##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended February 28, 2006
 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)
 (Registrants Telephone Number, Including Area Code) (972) 775-9801
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $2.50 per share
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ENNIS, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE PERIOD ENDED FEBRUARY 28, 2006
 TABLE OF CONTENTS
 PART I:Item 1
    
    Business
    
    3Item 1A
    
    Risk Factors
    
    7Item 1B
    
    Unresolved Staff Comments
    
    10Item 2
    
    Properties
    
    11Item 3
    
    Legal Proceedings
    
    13Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    13PART II:Item 5
    
    Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    13Item 6
    
    Selected Financial Data
    
    14Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    15Item 7A
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    23Item 8
    
    Consolidated Financial Statements and Supplementary Data
    
    24Item 9
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    24Item 9A
    
    Controls and Procedures
    
    24Managements Report on Internal Control over Financial Reporting
    
    25Report of Independent Registered Public Accounting Firm
    
    26Item 9B
    
    Other Information
    
    27PART III:Item 10
    
    Directors and Executive Officers of the Registrant
    
    27Item 11
    
    Executive Compensation
    
    28Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    29Item 13
    
    Certain Relationships and Related Transactions
    
    29Item 14
    
    Principal Accounting Fees and Services
    
    29PART IV:Item 15
    
    Exhibits and Financial Statement Schedules and Reports on Form 8-K
    
    30Signatures
    
    32Index to Exhibits
    
    33Amended and Restated Credit AgreementAmended and Restated Security AgreementSubsidiariesConsent of Independent Registered Public Accounting FirmConsent of Independent Registered Public Accounting FirmCertification Pursuant to Rule 13a-14(a)/15d-14(a) - CEOCertification Pursuant to Rule 13a-14(a)/15d-14(a) - CFOCertification Pursuant to 18 U.S.C. Section 1350Certification Pursuant to 18 U.S.C. Section 1350




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##### Table of Contents



PART I
 
 ITEM 1.
    
    BUSINESS
 Overview
    Business Segment Overview
  Print Segment
  3




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Forms Solutions Group
 Promotional Solutions Group
 Financial Solutions Group 
      4




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Apparel Segment
 Apparel Solutions Group,
         5




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Patents, Licenses, Franchises and Concessions
  Intellectual Property
  Backlog
  Research and Development
  Environment
  Employees
  6




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##### Table of Contents



ITEM 1A.
    
    RISK FACTORS
  We may be required to write down goodwill and other intangible assets in the future, which could
cause our financial condition and results of operations to be negatively affected in the future.
 .
 Printed business forms may be superceded over time by paperless business forms or otherwise
affected by technological obsolescence and changing customer preferences, which could reduce our
sales and profits.
  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.
  7




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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,
could have a material adverse effect on us.
    8




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Alstyle faces 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.
  Apparel business is subject to cyclical trends.
  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 has been faced with
significant U.S. government import restrictions.
    9




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##### Table of Contents



Environmental regulations may impact our future operating results.
  We depend upon the talents and contributions of a limited number of individuals, many of whom would
be difficult to replace.
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  Available Information
  10




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ITEM 2.
    
    PROPERTIES
  Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    LeasedPrint Segment  Forms
Solutions GroupEnnis, Texas
    
    Three Manufacturing Facilities
    
    
    325,118
    
    
    
    Chatham, Virginia
    
    Manufacturing
    
    
    127,956
    
    
    
    Paso Robles, California
    
    Manufacturing
    
    
    94,120
    
    
    
    Knoxville, Tennessee
    
    Manufacturing
    
    
    48,057
    
    
    
    Portland, Oregon
    
    Manufacturing
    
    
    
    
    
    
    47,000Fort Scott, Kansas
    
    Manufacturing
    
    
    86,660
    
    
    
    DeWitt, Iowa
    
    Two Manufacturing Facilities
    
    
    95,000
    
    
    
    Milwaukee, Wisconsin
    
    Sales Office
    
    
    
    
    
    
    300Moultrie, Georgia
    
    Manufacturing
    
    
    25,000
    
    
    
    Coshocton, Ohio
    
    Manufacturing
    
    
    24,750
    
    
    
    Print Segment  Forms Solutions Group  continuedBellville, Texas
    
    Manufacturing
    
    
    70,196
    
    
    
    San Antonio, Texas
    
    Manufacturing
    
    
    47,426
    
    
    
    Columbus, Kansas
    
    Manufacturing
    
    
    201,000
    
    
    
    Dayton, Ohio
    
    Administrative Offices
    
    
    
    
    
    
    5,526Leipsic, Ohio
    
    Manufacturing
    
    
    83,216
    
    
    
    El Dorado Springs, Missouri
    
    Manufacturing
    
    
    70,894
    
    
    
    Medfield, Massachusetts
    
    Vacant - held for sale
    
    
    55,116
    
    
    
    Princeton, Illinois
    
    Manufacturing
    
    
    
    
    
    
    74,340Arlington, Texas
    
    Manufacturing and Warehouse
    
    
    88,235
    
    
    
    33,120Mechanicsburg, Pennsylvania
    
    Warehouse
    
    
    
    
    
    
    7,500Sacramento, California
    
    Administrative Offices
    
    
    
    
    
    
    414Tullahoma, Tennessee
    
    Manufacturing
    
    
    24,950
    
    
    
    1,467,694
    
    
    
    168,200Print Segment  Promotional Solutions GroupWolfe City, Texas
    
    Two Manufacturing Facilities
    
    
    119,259
    
    
    
    Macomb, Michigan
    
    Manufacturing
    
    
    56,350
    
    
    
    Anaheim, California
    
    Manufacturing
    
    
    
    
    
    
    63,750Denver, Colorado
    
    Three Manufacturing Facilities
    
    
    
    
    
    
    126,505Dallas, Texas
    
    Manufacturing
    
    
    82,400
    
    
    
    258,009
    
    
    
    190,255Print Segment  Financial Solutions GroupBrooklyn Park, Minnesota
    
    Manufacturing
    
    
    94,800
    
    
    
    Roseville, Minnesota
    
    Manufacturing
    
    
    
    
    
    
    42,500Arden Hills, Minnesota
    
    Warehouse
    
    
    
    
    
    
    31,684Lakewood, New York
    
    Administrative Offices
    
    
    
    
    
    
    650Nevada, Iowa
    
    Manufacturing
    
    
    232,000
    
    
    
    Bridgewater, Virginia
    
    Manufacturing
    
    
    
    
    
    
    27,000326,800
    
    
    
    101,834
 11




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Approximate Square FootageLocation
    
    General Use
    
    
    
    Owned
    
    LeasedApparel Segment  Apparel Solutions GroupAnaheim, California
    
    Manufacturing *
    
    
    
    
    
    
    
    
    650,315Chicago, Illinois
    
    Distribution Center
    
    
    
    
    
    
    
    
    120,000Atlanta, Georgia
    
    Distribution Center
    
    
    
    
    
    
    
    
    31,958Carrollton, Texas
    
    Distribution Center
    
    
    
    
    
    
    
    
    26,136Bensalem, Pennsylvania
    
    Distribution Center
    
    
    
    
    
    
    
    
    41,948Mississauga, Canada
    
    Distribution Center
    
    
    
    
    
    
    
    
    53,982Los Angeles, California
    
    Distribution Center
    
    
    
    
    
    
    
    
    31,600Ensenada, Mexico
    
    Manufacturing
    
    
    
    
    92,657
    
    
    
    Hermosillo, Mexico
    
    Administrative Offices
    
    
    
    
    
    
    
    
    215Hermosillo, Mexico
    
    Manufacturing
    
    
    
    
    
    
    
    
    76,145Hermosillo, Mexico
    
    Manufacturing
    
    
    
    
    
    
    
    
    18,298Hermosillo, Mexico
    
    Yard Space
    
    
    
    
    
    
    
    
    4,036Hermosillo, Mexico
    
    Manufacturing
    
    
    
    
    
    
    
    
    31,820Ensenada, Mexico
    
    Warehouse
    
    
    
    
    
    
    
    
    2,583Ensenada, Mexico
    
    Manufacturing
    
    
    
    
    
    
    
    
    53,82092,657
    
    
    
    1,142,856Administrative OfficesEnnis, Texas
    
    Administrative Offices
    
    
    9,300
    
    
    
    Midlothian, Texas
    
    Executive and Administrative Offices
    
    
    28,000
    
    
    
    37,300
    
    
    
    Totals
    
    
    2,182,460
    
    
    
    1,603,145
 
 *
    
    Apparel Solutions Group  150,000 square feet of the manufacturing facilities in Anaheim,
California is subleased. ®
    12




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ITEM 3.
    
    LEGAL PROCEEDINGS
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5.
    
    MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES
  CommonStock TradingVolume
    
    
    Dividends(number
    
    
    per share ofCommon Stock Price Range
    
    
    of shares
    
    
    CommonHigh
    
    
    Low
    
    
    in thousands)
    
    
    StockFiscal Year Ended February 28, 2006First Quarter
    
    $
    17.70
    
    
    $
    14.11
    
    
    
    5,472
    
    
    $
    0.155Second Quarter
    
    
    19.27
    
    
    
    15.83
    
    
    
    6,248
    
    
    
    0.155Third Quarter
    
    
    18.17
    
    
    
    16.13
    
    
    
    5,857
    
    
    
    0.155Fourth Quarter
    
    
    20.33
    
    
    
    17.34
    
    
    
    5,575
    
    
    
    0.155Fiscal Year Ended February 28, 2005First Quarter
    
    $
    17.11
    
    
    $
    14.70
    
    
    
    1,595
    
    
    $
    0.155Second Quarter
    
    
    19.95
    
    
    
    15.26
    
    
    
    3,355
    
    
    
    0.155Third Quarter
    
    
    22.23
    
    
    
    18.31
    
    
    
    3,431
    
    
    
    0.155Fourth Quarter
    
    
    20.15
    
    
    
    16.80
    
    
    
    6,045
    
    
    
    0.155
   13




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##### Table of Contents



ITEM 6.
    
    SELECTED FINANCIAL DATA
  Fiscal Years Ended2006
    
    2005
    
    2004
    
    2003
    
    2002(Dollars and shares in thousands, except per share amounts)Operating results:Net sales
    
    $
    559,397
    
    
    $
    365,353
    
    
    $
    259,360
    
    
    $
    240,757
    
    
    $
    236,923Gross profit
    
    
    142,090
    
    
    
    90,757
    
    
    
    68,548
    
    
    
    63,272
    
    
    
    64,988SG&A expenses
    
    
    70,060
    
    
    
    51,159
    
    
    
    38,521
    
    
    
    37,559
    
    
    
    39,000Net earnings
    
    
    40,537
    
    
    
    22,959
    
    
    
    17,951
    
    
    
    15,247
    
    
    
    14,966Earnings and dividends per
share:Basic
    
    $
    1.59
    
    
    $
    1.21
    
    
    $
    1.10
    
    
    $
    .94
    
    
    $
    .92Diluted
    
    
    1.58
    
    
    
    1.19
    
    
    
    1.08
    
    
    
    .93
    
    
    
    .92Dividends
    
    
    .62
    
    
    
    .62
    
    
    
    .62
    
    
    
    .62
    
    
    
    .62Weighted average shares
outstanding:Basic
    
    
    25,453
    
    
    
    18,936
    
    
    
    16,358
    
    
    
    16,285
    
    
    
    16,272Diluted
    
    
    25,728
    
    
    
    19,260
    
    
    
    16,602
    
    
    
    16,478
    
    
    
    16,319Financial Position:Working capital
    
    $
    94,494
    
    
    $
    70,247
    
    
    $
    38,205
    
    
    $
    39,718
    
    
    $
    38,680Current assets
    
    
    158,455
    
    
    
    151,630
    
    
    
    63,605
    
    
    
    65,012
    
    
    
    62,646Total assets
    
    
    494,401
    
    
    
    497,246
    
    
    
    154,043
    
    
    
    152,537
    
    
    
    139,034Current liabilities
    
    
    63,961
    
    
    
    81,383
    
    
    
    25,400
    
    
    
    25,294
    
    
    
    23,966Long-term debt
    
    
    102,916
    
    
    
    112,342
    
    
    
    7,800
    
    
    
    18,135
    
    
    
    9,170Total liabilities
    
    
    197,066
    
    
    
    225,515
    
    
    
    43,461
    
    
    
    55,634
    
    
    
    42,999Equity
    
    
    297,335
    
    
    
    271,731
    
    
    
    110,582
    
    
    
    96,903
    
    
    
    96,035Current ratio
    
    
    2.48 to 1.0
    
    
    
    1.86 to 1.0
    
    
    
    2.50 to 1.0
    
    
    
    2.57 to 1.0
    
    
    
    2.61 to 1.0Long-term debt to equity
    
    
    .35 to 1.0
    
    
    
    .41 to 1.0
    
    
    
    .07 to 1.0
    
    
    
    .19 to 1.0
    
    
    
    .10 to 1.0
 14




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
 Cautionary Statements
   Liquidity and Capital Resources
 February 28,
    
    February 28,(Dollars in thousands)
    
    2006
    
    2005
    
    ChangeWorking Capital
    
    $
    94,494
    
    
    $
    70,247
    
    
    
    34.5
    %Cash and cash equivalents
    
    $
    13,860
    
    
    $
    10,694
    
    
    
    29.6
    %
 Working Capital.
 Cash and cash equivalents.
 Twelve months ended February 28,(Dollars in thousands)
    
    2006
    
    2005
    
    ChangeCash provided by operating activities
    
    $
    47,427
    
    
    $
    20,042
    
    
    
    136.6
    %Cash used for investing activities
    
    $
    (9,942
    )
    
    $
    (121,091
    )
    
    
    -91.9
    %Cash (used for) provided by financing activities
    
    $
    (34,895
    )
    
    $
    96,672
    
    
    
    -136.1
    %
 Cash flows from operating activities.
 15




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Cash flows from investing activities.
 Cash flows from financing activities.
 Credit
Facility 
    16




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Pension 
 Inventories 
 Capital Expenditures 
 Contractual Obligations & Off-Balance Sheet Arrangements 
 Payments due by fiscal period (in thousands)2011 and2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    thereafterRevolving credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    102,500Other debt
    
    $
    11,026
    
    
    $
    274
    
    
    
    
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    594
    
    
    
    118
    
    
    $
    24
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    7,366
    
    
    
    6,323
    
    
    
    4,810
    
    
    $
    1,680
    
    
    
    1,388Letters of credit (1)
    
    
    3,181
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Totals
    
    $
    22,167
    
    
    $
    6,715
    
    
    $
    4,834
    
    
    $
    1,680
    
    
    $
    103,888
 
 (1)
    
    Excludes approximately $10.0 million in stand-by letters of credit issued to
secure an outstanding debt obligation in the same amount, as this amount has been
included in other debtin the above schedule. Results
of Operations  Consolidated
 Net Sales.
  17




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Cost of Goods Sold.
  Selling, general & administrative expenses.
  Earnings from operations.
  Other income and expense.
  18




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Provision for income taxes.
  Net earnings.
  Results
of Operations  Segments
 Fiscal year endingRevenue by segment
    
    2006
    
    
    2005
    
    
    2004Print
    
    $
    321,410
    
    
    $
    309,308
    
    
    $
    259,360Apparel
    
    
    237,987
    
    
    
    56,045
    
    
    
    Total
    
    $
    559,397
    
    
    $
    365,353
    
    
    $
    259,360
 Print Segment
 Apparel Segment
 19




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Fiscal year endingGross profit by segment
    
    2006
    
    
    2005
    
    
    2004Print
    
    $
    79,859
    
    
    $
    78,521
    
    
    $
    68,548Apparel
    
    
    62,231
    
    
    
    12,236
    
    
    
    Total
    
    $
    142,090
    
    
    $
    90,757
    
    
    $
    68,548
 Print Segment
 Apparel Segment
 Fiscal year endingProfit by segment
    
    2006
    
    
    2005
    
    
    2004Print
    
    $
    43,351
    
    
    $
    44,275
    
    
    $
    36,139Apparel
    
    
    30,085
    
    
    
    3,575
    
    
    
    Total
    
    
    73,436
    
    
    
    47,850
    
    
    
    36,139Less corporate expenses
    
    
    9,465
    
    
    
    10,385
    
    
    
    7,249Earnings before income taxes
    
    $
    63,971
    
    
    $
    37,465
    
    
    $
    28,890
 Print Segment
 20




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Critical Accounting Policies
      21




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New Accounting Standards
 Share-Based Payment: Share-Based Payment Statement of Cash Flows
  
    
    Modified prospective method: Compensation cost is recognized beginning
with the effective date of adoption (a) based on the requirements of
Statement 123(R) for all share-based payments granted after the
effective date of adoption and (b) based on the requirements of
Statement 123 for all awards granted to employees prior to the
effective date of adoption that remain unvested on the date of
adoption.
    
    Modified retrospective method: Includes the requirements of the
modified prospective method described above, but also permits
restatement using amounts previously disclosed under the pro forma
provisions of Statement 123 either for (a) all prior periods presented
or (b) prior interim periods of the year of adoption.
  22




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Inventory Costs: Inventory Costs
 
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
    23




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ITEM 8.
    
    CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
  24




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MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Internal Control-Integrated Framework
  25




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework Internal ControlIntegrated Framework
  
 26




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ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 EXECUTIVE OFFICERS OF THE REGISTRANT
  Keith S. Walters
 Michael D. Magill
 Richard Travis, Jr.
 Ronald M. Graham
 Todd Scarborough
 27




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Code of Ethics
 http//:www.ennis.com
  Information About the Audit Committee
  
 ITEM 11. EXECUTIVE COMPENSATION
  28




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ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
   Number ofsecuritiesavailable forfuture issuancesNumber of
    
    
    
    
    
    
    under equitysecurities to be
    
    
    Weighted
    
    
    compensationissued upon
    
    
    average
    
    
    plans (excludingexercise of
    
    
    exercise price
    
    
    securitiesoutstanding
    
    
    of outstanding
    
    
    reflected inoptions
    
    
    options
    
    
    column (a))Plan Category
    
    (a)
    
    
    (b)
    
    
    (c)Equity
compensation plans
approved by the
security holders
(1)
    
    
    711,519
    
    
    $
    10.94
    
    
    
    398,208Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    711,519
    
    
    $
    10.94
    
    
    
    398,208
 
 (1)
    
    Includes the 1998 Option and Restricted Stock Plan, amended and restated as of June 17, 2004
and the 1991 Incentive Stock Option Plan. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  29




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Documents filed as a part of the report:
 (1)
    
    Index list to Consolidated Financial Statements of the Company:
 Index to Consolidated Financial Statements
    
    
    F-1Reports of Independent Registered Public Accounting Firms
    
    
    F-2Consolidated Balance Sheets  Fiscal years ended 2006 and 2005
    
    
    F-4Consolidated Statements of Earnings  Fiscal years ended 2006, 2005 and 2004
    
    
    F-6Consolidated Statement of Shareholders Equity and Comprehensive Income
 Fiscal years ended 2006, 2005 and 2004
    
    
    F-7Consolidated Statements of Cash Flows  Fiscal years ended 2006, 2005 and 2004
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-9
 (2)
    
    All schedules for which provision is made in the applicable
accounting regulation of the SEC have been omitted because of the absence of the
conditions under which they would be required or because the information required
is included in the consolidated financial statements of the Registrant or the
notes thereto.(3)
    
    ExhibitsSee the exhibit index, which is included in this Report beginning on page 34.
  (b)
    
    Reports on Form 8-K
  30




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 Index to Consolidated Financial Statements
 Index to Consolidated Financial Statements
    
    
    F-1Reports of Independent Registered Public Accounting Firms
    
    
    F-2Consolidated Balance Sheets  Fiscal years ended 2006 and 2005
    
    
    F-4Consolidated Statements of Earnings  Fiscal years ended 2006, 2005 and 2004
    
    
    F-6Consolidated Statement of Shareholders Equity and Comprehensive Income
 Fiscal years ended 2006, 2005 and 2004
    
    
    F-7Consolidated Statements of Cash Flows  Fiscal years ended 2006, 2005 and 2004
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-9
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 Board of Directors and Shareholders
Ennis, Inc.
    
 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 Board of Directors and
Shareholders of Ennis, Inc. and subsidiaries
    Internal Control 
Integrated Framework
 
 F-3




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
 February 28,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    13,860
    
    
    $
    10,694Accounts receivables, net of allowance for doubtful
receivables of $3,001 in 2006 and $3,567 in 2005
    
    
    41,686
    
    
    
    46,685Prepaid expenses
    
    
    4,425
    
    
    
    5,162Inventories
    
    
    89,155
    
    
    
    79,900Other current assets
    
    
    9,329
    
    
    
    9,189Total current assets
    
    
    158,455
    
    
    
    151,630Property, plant and equipment, at costPlant, machinery and equipment
    
    
    120,456
    
    
    
    114,053Land and buildings
    
    
    38,038
    
    
    
    36,346Other
    
    
    20,292
    
    
    
    19,521Total property, plant and equipment
    
    
    178,786
    
    
    
    169,920Less accumulated depreciation
    
    
    114,983
    
    
    
    100,358Net property, plant and equipment
    
    
    63,803
    
    
    
    69,562Goodwill
    
    
    178,280
    
    
    
    178,472Trademarks, net
    
    
    61,941
    
    
    
    62,090Purchased customer lists, net
    
    
    21,632
    
    
    
    23,275Deferred finance charges, net
    
    
    1,390
    
    
    
    2,817Prepaid pension asset
    
    
    8,277
    
    
    
    8,283Other assets
    
    
    623
    
    
    
    1,117Total assets
    
    $
    494,401
    
    
    $
    497,246
 See accompanying notes to consolidated financial statements.
 F-4




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except for share amounts)
 February 28,2006
    
    
    2005Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    26,589
    
    
    $
    33,887Accrued expensesEmployee compensation and benefits
    
    
    17,250
    
    
    
    16,135Taxes other than income
    
    
    1,488
    
    
    
    3,154Federal and state income taxes payable
    
    
    2,490
    
    
    
    1,389Other
    
    
    4,524
    
    
    
    5,116Current installments of long-term debt
    
    
    11,620
    
    
    
    21,702Total current liabilities
    
    
    63,961
    
    
    
    81,383Long-term debt, less current installments
    
    
    102,916
    
    
    
    112,342Deferred tax liability and other
    
    
    30,189
    
    
    
    31,790Total liabilities
    
    
    197,066
    
    
    
    225,515Commitments and contingenciesShareholders equitySeries A junior participating preferred stock of $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 in 2006 and 2005
    
    
    75,134
    
    
    
    75,134Additional paid in capital
    
    
    122,922
    
    
    
    123,640Retained earnings
    
    
    181,423
    
    
    
    156,666Accumulated other comprehensive income:Foreign currency translation
    
    
    460
    
    
    
    5Unrealized gain on derivative instruments, net
    
    
    
    
    
    
    1Total accumulated other comprehensive income
    
    
    460
    
    
    
    6Treasury stock:Cost of 4,574,329 shares in 2006 and
4,635,444 shares in 2005
    
    
    (82,604
    )
    
    
    (83,715
    )Total shareholders equity
    
    
    297,335
    
    
    
    271,731Total liabilities and shareholders equity
    
    $
    494,401
    
    
    $
    497,246
 See accompanying notes to consolidated financial statements.
 F-5




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF EARNINGS
 (Dollars in thousands, except share and per share amounts)
 Fiscal Years Ended2006
    
    
    2005
    
    
    2004Net sales
    
    $
    559,397
    
    
    $
    365,353
    
    
    $
    259,360Cost of goods sold
    
    
    417,307
    
    
    
    274,596
    
    
    
    190,812Gross profit
    
    
    142,090
    
    
    
    90,757
    
    
    
    68,548Selling, general and administrative expenses
    
    
    70,060
    
    
    
    51,159
    
    
    
    38,521Earnings from operations
    
    
    72,030
    
    
    
    39,598
    
    
    
    30,027Other income (expense)Interest expense
    
    
    (8,331
    )
    
    
    (2,755
    )
    
    
    (830
    )Other income (expense), net
    
    
    272
    
    
    
    622
    
    
    
    (307
    )(8,059
    )
    
    
    (2,133
    )
    
    
    (1,137
    )Earnings before income taxes
    
    
    63,971
    
    
    
    37,465
    
    
    
    28,890Provision for income taxes
    
    
    23,434
    
    
    
    14,506
    
    
    
    10,939Net earnings
    
    $
    40,537
    
    
    $
    22,959
    
    
    $
    17,951Weighted average common shares outstandingBasic
    
    
    25,452,582
    
    
    
    18,935,533
    
    
    
    16,358,107Diluted
    
    
    25,728,299
    
    
    
    19,259,550
    
    
    
    16,601,838Per share amountsNet earnings  basic
    
    $
    1.59
    
    
    $
    1.21
    
    
    $
    1.10Net earnings  diluted
    
    $
    1.58
    
    
    $
    1.19
    
    
    $
    1.08Cash dividends per share
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
 See accompanying notes to consolidated financial statements.
 F-6




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
 FOR THE FISCAL YEARS ENDED 2004, 2005, AND 2006  (Dollars in thousands, except share and per share amounts)
 Common Stock
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    Treasury StockAdditional
    
    
    
    
    
    
    OtherPaid-in
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance February 28, 2003
    
    
    21,249,860
    
    
    $
    53,125
    
    
    $
    461
    
    
    $
    137,848
    
    
    $
    (5,225
    )
    
    
    (4,916,887
    )
    
    $
    (89,306
    )
    
    $
    96,903Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,951
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,951Unrealized gain on
derivative instruments, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129
    
    
    
    
    
    
    
    
    
    
    
    129Minimum pension liability,
net of tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,982
    
    
    
    
    
    
    
    
    
    
    
    4,982Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,062Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,146
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,146
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    (410
    )
    
    
    
    
    
    
    
    
    
    
    60,825
    
    
    
    1,105
    
    
    
    695Treasury stock purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (564
    )
    
    
    (7
    )
    
    
    (7
    )Other
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75Balance February 29, 2004
    
    
    21,249,860
    
    
    
    53,125
    
    
    
    126
    
    
    
    145,653
    
    
    
    (114
    )
    
    
    (4,856,626
    )
    
    
    (88,208
    )
    
    
    110,582Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,959
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,959Foreign
currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Unrealized gain on
derivative instruments, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    115Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,079Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,574
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,574
    )Shares
issued in acquisitions
    
    
    8,803,583
    
    
    
    22,009
    
    
    
    123,514
    
    
    
    
    
    
    
    
    
    
    
    177,458
    
    
    
    3,700
    
    
    
    149,223Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (372
    )
    
    
    
    
    
    
    43,850
    
    
    
    795
    
    
    
    423Treasury stock purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (126
    )
    
    
    (2
    )
    
    
    (2
    )Balance February 28, 2005
    
    
    30,053,443
    
    
    
    75,134
    
    
    
    123,640
    
    
    
    156,666
    
    
    
    6
    
    
    
    (4,635,444
    )
    
    
    (83,715
    )
    
    
    271,731Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,537
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,537Foreign
currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    455
    
    
    
    
    
    
    
    
    
    
    
    455Unrealized loss on
derivative instruments, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,991Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,780
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,780
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    (718
    )
    
    
    
    
    
    
    
    
    
    
    79,369
    
    
    
    1,434
    
    
    
    716Treasury stock purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,254
    )
    
    
    (323
    )
    
    
    (323
    )Balance February 28, 2006
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,922
    
    
    $
    181,423
    
    
    $
    460
    
    
    
    (4,574,329
    )
    
    $
    (82,604
    )
    
    $
    297,335
 See accompanying notes to consolidated financial statements.
 F-7




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
  Fiscal Years Ended2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    40,537
    
    
    $
    22,959
    
    
    $
    17,951Adjustments to reconcile net earnings to
net cash provided by operating activities:Depreciation
    
    
    15,474
    
    
    
    10,367
    
    
    
    9,216Amortization of deferred finance charges
    
    
    495
    
    
    
    242
    
    
    
    Amortization of trademarks and customer lists
    
    
    2,337
    
    
    
    709
    
    
    
    132Gain on the sale of equipment
    
    
    (188
    )
    
    
    (316
    )
    
    
    (65
    )Bad debt expense
    
    
    317
    
    
    
    893
    
    
    
    890Changes in operating assets and liabilities,
net of the effects of acquisitionsAccounts receivable
    
    
    4,633
    
    
    
    (2,922
    )
    
    
    1,387Prepaid expenses
    
    
    761
    
    
    
    (1,315
    )
    
    
    (314
    )Inventories
    
    
    (9,332
    )
    
    
    (3,958
    )
    
    
    (617
    )Other current assets
    
    
    334
    
    
    
    (2,084
    )
    
    
    1,189Accounts payable and accrued expenses
    
    
    (7,227
    )
    
    
    (6,640
    )
    
    
    1,017Prepaid pension assets
    
    
    6
    
    
    
    (735
    )
    
    
    (4,696
    )Other assets
    
    
    (720
    )
    
    
    2,842
    
    
    
    159Net cash provided by operating activities
    
    
    47,427
    
    
    
    20,042
    
    
    
    26,249Cash flows from investing activities:Capital expenditures
    
    
    (9,040
    )
    
    
    (6,143
    )
    
    
    (4,543
    )Purchase of operating assets, net of cash acquired
    
    
    (1,196
    )
    
    
    (115,429
    )
    
    
    Proceeds from disposal of property
    
    
    294
    
    
    
    481
    
    
    
    176Other
    
    
    
    
    
    
    
    
    
    
    (179
    )Net cash used in investing activities
    
    
    (9,942
    )
    
    
    (121,091
    )
    
    
    (4,546
    )Cash flows from financing activities:Debt issued
    
    
    9,000
    
    
    
    114,200
    
    
    
    Repayment of debt
    
    
    (28,508
    )
    
    
    (6,375
    )
    
    
    (11,038
    )Dividends
    
    
    (15,780
    )
    
    
    (11,574
    )
    
    
    (10,146
    )Purchase of treasury stock
    
    
    
    
    
    
    (2
    )
    
    
    (7
    )Proceeds from exercise of stock options
    
    
    393
    
    
    
    423
    
    
    
    695Net cash provided by (used in) financing activities
    
    
    (34,895
    )
    
    
    96,672
    
    
    
    (20,496
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    576
    
    
    
    4
    
    
    
    Net change in cash and cash equivalents
    
    
    3,166
    
    
    
    (4,373
    )
    
    
    1,207Cash and cash equivalents at beginning of year
    
    
    10,694
    
    
    
    15,067
    
    
    
    13,860Cash and cash equivalents at end of year
    
    $
    13,860
    
    
    $
    10,694
    
    
    $
    15,067
  F-8




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters
 Nature of Operations
 Basis of Consolidation.
 Cash and Cash Equivalents.
 Accounts Receivable.
   Inventories.
 Property, Plant and Equipment other current assets
 Goodwill and Other Intangible Assets.
 F-9




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (1) Significant Accounting Policies and General Matters  continued
 Long-Lived Assets
  Fair Value of Financial Instruments
 Deferred Finance Charges
 Derivative Financial Instruments.
 Revenue Recognition
 Advertising Expenses
 F-10




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (1) Significant Accounting Policies and General Matters  continued
 Income Taxes.
 Earnings Per Share
 Accumulated Other Comprehensive Income (Loss)
 Foreign Currency Translation.
  Estimates.
 Shipping and Handling Costs.
 Stock Based Compensation.
 F-11




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (1) Significant Accounting Policies and General Matters  continued
 Stock Based Compensation  continued.
 2006
    
    
    2005
    
    
    2004Net earnings, as reported
    
    $
    40,537
    
    
    $
    22,959
    
    
    $
    17,951Deduct total stock-based employee
compensation
expense determined
under fair value
based methods for
all awards, net of
related tax effects
    
    
    (134
    )
    
    
    (47
    )
    
    
    (26
    )Pro forma net earnings
    
    $
    40,403
    
    
    $
    22,912
    
    
    $
    17,925Earnings per share:As reported  basic
    
    $
    1.59
    
    
    $
    1.21
    
    
    $
    1.10Pro forma  basic
    
    $
    1.59
    
    
    $
    1.21
    
    
    $
    1.10As reported  diluted
    
    $
    1.58
    
    
    $
    1.19
    
    
    $
    1.08Pro forma  diluted
    
    $
    1.57
    
    
    $
    1.19
    
    
    $
    1.08
  Accounting Pronouncements Not Adopted
 Share-Based Payment: Share-Based Payment Statement of Cash Flows
  
    
    Modified prospective method: Compensation cost is
recognized beginning with the effective date of adoption
(a) based on the requirements of Statement 123(R) for all
share-based payments granted after the effective date of
adoption and (b) based on the requirements of Statement
123 for all awards granted to employees prior to the
effective date of adoption that remain unvested on the
date of adoption.
    
    Modified retrospective method: Includes the requirements
of the modified prospective method described above, but
also permits restatement using amounts previously
disclosed under the pro forma provisions of Statement 123
either for (a) all prior periods presented or (b) prior
interim periods of the year of adoption.
   F-12




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  Inventory Costs: Inventory Costs
 Concentrations of Risk.
   F-13




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (2) Due From Factors
     2006
    
    
    2005Outstanding factored receivablesWithout recourse
    
    $
    19,762
    
    
    $
    26,756With recourse
    
    
    1,099
    
    
    
    1,213Advances
    
    
    (17,772
    )
    
    
    (24,675
    )Due from factors
    
    $
    3,089
    
    
    $
    3,294
 (3) Accounts Receivable and Allowance for Doubtful Accounts
   2006
    
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    3,567
    
    
    $
    1,771
    
    
    $
    1,294Bad debt expense
    
    
    317
    
    
    $
    893
    
    
    $
    890Other (1)
    
    
    3
    
    
    
    1,505
    
    
    
    Recoveries
    
    
    67
    
    
    
    115
    
    
    
    47Accounts written off, net
    
    
    (953
    )
    
    
    (717
    )
    
    
    (460
    )Balance at end of period
    
    $
    3,001
    
    
    $
    3,567
    
    
    $
    1,771
 
 (1)
    
    Principally the allowance established in connection with certain acquisitions. F-14




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (4) Inventories
  2006
    
    
    2005Raw material
    
    $
    12,694
    
    
    $
    26,717Work-in-process
    
    
    16,886
    
    
    
    17,669Finished goods
    
    
    59,575
    
    
    
    35,514$
    89,155
    
    
    $
    79,900
   (5) Long-Term Debt
  2006
    
    
    2005Revolving credit facility
    
    $
    62,500
    
    
    $
    63,500Term credit facility
    
    
    40,000
    
    
    
    50,000Capital lease obligations
    
    
    736
    
    
    
    1,664Notes payable to finance companies
    
    
    1,300
    
    
    
    8,344Other
    
    
    10,000
    
    
    
    10,536114,536
    
    
    
    134,044Less current installments
    
    
    11,620
    
    
    
    21,702Long-term debt
    
    $
    102,916
    
    
    $
    112,342
  F-15




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (5) Long-Term Debt  continued
      CapitalDebt
    
    
    Leases
    
    
    Total2007
    
    $
    11,026
    
    
    $
    637
    
    
    $
    11,6632008
    
    
    274
    
    
    
    123
    
    
    
    3972009
    
    
    
    
    
    
    24
    
    
    
    242010
    
    
    
    
    
    
    
    
    
    
    2011
    
    
    102,500
    
    
    
    
    
    
    
    102,500113,800
    
    
    
    784
    
    
    
    114,584Less amount representing interest
    
    
    
    
    
    
    48
    
    
    
    48$
    113,800
    
    
    $
    736
    
    
    $
    114,536
 F-16




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (6) Shareholders Equity
   (7) Stock Options
   2006
    
    2005
    
    2004Expected dividend yield
    
    
    3.64
    %
    
    
    3.42
    %
    
    
    4.38
    %Stock price volatility
    
    
    23.85
    %
    
    
    23.59
    %
    
    
    23.24
    %Risk-free interest rate
    
    
    4.37
    %
    
    
    3.93
    %
    
    
    2.89
    %Expected option term
    
    5 years
    
    5 years
    
    5 years
 F-17




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (7) Stock Options  continued
  WeightedNumber
    
    Averageof
    
    ExerciseShares
    
    PriceOutstanding at February 28, 2003
(376,438 shares exercisable)
    
    
    767,750
    
    
    $
    9.37Granted
    
    
    40,000
    
    
    
    12.46Terminated
    
    
    (47,750
    )
    
    
    11.34Exercised
    
    
    (60,825
    )
    
    
    11.42Outstanding at February 29, 2004
(445,425 shares exercisable)
    
    
    699,175
    
    
    $
    9.23Granted
    
    
    48,700
    
    
    
    16.05Terminated
    
    
    (12,000
    )
    
    
    10.42Exercised
    
    
    (40,550
    )
    
    
    9.61Outstanding at February 28, 2005
(511,250 shares exercisable)
    
    
    695,325
    
    
    $
    9.67Granted
    
    
    96,619
    
    
    
    18.51Terminated
    
    
    (750
    )
    
    
    10.25Exercised
    
    
    (79,675
    )
    
    
    9.02Outstanding at February 28, 2006
(543,900 shares exercisable)
    
    
    711,519
    
    
    $
    10.94
  Options Outstanding
    
    Options ExercisableWeighted Average
    
    Weighted
    
    
    
    
    
    WeightedNumber
    
    Remaining Contractual
    
    Average
    
    Number
    
    AverageExercise Prices
    
    Outstanding
    
    Life (In Years)
    
    Exercise Price
    
    Exercisable
    
    Exercise$7.06 to $8.69
    
    
    329,000
    
    
    
    3.9
    
    
    $
    7.91
    
    
    
    314,000
    
    
    $
    7.9110.06 to 11.67
    
    
    200,200
    
    
    
    2.9
    
    
    
    10.51
    
    
    
    177,700
    
    
    
    10.3613.28 to 16.42
    
    
    120,700
    
    
    
    7.9
    
    
    
    15.44
    
    
    
    14,500
    
    
    
    13.5519.69
    
    
    61,619
    
    
    
    3.4
    
    
    
    19.69
    
    
    
    37,700
    
    
    
    19.69711,519
    
    
    
    4.8
    
    
    
    10.94
    
    
    
    543,900
    
    
    
    9.68
 F-18




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (8) Earnings per Share
  2006
    
    
    2005
    
    
    2004Basic weighted average common shares outstanding
    
    
    25,452,582
    
    
    
    18,935,533
    
    
    
    16,358,107Effect of dilutive stock options
    
    
    275,717
    
    
    
    324,017
    
    
    
    243,731Diluted weighted average common shares outstanding
    
    
    25,728,299
    
    
    
    19,259,550
    
    
    
    16,601,838Per share amounts:Net earnings  basic
    
    $
    1.59
    
    
    $
    1.21
    
    
    $
    1.10Net earnings  diluted
    
    $
    1.58
    
    
    $
    1.19
    
    
    $
    1.08Cash dividends
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
 (9) Income Taxes
  2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    20,517
    
    
    $
    13,254
    
    
    $
    8,752State and local
    
    
    2,900
    
    
    
    2,234
    
    
    
    1,127Foreign
    
    
    1,237
    
    
    
    
    
    
    
    Deferred
    
    
    (1,220
    )
    
    
    (982
    )
    
    
    1,060Total provision for income taxes
    
    $
    23,434
    
    
    $
    14,506
    
    
    $
    10,939
  2006
    
    2005
    
    2004Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Provision for state income taxes, net
of Federal income tax benefit
    
    
    3.0
    
    
    
    3.9
    
    
    
    2.8Other
    
    
    (1.4
    )
    
    
    (0.2
    )
    
    
    0.136.6
    %
    
    
    38.7
    %
    
    
    37.9
    %
 F-19




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (9) Income Taxes  continued
  2006
    
    
    2005Current deferred assets related to:Allowance for doubtful receivables
    
    $
    1,170
    
    
    $
    1,283Inventory valuation allowance
    
    
    3,417
    
    
    
    2,239Employee compensation and benefits
    
    
    1,957
    
    
    
    2,041Other
    
    
    391
    
    
    
    760$
    6,935
    
    
    $
    6,323Noncurrent deferred liability related to:Depreciation
    
    $
    8,003
    
    
    $
    8,017Intangibles amortization and impairments
    
    
    17,648
    
    
    
    17,651Prepaid pension cost
    
    
    2,309
    
    
    
    2,540Partnership interest
    
    
    
    
    
    
    207Other
    
    
    212
    
    
    
    213$
    28,172
    
    
    $
    28,628
  (10) Employee Benefit Plans
   2006
    
    2005Equity securities
    
    
    47
    %
    
    
    0
    %Debt securities
    
    
    43
    %
    
    
    0
    %Cash and cash equivalents
    
    
    10
    %
    
    
    100
    %Total
    
    
    100
    %
    
    
    100
    %
  F-20




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (10) Employee Benefit Plans  continued
   2006
    
    
    2005
    
    
    2004Service cost
    
    $
    1,422
    
    
    $
    1,470
    
    
    $
    1,337Interest cost
    
    
    2,443
    
    
    
    2,417
    
    
    
    2,359Expected return on plan assets
    
    
    (2,771
    )
    
    
    (2,663
    )
    
    
    (2,193
    )Prior service cost
    
    
    (145
    )
    
    
    (145
    )
    
    
    (145
    )Loss
    
    
    1,057
    
    
    
    1,066
    
    
    
    1,046Net periodic pension cost
    
    $
    2,006
    
    
    $
    2,145
    
    
    $
    2,404
  2006
    
    2005
    
    2004Weighted average discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.50
    %Earnings progression
    
    
    3.50
    %
    
    
    3.50
    %
    
    
    3.50
    %Expected long-term rate of return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.50
    %
  2006
    
    
    2005Beginning prepaid asset
    
    $
    8,283
    
    
    $
    7,548Company contributions
    
    
    2,000
    
    
    
    2,880Net periodic pension cost
    
    
    (2,006
    )
    
    
    (2,145
    )Ending prepaid asset
    
    $
    8,277
    
    
    $
    8,283
  F-21




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (10) Employee Benefit Plans  continued
  2006
    
    
    2005Projected benefit obligationBeginning of year
    
    $
    42,578
    
    
    $
    41,340Service and interest cost
    
    
    3,865
    
    
    
    3,887Actuarial gain (loss)
    
    
    (725
    )
    
    
    405Benefits paid
    
    
    (3,176
    )
    
    
    (3,054
    )End of year
    
    
    42,542
    
    
    
    42,578Plan assets at fair valueBeginning of year
    
    
    35,779
    
    
    
    34,791Company contributions
    
    
    2,000
    
    
    
    2,880Gains on plan assets
    
    
    3,004
    
    
    
    1,162Benefits paid
    
    
    (3,176
    )
    
    
    (3,054
    )End of year
    
    
    37,607
    
    
    
    35,779Unfunded status
    
    
    (4,935
    )
    
    
    (6,799
    )Unrecognized losses
    
    
    14,601
    
    
    
    16,616Unrecognized prior service costs
    
    
    (1,389
    )
    
    
    (1,534
    )Ending prepaid asset
    
    $
    8,277
    
    
    $
    8,283
   ProjectedYear
    
    Payments2006
    
    $
    3,7052007
    
    
    2,9852008
    
    
    3,3552009
    
    
    2,4252010
    
    
    4,1202011  2015
    
    
    20,540
  F-22




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (10) Employee Benefit Plans  continued
  (11) Acquisitions and Disposal
   Accounts receivable, net
    
    $
    115Inventories
    
    
    186Property, plant & equipment
    
    
    900Other assets
    
    
    25Goodwill
    
    
    44Accounts payable and accrued liabilities
    
    
    (70
    )$
    1,200
 Agreement and Plan
of Merger
 Ennis common stock issued 8,803,583 shares
    
    $
    145,523Cash
    
    
    2,889Alstyle debt assumed
    
    
    98,074Purchase price of Alstyle
    
    $
    246,486
  F-23




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (11) Acquisitions and Disposal  continued
    Crabar
    
    
    Royal
    
    
    AlstyleCash
    
    $
    133
    
    
    $
    601
    
    
    $
    3,187Accounts receivable, net
    
    
    7,553
    
    
    
    1,125
    
    
    
    4,457Other receivables
    
    
    1,082
    
    
    
    
    
    
    
    639Prepaid expenses
    
    
    298
    
    
    
    76
    
    
    
    1,451Other current assets
    
    
    
    
    
    
    211
    
    
    
    1,697Inventories
    
    
    4,435
    
    
    
    1,985
    
    
    
    55,801Property, plant & equipment
    
    
    8,087
    
    
    
    808
    
    
    
    21,033Goodwill
    
    
    6,204
    
    
    
    
    
    
    
    137,700Trademarks
    
    
    80
    
    
    
    
    
    
    
    61,000Customer list
    
    
    1,760
    
    
    
    
    
    
    
    22,000Other identifiable intangibles
    
    
    92
    
    
    
    
    
    
    
    3,763Accounts payable and accrued liabilities
    
    
    (11,464
    )
    
    
    (1,106
    )
    
    
    (66,242
    )$
    18,260
    
    
    $
    3,700
    
    
    $
    246,486
  Unaudited2005
    
    2004Net sales
    
    $
    567,700
    
    
    $
    545,686Net earnings
    
    
    30,595
    
    
    
    18,062Net earnings per share-basic
    
    
    1.09
    
    
    
    .71Net earnings per share-diluted
    
    
    1.08
    
    
    
    .70
  F-24




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (12) Goodwill and Other Intangible Assets
    GrossCarrying
    
    
    AccumulatedAs of February 28, 2006
    
    Amount
    
    
    Amortization
    
    
    NetAmortized intangible assetsTrademarks
    
    $
    1,234
    
    
    $
    293
    
    
    $
    941Purchased customer lists
    
    
    23,760
    
    
    
    2,128
    
    
    
    21,632$
    24,994
    
    
    $
    2,421
    
    
    $
    22,573As of February 28, 2005Amortized intangible assets
    
    $
    1,234
    
    
    $
    144
    
    
    $
    1,090Trademarks
    
    
    23,760
    
    
    
    485
    
    
    
    23,275Purchased customer lists
    
    $
    24,994
    
    
    $
    629
    
    
    $
    24,365Unamortized
intangible assets, as of February 28, 2006 and 2005.Trademarks
    
    
    
    
    
    
    
    
    
    $
    61,000
   2007
    
    $
    1,944,0002008
    
    
    1,805,0002009
    
    
    1,792,0002010
    
    
    1,776,0002011
    
    
    1,775,000
 F-25




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (12) Goodwill and Other Intangible Assets  continued
  ApparelPrint Segment
    
    
    SegmentForms
    
    
    Promotional
    
    
    Financial
    
    
    Print
    
    
    ApparelSolutions
    
    
    Solutions
    
    
    Solutions
    
    
    Segment
    
    
    SolutionsGroup
    
    
    Group
    
    
    Group
    
    
    Total
    
    
    Group
    
    
    TotalBalance as of March 1, 2004
    
    $
    13,827
    
    
    $
    6,579
    
    
    $
    14,014
    
    
    $
    34,420
    
    
    $
    
    
    
    $
    34,420Goodwill acquired during year
    
    
    5,918
    
    
    
    
    
    
    
    
    
    
    
    5,918
    
    
    
    138,134
    
    
    
    144,052Impairment losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance as of March 1, 2005
    
    
    19,745
    
    
    
    6,579
    
    
    
    14,014
    
    
    
    40,338
    
    
    
    138,134
    
    
    
    178,472Goodwill adjusted during year
    
    
    242
    
    
    
    
    
    
    
    
    
    
    
    242
    
    
    
    (434
    )
    
    
    (192
    )Impairment losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance as of February 28, 2006
    
    $
    19,987
    
    
    $
    6,579
    
    
    $
    14,014
    
    
    $
    40,580
    
    
    $
    137,700
    
    
    $
    178,280
  (13) Segment Information and Geographic Information
   ®
 F-26




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (13) Segment Information and Geographic Information  continued
    ApparelPrint Segment
    
    SegmentForms
    
    Promotional
    
    Financial
    
    Print
    
    ApparelSolutions
    
    Solutions
    
    Solutions
    
    Segment
    
    Solutions
    
    
    
    
    
    ConsolidatedGroup
    
    Group
    
    Group
    
    Total
    
    Group
    
    Corporate
    
    TotalsFiscal year ended 2006:Net sales
    
    $
    188,551
    
    
    $
    85,632
    
    
    $
    47,227
    
    
    $
    321,410
    
    
    $
    237,987
    
    
    $
    
    
    
    $
    559,397Depreciation
    
    
    3,223
    
    
    
    2,376
    
    
    
    1,627
    
    
    
    7,226
    
    
    
    7,604
    
    
    
    644
    
    
    
    15,474Amortization
    
    
    361
    
    
    
    
    
    
    
    
    
    
    
    361
    
    
    
    1,976
    
    
    
    
    
    
    
    2,337Segment earnings (loss)
before income taxes
    
    
    25,792
    
    
    
    9,117
    
    
    
    8,442
    
    
    
    43,351
    
    
    
    30,085
    
    
    
    (9,465
    )
    
    
    63,971Segment assets
    
    
    91,209
    
    
    
    32,914
    
    
    
    31,334
    
    
    
    155,457
    
    
    
    320,113
    
    
    
    18,831
    
    
    
    494,401Capital expenditures
    
    
    574
    
    
    
    1,898
    
    
    
    505
    
    
    
    2,977
    
    
    
    5,061
    
    
    
    1,002
    
    
    
    9,040Fiscal year ended 2005:Net sales
    
    $
    177,618
    
    
    $
    83,881
    
    
    $
    47,809
    
    
    $
    309,308
    
    
    $
    56,045
    
    
    $
    
    
    
    $
    365,353Depreciation
    
    
    3,356
    
    
    
    2,455
    
    
    
    2,141
    
    
    
    7,952
    
    
    
    1,878
    
    
    
    537
    
    
    
    10,367Amortization
    
    
    283
    
    
    
    
    
    
    
    
    
    
    
    283
    
    
    
    426
    
    
    
    
    
    
    
    709Segment earnings (loss)
before income taxes
    
    
    25,761
    
    
    
    11,168
    
    
    
    7,346
    
    
    
    44,275
    
    
    
    3,575
    
    
    
    (10,385
    )
    
    
    37,465Segment assets
    
    
    90,950
    
    
    
    45,514
    
    
    
    33,230
    
    
    
    169,694
    
    
    
    312,788
    
    
    
    14,764
    
    
    
    497,246Capital expenditures
    
    
    1,313
    
    
    
    1,332
    
    
    
    557
    
    
    
    3,202
    
    
    
    237
    
    
    
    2,704
    
    
    
    6,143Fiscal year ended 2004:Net sales
    
    $
    142,006
    
    
    $
    67,024
    
    
    $
    50,330
    
    
    $
    259,360
    
    
    
    
    
    
    $
    
    
    
    $
    259,360Depreciation
    
    
    3,288
    
    
    
    2,355
    
    
    
    2,959
    
    
    $
    8,602
    
    
    
    
    
    
    
    614
    
    
    
    9,216Amortization
    
    
    132
    
    
    
    
    
    
    
    
    
    
    $
    132
    
    
    
    
    
    
    
    
    
    
    
    132Segment earnings (loss)
before income taxes
    
    
    21,830
    
    
    
    7,433
    
    
    
    6,876
    
    
    $
    36,139
    
    
    
    
    
    
    
    (7,249
    )
    
    
    28,890Segment assets
    
    
    68,950
    
    
    
    33,287
    
    
    
    36,004
    
    
    $
    138,241
    
    
    
    
    
    
    
    15,802
    
    
    
    154,043Capital expenditures
    
    
    1,408
    
    
    
    620
    
    
    
    1,011
    
    
    $
    3,039
    
    
    
    
    
    
    
    1,504
    
    
    
    4,543
  F-27




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (13) Segment Information and Geographic Information  continued
   UnitedStates
    
    
    Canada
    
    
    Mexico
    
    
    Total2006Net sales to unaffiliated customersCustomersPrint Segment
    
    $
    321,410
    
    
    $
    
    
    
    $
    
    
    
    $
    321,410Apparel Segment
    
    
    220,090
    
    
    
    17,897
    
    
    
    
    
    
    
    237,987$
    541,500
    
    
    $
    17,897
    
    
    $
    
    
    
    $
    559,397Identifiable long-lived assetsPrint Segment
    
    $
    40,903
    
    
    $
    
    
    
    $
    
    
    
    $
    40,903Apparel Segment
    
    
    12,814
    
    
    
    102
    
    
    
    3,720
    
    
    
    16,636Corporate
    
    
    6,264
    
    
    
    
    
    
    
    
    
    
    
    6,264$
    59,981
    
    
    $
    102
    
    
    $
    3,720
    
    
    $
    63,8032005Net sales to unaffiliated customersCustomersPrint Segment
    
    $
    309,308
    
    
    $
    
    
    
    $
    
    
    
    $
    309,308Apparel Segment
    
    
    50,950
    
    
    
    5,095
    
    
    
    
    
    
    
    56,045$
    360,258
    
    
    $
    5,095
    
    
    $
    
    
    
    $
    365,353Identifiable long-lived assetsPrint Segment
    
    $
    44,326
    
    
    $
    
    
    
    $
    
    
    
    $
    44,326Apparel Segment
    
    
    14,685
    
    
    
    137
    
    
    
    4,527
    
    
    
    19,349Corporate
    
    
    5,887
    
    
    
    
    
    
    
    
    
    
    
    5,887$
    64,898
    
    
    $
    137
    
    
    $
    4,527
    
    
    $
    69,5622004Net sales to unaffiliated customersCustomersPrint Segment
    
    $
    259,360
    
    
    $
    
    
    
    $
    
    
    
    $
    259,360Apparel Segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    259,360
    
    
    $
    
    
    
    $
    
    
    
    $
    259,360Identifiable long-lived assetsPrint Segment
    
    $
    42,765
    
    
    $
    
    
    
    $
    
    
    
    $
    42,765Apparel Segment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    3,715
    
    
    
    
    
    
    
    
    
    
    
    3,715$
    46,480
    
    
    $
    
    
    
    $
    
    
    
    $
    46,480
 F-28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (14) Quarterly Consolidated Financial Information
  For the Three Months Ended
    
    May 31
    
    August 31
    
    November 30
    
    February 28,Fiscal year ended 2006:Net sales
    
    $
    149,113
    
    
    $
    148,116
    
    
    $
    131,690
    
    
    $
    130,478Gross profit
    
    
    37,478
    
    
    
    37,252
    
    
    
    35,620
    
    
    
    31,740Net earnings
    
    
    10,558
    
    
    
    10,576
    
    
    
    10,098
    
    
    
    9,305Dividends paid
    
    
    3,940
    
    
    
    3,945
    
    
    
    3,946
    
    
    
    3,949Per share of common stock:Basic net earnings
    
    $
    0.42
    
    
    $
    0.42
    
    
    $
    0.40
    
    
    $
    0.37Diluted net earnings
    
    $
    0.41
    
    
    $
    0.41
    
    
    $
    0.39
    
    
    $
    0.36Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155Fiscal year ended 2005:Net sales
    
    $
    65,736
    
    
    $
    73,374
    
    
    $
    91,750
    
    
    $
    134,493Gross profit
    
    
    17,060
    
    
    
    19,352
    
    
    
    22,874
    
    
    
    31,471Net earnings
    
    
    4,582
    
    
    
    5,370
    
    
    
    6,104
    
    
    
    6,903Dividends paid
    
    
    2,542
    
    
    
    2,546
    
    
    
    2,546
    
    
    
    3,940Per share of common stock:Basic net earnings
    
    $
    0.28
    
    
    $
    0.33
    
    
    $
    0.36
    
    
    $
    0.27Diluted net earnings
    
    $
    0.27
    
    
    $
    0.32
    
    
    $
    0.35
    
    
    $
    0.27Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
 (15) Commitments and Contingencies
  OperatingLease
    
    
    SubleaseCommitments
    
    
    Income
    
    
    Net2007
    
    $
    7,366
    
    
    $
    (1,253
    )
    
    $
    6,1132008
    
    
    6,323
    
    
    
    (1,276
    )
    
    
    5,0472009
    
    
    4,810
    
    
    
    (106
    )
    
    
    4,7042010
    
    
    1,680
    
    
    
    
    
    
    
    1,6802011
    
    
    1,050
    
    
    
    
    
    
    
    1,050Thereafter
    
    
    338
    
    
    
    
    
    
    
    338$
    21,567
    
    
    $
    (2,635
    )
    
    $
    18,932
    F-29




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 (16) Supplemental Cash Flow Information
  2006
    
    2005
    
    2004Interest paid
    
    $
    8,038,000
    
    
    $
    2,755,000
    
    
    $
    830,000Income taxes paid
    
    $
    22,957,000
    
    
    $
    13,273,000
    
    
    $
    10,208,000
  2006
    
    2005Fair value of assets acquired in business acquisition
    
    $
    1,226
    
    
    $
    199,433Liabilities assumed in business acquisitions
    
    $
    70
    
    
    $
    110,689Promissory notes issued for business acquisitionsCommon stock issued for business acquisitons
    
    $
    
    
    
    $
    149,223
 (17) Subsequent Events
 1 2
  F-30




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##### Table of Contents



UNDERTAKINGS WITH RESPECT TO REGISTRANTS REGISTRATION
STATEMENTS, FORM S-8
(NUMBERS: 33-43087, 333-58963, 333-44624, 333-38100, 333-119845)
    31




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##### Table of Contents



SIGNATURES
  ENNIS, INC.Date: May 12, 2006
    
    BY:
    
    /s/ KEITH S. WALTERSKeith S. Walters, Chairman of the Board,Chief Executive Officer and PresidentDate: May 12, 2006
    
    BY:
    
    /s/ RICHARD L. TRAVIS, JR.Richard L. Travis, Jr.Vice President  Finance and CFO, Secretary
and Principal Financial and Accounting Officer
  Date: May 12, 2006
    
    BY:
    
    /s/ KEITH S. WALTERSKeith S. Walters, ChairmanDate: May 12, 2006
    
    BY:
    
    /s/ RONALD M. GRAHAMRonald M. Graham, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ JAMES B. GARDNERJames B. Gardner, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ THOMAS R. PRICEThomas R. Price, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ KENNETH G. PRITCHETTKenneth G. Pritchett, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ JAMES C. TAYLORJames C. Taylor, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ HAROLD W. HARTLEYHarold W. Hartley, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ ROBERT L. MITCHELLRobert L. Mitchell, DirectorDate: May 12, 2006
    
    BY:
    
    /s/ ALEJANDRO QUIROZAlejandro Quiroz, Director
 32




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    Description of DocumentExhibit 2.1
    
    Agreement and Plan of Merger dated as of June 25, 2004 by
and among Ennis, Inc., Midlothian Holdings LLC, and Centrum
Acquisition, Inc., incorporated herein by reference to
Exhibit 2.1 to the Registrants Current Report on Form 8-K
filed on November 19, 2004.Exhibit 2.2
    
    First Amendment to Agreement and Plan of Merger dated as of
August 23, 2004 by and among Ennis, Inc., Midlothian
Holdings LLC, and Centrum Acquisition, Inc., incorporated
herein by reference to Exhibit 2.2 to the Registrants
Current Report on Form 8-K filed on filed on November 19,
2004.Exhibit 3.1
    
    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 3.2
    
    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 10.1
    
    Employee Agreement between Ennis, Inc. and Keith S. Walters
dated April 21, 2006 incorporated herein by reference to
Exhibit 10.1 to the Registrants Current Report on Form 8-K
filed on April 25, 2006.Exhibit 10.2
    
    Employee Agreement between Ennis, Inc. and Michael D.
Magill dated April 21, 2006 incorporated herein by
reference to Exhibit 10.2 to the Registrants Current
Report on Form 8-K filed on April 25, 2006.Exhibit 10.3
    
    Employee Agreement between Ennis, Inc. and Ronald M. Graham
dated April 21, 2006 incorporated herein by reference to
Exhibit 10.3 to the Registrants Current Report on Form 8-K
filed on April 25, 2006.Exhibit 10.4
    
    Employee Agreement between Ennis, Inc. and Richard L.
Travis, Jr. dated April 21, 2006 incorporated herein by
reference to Exhibit 10.4 to the Registrants Current
Report on Form 8-K filed on April 25, 2006.Exhibit 10.5
    
    Employee Agreement between Ennis, Inc. and David Todd
Scarborough dated April 21, 2006 incorporated herein by
reference to Exhibit 10.5 to the Registrants Current
Report on Form 8-K filed on April 25, 2006.Exhibit 10.6
    
    2004 Long-Term Incentive Plan incorporated herein by
reference to Exhibit 4.1 of the Registrants Form S-8 filed
on January 5, 2005.Exhibit 10.7
    
    Stock Purchase Agreement dated as of June 25, 2004, among
Crabar/GBF, Inc. the shareholders of Crabar/GBF, Inc. and
Ennis, Inc. incorporated herein by reference to Exhibit 2
to the Registrants Current Report on Form 8-K filed on
July 15, 2004.
 33




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##### Table of Contents



Exhibit Number
    
    Description of DocumentExhibit 10.8
    
    Form of Executive Incentive and Non-Qualified Stock Option
Agreement granted February 27, 2006 incorporated herein by
reference to Exhibit 10.2 to the Registrants Current
Report on Form 8-K filed on March 1, 2006.Exhibit 10.9
    
    Form of Executive Restricted Stock Agreement granted
February 27, 2006 incorporated herein by reference to
Exhibit 10.2 to the Registrants Current Report on Form 8-K
filed on March 1, 2006.Exhibit 10.10
    
    First Amendment Agreement dated as of June 25, 2004, by and
among Amin Amdani, Rauf Gajiani, Centrum Acquisition, Inc.,
Ennis, Inc. and Midlothian Holdings LLC incorporated herein
by reference to Exhibit 10.6 to the Registrants Form S-4
filed on September 3, 2004.Exhibit 10.11
    
    Indemnity Agreement dated as of June 25, 2004, by and among
Laurence Ashkin, Roger Brown, John McLinden, Arthur Slaven,
Ennis, Inc. and Midlothian Holdings LLC incorporated herein
by reference to Exhibit 10.7 to the Registrants Form S-4
filed on September 3, 2004.Exhibit 10.13
    
    UPS Ground, Air Hundredweight and Sonicair Incentive
Program Carrier Agreement incorporated herein by reference
to Exhibit 10 to the Registrants Form 10-K Annual Report
for the fiscal year ended February 29, 2003.Exhibit 10.14
    
    Addendum to UPS Ground, Air and Sonicair Incentive Program
Carrier Agreement dated as of August 9, 2004, between
Ennis, Inc. and United Parcel Service, Inc. incorporated
herein by reference to Exhibit 10.10 to the Registrants
Form S-4 filed on September 3, 2004.*Exhibit 10.15
    
    Carbonless Paper Agreement dated as of July 13, 2004
between Ennis, Inc & MeadWestvaco Corporation incorporated
herein by reference to Exhibit 10.11 to the Registrants
Form S-4 filed on September 3, 2004.*Exhibit 10.16
    
    Credit Agreement dated as of November 19, 2004 among
Ennis, Inc., various other co-borrowers and lenders that
sign and become a party to the credit agreement,
LaSalle Bank National Association, as Administrative Agent,
Documentation Agent and Arranger, and Compass Bank and
JPMorgan Chase Bank, N.A., as Co-Syndication Agent
incorporated herein by reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed on November
19, 2004.Exhibit 10.17
    
    Security Agreement dated as of November 19, 2004 among
Ennis, Inc., various other parties that sign and become a
party to the security agreement and LaSalle Bank National
Association, as the Administrative Agent incorporated
herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K filed on November 19, 2004.Exhibit 10.18
    
    Amended and Restated Credit Agreement dated as of March 31,
2006 among Ennis, Inc., various other parties that sign and
become a party to the security agreement and LaSalle Bank
National Association, as the Administrative Agent (filed
herewith).
 34




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##### Table of Contents



Exhibit Number
    
    Description of DocumentExhibit 10.19
    
    Amended and Restated Security Agreement dated as of March 31, 2006 among
Ennis, Inc. various other parties that sign and become a party to the
security agreement and LaSalle Bank National Association, as the
Administrative Agent (filed herewith).Exhibit 21
    
    Subsidiaries of RegistrantExhibit 23.1
    
    Consent of Independent Registered Public Accounting FirmExhibit 23.2
    
    Consent of Independent Registered Public Accounting FirmExhibit 31.1
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)Exhibit 31.2
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)Exhibit 32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002Exhibit 32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 35