acquisitions immaterial.

6. Goodwill and Intangible Assets

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

The Company 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.

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

	Weighted
	Average
	Remaining		Gross
	Life		Carrying		Accumulated
As of May 31, 2018	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		15.5	$	20,558	$	2,715	$	17,843
Customer lists		7.9		58,973		27,136		31,837
Noncompete		4.1		275		151		124
Patent		0.2		783		782		1
Total		10.6	$	80,589	$	30,784	$	49,805
As of February 28, 2018
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

12

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

Aggregate amortization expense for the three months ended May 31, 2018 and May 31, 2017 was $1.4 million and $1.5 million, respectively.

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

2019	$	5,730
2020		5,682
2021		5,612
2022		5,569
2023		4,781

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

Balance as of March 1, 2017	$	70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of February 28, 2018		70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of May 31, 2018	$	70,603

7. Accrued Expenses

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

	May 31,		February 28,
	2018		2018
Employee compensation and benefits	$	14,472	$	15,597
Taxes other than income		769		296
Accrued legal and professional fees		201		282
Accrued interest		170		143
Accrued utilities		90		148
Accrued acquisition related obligations		624		654
Accrued credit card fees		127		115
Other accrued expenses		169		168
	$	16,622	$	17,403

8. Long-Term Debt

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

	May 31,		February 28,
	2018		2018
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

13

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

dividend or distribution is equal to or less than 2.50:1.00.  As of May 31, 2018, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.3% (3 month LIBOR + 1.0%) at May 31, 2018 and 3.0% (3 month LIBOR + 1.0%) at February 28, 2018.  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 May 31, 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 three months ended May 31, 2018 the Company, under the program, repurchased 37,943 shares of common stock at an average price of $17.92 per share.  Since the program’s inception in October 2008, there have been 1,480,179 common shares repurchased at an average price of $15.07 per share. As of May 31, 2018 there was $17.7 million available to repurchase shares of the Company’s common stock under the program.

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 May 31, 2018, the Company had one stock option plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011, formerly the 1998 Option and Restricted Stock Plan amended and restated as of May 14, 2008 (the “Plan”). The Company has 456,796 shares of unissued common stock reserved under the Plan for issuance as of May 31, 2018.  The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants on a straight-line basis over the requisite service period.  For the three months ended May 31, 2018 and May 31, 2017, the Company included compensation expense related to share-based compensation of $0.3 million and $0.3 million, respectively, in selling, general, and administrative expenses.

Stock Options

The Company had the following stock option activity for the three months ended May 31, 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, 2018		172,496	$	15.95		3.2	$	612
Granted		—		—
Terminated		—		—
Exercised		—		—
Outstanding at May 31, 2018		172,496	$	15.95		3.0	$	405
Exercisable at May 31, 2018		172,496	$	15.95		3.0	$	405

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

14

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

No stock options were granted or exercised during the three months ended May 31, 2018 and May 31, 2017. 

A summary of the Company’s unvested stock options at May 31, 2018 and the changes during the three months ended May 31, 2018 are presented below:

				Weighted
				Average
	Number			Grant Date
	of Options			Fair Value
Unvested at March 1, 2018		1,616		$	2.24
New grants		—			—
Vested		(1,616	)		2.24
Forfeited		—			—
Unvested at May 31, 2018		—			—

Restricted Stock

The Company had the following restricted stock grant activity for the three months ended May 31, 2018:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2018		152,675		$	16.59
Granted		72,612			20.35
Terminated		—			—
Vested		(80,692	)		16.02
Outstanding at May 31, 2018		144,595		$	18.80

As of May 31, 2018, the total remaining unrecognized compensation cost related to unvested restricted stock granted under the Plan was approximately $2.6 million.  The weighted average remaining requisite service period of the unvested restricted stock awards was 2.2 years.

11. Pension Plan

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 20% of our aggregate employees.  Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination.

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

	Three months ended
	May 31,
	2018			2017
Components of net periodic benefit cost
Service cost	$	277		$	271
Interest cost		568			568
Expected return on plan assets		(1,027	)		(949	)
Amortization of:
Unrecognized net loss		511			510
Net periodic benefit cost	$	329		$	400

The Company is required to make contributions to the Pension Plan.  These contributions are required under the minimum funding requirements of ERISA.  Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a 25-year average of interest rates plus or minus a corridor.  The Company’s minimum required contribution to the Pension Plan is zero for the Pension Plan year ending

15

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

February 28, 2019.  However, the Company expects to make a cash contribution to the Pension Plan of between $2.0 million and $3.0 million during fiscal year 2019.  The Company contributed $3.0 million to the Pension Plan during fiscal year 2018.

The Company adopted ASU No. 2017-07 “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”, with retrospective adoption, during the first quarter of fiscal year 2019 and records benefit service costs in cost of sales and selling, general and administrative expenses.  The other components, which include interest cost, expected return on plan assets and net amortization, are recorded in other income (expense)-net within the Consolidated Statements of Operations.  Previously, all pension and postretirement benefits expense (income) was recorded in cost of sales and selling, general and administrative expenses.  See Note 1, Recent Accounting Pronouncements, for further discussion and impact of adoption.

12.Earnings per Share

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

For the three months ended May 31, 2018, all options were included in the diluted earnings per share computation because the average fair market value of the Company’s stock exceeded the exercise price of the options.For the three months ended May 31, 2017, 95,692 sharesrelated to stock options were not included in the diluted earnings per share computation because the exercise price exceeded the average fair market value of the Company’s stock.  The following table sets forth the computation for basic and diluted earnings (loss) per share for the periods indicated:

	Three months ended
	May 31,
	2018		2017
Basic weighted average common shares outstanding		25,333,673		25,422,856
Effect of dilutive options		30,099		13,931
Diluted weighted average common shares outstanding		25,363,772		25,436,787
Earnings per share:
Net earnings - basic	$	0.37	$	0.31
Net earnings - diluted	$	0.36	$	0.31
Cash dividends	$	0.200	$	0.175

16

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2018

13. Concentrations of Risk

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

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

For the purposes of the Consolidated Statements of Cash Flows, the Company considers cash to include cash on hand and in bank accounts.  The Federal Deposit Insurance Corporation insures accounts up to $250,000.  At May 31, 2018, cash balances included $95.2 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.

14. Subsequent Events

On June 15, 2018, the Board increased the quarterly dividend on our common stock to 22.5 cents per share from 20 cents per share, which will be paid on August 3, 2018 to the shareholders of record on July 6, 2018.

17

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

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

Overview

Ennis, Inc. (formerly Ennis Business Forms, 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 $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment.  In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years.  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.

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 57 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®, 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); Allen-Bailey Tag & Label^SM, 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., a wholly-owned subsidiary, also sells direct to a small number of customers, generally large banking organizations (where a distributor is not acceptable or available to the end-user).  Adams McClure, LP, a wholly-owned subsidiary, also sells direct to a small number of customers, where sales are generally through advertising agencies.

The printing industry generally sells its products either through sales made 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.

18

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

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.

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, 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, suppliers have historically raised prices in the marketplace.  Increases have been announced and experienced across all paper grades, with some paper grades having seen multiple announced price increases.  In addition, some paper grades are being placed on allocations given the tight supply environment.  In the past, we have been fairly successful in passing cost increases through to the marketplace over time.  In addition, with our long-term relationship with our paper supplier, our financial strength and our size, we believe we should be able to avoid any potential disruptions in our supply chain.  Given the current environment, it will be more important than ever for us to continue to focus on effectively managing and controlling our product costs so we are able to minimize these effects on our operational results.  We will continue to accomplish this through the use of forecasting, production and costing models, as well as working closely with our domestic suppliers to reduce our procurement costs.  In addition, 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.

19

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

Cautionary Statements Regarding Forward Looking Statements

You should read this discussion and analysis in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Report. All of the statements in this Report, other than historical facts, are forward-looking statements, including, without limitation, the statements made in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” particularly under the caption “Overview.”  As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relating to matters that are not historical in nature.  The words “could,” “should,” “feel,” “anticipate,” “aim,” “preliminary,” “expect,” “believe,” “estimate,” “intend,” “intent,” “plan,” “will,” “foresee,” “project,” “ forecast,” or the negative thereof or variations thereon, and similar expressions identify forward-looking statements.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for these forward-looking statements.  In order to comply with the terms of the safe harbor, the Company notes that forward-looking statements are subject to known and unknown risks, uncertainties and other factors relating to its operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company.  These known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those matters expressed in, anticipated by or implied by such forward-looking statements.

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

We believe these forward-looking statements are based upon reasonable assumptions.  All such statements involve risks and uncertainties, and as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including but not limited to, general economic, business and labor conditions and the potential impact on our operations; our ability to implement our strategic initiatives and control our operational costs; dependence on a limited number of key suppliers; our ability to recover the rising cost of raw materials and other costs (i.e., energy, freight, labor, benefit costs, etc.) in markets that are highly price competitive and volatile;  our ability to timely or adequately respond to technological changes in the industry; the impact of the Internet and other electronic media on the demand for forms and printed materials; the impact of foreign competition; changes in economic conditions; customer credit risk; competitors’ pricing strategies; a decline in business volume and profitability could result in an impairment in our reported goodwill negatively impacting our operational results; our ability to retain key management personnel; our ability to identify, manage or integrate acquisitions; and changes in government regulations.  In addition to the factors indicated above, you should carefully consider the risks described in and incorporated by reference herein and in the risk factors in our Annual Report on Form 10-K for the fiscal year ended February 28, 2018 before making an investment in our common stock.

Critical Accounting Policies and Estimates

In preparing our consolidated financial statements, we are required to make estimates and assumptions that affect the disclosures and reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and judgments on an ongoing basis, including those related to allowance for doubtful receivables, inventory valuations, property, plant and equipment, intangible assets, pension plan obligations, accrued liabilities and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We believe our accounting policies related to the aforementioned items are the most critical due to their effect on our more significant estimates and judgments used in preparation of our consolidated financial statements.  For additional information, reference is made to the Critical Accounting Policies and Estimates section of our Annual Report on Form 10-K for the fiscal year ended February 28, 2018.

Results of Operations

The discussion that follows provides information which we believe is relevant to an understanding of our results of operations and financial condition.  The discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto, which are incorporated herein by reference.  The operating results of the Company for the three months ended May 31, 2018 and the comparative periods for 2017 are set forth in the unaudited consolidated financial information included in the tables below.

20

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

Consolidated Summary

Unaudited Consolidated Statements of	Three Months Ended May 31,
Operations - Data (in thousands)	2018					2017
Net sales	$	93,419		100.0	%	$	94,590		100.0	%
Cost of goods sold		63,228		67.7			64,598		68.3
Gross profit margin		30,191		32.3			29,992		31.7
Selling, general and administrative		17,735		19.0			17,316		18.3
(Gain) loss from disposal of assets		(4	)	—			15		—
Income from operations		12,460		13.3			12,661		13.4
Other expense		(131	)	(0.1	)		(306	)	(0.3	)
Earnings before income taxes		12,329		13.2			12,355		13.1
Provision for income taxes		3,082		3.3			4,571		4.9
Net earnings	$	9,247		9.9	%	$	7,784		8.2	%

Three months ended May 31, 2018 compared to three months ended May 31, 2017

Net Sales.  Our net sales were $93.4 million for the quarter ended May 31, 2018, compared to $94.6 million for the same quarter in the prior year, or a decrease of $1.2 million, or 1.3%.  On a sequential quarter basis, our revenues increased from $87.1 million, a $6.3 million increase, or 7.3%.  The market continues to be fairly soft with competitive pricing pressures.  However, current dollar pricing, has made domestic paper production more attractive internationally and coupled with shrinking domestic mill capacity, has resulted in an environment conducive for material price increases domestically.  These increases, if able to be passed along to customers, should offset some of the normal industry sales attrition in the marketplace.  The acquisition of Allen-Bailey Tag & Label (“ABTL”), which was completed in April 2018 and which is an integral part of our strategy to offset normal industry revenue declines due to print attrition and other changes, contributed $1.0 million in net sales during the three months ended May 31, 2018.

Cost of Goods Sold.  Our cost of goods sold decreased by $1.4 million from $64.6 million for the three months ended May 31, 2017 to $63.2 million for the three months ended May 31, 2018, or 2.2%. Our gross profit margin (“margin”) was $30.2 million for the quarter, or 32.3% of net sales, compared to $30.0 million, or 31.7% of net sales, for the same quarter in the prior year.  The Company attributed its margin increase during the quarter to three factors: 1) increased absorption factor, 2) plant consolidation and 3) product mix changes.

Selling, general, and administrative expense.  For the three months ended May 31, 2018, our selling, general, and administrative (“SG&A”) expenses were $17.7 million compared to $17.3 million for the three months ended May 31, 2017, or an increase of 2.3%.  As a percentage of net sales, the SG&A expenses were 19.0% and 18.3% for the three months ended May 31, 2018 and May 31, 2017, respectively.  The acquisition of ABTL added $0.2 million in SG&A expenses, and increases in our legal and performance bonus accruals added approximately $0.5 million in SG&A expenses during the quarter.  The acquisition of Independent Printing Company, Inc. and its related entities (collectively, “Independent”) in the fourth quarter of fiscal year 2017 increased our historical SG&A percentage.  We have recently completed the implementation of our enterprise resource planning (ERP) system at this location, which should allow us to reduce their expenses to be more in line with our historical percentage prior to the acquisition of Independent.  In addition, we continue to look for additional acquisitions to more fully leverage our corporate expense structure following our sale of Alstyle Apparel, LLC and its subsidiaries in May 2016.

(Gain) loss from disposal of assets.  The $4,000 net gain from disposal of assets during the quarter related primarily to the sale of manufacturing equipment.  The $15,000 loss during the same quarter in the prior year related primarily to sale of manufacturing equipment.

Income from operations.  As a result of the above factors, our income from operations for the three months ended May 31, 2018 was $12.5 million, or 13.3% of net sales, as compared to $12.7 million, or 13.4% of net sales, for the three months ended May 31, 2017.  The acquisition of ABTL contributed approximately $0.1 million of income during quarter.

Other expense.  Other expense was $0.1 million and $0.3 million for the three months ended May 31, 2018 and May 31, 2017, respectively.

21

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

Provision for income taxes. Our effective tax rate for operations was 25.0% for the three months ended May 31, 2018 as compared to 37% for the three months ended May 31, 2017.  The lower tax rate as compared to the first quarter in the prior year was due to the enactment of the Tax Cuts and Jobs Act of 2017 in the fourth quarter of the prior fiscal year.

Net earnings.  Earnings from operations, due to the factors above, were $9.2 million for the three months ended May 31, 2018 as compared to $7.8 million for the comparable quarter in the prior year, an increase of 17.9%.  Earnings from operations per diluted share for the three months ended May 31, 2018 was $0.36, compared to $0.31 for the same quarter in the prior year.

Liquidity and Capital Resources

We rely on our cash flows generated from operations and the borrowing capacity under our credit facility extended pursuant to our Second Amended and Restated Credit Agreement, as amended from time to time (the “Credit Facility”), to meet cash requirements of our business.  The primary cash requirements of our business are payments to vendors in the normal course of business, capital expenditures, debt repayments and related interest payments, contributions to our noncontributory defined benefit retirement plan, which covers approximately 20% of our aggregate employees (the “Pension Plan”), and the payment of dividends to our shareholders.  We expect to generate sufficient cash flows from operations supplemented by our Credit Facility as required to cover our operating and capital requirements for the foreseeable future.

	May 31,		February 28,
(Dollars in thousands)	2018		2018
Working Capital	$	137,334	$	133,773
Cash and cash equivalents	$	96,420	$	96,230

Working Capital.  Our working capital increased $3.6 million or 2.7%, from $133.8 million at February 28, 2018 to $137.3 million at May 31, 2018.  Our working capital was impacted primarily by an increase in our inventories of $4.5 million and a reduction of our current payables of $1.7 million, both of which were offset by a decrease in our prepaid income taxes of approximately $3.3 million. Our current ratio, calculated by dividing our current assets by our current liabilities, increased from 5.5 to 1.0 at February 28, 2018 to 5.9 to 1.0 at May 31, 2018.

	Three months ended May 31,
(Dollars in thousands)	2018			2017
Net cash provided by operating activities	$	11,890		$	12,346
Net cash used in investing activities	$	(5,937	)	$	(711	)
Net cash used in financing activities	$	(5,763	)	$	(7,778	)

Cash flows from operating activities.  Cash provided by operating activities decreased by $0.5 million from $12.3 million for the three months ended May 31, 2017 to $11.9 million for the three months ended May 31, 2018.  Our decreased operational cash flows in comparison to the comparable period in the prior year was primarily the result of a $2.2 million increase in our inventories, a $0.7 million increase in our receivables, and a $1.4 million decrease in our payables and accrued expenses.  These decreases in our cash were offset by $1.5 million of increased earnings and a $2.2 million decrease in our prepaid expenses and income taxes.

Cash flows from investing activities. Cash used in investing activities increased $5.2 million from $0.7 million to $5.9 million used for the three months ended May 31, 2017 and May 31, 2018, respectively.  This was primarily due to our acquisition of a tag and label operation in the current quarter of $4.7 million and $0.5 million more in cash used for capital expenditures.

Cash flows from financing activities.  We used $2.0 million less in cash from financing activities during the three months ended May 31, 2018 compared to the same period in the prior year.  We used $0.7 million to repurchase our common stock under our stock repurchase program during the three months ended May 31, 2018, whereas we used $3.3 million to repurchase shares of our common stock during the three months ended May 31, 2017.  This was offset by 0.6 million more used to pay dividends during the three months ended May 31, 2018 as compared to the three months ended May 31, 2017.

Credit Facility.  The Company’s Credit Facility, extended to the Company until August 11, 2020, provides the Company and its subsidiaries with up to $100.0 million in revolving credit, as well as a $20.0 million sublimit for the issuance of letters of credit and a $15.0 million sublimit for swing-line loans.  Under the Credit Facility, the Company or any of its subsidiaries 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 impose other customary covenants, such as requiring that our fixed charge coverage ratio not be less than

22

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

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 3.3% (3 month LIBOR + 1.0%) at May 31, 2018 and 3.0% (3 month LIBOR + 1.0%) at February 28, 2018.  The rate is determined by our fixed charge coverage ratio of total funded debt to EBITDA.  As of May 31, 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.

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

Pension Plan – We are required to make contributions to our Pension Plan.  These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).  Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, which effectively raises the discount rates mandated for determining the value of a plan’s benefit liability and annual cost of accruals, our minimum required contribution to the Pension Plan is zero for the Pension Plan year ending February 28, 2019. However, we expect to make a cash contribution to the Pension Plan of between $2.0 million and $3.0 million during fiscal year 2019.  We made contributions totaling $3.0 million to our Pension Plan during fiscal 2018. As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funding status, associated liabilities recorded and future required minimum contributions.  At May 31, 2018, we had an unfunded pension liability recorded on our balance sheet of $0.7 million.

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

Capital Expenditures – We expect our capital requirements for our current fiscal year, exclusive of capital required for possible acquisitions, will be within our historical levels of between $3.0 million and $5.0 million.  To date we have spent approximately $1.2 million on capital expenditures.  We expect to fund these expenditures through existing cash flows.

Contractual Obligations & Off-Balance Sheet Arrangements – There have been no significant changes in our contractual obligations since February 28, 2018 that have, or are reasonably likely to have, a material impact on our results of operations or financial condition.  We had no off-balance sheet arrangements in place as of May 31, 2018.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Interest Rates

We are exposed to interest rate risk on short-term and long-term financial instruments carrying variable interest rates.  We may from time to time utilize interest rate swaps to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates.  We do not use derivative instruments for trading purposes.  Our variable rate financial instruments, consisting of the outstanding loans under the Credit Facility, totaled $30.0 million at May 31, 2018.  The annual impact on our results of operations of a one-point interest rate change on the outstanding balance of the variable rate financial instruments as of May 31, 2018 would be approximately $0.3 million.

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

23

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. A review and evaluation were carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q, pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that review and evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures as of May 31, 2018 are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive and financial officers as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations of control systems, not all misstatements may be detected. Those inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people. Our controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during our fiscal quarter ended May 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

24

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes in our Risk Factors as previously discussed in our Annual Report on Form 10-K for the year ended February 28, 2018.

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

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 the three months ended May 31, 2018, the Company, under the program, repurchased 37,943 shares of common stock at an average price of $17.92 per share.  Since the program’s inception in October 2008, there have been 1,480,179 common shares repurchased at an average price of $15.07 per share. As of May 31, 2018 there was $17.7 million available to repurchase shares of the Company’s common stock under the program.

					Total Number
	Total				of Shares		Maximum Amount
	Number		Average		Purchased as		that May Yet Be Used
	of Shares		Price Paid		Part of Publicly		to Purchase Shares
Period	Purchased		per Share		Announced Programs		Under the Program
March 1, 2018 - March 31, 2018		—	$	—		—	$	18,377,146
April 1, 2018 - April 30, 2018		—	$	—		—	$	18,377,146
May 1, 2018 - May 31, 2018		37,943	$	17.92		37,943	$	17,697,351
Total		37,943	$	17.92		37,943	$	17,697,351

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

25

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

Item 6. Exhibits

The following exhibits are filed as part of this report.

Exhibit Number	Description
Exhibit 3.1(a)	Restated Articles of Incorporation, as amended through June 23, 1983 with attached amendments dated June 20, 1985, July 31, 1985, June 16, 1988 and November 4, 1998, incorporated herein by reference to Exhibit 3.1(a) to the Registrant’s Form 10-Q filed on October 6, 2017 (File No. 001-05807).
Exhibit 3.1(b)	Amendment to Articles of Incorporation, dated June 17, 2004, incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007 filed on May 9, 2007 (File No. 001-05807).
Exhibit 3.2	Fourth Amended and Restated Bylaws of Ennis, Inc., dated July 10, 2017, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 10, 2017 (File No. 001-05807).
Exhibit 31.1	Certification Pursuant to Rule 13a-14(a) of Chief Executive Officer.*
Exhibit 31.2	Certification Pursuant to Rule 13a-14(a) of Chief Financial Officer.*
Exhibit 32.1	Section 1350 Certification of Chief Executive Officer.**
Exhibit 32.2	Section 1350 Certification of Chief Financial Officer.**
Exhibit 101	The following information from Ennis, Inc.’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2018, filed on July 6, 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

26

ENNIS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE PERIOD ENDED MAY 31, 2018

SIGNATURES

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

	ENNIS, INC.
Date: July 6, 2018	/s/ Keith S. Walters
	Keith S. Walters
	Chairman, Chief Executive Officer and President
Date: July 6, 2018	/s/ Richard L. Travis, Jr.
	Richard L. Travis, Jr.
	Vice President — Finance and CFO, Treasurer and
	Principal Financial and Accounting Officer

27

EX-31.1

Exhibit 31.1

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

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

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

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

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

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

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

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

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

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

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

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

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

/s/ Keith S. Walters

Keith S. Walters

Chief Executive Officer

July 6, 2018

EX-31.2

Exhibit 31.2

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

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

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

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

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

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

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

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

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

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

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

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

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

/s/ Richard L. Travis, Jr.

Richard L. Travis, Jr.

Chief Financial Officer

July 6, 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 Quarterly Report on Form 10-Q of the Company for the period ended May 31, 2018, as filed with the Securities Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

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

/s/ Keith S. Walters

Keith S. Walters

Chairman of the Board and

Chief Executive Officer

Date:  July 6, 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 Quarterly Report on Form 10-Q of the Company for the period ended May 31, 2018, as filed with the Securities Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

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

/s/ Richard L. Travis, Jr.

Richard L. Travis, Jr.

Chief Financial Officer

Date:  July 6, 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 - shares	3 Months Ended
	May 31, 2018	Jun. 29, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	EBF
Entity Registrant Name	ENNIS, INC.
Entity Central Index Key	0000033002
Current Fiscal Year End Date	--02-28
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,456,559

XML

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2018	Feb. 28, 2018
Current assets
Cash	$ 96,420	$ 96,230
Accounts receivable, net of allowance for doubtful receivables of $1,298 at May 31, 2018 and $1,194 at February 28, 2018	36,241	35,654
Prepaid expenses	1,227	1,305
Prepaid income taxes	312	3,600
Inventories	30,971	26,480
Assets held for sale	75	75
Total current assets	165,246	163,344
Property, plant and equipment
Plant, machinery and equipment	134,678	133,222
Land and buildings	55,164	54,318
Other	23,299	23,208
Total property, plant and equipment	213,141	210,748
Less accumulated depreciation	166,770	164,840
Net property, plant and equipment	46,371	45,908
Goodwill	70,603	70,603
Intangible assets, net	49,805	49,254
Other assets	302	330
Total assets	332,327	329,439
Current liabilities
Accounts payable	11,290	12,168
Accrued expenses	16,622	17,403
Total current liabilities	27,912	29,571
Long-term debt	30,000	30,000
Liability for pension benefits	735	735
Deferred income taxes	6,257	6,189
Other liabilities	1,647	1,240
Total liabilities	66,551	67,735
Commitments and contingencies
Shareholders’ equity
Preferred stock $10 par value, authorized 1,000,000 shares; none issued
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at May 31, 2018 and February 28, 2018	75,134	75,134
Additional paid-in capital	120,270	121,333
Retained earnings	168,341	164,177
Accumulated other comprehensive income (loss):
Minimum pension liability, net of taxes	(16,167)	(16,428)
Total accumulated other comprehensive income (loss)	(16,167)	(16,428)
Treasury stock	(81,802)	(82,512)
Total shareholders’ equity	265,776	261,704
Total liabilities and shareholders' equity	$ 332,327	$ 329,439

XML

Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May 31, 2018	Feb. 28, 2018
Statement Of Financial Position [Abstract]
Allowance for doubtful receivables	$ 1,298	$ 1,194
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

Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	May 31, 2018	May 31, 2017
Income Statement [Abstract]
Net sales	$ 93,419	$ 94,590
Type of revenue [extensible list]	ebf:CommercialPrintedProductMember	ebf:CommercialPrintedProductMember
Cost of goods sold	$ 63,228	$ 64,598
Type of cost, good or service [extensible list]	ebf:CommercialPrintedProductMember	ebf:CommercialPrintedProductMember
Gross profit margin	$ 30,191	$ 29,992
Selling, general and administrative	17,735	17,316
(Gain) loss from disposal of assets	(4)	15
Income from operations	12,460	12,661
Other income (expense)
Interest expense	(261)	(190)
Other, net	130	(116)
Total other income (expense)	(131)	(306)
Earnings before income taxes	12,329	12,355
Income tax expense	3,082	4,571
Net earnings	$ 9,247	$ 7,784
Weighted average common shares outstanding
Basic	25,333,673	25,422,856
Diluted	25,363,772	25,436,787
Earnings per share
Basic	$ 0.37	$ 0.31
Diluted	0.36	0.31
Cash dividends per share	$ 0.200	$ 0.175

XML

Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	May 31, 2018	May 31, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 9,247	$ 7,784
Adjustment to pension, net of deferred taxes	261	248
Comprehensive income	$ 9,508	$ 8,032

XML

Unaudited Consolidated Statement of Changes in Shareholders' Equity - 3 months ended May 31, 2018 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]
Beginning balance at Feb. 28, 2018	$ 261,704	$ 75,134	$ 121,333	$ 164,177	$ (16,428)	$ (82,512)
Beginning balance common stock, shares at Feb. 28, 2018	30,053,443	30,053,443
Beginning balance, treasury stock, shares at Feb. 28, 2018						(4,789,228)
Net earnings	$ 9,247			9,247
Adjustment to pension, net of deferred tax of $87	261				261
Dividends paid ($0.20 per share)	(5,083)			(5,083)
Stock based compensation	327		327
Exercise of stock options and restricted stock			(1,390)			$ 1,390
Exercise of stock options and restricted stock, shares						80,692
Common stock repurchases	$ (680)					$ (680)
Common stock repurchases, shares	(37,943)					(37,943)
Ending balance at May. 31, 2018	$ 265,776	$ 75,134	$ 120,270	$ 168,341	$ (16,167)	$ (81,802)
Ending balance common stock, shares at May. 31, 2018	30,053,443	30,053,443
Ending balance treasury stock, shares at May. 31, 2018						(4,746,479)

XML

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

XML

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	May 31, 2018	May 31, 2017
Cash flows from operating activities:
Net earnings	$ 9,247	$ 7,784
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	2,035	1,996
Amortization of deferred finance charges	28	28
Amortization of intangible assets	1,415	1,525
(Gain) loss from disposal of assets	(4)	15
Bad debt expense, net of recoveries	135	(166)
Stock based compensation	327	333
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable	453	1,175
Prepaid expenses and income taxes	3,391	1,165
Inventories	(3,505)	(1,284)
Other assets		1
Accounts payable and accrued expenses	(1,964)	(543)
Other liabilities	3	(83)
Liability for pension benefits	329	400
Net cash provided by operating activities	11,890	12,346
Cash flows from investing activities:
Capital expenditures	(1,205)	(731)
Purchase of businesses, net of cash acquired	(4,736)
Proceeds from disposal of plant and property	4	20
Net cash used in investing activities	(5,937)	(711)
Cash flows from financing activities:
Dividends paid	(5,083)	(4,468)
Common stock repurchases	(680)	(3,310)
Net cash used in financing activities	(5,763)	(7,778)
Net change in cash	190	3,857
Cash at beginning of period	96,230	80,466
Cash at end of period	$ 96,420	$ 84,323

XML

Significant Accounting Policies and General Matters

3 Months Ended

May 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies and General Matters

1. Significant Accounting Policies and General Matters

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2018 have been prepared in accordance with generally accepted accounting principles for interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2018, from which the accompanying consolidated balance sheet at February 28, 2018 was derived.  All intercompany balances and transactions have been eliminated in consolidation.  In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included and are of a normal recurring nature. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

In 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 Company retrospectively adopted this guidance as of March 1, 2018.  See Note 11, Pension Plan, for further discussion.  The impact of adoption was a $73,000 decrease in cost of sales, $56,000 decrease in selling, general and administrative expenses and $129,000 increase in other expense-net for the three months ended May 31, 2017 compared to the amount previously reported.

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 adopted this standard on March 1, 2018.  The adoption of ASU 2016-01 did not have a material impact on the Company’s 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.  Our conclusion is that the timing of revenue recognition for our various revenue streams is not materially impacted by the adoption of this standard.  The Company adopted this standard on March 1, 2018 using the modified retrospective approach.  The adoption did not have, and is not expected to have, a significant impact on the consolidated operating results, financial position or cash flows of the Company.  See Note 2, Revenue, below for further disclosures associated with the adoption of this pronouncement.

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Revenue

3 Months Ended

May 31, 2018

Revenue From Contract With Customer [Abstract]

Revenue

2. Revenue

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

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

Nature of Revenues

Substantially all of the Company’s revenue from contracts with customers consist of the sale of commercial printing products in the continental United States and is primarily recognized at a point in time in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.  Revenue from the sale of commercial printing products, including shipping and handling fees billed to customers, is recognized upon the transfer of control to the customer, which is generally upon shipment to the customer when the terms of the sale are freight on board (“FOB”) shipping point, or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination.

In some cases and upon customer request, the Company prints and stores commercial printing product for customer specified future delivery, generally within the same year as the product is manufactured. In this case, revenue is recognized upon the transfer of control when manufacturing is complete and title and risk of ownership is passed to the customer, which for certain customers may be recognized over time rather than at a point in time.  As the output method for measure of progress is determined to be appropriate, the Company recognizes revenue in the amount for which it has the right to invoice for revenue that is recognized over time and for which it demonstrates that the invoiced amount corresponds directly with the value to the customer for the performance completed to date.

The Company does not disaggregate revenue and operates in one sales category consisting of commercial printed product revenue, which is reported as net sales on the consolidated statements of operations. The Company does not have material contract assets and contract liabilities as of May 31, 2018.

Significant Judgments

Generally, the Company’s contracts with customers are comprised of a written quote and customer purchase order or statement of work, and governed by the Company’s trade terms and conditions.  In certain instances, it may be further supplemented by separate pricing agreements and customer incentive arrangements, which typically only affect the contract’s transaction price. Contracts do not contain a significant financing component as payment terms on invoiced amounts are typically between 30 to 90 days, based on the Company’s credit assessment of individual customers, as well as industry expectations.  Product returns are not significant.

From time to time, the Company may offer incentives to its customers considered to be variable consideration including volume-based rebates or early payment discounts.   Customer incentives considered to be variable consideration are recorded as a reduction to revenue as part of the transaction price at contract inception when there is a basis to reasonably estimate the amount of the incentive and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur.  Customer incentives are allocated entirely to the single performance obligation of transferring printed product to the customer.

For customers with terms of FOB shipping point, the Company accounts for shipping and handling activities performed after the control of the printed product has been transferred to the customer as a fulfillment cost. The Company accrues for the costs of shipping and handling activities if revenue is recognized before contractually agreed shipping and handling activities occur.

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

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Accounts Receivable and Allowance for Doubtful Receivables

3 Months Ended

May 31, 2018

Receivables [Abstract]

Accounts Receivable and Allowance for Doubtful Receivables

3.Accounts Receivable and Allowance for Doubtful Receivables

Accounts receivable are reduced by an allowance for an estimate of amounts that are uncollectible. Substantially all of the Company’s receivables are due from customers in the United States.  The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution).  The Company does not typically require its customers to post a deposit or supply collateral.  The Company’s allowance for doubtful receivables is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible.  This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer creditworthiness, and (iii) review of customer receivable aging and payment trends.

The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance in the period the payment is received.

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

	Three months ended
	May 31,
	2018			2017
Balance at beginning of period	$	1,194		$	1,674
Bad debt expense, net of recoveries		135			(166	)
Accounts written off		(31	)		(66	)
Balance at end of period	$	1,298		$	1,442

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Inventories

3 Months Ended

May 31, 2018

Inventory Disclosure [Abstract]

Inventories

4. Inventories

The Company uses the lower of last-in, first-out (“LIFO”) cost or market to value certain of its business forms inventories and the lower of first-in, first-out (“FIFO”) cost or market to value its remaining forms inventories.  The Company regularly reviews inventories on hand, using specific aging categories, and writes down the carrying value of its inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage.  In assessing the ultimate realization of its inventories, the Company is required to make judgments as to future demand requirements.  As actual future demand or market conditions may vary from those projected by the Company, adjustments to inventories may be required.

The following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):

	May 31,		February 28,
	2018		2018
Raw material	$	19,264	$	15,854
Work-in-process		3,381		3,114
Finished goods		8,326		7,512
	$	30,971	$	26,480

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Acquisitions

3 Months Ended

May 31, 2018

Business Combinations [Abstract]

Acquisitions

5. Acquisitions

On April 30, 2018, the Company acquired the assets of a tag and label operation located in New York for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment.  In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years.  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 both of these acquisitions immaterial.

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Goodwill and Intangible Assets

3 Months Ended

May 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

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

The Company 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.

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

	Weighted
	Average
	Remaining		Gross
	Life		Carrying		Accumulated
As of May 31, 2018	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		15.5	$	20,558	$	2,715	$	17,843
Customer lists		7.9		58,973		27,136		31,837
Noncompete		4.1		275		151		124
Patent		0.2		783		782		1
Total		10.6	$	80,589	$	30,784	$	49,805
As of February 28, 2018
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

Aggregate amortization expense for the three months ended May 31, 2018 and May 31, 2017 was $1.4 million and $1.5 million, respectively.

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

2019	$	5,730
2020		5,682
2021		5,612
2022		5,569
2023		4,781

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

Balance as of March 1, 2017	$	70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of February 28, 2018		70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of May 31, 2018	$	70,603

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Accrued Expenses

3 Months Ended

May 31, 2018

Payables And Accruals [Abstract]

Accrued Expenses

7. Accrued Expenses

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

	May 31,		February 28,
	2018		2018
Employee compensation and benefits	$	14,472	$	15,597
Taxes other than income		769		296
Accrued legal and professional fees		201		282
Accrued interest		170		143
Accrued utilities		90		148
Accrued acquisition related obligations		624		654
Accrued credit card fees		127		115
Other accrued expenses		169		168
	$	16,622	$	17,403

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Long-Term Debt

3 Months Ended

May 31, 2018

Debt Disclosure [Abstract]

Long-Term Debt

8. Long-Term Debt

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

	May 31,		February 28,
	2018		2018
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 May 31, 2018, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.3% (3 month LIBOR + 1.0%) at May 31, 2018 and 3.0% (3 month LIBOR + 1.0%) at February 28, 2018.  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 May 31, 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

3 Months Ended

May 31, 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 three months ended May 31, 2018 the Company, under the program, repurchased 37,943 shares of common stock at an average price of $17.92 per share.  Since the program’s inception in October 2008, there have been 1,480,179 common shares repurchased at an average price of $15.07 per share. As of May 31, 2018 there was $17.7 million available to repurchase shares of the Company’s common stock under the program.

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Stock Option Plan and Stock Based Compensation

3 Months Ended

May 31, 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 May 31, 2018, the Company had one stock option plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011, formerly the 1998 Option and Restricted Stock Plan amended and restated as of May 14, 2008 (the “Plan”). The Company has 456,796 shares of unissued common stock reserved under the Plan for issuance as of May 31, 2018.  The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants on a straight-line basis over the requisite service period.  For the three months ended May 31, 2018 and May 31, 2017, the Company included compensation expense related to share-based compensation of $0.3 million and $0.3 million, respectively, in selling, general, and administrative expenses.

Stock Options

The Company had the following stock option activity for the three months ended May 31, 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, 2018		172,496	$	15.95		3.2	$	612
Granted		—		—
Terminated		—		—
Exercised		—		—
Outstanding at May 31, 2018		172,496	$	15.95		3.0	$	405
Exercisable at May 31, 2018		172,496	$	15.95		3.0	$	405

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

No stock options were granted or exercised during the three months ended May 31, 2018 and May 31, 2017. 

A summary of the Company’s unvested stock options at May 31, 2018 and the changes during the three months ended May 31, 2018 are presented below:

				Weighted
				Average
	Number			Grant Date
	of Options			Fair Value
Unvested at March 1, 2018		1,616		$	2.24
New grants		—			—
Vested		(1,616	)		2.24
Forfeited		—			—
Unvested at May 31, 2018		—			—

Restricted Stock

The Company had the following restricted stock grant activity for the three months ended May 31, 2018:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2018		152,675		$	16.59
Granted		72,612			20.35
Terminated		—			—
Vested		(80,692	)		16.02
Outstanding at May 31, 2018		144,595		$	18.80

As of May 31, 2018, the total remaining unrecognized compensation cost related to unvested restricted stock granted under the Plan was approximately $2.6 million.  The weighted average remaining requisite service period of the unvested restricted stock awards was 2.2 years.

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Pension Plan

3 Months Ended

May 31, 2018

Compensation And Retirement Disclosure [Abstract]

Pension Plan

11. Pension Plan

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 20% of our aggregate employees.  Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination.

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

	Three months ended
	May 31,
	2018			2017
Components of net periodic benefit cost
Service cost	$	277		$	271
Interest cost		568			568
Expected return on plan assets		(1,027	)		(949	)
Amortization of:
Unrecognized net loss		511			510
Net periodic benefit cost	$	329		$	400

The Company is required to make contributions to the Pension Plan.  These contributions are required under the minimum funding requirements of ERISA.  Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a 25-year average of interest rates plus or minus a corridor.  The Company’s minimum required contribution to the Pension Plan is zero for the Pension Plan year ending February 28, 2019.  However, the Company expects to make a cash contribution to the Pension Plan of between $2.0 million and $3.0 million during fiscal year 2019.  The Company contributed $3.0 million to the Pension Plan during fiscal year 2018.

The Company adopted ASU No. 2017-07 “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”, with retrospective adoption, during the first quarter of fiscal year 2019 and records benefit service costs in cost of sales and selling, general and administrative expenses.  The other components, which include interest cost, expected return on plan assets and net amortization, are recorded in other income (expense)-net within the Consolidated Statements of Operations.  Previously, all pension and postretirement benefits expense (income) was recorded in cost of sales and selling, general and administrative expenses.  See Note 1, Recent Accounting Pronouncements, for further discussion and impact of adoption.

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Earnings per Share

3 Months Ended

May 31, 2018

Earnings Per Share [Abstract]

Earnings per Share

12.Earnings per Share

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

For the three months ended May 31, 2018, all options were included in the diluted earnings per share computation because the average fair market value of the Company’s stock exceeded the exercise price of the options.For the three months ended May 31, 2017, 95,692 sharesrelated to stock options were not included in the diluted earnings per share computation because the exercise price exceeded the average fair market value of the Company’s stock.  The following table sets forth the computation for basic and diluted earnings (loss) per share for the periods indicated:

	Three months ended
	May 31,
	2018		2017
Basic weighted average common shares outstanding		25,333,673		25,422,856
Effect of dilutive options		30,099		13,931
Diluted weighted average common shares outstanding		25,363,772		25,436,787
Earnings per share:
Net earnings - basic	$	0.37	$	0.31
Net earnings - diluted	$	0.36	$	0.31
Cash dividends	$	0.200	$	0.175

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Concentrations of Risk

3 Months Ended

May 31, 2018

Risks And Uncertainties [Abstract]

Concentrations of Risk

13. Concentrations of Risk

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

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

For the purposes of the Consolidated Statements of Cash Flows, the Company considers cash to include cash on hand and in bank accounts.  The Federal Deposit Insurance Corporation insures accounts up to $250,000.  At May 31, 2018, cash balances included $95.2 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

3 Months Ended

May 31, 2018

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

On June 15, 2018, the Board increased the quarterly dividend on our common stock to 22.5 cents per share from 20 cents per share, which will be paid on August 3, 2018 to the shareholders of record on July 6, 2018.

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Significant Accounting Policies and General Matters (Policies)

3 Months Ended

May 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended May 31, 2018 have been prepared in accordance with generally accepted accounting principles for interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2018, from which the accompanying consolidated balance sheet at February 28, 2018 was derived.  All intercompany balances and transactions have been eliminated in consolidation.  In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included and are of a normal recurring nature. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In 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 Company retrospectively adopted this guidance as of March 1, 2018.  See Note 11, Pension Plan, for further discussion.  The impact of adoption was a $73,000 decrease in cost of sales, $56,000 decrease in selling, general and administrative expenses and $129,000 increase in other expense-net for the three months ended May 31, 2017 compared to the amount previously reported.

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 adopted this standard on March 1, 2018.  The adoption of ASU 2016-01 did not have a material impact on the Company’s 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.  Our conclusion is that the timing of revenue recognition for our various revenue streams is not materially impacted by the adoption of this standard.  The Company adopted this standard on March 1, 2018 using the modified retrospective approach.  The adoption did not have, and is not expected to have, a significant impact on the consolidated operating results, financial position or cash flows of the Company.  See Note 2, Revenue, below for further disclosures associated with the adoption of this pronouncement.

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Accounts Receivable and Allowance for Doubtful Receivables (Tables)

3 Months Ended

May 31, 2018

Receivables [Abstract]

Allowance for Doubtful Receivables

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

	Three months ended
	May 31,
	2018			2017
Balance at beginning of period	$	1,194		$	1,674
Bad debt expense, net of recoveries		135			(166	)
Accounts written off		(31	)		(66	)
Balance at end of period	$	1,298		$	1,442

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Inventories (Tables)

3 Months Ended

May 31, 2018

Inventory Disclosure [Abstract]

Components of Inventories

The following table summarizes the components of inventories at the different stages of production as of the dates indicated (in thousands):

	May 31,		February 28,
	2018		2018
Raw material	$	19,264	$	15,854
Work-in-process		3,381		3,114
Finished goods		8,326		7,512
	$	30,971	$	26,480

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Goodwill and Intangible Assets (Tables)

3 Months Ended

May 31, 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 May 31, 2018	(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		15.5	$	20,558	$	2,715	$	17,843
Customer lists		7.9		58,973		27,136		31,837
Noncompete		4.1		275		151		124
Patent		0.2		783		782		1
Total		10.6	$	80,589	$	30,784	$	49,805
As of February 28, 2018
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

Estimated Amortization Expense

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

2019	$	5,730
2020		5,682
2021		5,612
2022		5,569
2023		4,781

Changes in Net Carrying Amount of Goodwill

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

Balance as of March 1, 2017	$	70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of February 28, 2018		70,603
Goodwill acquired		—
Goodwill impairment		—
Balance as of May 31, 2018	$	70,603

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Accrued Expenses (Tables)

3 Months Ended

May 31, 2018

Payables And Accruals [Abstract]

Components of Accrued Expenses

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

	May 31,		February 28,
	2018		2018
Employee compensation and benefits	$	14,472	$	15,597
Taxes other than income		769		296
Accrued legal and professional fees		201		282
Accrued interest		170		143
Accrued utilities		90		148
Accrued acquisition related obligations		624		654
Accrued credit card fees		127		115
Other accrued expenses		169		168
	$	16,622	$	17,403

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Long-Term Debt (Tables)

3 Months Ended

May 31, 2018

Debt Disclosure [Abstract]

Summary of Long-Term Debt

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

	May 31,		February 28,
	2018		2018
Revolving credit facility	$	30,000	$	30,000

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Stock Option Plan and Stock Based Compensation (Tables)

3 Months Ended

May 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option Activity

The Company had the following stock option activity for the three months ended May 31, 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, 2018		172,496	$	15.95		3.2	$	612
Granted		—		—
Terminated		—		—
Exercised		—		—
Outstanding at May 31, 2018		172,496	$	15.95		3.0	$	405
Exercisable at May 31, 2018		172,496	$	15.95		3.0	$	405

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

Summary of Unvested Stock Options

A summary of the Company’s unvested stock options at May 31, 2018 and the changes during the three months ended May 31, 2018 are presented below:

				Weighted
				Average
	Number			Grant Date
	of Options			Fair Value
Unvested at March 1, 2018		1,616		$	2.24
New grants		—			—
Vested		(1,616	)		2.24
Forfeited		—			—
Unvested at May 31, 2018		—			—

Restricted Stock Grant Activity

The Company had the following restricted stock grant activity for the three months ended May 31, 2018:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2018		152,675		$	16.59
Granted		72,612			20.35
Terminated		—			—
Vested		(80,692	)		16.02
Outstanding at May 31, 2018		144,595		$	18.80

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Pension Plan (Tables)

3 Months Ended

May 31, 2018

Compensation And Retirement Disclosure [Abstract]

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

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

	Three months ended
	May 31,
	2018			2017
Components of net periodic benefit cost
Service cost	$	277		$	271
Interest cost		568			568
Expected return on plan assets		(1,027	)		(949	)
Amortization of:
Unrecognized net loss		511			510
Net periodic benefit cost	$	329		$	400

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Earnings per Share (Tables)

3 Months Ended

May 31, 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 periods indicated:

	Three months ended
	May 31,
	2018		2017
Basic weighted average common shares outstanding		25,333,673		25,422,856
Effect of dilutive options		30,099		13,931
Diluted weighted average common shares outstanding		25,363,772		25,436,787
Earnings per share:
Net earnings - basic	$	0.37	$	0.31
Net earnings - diluted	$	0.36	$	0.31
Cash dividends	$	0.200	$	0.175

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Significant Accounting Policies and General Matters - Additional Information (Detail) - Accounting Standards Update 2017-07 [Member]	3 Months Ended
	May 31, 2017 USD ($)
Cost of Sales [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
New accounting pronouncement or change in accounting principle, effect of change on operating results	$ (73,000)
Selling, General and Administrative Expenses [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
New accounting pronouncement or change in accounting principle, effect of change on operating results	(56,000)
Other Expense [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
New accounting pronouncement or change in accounting principle, effect of change on operating results	$ 129,000

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Revenue - Additional Information (Detail)	3 Months Ended
	May 31, 2018
Disaggregation Of Revenue [Line Items]
Revenue unsatisfied performance obligation, practical expedient	true
Minimum [Member]
Disaggregation Of Revenue [Line Items]
Contract with customer, customer payment terms	30 days
Maximum [Member]
Disaggregation Of Revenue [Line Items]
Contract with customer, customer payment terms	90 days

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Accounts Receivable and Allowance for Doubtful Receivables - Allowance for Doubtful Receivables (Detail) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2018	May 31, 2017
Receivables [Abstract]
Balance at beginning of period	$ 1,194	$ 1,674
Bad debt expense, net of recoveries	135	(166)
Accounts written off	(31)	(66)
Balance at end of period	$ 1,298	$ 1,442

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Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands	May 31, 2018	Feb. 28, 2018
Inventory Disclosure [Abstract]
Raw material	$ 19,264	$ 15,854
Work-in-process	3,381	3,114
Finished goods	8,326	7,512
Inventories	$ 30,971	$ 26,480

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Acquisitions - Additional Information (Detail) - USD ($)	Apr. 30, 2018	Jul. 07, 2017
Tag and Label Company [Member]
Business Acquisition [Line Items]
Total purchase consideration	$ 4,700,000
Contingent consideration payable, period	3 years
Tag and Label Company [Member] | Maximum [Member]
Business Acquisition [Line Items]
Contingent consideration payable	$ 500,000
Tag Company [Member]
Business Acquisition [Line Items]
Total purchase consideration		$ 1,400,000

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended		12 Months Ended
	Mar. 01, 2017	May 31, 2018	May 31, 2017	Feb. 28, 2018
Finite-Lived Intangible Assets [Line Items]
Remaining estimated useful life		10 years 7 months 6 days		10 years 9 months 18 days
Amortization of trade names, customer lists, and patent		$ 1,415	$ 1,525
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining estimated useful life		15 years 6 months		16 years
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 Intangible Assets - Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	May 31, 2018	Feb. 28, 2018
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	10 years 7 months 6 days	10 years 9 months 18 days
Gross Carrying Amount	$ 80,589	$ 78,623
Accumulated Amortization	30,784	29,369
Amortized intangible assets, Net	$ 49,805	$ 49,254
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	15 years 6 months	16 years
Gross Carrying Amount	$ 20,558	$ 19,625
Accumulated Amortization	2,715	2,408
Amortized intangible assets, Net	$ 17,843	$ 17,217
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	7 years 10 months 24 days	8 years 1 month 6 days
Gross Carrying Amount	$ 58,973	$ 58,040
Accumulated Amortization	27,136	26,039
Amortized intangible assets, Net	$ 31,837	$ 32,001
Noncompete [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	4 years 1 month 6 days	1 year 1 month 6 days
Gross Carrying Amount	$ 275	$ 175
Accumulated Amortization	151	140
Amortized intangible assets, Net	$ 124	$ 35
Patent [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life (in years)	2 months 12 days	4 months 24 days
Gross Carrying Amount	$ 783	$ 783
Accumulated Amortization	782	782
Amortized intangible assets, Net	$ 1	$ 1

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Goodwill and Intangible Assets - Estimated Amortization Expense (Detail) $ in Thousands	May 31, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2019	$ 5,730
2020	5,682
2021	5,612
2022	5,569
2023	$ 4,781

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Goodwill and Intangible Assets - Changes in Net Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	May 31, 2018	Feb. 28, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Beginning balance	$ 70,603	$ 70,603
Goodwill impairment	0	0
Goodwill, Ending balance	$ 70,603	$ 70,603

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Accrued Expenses - Components of Accrued Expenses (Detail) - USD ($) $ in Thousands	May 31, 2018	Feb. 28, 2018
Payables And Accruals [Abstract]
Employee compensation and benefits	$ 14,472	$ 15,597
Taxes other than income	769	296
Accrued legal and professional fees	201	282
Accrued interest	170	143
Accrued utilities	90	148
Accrued acquisition related obligations	624	654
Accrued credit card fees	127	115
Other accrued expenses	169	168
Accrued expenses, Total	$ 16,622	$ 17,403

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Long-Term Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands	May 31, 2018	Feb. 28, 2018
Line of Credit Facility [Line Items]
Revolving credit facility	$ 30,000	$ 30,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility	$ 30,000	$ 30,000

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Long-Term Debt - Additional Information (Detail)	3 Months Ended	12 Months Ended
	May 31, 2018 USD ($)	Feb. 28, 2018
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 3.3% (3 month LIBOR + 1.0%) at May 31, 2018 and 3.0% (3 month LIBOR + 1.0%) at February 28, 2018.
Revolving credit facility, variable basis spread	1.00%	1.00%
Revolving credit facility, interest rate	3.30%	3.00%
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)		3 Months Ended	115 Months Ended
	May 31, 2018 USD ($)	May 31, 2018 USD ($) $ / shares shares	May 31, 2018 USD ($) $ / shares shares
Equity [Abstract]
Repurchase of common stock through a stock repurchase program	$ 40,000,000	$ 40,000,000	$ 40,000,000
Repurchase of common stock | shares		37,943	1,480,179
Repurchase of common stock, average cost per share | $ / shares		$ 17.92	$ 15.07
Total amount available to repurchase of shares	$ 17,700,000

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Stock Option Plan and Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	May 31, 2018	May 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unissued common stock reserved	456,796
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
Number of stock options exercised	0	0
Remaining unrecognized compensation cost related to unvested restricted stock	$ 2.6
Weighted average remaining requisite service period of the unvested restricted stock awards	2 years 2 months 12 days
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense related share based compensation before tax	$ 0.3	$ 0.3

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Stock Option Plan and Stock Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	May 31, 2018	May 31, 2017	Feb. 28, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Shares, Options Outstanding, Beginning Balance	172,496
Number of Shares, Granted	0	0
Number of Shares, Terminated	0
Number of Shares, Exercised	0	0
Number of Shares, Options Outstanding, Ending Balance	172,496		172,496
Number of Shares, Exercisable	172,496
Weighted Average Exercise Price, Beginning Balance	$ 15.95
Weighted Average Exercise Price, Granted	0
Weighted Average Exercise Price, Terminated	0
Weighted Average Exercise Price, Exercised	0
Weighted Average Exercise Price, Ending Balance	15.95		$ 15.95
Weighted Average Exercise Price, Exercisable	$ 15.95
Weighted Average Remaining Contractual Life (in years)	3 years		3 years 2 months 12 days
Weighted Average Remaining Contractual Life, Exercisable	3 years
Aggregate Intrinsic Value	$ 405		$ 612
Aggregate Intrinsic Value, Exercisable	$ 405

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Stock Option Plan and Stock Based Compensation - Summary of Unvested Stock Options (Detail) - $ / shares	3 Months Ended
	May 31, 2018	May 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Unvested Beginning Balance, Number of Options	1,616
New grants, Number of Options	0	0
Vested, Number of Options	(1,616)
Forfeited, Number of Options	0
Unvested Ending Balance, Number of Options	0
Unvested Beginning Balance, Weighted Average Grant Date Fair Value	$ 2.24
New grants, Weighted Average Grant Date Fair Value	0
Vested, Weighted Average Grant Date Fair Value	2.24
Forfeited, Weighted Average Grant Date Fair Value	0
Unvested Ending Balance, Weighted Average Grant Date Fair Value	$ 0

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Stock Option Plan and Stock Based Compensation - Restricted Stock Grant Activity (Detail) - Restricted Stock [Member]	3 Months Ended
	May 31, 2018 $ / shares shares
Restricted stock grant activity
Outstanding at Beginning, Number of Shares | shares	152,675
Number of Shares, Granted | shares	72,612
Number of Shares, Terminated | shares	0
Number of Shares, Vested | shares	(80,692)
Outstanding at Ending, Number of Shares | shares	144,595
Outstanding at Beginning, Weighted Average Grant Date Fair value | $ / shares	$ 16.59
Weighted Average Grant Date Fair Value, Granted | $ / shares	20.35
Weighted Average Grant Date Fair Value, Terminated | $ / shares	0
Weighted Average Grant Date Fair Value, Vested | $ / shares	16.02
Outstanding at Ending, Weighted Average Grant Date Fair value | $ / shares	$ 18.80

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Pension Plan - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	May 31, 2018	Feb. 28, 2019	Feb. 28, 2018
Defined Benefit Plan Disclosure [Line Items]
Employees covered under noncontributory Pension Plan	20.00%
Compensation period preceding retirement and termination	5 years
Period used for calculating Pension Plan liability	25 years
Cash contribution to the pension plan			$ 3,000,000
Scenario Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Minimum required contribution to the plan is approximately		$ 0
Scenario Forecast [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash contribution to the pension plan		2,000,000
Scenario Forecast [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash contribution to the pension plan		$ 3,000,000

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Pension Plan - Summary of Pension Expense Composed of Components Included in Cost of Goods Sold and Selling, General and Administrative Expenses (Detail) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2018	May 31, 2017
Components of net periodic benefit cost
Service cost	$ 277	$ 271
Interest cost	568	568
Expected return on plan assets	(1,027)	(949)
Amortization of:
Unrecognized net loss	511	510
Net periodic benefit cost	$ 329	$ 400

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Earnings per Share - Additional Information (Detail)	3 Months Ended
	May 31, 2017 shares
Earnings Per Share [Abstract]
Stock options not included in the diluted earnings per share computation	95,692

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Earnings per Share - Computation for Basic and Diluted Earnings (loss) per Share (Detail) - $ / shares	3 Months Ended
	May 31, 2018	May 31, 2017
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	25,333,673	25,422,856
Effect of dilutive options	30,099	13,931
Diluted weighted average common shares outstanding	25,363,772	25,436,787
Earnings per share
Net earnings - basic	$ 0.37	$ 0.31
Net earnings - diluted	0.36	0.31
Cash dividends	$ 0.200	$ 0.175

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Concentrations of Risk - Additional Information (Detail)	May 31, 2018 USD ($)
Risks And Uncertainties [Abstract]
Maximum insurance available to depositors under the FDIC's general deposit insurance rules	$ 250,000
Cash balances not federally insured	$ 95,200,000

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Subsequent Events - Additional Information (Detail) - $ / shares	Jun. 15, 2018	Mar. 26, 2018
Subsequent Event [Member]
Subsequent Event [Line Items]
Dividend payable date	Aug. 03, 2018
Dividend payable, date of record	Jul. 06, 2018
Common Stock [Member]
Subsequent Event [Line Items]
Dividend payable per share		$ 0.20
Common Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Dividend payable per share	$ 0.225