##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended August 31, 2010
 OR
 o
    
    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.
  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)
 þ o
 o o
  Large accelerated Filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 TABLE OF CONTENTS
 PART I: FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Consolidated Balance Sheets at August 31, 2010 (unaudited) and February 28, 2010
    
    
    3Unaudited Consolidated Statements of Earnings for the three and six months ended August 31, 2010
and 2009
    
    
    5Unaudited Consolidated Statements of Cash Flows for the six months ended August 31, 2010 and 2009
    
    
    6Notes to the Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    37PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 1A. Risk Factors
    
    
    37Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    37Item 3. Defaults Upon Senior Securities
    
    
    37Item 4. Removed and Reserved
    
    
    37Item 5. Other Information
    
    
    37Item 6. Exhibits
    
    
    38SIGNATURES
    
    
    39EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    FINANCIAL STATEMENTS
 ENNIS, INC. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS  (Dollars in thousands )
 August 31,
    
    
    February 28,2010
    
    
    2010(unaudited)AssetsCurrent assetsCash
    
    $
    16,993
    
    
    $
    21,063Accounts receivable, net of allowance for doubtful receivables
of $4,900 at August 31, 2010 and $4,446 at February 28, 2010
    
    
    55,793
    
    
    
    57,249Prepaid expenses
    
    
    4,431
    
    
    
    6,867Inventories
    
    
    83,936
    
    
    
    75,137Deferred income taxes
    
    
    5,319
    
    
    
    5,319Assets held for sale
    
    
    
    
    
    
    804Total current assets
    
    
    166,472
    
    
    
    166,439Property, plant and equipment, at costPlant, machinery and equipment
    
    
    151,938
    
    
    
    138,419Land and buildings
    
    
    65,591
    
    
    
    55,430Other
    
    
    22,529
    
    
    
    22,402Total property, plant and equipment
    
    
    240,058
    
    
    
    216,251Less accumulated depreciation
    
    
    154,900
    
    
    
    150,531Net property, plant and equipment
    
    
    85,158
    
    
    
    65,720Goodwill
    
    
    117,341
    
    
    
    117,341Trademarks and tradenames, net
    
    
    58,831
    
    
    
    58,897Customer lists, net
    
    
    18,626
    
    
    
    19,753Deferred finance charges, net
    
    
    863
    
    
    
    1,079Other assets
    
    
    3,359
    
    
    
    3,470Total assets
    
    $
    450,650
    
    
    $
    432,699
 See accompanying notes to consolidated financial statements.
 3




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ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except for share amounts )
 August 31,
    
    
    February 28,2010
    
    
    2010(unaudited)Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    24,173
    
    
    $
    27,463Accrued expensesEmployee compensation and benefits
    
    
    14,560
    
    
    
    14,374Taxes other than income
    
    
    1,302
    
    
    
    1,539Federal and state income taxes payable
    
    
    3,230
    
    
    
    705Other
    
    
    7,155
    
    
    
    5,720Total current liabilities
    
    
    50,420
    
    
    
    49,801Long-term debt, less current installments
    
    
    41,272
    
    
    
    41,817Liability for pension benefits
    
    
    8,117
    
    
    
    7,132Deferred income taxes
    
    
    19,726
    
    
    
    19,821Other liabilities
    
    
    271
    
    
    
    868Total liabilities
    
    
    119,806
    
    
    
    119,439Commitments and contingenciesShareholders equityPreferred 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 August 31 and February 28, 2010
    
    
    75,134
    
    
    
    75,134Additional paid in capital
    
    
    121,370
    
    
    
    121,978Retained earnings
    
    
    223,208
    
    
    
    206,062Accumulated other comprehensive income (loss):Foreign currency translation, net of taxes
    
    
    (247
    )
    
    
    267Unrealized loss on derivative instruments, net of taxes
    
    
    (808
    )
    
    
    (1,154
    )Minimum pension liability, net of taxes
    
    
    (12,376
    )
    
    
    (12,376
    )(13,431
    )
    
    
    (13,263
    )406,281
    
    
    
    389,911Treasury stockCost of 4,224,137 shares at August 31, 2010 and
4,292,080 shares at February 28, 2010
    
    
    (75,437
    )
    
    
    (76,651
    )Total shareholders equity
    
    
    330,844
    
    
    
    313,260Total liabilities and shareholders equity
    
    $
    450,650
    
    
    $
    432,699
 See accompanying notes to consolidated financial statements.
 4




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ENNIS, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF EARNINGS
( Dollars in thousands except share and per share amounts )
(Unaudited)
 Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    143,034
    
    
    $
    137,767
    
    
    $
    283,775
    
    
    $
    268,597Cost of goods sold
    
    
    103,326
    
    
    
    101,945
    
    
    
    201,887
    
    
    
    201,791Gross profit margin
    
    
    39,708
    
    
    
    35,822
    
    
    
    81,888
    
    
    
    66,806Selling, general and administrative
    
    
    20,276
    
    
    
    19,952
    
    
    
    41,523
    
    
    
    39,411Gain from disposal of assets
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (3
    )Income from operations
    
    
    19,432
    
    
    
    15,871
    
    
    
    40,365
    
    
    
    27,398Other income (expense)Interest expense
    
    
    (321
    )
    
    
    (725
    )
    
    
    (758
    )
    
    
    (1,420
    )Other, net
    
    
    (11
    )
    
    
    6
    
    
    
    29
    
    
    
    (294
    )(332
    )
    
    
    (719
    )
    
    
    (729
    )
    
    
    (1,714
    )Earnings before income taxes
    
    
    19,100
    
    
    
    15,152
    
    
    
    39,636
    
    
    
    25,684Provision for income taxes
    
    
    6,971
    
    
    
    5,606
    
    
    
    14,467
    
    
    
    9,503Net earnings
    
    $
    12,129
    
    
    $
    9,546
    
    
    $
    25,169
    
    
    $
    16,181Weighted average common shares
outstandingBasic
    
    
    25,840,376
    
    
    
    25,735,950
    
    
    
    25,820,626
    
    
    
    25,727,577Diluted
    
    
    25,883,449
    
    
    
    25,781,298
    
    
    
    25,866,869
    
    
    
    25,757,226Per share amountsNet earnings  basic
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.97
    
    
    $
    0.63Net earnings  diluted
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.97
    
    
    $
    0.63Cash dividends per share
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.310
    
    
    $
    0.310
 See accompanying notes to consolidated financial statements.
 5




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ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (Dollars in thousands)
 (Unaudited)
 Six months endedAugust 31,2010
    
    
    2009Cash flows from operating activities:Net earnings
    
    $
    25,169
    
    
    $
    16,181Adjustments to reconcile net earnings to net cash provided
by operating activities:Depreciation
    
    
    4,152
    
    
    
    4,609Amortization of deferred finance charges
    
    
    216
    
    
    
    224Amortization of tradenames and customer lists
    
    
    1,201
    
    
    
    1,202Gain from disposal of assets
    
    
    
    
    
    
    (3
    )Bad debt expense
    
    
    1,304
    
    
    
    1,528Stock based compensation
    
    
    607
    
    
    
    528Changes in operating assets and liabilities:Accounts receivable
    
    
    112
    
    
    
    (7,883
    )Prepaid expenses
    
    
    2,424
    
    
    
    5,094Inventories
    
    
    (8,840
    )
    
    
    23,406Other assets
    
    
    103
    
    
    
    (937
    )Accounts payable and accrued expenses
    
    
    671
    
    
    
    5,186Other liabilities
    
    
    (597
    )
    
    
    (666
    )Prepaid pension asset/liability for pension benefits
    
    
    985
    
    
    
    1,505Net cash provided by operating activities
    
    
    27,507
    
    
    
    49,974Cash flows from investing activities:Capital expenditures
    
    
    (23,242
    )
    
    
    (5,800
    )Proceeds from disposal of plant and property
    
    
    4
    
    
    
    8Net cash used in investing activities
    
    
    (23,238
    )
    
    
    (5,792
    )Cash flows from financing activities:Repayment of debt
    
    
    
    
    
    
    (24,133
    )Dividends
    
    
    (8,023
    )
    
    
    (7,996
    )Purchase of treasury stock
    
    
    (1
    )
    
    
    (405
    )Net cash used in financing activities
    
    
    (8,024
    )
    
    
    (32,534
    )Effect of exchange rate changes on cash
    
    
    (315
    )
    
    
    210Net change in cash
    
    
    (4,070
    )
    
    
    11,858Cash at beginning of period
    
    
    21,063
    
    
    
    9,286Cash at end of period
    
    $
    16,993
    
    
    $
    21,144
 See accompanying notes to consolidated financial statements.
 6




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ENNIS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 1. Significant Accounting Policies and General Matters
 Basis of Presentation
  Recent Accounting Pronouncements
  2. Accounts Receivable and Allowance for Doubtful Receivables
   7




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 2. Accounts Receivable and Allowance for Doubtful Receivables-continued
  Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Balance at beginning of period
    
    $
    4,993
    
    
    $
    3,593
    
    
    $
    4,446
    
    
    $
    3,561Bad debt expense
    
    
    315
    
    
    
    989
    
    
    
    1,304
    
    
    
    1,528Recoveries
    
    
    23
    
    
    
    6
    
    
    
    35
    
    
    
    18Accounts written off
    
    
    (431
    )
    
    
    (520
    )
    
    
    (885
    )
    
    
    (1,067
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Balance at end of period
    
    $
    4,900
    
    
    $
    4,068
    
    
    $
    4,900
    
    
    $
    4,068
 3. Inventories
   August 31,
    
    
    February 28,2010
    
    
    2010Raw material
    
    $
    12,343
    
    
    $
    11,089Work-in-process
    
    
    18,353
    
    
    
    14,280Finished goods
    
    
    53,240
    
    
    
    49,768$
    83,936
    
    
    $
    75,137
 4. Goodwill and Other Intangible Assets
   8




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 4. Goodwill and Other Intangible Assets-continued
  GrossCarrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetAs of August 31, 2010Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    941
    
    
    $
    293Customer lists
    
    
    29,908
    
    
    
    11,282
    
    
    
    18,626Noncompete
    
    
    500
    
    
    
    491
    
    
    
    9$
    31,642
    
    
    $
    12,714
    
    
    $
    18,928As of February 28, 2010Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    875
    
    
    $
    359Customer lists
    
    
    29,908
    
    
    
    10,155
    
    
    
    19,753Noncompete
    
    
    500
    
    
    
    483
    
    
    
    17$
    31,642
    
    
    $
    11,513
    
    
    $
    20,129
 August 31,
    
    
    February 28,2010
    
    
    2010Non-amortizing intangible assets (in thousands)Trademarks
    
    $
    58,538
    
    
    $
    58,538
   2011
    
    $
    2,3972012
    
    
    2,3912013
    
    
    2,3472014
    
    
    2,2542015
    
    
    2,1362016
    
    
    2,078
  Print
    
    
    ApparelSegment
    
    
    SegmentTotal
    
    
    Total
    
    
    TotalBalance as of March 1, 2009
    
    $
    42,792
    
    
    $
    74,549
    
    
    $
    117,341Goodwill acquired
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    Balance as of March 1, 2010
    
    
    42,792
    
    
    
    74,549
    
    
    
    117,341Goodwill acquired
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    Balance as of August 31, 2010
    
    $
    42,792
    
    
    $
    74,549
    
    
    $
    117,341
 9




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 4. Goodwill and Other Intangible Assets-continued
  5. Other Accrued Expenses
  August 31, 2010
    
    
    February 28, 2010Accrued taxes
    
    $
    307
    
    
    $
    265Accrued legal and professional fees
    
    
    406
    
    
    
    392Accrued interest
    
    
    126
    
    
    
    114Accrued utilities
    
    
    1,436
    
    
    
    1,322Accrued repairs and maintenance
    
    
    616
    
    
    
    547Accrued construction retainer
    
    
    1,235
    
    
    
    582Accrued phantom stock obligation
    
    
    429
    
    
    
    422Accrued acquisition related obligations
    
    
    507
    
    
    
    594Other accrued expenses
    
    
    2,093
    
    
    
    1,482$
    7,155
    
    
    $
    5,720
 6. Derivative Instruments and Hedging Activities
   7. Fair Value Financial Instruments
   Level 1 
    
    Inputs utilize quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access.
 Level 2 
    
    Inputs utilize data points that are observable such as quoted prices,
interest rates and yield curves.
 Level 3 
    
    Inputs are unobservable data points for the asset or liability, and
include situations where there is little, if any, market activity for the asset or
liability.
 10




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 7. Fair Value Financial Instruments-continued
   August 31,
    
    
    Fair Value MeasurementsDescription
    
    2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative liability (Swap)
    
    $
    (1,272
    )
    
    $
    
    
    
    $
    (1,272
    )
    
    $
    $
    (1,272
    )
    
    $
    
    
    
    $
    (1,272
    )
    
    $
    
 February 28,
    
    
    Fair Value MeasurementsDescription
    
    2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative liability (Swap)
    
    $
    (1,817
    )
    
    $
    
    
    
    $
    (1,817
    )
    
    $
    $
    (1,817
    )
    
    $
    
    
    
    $
    (1,817
    )
    
    $
    
 8. Long-Term Debt
  August 31,
    
    
    February 28,2010
    
    
    2010Revolving credit facility
    
    $
    40,000
    
    
    $
    40,000Interest rate swap
    
    
    1,272
    
    
    
    1,817Long-term debt
    
    $
    41,272
    
    
    $
    41,817
   11




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 9. Shareholders Equity
  Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Net earnings
    
    $
    12,129
    
    
    $
    9,546
    
    
    $
    25,169
    
    
    $
    16,181Foreign currency translation adjustment,
net of deferred taxes
    
    
    (354
    )
    
    
    (57
    )
    
    
    (514
    )
    
    
    973Unrealized gain (loss) on derivative instruments,
net of deferred taxes
    
    
    101
    
    
    
    134
    
    
    
    346
    
    
    
    94Comprehensive income
    
    $
    11,876
    
    
    $
    9,623
    
    
    $
    25,001
    
    
    $
    17,248
  AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury StockShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance February 28, 2010
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    121,978
    
    
    $
    206,062
    
    
    $
    (13,263
    )
    
    
    (4,292,080
    )
    
    $
    (76,651
    )
    
    $
    313,260Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,169
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,169Foreign currency translation,
net of deferred tax
of $295
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (514
    )
    
    
    
    
    
    
    
    
    
    
    (514
    )Unrealized gain on
derivative instruments, net
of deferred tax
benefit of $199
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    346
    
    
    
    
    
    
    
    
    
    
    
    346Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,001Dividends declared
($.31 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,023
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,023
    )Stock based
compensation
    
    
    
    
    
    
    
    
    
    
    607
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    607Exercise of stock
options
and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    (1,215
    )
    
    
    
    
    
    
    
    
    
    
    68,034
    
    
    
    1,215
    
    
    
    Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91
    )
    
    
    (1
    )
    
    
    (1
    )Balance August 31, 2010
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    121,370
    
    
    $
    223,208
    
    
    $
    (13,431
    )
    
    
    (4,224,137
    )
    
    $
    (75,437
    )
    
    $
    330,844
  10. Stock Option Plan and Stock Based Compensation
  12




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 10. Stock Option Plan and Stock Based Compensation-continued
   Stock Options
  WeightedNumber
    
    
    Weighted
    
    
    Average
    
    
    Aggregateof
    
    
    Average
    
    
    Remaining
    
    
    IntrinsicShares
    
    
    Exercise
    
    
    Contractual
    
    
    Value(a)(exact quantity)
    
    
    Price
    
    
    Life (in years)
    
    
    (in thousands)Outstanding at February 28, 2010
    
    
    250,200
    
    
    $
    12.09
    
    
    
    6.0
    
    
    $
    1,003Granted
    
    
    62,500
    
    
    
    18.46Terminated
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Outstanding at August 31, 2010
    
    
    312,700
    
    
    $
    13.36
    
    
    
    6.3
    
    
    $
    1,007Exercisable at August 31, 2010
    
    
    171,450
    
    
    $
    13.53
    
    
    
    4.1
    
    
    $
    499
 
 (a)
    
    Intrinsic value is measured as the excess fair market value of the Companys Common Stock as
reported on the New York Stock Exchange over the applicable exercise price.  August 31,2010
    
    
    2009Expected volatility
    
    
    34.63
    %
    
    
    32.35
    %Expected term (years)
    
    
    3
    
    
    
    4Risk free interest rate
    
    
    1.58
    %
    
    
    2.01
    %Dividend yield
    
    
    4.24
    %
    
    
    4.74
    %Weighted average grant-date fair value
    
    $
    3.348
    
    
    $
    1.583
  13




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 10. Stock Option Plan and Stock Based Compensation-continued
  WeightedAverageNumber
    
    
    Grant Dateof Options
    
    
    Fair ValueUnvested at February 28, 2010
    
    
    110,000
    
    
    $
    1.64New grants
    
    
    62,500
    
    
    
    3.35Vested
    
    
    (31,250
    )
    
    
    1.79Forfeited
    
    
    
    
    
    
    Unvested at August 31, 2010
    
    
    141,250
    
    
    $
    2.36
  Restricted Stock
  WeightedAverageNumber of
    
    
    Grant DateShares
    
    
    Fair ValueOutstanding at February 28, 2010
    
    
    91,470
    
    
    $
    15.38Granted
    
    
    57,655
    
    
    
    17.34Terminated
    
    
    
    
    
    
    Vested
    
    
    (68,034
    )
    
    
    16.79Outstanding at August 31, 2010
    
    
    81,091
    
    
    $
    15.59
  11. Employee Benefit Plans
   14




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 11. Employee Benefit Plans-continued
 Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Components of net periodic benefit costService cost
    
    $
    304
    
    
    $
    285
    
    
    $
    607
    
    
    $
    570Interest cost
    
    
    655
    
    
    
    685
    
    
    
    1,309
    
    
    
    1,370Expected return on plan assets
    
    
    (766
    )
    
    
    (606
    )
    
    
    (1,531
    )
    
    
    (1,212
    )Amortization of:Prior service cost
    
    
    (36
    )
    
    
    (36
    )
    
    
    (72
    )
    
    
    (72
    )Unrecognized net loss
    
    
    336
    
    
    
    425
    
    
    
    672
    
    
    
    849Net periodic benefit cost
    
    $
    493
    
    
    $
    753
    
    
    $
    985
    
    
    $
    1,505
  12. Earnings per share
   Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Basic weighted average
common shares outstanding
    
    
    25,840,376
    
    
    
    25,735,950
    
    
    
    25,820,626
    
    
    
    25,727,577Effect of dilutive options
    
    
    43,073
    
    
    
    45,348
    
    
    
    46,243
    
    
    
    29,649Diluted weighted average
common shares outstanding
    
    
    25,883,449
    
    
    
    25,781,298
    
    
    
    25,866,869
    
    
    
    25,757,226Per share amounts:Net earnings  basic
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.97
    
    
    $
    0.63Net earnings  diluted
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.97
    
    
    $
    0.63Cash dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.310
    
    
    $
    0.310
 13. Segment Information and Geographic Information
   15




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 13. Segment Information and Geographic Information-continued
  ® ® ® SM SM ® ® SM SM ® ® ® ® SM ® ® ® ®
     Print
    
    
    Apparel
    
    
    
    
    
    
    ConsolidatedSegment
    
    
    Segment
    
    
    Corporate
    
    
    TotalsThree months ended August 31, 2010:Net sales
    
    $
    69,146
    
    
    $
    73,888
    
    
    $
    
    
    
    $
    143,034Depreciation
    
    
    1,412
    
    
    
    486
    
    
    
    187
    
    
    
    2,085Amortization of identifiable intangibles
    
    
    234
    
    
    
    366
    
    
    
    
    
    
    
    600Segment earnings (loss) before
income tax
    
    
    11,861
    
    
    
    11,621
    
    
    
    (4,382
    )
    
    
    19,100Segment assets
    
    
    139,475
    
    
    
    295,270
    
    
    
    15,905
    
    
    
    450,650Capital expenditures
    
    
    762
    
    
    
    9,312
    
    
    
    10
    
    
    
    10,084Three months ended August 31, 2009:Net sales
    
    $
    73,915
    
    
    $
    63,852
    
    
    $
    
    
    
    $
    137,767Depreciation
    
    
    1,488
    
    
    
    548
    
    
    
    217
    
    
    
    2,253Amortization of identifiable intangibles
    
    
    234
    
    
    
    366
    
    
    
    
    
    
    
    600Segment earnings (loss) before
income tax
    
    
    12,710
    
    
    
    6,224
    
    
    
    (3,782
    )
    
    
    15,152Segment assets
    
    
    148,940
    
    
    
    254,888
    
    
    
    24,347
    
    
    
    428,175Capital expenditures
    
    
    1,147
    
    
    
    3,973
    
    
    
    51
    
    
    
    5,171
 16




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 13. Segment Information and Geographic Information-continued
 Print
    
    
    Apparel
    
    
    
    
    
    
    ConsolidatedSegment
    
    
    Segment
    
    
    Corporate
    
    
    TotalsSix months ended August 31, 2010:Net sales
    
    $
    136,936
    
    
    $
    146,839
    
    
    $
    
    
    
    $
    283,775Depreciation
    
    
    2,788
    
    
    
    987
    
    
    
    377
    
    
    
    4,152Amortization of identifiable intangibles
    
    
    468
    
    
    
    733
    
    
    
    
    
    
    
    1,201Segment earnings (loss) before
income tax
    
    
    24,363
    
    
    
    24,123
    
    
    
    (8,850
    )
    
    
    39,636Segment assets
    
    
    139,475
    
    
    
    295,270
    
    
    
    15,905
    
    
    
    450,650Capital expenditures
    
    
    1,383
    
    
    
    21,846
    
    
    
    13
    
    
    
    23,242Six months ended August 31, 2009:Net sales
    
    $
    145,625
    
    
    $
    122,972
    
    
    $
    
    
    
    $
    268,597Depreciation
    
    
    3,042
    
    
    
    1,132
    
    
    
    435
    
    
    
    4,609Amortization of identifiable intangibles
    
    
    469
    
    
    
    733
    
    
    
    
    
    
    
    1,202Segment earnings (loss) before
income tax
    
    
    23,520
    
    
    
    9,623
    
    
    
    (7,459
    )
    
    
    25,684Segment assets
    
    
    148,940
    
    
    
    254,888
    
    
    
    24,347
    
    
    
    428,175Capital expenditures
    
    
    1,354
    
    
    
    4,326
    
    
    
    120
    
    
    
    5,800
  United States
    
    
    Canada
    
    
    Mexico
    
    
    TotalThree months ended August 31, 2010:Net sales to unaffiliated customersPrint Segment
    
    $
    69,146
    
    
    $
    
    
    
    $
    
    
    
    $
    69,146Apparel Segment
    
    
    66,380
    
    
    
    6,895
    
    
    
    613
    
    
    
    73,888$
    135,526
    
    
    $
    6,895
    
    
    $
    613
    
    
    $
    143,034Identifiable long-lived assetsPrint Segment
    
    $
    37,378
    
    
    $
    
    
    
    $
    
    
    
    $
    37,378Apparel Segment
    
    
    20,492
    
    
    
    31
    
    
    
    23,027
    
    
    
    43,550Corporate
    
    
    4,230
    
    
    
    
    
    
    
    
    
    
    
    4,230$
    62,100
    
    
    $
    31
    
    
    $
    23,027
    
    
    $
    85,158Three months ended August 31, 2009:Net sales to unaffiliated customersPrint Segment
    
    $
    73,915
    
    
    $
    
    
    
    $
    
    
    
    $
    73,915Apparel Segment
    
    
    58,875
    
    
    
    4,349
    
    
    
    628
    
    
    
    63,852$
    132,790
    
    
    $
    4,349
    
    
    $
    628
    
    
    $
    137,767Identifiable long-lived assetsPrint Segment
    
    $
    39,774
    
    
    $
    
    
    
    $
    
    
    
    $
    39,774Apparel Segment
    
    
    5,230
    
    
    
    38
    
    
    
    5,217
    
    
    
    10,485Corporate
    
    
    5,019
    
    
    
    
    
    
    
    
    
    
    
    5,019$
    50,023
    
    
    $
    38
    
    
    $
    5,217
    
    
    $
    55,278
 17




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ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2010
 13. Segment Information and Geographic Information-continued
 United States
    
    
    Canada
    
    
    Mexico
    
    
    TotalSix months ended August 31, 2010:Net sales to unaffiliated customersPrint Segment
    
    $
    136,936
    
    
    $
    
    
    
    $
    
    
    
    $
    136,936Apparel Segment
    
    
    133,322
    
    
    
    12,215
    
    
    
    1,302
    
    
    
    146,839$
    270,258
    
    
    $
    12,215
    
    
    $
    1,302
    
    
    $
    283,775Six months ended August 31, 2009:Net sales to unaffiliated customersPrint Segment
    
    $
    145,625
    
    
    $
    
    
    
    $
    
    
    
    $
    145,625Apparel Segment
    
    
    113,574
    
    
    
    7,744
    
    
    
    1,654
    
    
    
    122,972$
    259,199
    
    
    $
    7,744
    
    
    $
    1,654
    
    
    $
    268,597
 14. Supplemental Cash Flow Information
  Six months endedAugust 31,2010
    
    
    2009Interest paid
    
    $
    746
    
    
    $
    1,477Income taxes paid
    
    $
    11,984
    
    
    $
    4,591
 15. Concentrations of Risk
    16. Assets Held for Sale
  17. Subsequent Events
  18




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
  Business Segment Overview
  Print Segment
  ® ® ® SM SM ® ® SM SM ® ® ® ® SM ® ® ® ®
   19




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
      Our Print Business Challenges 
 
    
    Transformation of our portfolio of products
    
    Excess production capacity and price competition within our industry
    
    Economic uncertainties
  Transformation of our portfolio of products
 Excess production capacity and price competition within our industry
  20




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Economic uncertainties
 Apparel Segment
 ® ®
       21




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
    Our Apparel Business Challenges 
 
    
    Cotton prices
    
    Completion of our new manufacturing facility
    
    Economic uncertainties
 Cotton prices
 Completion of our new manufacturing facility
  22




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Economic uncertainties
 Risk Factors
  Our results and financial condition are affected by global and local market conditions, and
competitors pricing strategies, which can adversely affect our sales, margins, and net income.
  
    
    Our ability to manage upward pressure on commodity prices and the impact of
government actions to manage national economic conditions such as consumer spending,
inflation rates and unemployment levels, particularly given the current volatility in
the global financial markets;
    
    The impact on our margins of labor costs given our labor-intensive business model,
the trend toward higher wages in both mature and developing markets and the potential
impact of union organizing efforts on day-to-day operations of our manufacturing
facilities.
 Declining economic conditions could negatively impact our business.
   23




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 The terms and conditions of our credit facility impose certain restrictions on our operations. We
may not be able to raise additional capital, if needed, for proposed expansion projects.
   Declining financial market conditions could adversely impact the funding status of our pension
plan.
  We may be required to write down goodwill and other intangible assets which could cause our
financial condition and results of operations to be negatively affected in the future.
  Digital technologies will continue to erode the demand for our printed business documents.
   24




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Our distributors face increased competition from various sources, such as office supply
superstores. Increased competition may require us to reduce prices or to offer other incentives in
order to enable our distributors to attract new customers and retain existing customers.
  Technological improvements may reduce our competitive advantage over some of our competitors, which
could reduce our profits.
  We could experience labor disputes that could disrupt our business in the future.
  We obtain our raw materials from a limited number of suppliers, and any disruption in our
relationships with these suppliers, or any substantial increase in the price of raw materials or
material shortages could have a material adverse effect on us.
    25




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  We face intense competition to gain market share, which may lead some competitors to sell
substantial amounts of goods at prices against which we cannot profitably compete.
  The apparel industry is heavily influenced by general economic cycles.
  Our apparel foreign operations could be subject to unexpected changes in regulatory requirements,
tariffs and other market barriers and political and economic instability in the countries where it
operates, which could negatively impact our operating results.
  Our apparel products are subject to foreign competition, which in the past have been faced with
significant U.S. government import restrictions.
   26




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
     Environmental regulations may impact our future operating results.
  Our construction of a new apparel manufacturing facility in Mexico is subject to multiple approvals
and uncertainties that could affect our ability to complete the project on schedule or at budgeted
cost.
  We are exposed to the risk of non-payment by our customers on a significant amount of our sales.
  27




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Our business incurs significant freight and transportation costs.
  The price of energy is prone to significant fluctuations and volatility.
  We rely on independent contract production for a portion of our apparel production.
  We depend upon the talents and contributions of a limited number of individuals, many of whom would
be difficult to replace.
  Cautionary Statements
  28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
   Critical Accounting Policies and Estimates
       29




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
      30




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 Result of Operations
  
    
    Consolidated Summary this section provides an overview of our consolidated results of
operations for the three and six months ended August 31, 2010 and 2009.
    
    Segment Operating Results this section provides an analysis of our net sales, gross
profit margin and operating income by segment.
 Consolidated Summary
 Consolidated
    
    Three Months Ended August 31,
    
    
    Six Months Ended August 31,Statements of Earnings - Data
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    143,034
    
    
    
    100.0
    %
    
    $
    137,767
    
    
    
    100.0
    %
    
    $
    283,775
    
    
    
    100.0
    %
    
    $
    268,597
    
    
    
    100.0
    %Cost of goods sold
    
    
    103,326
    
    
    
    72.2
    
    
    
    101,945
    
    
    
    74.0
    
    
    
    201,887
    
    
    
    71.1
    
    
    
    201,791
    
    
    
    75.1Gross profit margin
    
    
    39,708
    
    
    
    27.8
    
    
    
    35,822
    
    
    
    26.0
    
    
    
    81,888
    
    
    
    28.9
    
    
    
    66,806
    
    
    
    24.9Selling, general and administrative
    
    
    20,276
    
    
    
    14.2
    
    
    
    19,952
    
    
    
    14.5
    
    
    
    41,523
    
    
    
    14.7
    
    
    
    39,411
    
    
    
    14.7Gain from disposal of assets
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    Income from operations
    
    
    19,432
    
    
    
    13.6
    
    
    
    15,871
    
    
    
    11.5
    
    
    
    40,365
    
    
    
    14.2
    
    
    
    27,398
    
    
    
    10.2Other expense, net
    
    
    (332
    )
    
    
    (0.2
    )
    
    
    (719
    )
    
    
    (0.5
    )
    
    
    (729
    )
    
    
    (0.2
    )
    
    
    (1,714
    )
    
    
    (0.6
    )Earnings before income taxes
    
    
    19,100
    
    
    
    13.4
    
    
    
    15,152
    
    
    
    11.0
    
    
    
    39,636
    
    
    
    14.0
    
    
    
    25,684
    
    
    
    9.6Provision for income taxes
    
    
    6,971
    
    
    
    4.9
    
    
    
    5,606
    
    
    
    4.1
    
    
    
    14,467
    
    
    
    5.1
    
    
    
    9,503
    
    
    
    3.6Net earnings
    
    $
    12,129
    
    
    
    8.5
    %
    
    $
    9,546
    
    
    
    6.9
    %
    
    $
    25,169
    
    
    
    8.9
    %
    
    $
    16,181
    
    
    
    6.0
    %
 Three Months ended August 31, 2010 compared to Three Months ended August 31, 2009
 Net Sales.
 Cost of Goods Sold.
 Selling, general and administrative expense.
 Gain/Loss from disposal of assets.
 Income from operations.
 31




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Other income and expense.
 Provision for income taxes.
 Net earnings.
 Six Months ended August 31, 2010 compared to Six Months ended August 31, 2009
 Net Sales.
 Cost of Goods Sold.
 Selling, general and administrative expense.
 Gain from disposal of assets.
 Income from operations.
 Other income and expense.
 32




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ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Provision for income taxes.
 Net earnings.
 Segment Operating Results
 Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,Net Sales by Segment (in thousands)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Print
    
    $
    69,146
    
    
    $
    73,915
    
    
    $
    136,936
    
    
    $
    145,625Apparel
    
    
    73,888
    
    
    
    63,852
    
    
    
    146,839
    
    
    
    122,972Total
    
    $
    143,034
    
    
    $
    137,767
    
    
    $
    283,775
    
    
    $
    268,597
 Print Segment
 Apparel Segment
 Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,Gross Profit by Segment (in thousands)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Print
    
    $
    19,475
    
    
    $
    21,205
    
    
    $
    40,011
    
    
    $
    40,106Apparel
    
    
    20,233
    
    
    
    14,617
    
    
    
    41,877
    
    
    
    26,700Total
    
    $
    39,708
    
    
    $
    35,822
    
    
    $
    81,888
    
    
    $
    66,806
 Print Segment
 33




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
  Apparel Segment
 Three months ended
    
    
    Six months endedAugust 31,
    
    
    August 31,Profit by Segment (in thousands)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Print
    
    $
    11,861
    
    
    $
    12,709
    
    
    $
    24,363
    
    
    $
    23,520Apparel
    
    
    11,621
    
    
    
    6,224
    
    
    
    24,123
    
    
    
    9,623Total
    
    
    23,482
    
    
    
    18,933
    
    
    
    48,486
    
    
    
    33,143Less corporate expenses
    
    
    4,382
    
    
    
    3,781
    
    
    
    8,850
    
    
    
    7,459Earnings before income taxes
    
    $
    19,100
    
    
    $
    15,152
    
    
    $
    39,636
    
    
    $
    25,684
 Print Segment
 Apparel Segment
 Liquidity and Capital Resources
 August 31,
    
    
    February 28,(Dollars in thousands)
    
    2010
    
    
    2010
    
    
    ChangeWorking Capital
    
    $
    116,052
    
    
    $
    116,638
    
    
    
    -0.5
    %Cash
    
    $
    16,993
    
    
    $
    21,063
    
    
    
    -19.3
    %
 34




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 Working Capital.
 Six months ended August 31,(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    ChangeNet Cash provided by operating activities
    
    $
    27,507
    
    
    $
    49,974
    
    
    
    -45.0
    %Net Cash used in investing activities
    
    $
    (23,238
    )
    
    $
    (5,792
    )
    
    
    301.2
    %Net Cash used in financing activities
    
    $
    (8,024
    )
    
    $
    (32,534
    )
    
    
    -75.3
    %
 Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
 Credit Facility.
    35




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 Pension 
 Inventories 
 Capital Expenditures 
  Contractual Obligations & Off-Balance Sheet Arrangements 
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
 Cash
  Interest Rates
  Foreign Exchange
  36




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
   
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 
 
 Items 3, 4 and 5 are not applicable and have been omitted
 37




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 
 Item 6. Exhibits
  Exhibit Number
    
    DescriptionExhibit 3.1(a)
    
    Restated Articles of Incorporation as amended through June 23, 1983 with
attached amendments dated June 20, 1985, July 31, 1985 and June 16, 1988
incorporated herein by reference to Exhibit 5 to the Registrants Form 10-K
Annual Report for the fiscal year ended February 28, 1993.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 Form 10-K Annual Report for
the fiscal year ended February 28, 2007.Exhibit 3.2(a)
    
    Bylaws of the Registrant as amended through October 15, 1997 incorporated
herein by reference to Exhibit 3(ii) to the registrants Form 10-Q Quarterly
Report for the quarter ended November 30, 1997.Exhibit 3.2(b)
    
    First amendment to Bylaws of the Registrant dated December 20, 2007
incorporated herein by reference to Exhibit 3.1 to the Registrants Form 8-K
Current Report filed on December 20, 2007.Exhibit 10.1
    
    Employee Agreement between Ennis, Inc. and Keith S. Walters dated December 19,
2008 incorporated herein by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.2
    
    Employee Agreement between Ennis, Inc. and Michael D. Magill dated December
19, 2008 incorporated herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.3
    
    Employee Agreement between Ennis, Inc. and Ronald M. Graham dated December 19,
2008 incorporated herein by reference to Exhibit 10.3 to the Registrants
Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.4
    
    Employee Agreement between Ennis, Inc. and Richard L. Travis, Jr. dated
December 19, 2008 incorporated herein by reference to Exhibit 10.4 to the
Registrants Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.5
    
    Employee Agreement between Ennis, Inc. and Irshad Ahmad, Vice
President-Apparel Group and CTO dated December 19, 2008 incorporated herein by
reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K filed
on January 20, 2009.Exhibit 10.6
    
    2004 Long-Term Incentive Plan as amended and restated effective May 14, 2008
incorporated herein by reference to Appendix A of the Registrants Form DEF
14A filed on May 23, 2008.Exhibit 10.7
    
    Second Amended and Restated Credit Agreement between Ennis, Inc., each of the
other co-borrowers who are parties, Bank of America, N.A. as Administrative
Agent, Swing Line Lender and L/C Issuer, Compass Bank, as Syndication Agent,
Wells Fargo Bank, N.A., as Documentation Agent, the other lenders who are
parties and Banc of America Securities, LLC, as Sole Lead Arranger and Sole
Book Manager, dated as of August 18, 2009 herein incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on August 20, 2009.Exhibit 31.1
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) of Chief Executive Officer.*Exhibit 31.2
    
    Certification Pursuant to Rule 13a-14(a)/15d-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.**
 
 *
    
    Filed herewith**
    
    Furnished herewith 38




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED AUGUST 31, 2010
 
   ENNIS, INC.Date: September 24, 2010
    /s/ Keith S. WaltersKeith S. WaltersChairman, Chief Executive Officer and
PresidentDate: September 24, 2010
    /s/ Richard L. Travis, Jr.Richard L. Travis, Jr.V.P.  Finance and CFO, Secretary and
Principal Financial and Accounting Officer 39




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    DescriptionExhibit 3.1(a)
    
    Restated Articles of Incorporation as amended through June 23, 1983 with
attached amendments dated June 20, 1985, July 31, 1985 and June 16, 1988
incorporated herein by reference to Exhibit 5 to the Registrants Form 10-K
Annual Report for the fiscal year ended February 28, 1993.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 Form 10-K Annual Report for
the fiscal year ended February 28, 2007.Exhibit 3.2(a)
    
    Bylaws of the Registrant as amended through October 15, 1997 incorporated
herein by reference to Exhibit 3(ii) to the registrants Form 10-Q Quarterly
Report for the quarter ended November 30, 1997.Exhibit 3.2(b)
    
    First amendment to Bylaws of the Registrant dated December 20, 2007
incorporated herein by reference to Exhibit 3.1 to the Registrants Form 8-K
Current Report filed on December 20, 2007.Exhibit 10.1
    
    Employee Agreement between Ennis, Inc. and Keith S. Walters dated December 19,
2008 incorporated herein by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.2
    
    Employee Agreement between Ennis, Inc. and Michael D. Magill dated December
19, 2008 incorporated herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.3
    
    Employee Agreement between Ennis, Inc. and Ronald M. Graham dated December 19,
2008 incorporated herein by reference to Exhibit 10.3 to the Registrants
Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.4
    
    Employee Agreement between Ennis, Inc. and Richard L. Travis, Jr. dated
December 19, 2008 incorporated herein by reference to Exhibit 10.4 to the
Registrants Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.5
    
    Employee Agreement between Ennis, Inc. and Irshad Ahmad, Vice
President-Apparel Group and CTO dated December 19, 2008 incorporated herein by
reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K filed
on January 20, 2009.Exhibit 10.6
    
    2004 Long-Term Incentive Plan as amended and restated effective May 14, 2008
incorporated herein by reference to Appendix A of the Registrants Form DEF
14A filed on May 23, 2008.Exhibit 10.7
    
    Second Amended and Restated Credit Agreement between Ennis, Inc., each of the
other co-borrowers who are parties, Bank of America, N.A. as Administrative
Agent, Swing Line Lender and L/C Issuer, Compass Bank, as Syndication Agent,
Wells Fargo Bank, N.A., as Documentation Agent, the other lenders who are
parties and Banc of America Securities, LLC, as Sole Lead Arranger and Sole
Book Manager, dated as of August 18, 2009 herein incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on August 20, 2009.Exhibit 31.1
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) of Chief Executive Officer.*Exhibit 31.2
    
    Certification Pursuant to Rule 13a-14(a)/15d-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.**
 
 *
    
    Filed herewith**
    
    Furnished herewith