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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, 2007
 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
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ENNIS, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE PERIOD ENDED FEBRUARY 28, 2007
  
 TABLE OF CONTENTS
 PART I:Item 1 Business
    
    
    3Item 1A Risk Factors
    
    
    7Item 1B Unresolved Staff Comments
    
    
    10Item 2 Properties
    
    
    10Item 3 Legal Proceedings
    
    
    12Item 4 Submission of Matters to a Vote of Security Holders
    
    
    12PART II:Item 5 Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    12Item 6 Selected Financial Data
    
    
    14Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 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
    
    
    24Item 9B Other Information
    
    
    25PART III:Item 10 Directors, Executive Officers, and Corporate Governance
    
    
    26Item 11 Executive Compensation
    
    
    26Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    26Item 13 Certain Relationships and Related Transactions, and Director Independence
    
    
    27Item 14 Principal Accounting Fees and Services
    
    
    27PART IV:Item 15 Exhibits and Financial Statement Schedules
    
    
    27Signatures
    
    
    28Amendment to Articles of IncorporationSubsidiariesConsent 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
  2




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




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Apparel Segment
   4




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Patents, Licenses, Franchises and Concessions
  5




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Intellectual Property
  Customers
  Backlog
  Research and Development
  Environment
  Employees
  Available Information
 www.ennis.com www.sec.gov
 6




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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,
material shortages, or an increase in transportation costs, could have a material adverse effect on
us.
     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.
  8




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##### Table of Contents



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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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
  
 ITEM 2. PROPERTIES
      10




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Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    LeasedPrint SegmentEnnis, Texas
    
    Three Manufacturing Facilities
    
    
    325,118
    
    
    
    Chatham, Virginia
    
    Two Manufacturing Facilities
    
    
    127,956
    
    
    
    Paso Robles, California
    
    Manufacturing
    
    
    94,120
    
    
    
    DeWitt, Iowa
    
    Two Manufacturing Facilities
    
    
    95,000
    
    
    
    Milwaukee, Wisconsin
    
    Sales Office
    
    
    
    
    
    
    300Knoxville, Tennessee
    
    Manufacturing
    
    
    48,057
    
    
    
    Ft, Scott, Kansas
    
    Manufacturing
    
    
    86,660
    
    
    
    Portland, Oregon
    
    Two Manufacturing Facilities
    
    
    
    
    
    
    186,330Wolfe City, Texas
    
    Two Manufacturing Facilities
    
    
    119,259
    
    
    
    Moultrie, Georgia
    
    Manufacturing
    
    
    25,000
    
    
    
    Coshocton, Ohio
    
    Manufacturing
    
    
    24,750
    
    
    
    Macomb, Michigan
    
    Manufacturing
    
    
    56,350
    
    
    
    Anaheim, California
    
    Three Manufacturing Facilities
    
    
    
    
    
    
    63,750Bellville, Texas
    
    Manufacturing
    
    
    70,196
    
    
    
    Denver, Colorado
    
    Four Manufacturing Facilities
    
    
    
    
    
    
    126,505Dallas, Texas
    
    Held for sale
    
    
    82,400
    
    
    
    San Antonio, Texas
    
    Manufacturing
    
    
    47,426
    
    
    
    Brooklyn 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
    
    
    
    
    
    
    27,000Columbus, Kansas
    
    Manufacturing
    
    
    201,000
    
    
    
    Dayton, Ohio
    
    Vacant
    
    
    
    
    
    
    5,526Leipsic, Ohio
    
    Manufacturing
    
    
    83,216
    
    
    
    El Dorado Springs, Missouri
    
    Manufacturing
    
    
    70,894
    
    
    
    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
    
    
    
    Caledonia, New York
    
    Manufacturing
    
    
    138,730
    
    
    
    Sun City, California
    
    Manufacturing
    
    
    52,617
    
    
    
    Sparks, Nevada
    
    Manufacturing
    
    
    
    
    
    
    18,5892,188,734
    
    
    
    618,208Apparel SegmentAnaheim, California
    
    Office and Distribution Center
    
    
    
    
    
    
    200,000Anaheim, California
    
    Manufacturing*
    
    
    
    
    
    
    450,315Chicago, Illinois
    
    Distribution Center
    
    
    
    
    
    
    120,000Atlanta, Georgia
    
    Distribution Center
    
    
    
    
    
    
    31,958Carrollton, Texas
    
    Distribution Center
    
    
    
    
    
    
    26,136Bensalem, Pennsylvania
    
    Distribution Center
    
    
    
    
    
    
    60,848Mississauga, Canada
    
    Distribution Center
    
    
    
    
    
    
    53,982Los Angeles, California
    
    Distribution Center
    
    
    
    
    
    
    31,600Ensenada, Mexico
    
    Two Manufacturing Facilities
    
    
    112,622
    
    
    
    53,820Ensenada, Mexico
    
    Car Parking
    
    
    
    
    
    
    22,000Ensenada, Mexico
    
    Warehouse
    
    
    
    
    
    
    2,583Hermosillo, Mexico
    
    Administrative Offices
    
    
    
    
    
    
    215Hermosillo, Mexico
    
    Three Manufacturing Facilities
    
    
    
    
    
    
    126,263Hermosillo, Mexico
    
    Yard Space
    
    
    
    
    
    
    19,685Hermosillo, Mexico
    
    Vacant
    
    
    
    
    
    
    8,432Hermosillo, Mexico
    
    Storage for Machines
    
    
    
    
    
    
    1,640112,622
    
    
    
    1,209,477Corporate OfficesEnnis, Texas
    
    Administrative Offices
    
    
    9,300
    
    
    
    Midlothian, Texas
    
    Executive and Administrative Offices
    
    
    28,000
    
    
    
    37,300
    
    
    
    Totals
    
    
    2,338,656
    
    
    
    1,827,685
 
 *
    
    Apparel Segment  150,000 square feet of the manufacturing facilities in Anaheim, California
is subleased. 11




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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, 2007First Quarter
    
    $
    20.16
    
    
    $
    18.57
    
    
    
    6,684
    
    
    $
    0.155Second Quarter
    
    
    20.87
    
    
    
    18.52
    
    
    
    6,185
    
    
    $
    0.155Third Quarter
    
    
    23.37
    
    
    
    19.99
    
    
    
    6,850
    
    
    $
    0.155Fourth Quarter
    
    
    27.11
    
    
    
    22.19
    
    
    
    4,801
    
    
    $
    0.155Fiscal 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
    
    
    $
    0.155
   Stock Performance Graph
  12




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COMPARISON OF 5 YEAR CUMULATIVE TOTAL
 
 
   2/02
    
    
    2/03
    
    
    2/04
    
    
    2/05
    
    
    2/06
    
    
    2/07Ennis, Inc.
    
    
    
    100.00
    
    
    
    
    112.09
    
    
    
    
    174.24
    
    
    
    
    182.78
    
    
    
    
    218.62
    
    
    
    
    292.43S & P 500
    
    
    
    100.00
    
    
    
    
    77.32
    
    
    
    
    107.10
    
    
    
    
    114.57
    
    
    
    
    124.20
    
    
    
    
    139.07Russell 2000
    
    
    
    100.00
    
    
    
    
    77.90
    
    
    
    
    128.08
    
    
    
    
    140.28
    
    
    
    
    163.55
    
    
    
    
    179.70
 The stock price performance included in this graph is not necessarily indicative of
future stock price performance.
 13




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ITEM 6. SELECTED FINANCIAL DATA
  Fiscal Years Ended2007
    
    2006
    
    2005
    
    2004
    
    2003(Dollars and shares in thousands, except per share amounts)Operating results:Net sales
    
    $
    584,713
    
    
    $
    559,397
    
    
    $
    365,353
    
    
    $
    259,360
    
    
    $
    240,757Gross profit
    
    
    145,937
    
    
    
    142,090
    
    
    
    90,757
    
    
    
    68,548
    
    
    
    63,272SG&A expenses
    
    
    72,579
    
    
    
    70,060
    
    
    
    51,159
    
    
    
    38,521
    
    
    
    37,559Net earnings
    
    
    41,601
    
    
    
    40,537
    
    
    
    22,959
    
    
    
    17,951
    
    
    
    15,247Earnings and dividends per share:Basic
    
    $
    1.63
    
    
    $
    1.59
    
    
    $
    1.21
    
    
    $
    1.10
    
    
    $
    0.94Diluted
    
    
    1.62
    
    
    
    1.58
    
    
    
    1.19
    
    
    
    1.08
    
    
    
    0.93Dividends
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62Weighted average shares outstanding:Basic
    
    
    25,531
    
    
    
    25,453
    
    
    
    18,936
    
    
    
    16,358
    
    
    
    16,285Diluted
    
    
    25,759
    
    
    
    25,728
    
    
    
    19,260
    
    
    
    16,602
    
    
    
    16,478Financial Position:Working capital
    
    $
    102,269
    
    
    $
    94,494
    
    
    $
    70,247
    
    
    $
    38,205
    
    
    $
    39,718Current assets
    
    
    151,516
    
    
    
    158,455
    
    
    
    151,630
    
    
    
    63,605
    
    
    
    65,012Total assets
    
    
    478,228
    
    
    
    494,401
    
    
    
    497,246
    
    
    
    154,043
    
    
    
    152,537Current liabilities
    
    
    49,247
    
    
    
    63,961
    
    
    
    81,383
    
    
    
    25,400
    
    
    
    25,294Long-term debt
    
    
    88,971
    
    
    
    102,916
    
    
    
    112,342
    
    
    
    7,800
    
    
    
    18,135Total liabilities
    
    
    161,825
    
    
    
    197,066
    
    
    
    225,515
    
    
    
    43,461
    
    
    
    55,634Equity
    
    
    316,403
    
    
    
    297,335
    
    
    
    271,731
    
    
    
    110,582
    
    
    
    96,903Current ratio
    
    
    3.08 to 1.0
    
    
    
    2.48 to 1.0
    
    
    
    1.86 to 1.0
    
    
    
    2.50 to 1.0
    
    
    
    2.57 to 1.0Long-term debt to equity
    
    
    .28 to 1.0
    
    
    
    .35 to 1.0
    
    
    
    .41 to 1.0
    
    
    
    .07 to 1.0
    
    
    
    .19 to 1.0
 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Cautionary Statements
  14




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##### Table of Contents



Results of Operations
 Consolidated
    
    Fiscal Years EndedStatements of Earnings - Data
    
    2007
    
    
    2006
    
    
    2005Net sales
    
    $
    584,713
    
    
    
    100.0
    %
    
    $
    559,397
    
    
    
    100.0
    %
    
    $
    365,353
    
    
    
    100.0
    %Cost of goods sold
    
    
    438,776
    
    
    
    75.0
    
    
    
    417,307
    
    
    
    74.6
    
    
    
    274,596
    
    
    
    75.2Gross profit
    
    
    145,937
    
    
    
    25.0
    
    
    
    142,090
    
    
    
    25.4
    
    
    
    90,757
    
    
    
    24.8Selling, general and
administrative
    
    
    72,579
    
    
    
    12.4
    
    
    
    70,060
    
    
    
    12.5
    
    
    
    51,159
    
    
    
    14.0Income from operations
    
    
    73,358
    
    
    
    12.6
    
    
    
    72,030
    
    
    
    12.9
    
    
    
    39,598
    
    
    
    10.8Other expense
    
    
    (6,993
    )
    
    
    (1.2
    )
    
    
    (8,059
    )
    
    
    (1.4
    )
    
    
    (2,133
    )
    
    
    (0.6
    )Earnings before income taxes
    
    
    66,365
    
    
    
    11.4
    
    
    
    63,971
    
    
    
    11.4
    
    
    
    37,465
    
    
    
    10.3Provision for income taxes
    
    
    24,764
    
    
    
    4.2
    
    
    
    23,434
    
    
    
    4.2
    
    
    
    14,506
    
    
    
    4.0Net earnings
    
    $
    41,601
    
    
    
    7.2
    %
    
    $
    40,537
    
    
    
    7.2
    %
    
    $
    22,959
    
    
    
    6.3
    %
 Critical Accounting Policies and Judgments
     15




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Results of Operations  Consolidated
 Net Sales.
  Cost of Goods Sold.
  Selling, general, and administrative expenses.
  Income from operations.
  17




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Other income and expense.
  Provision for income taxes.
  Net earnings.
  Results of Operations  Segments
 Fiscal year endingNet Sales by Segment (in thousands)
    
    2007
    
    
    2006
    
    
    2005Print
    
    $
    325,679
    
    
    $
    321,410
    
    
    $
    309,308Apparel
    
    
    259,034
    
    
    
    237,987
    
    
    
    56,045Total
    
    $
    584,713
    
    
    $
    559,397
    
    
    $
    365,353
 Print Segment
  18




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Apparel Segment
   Fiscal year endingGross Profit by Segment (in thousands)
    
    2007
    
    
    2006
    
    
    2005Print
    
    $
    81,986
    
    
    $
    79,859
    
    
    $
    78,521Apparel
    
    
    63,951
    
    
    
    62,231
    
    
    
    12,236Total
    
    $
    145,937
    
    
    $
    142,090
    
    
    $
    90,757
 Print Segment.
 Apparel Segment
 19




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##### Table of Contents



Fiscal year endingProfit by Segment (in thousands)
    
    2007
    
    
    2006
    
    
    2005Print
    
    $
    46,077
    
    
    $
    45,121
    
    
    $
    45,678Apparel
    
    
    33,321
    
    
    
    30,085
    
    
    
    3,575Total
    
    
    79,398
    
    
    
    75,206
    
    
    
    49,253Less corporate expenses
    
    
    13,033
    
    
    
    11,235
    
    
    
    11,788Earnings before income taxes
    
    $
    66,365
    
    
    $
    63,971
    
    
    $
    37,465
 Print Segment
 Apparel Segment.
 Liquidity and Capital Resources
 February 28,
    
    February 28,(Dollars in thousands)
    
    2007
    
    2006
    
    ChangeWorking Capital
    
    $
    102,269
    
    
    $
    94,494
    
    
    
    8.2
    %Cash and cash equivalents
    
    $
    3,582
    
    
    $
    13,860
    
    
    
    -74.2
    %
 Working Capital.
 Cash and cash equivalents.
 20




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Fiscal year ending(Dollars in thousands)
    
    2007
    
    2006
    
    ChangeNet Cash provided by operating activities
    
    $
    49,517
    
    
    $
    47,427
    
    
    
    4.4
    %Net Cash used in investing activities
    
    $
    (19,825
    )
    
    $
    (9,942
    )
    
    
    99.4
    %Net Cash used in financing activities
    
    $
    (39,978
    )
    
    $
    (34,895
    )
    
    
    14.6
    %
 Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
 Credit Facility 
   Pension 
  21




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Inventories 
 Capital Expenditures 
 Contractual Obligations & Off-Balance Sheet Arrangements 
 2012 toTotal
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2017Debt:Revolving credit facility
    
    $
    88,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    88,500
    
    
    $
    Notes to finance companies
    
    
    314
    
    
    
    314
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital leases
    
    
    784
    
    
    
    326
    
    
    
    248
    
    
    
    210
    
    
    
    
    
    
    
    Other
    
    
    25
    
    
    
    12
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    Debt subtotal
    
    
    89,623
    
    
    
    652
    
    
    
    261
    
    
    
    210
    
    
    
    88,500
    
    
    
    Interest on capital leases
    
    
    54
    
    
    
    32
    
    
    
    17
    
    
    
    5
    
    
    
    
    
    
    
    Debt and interest total
    
    
    89,677
    
    
    
    684
    
    
    
    278
    
    
    
    215
    
    
    
    88,500
    
    
    
    Other contractual commitments:Estimated pension benefit payments
    
    
    34,899
    
    
    
    3,080
    
    
    
    2,612
    
    
    
    2,555
    
    
    
    3,499
    
    
    
    23,153Letters of credit
    
    
    3,938
    
    
    
    3,938
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    18,286
    
    
    
    7,252
    
    
    
    6,062
    
    
    
    2,755
    
    
    
    1,765
    
    
    
    452Total other contractual
commitments
    
    
    57,123
    
    
    
    14,270
    
    
    
    8,674
    
    
    
    5,310
    
    
    
    5,264
    
    
    
    23,605Total
    
    $
    146,800
    
    
    $
    14,954
    
    
    $
    8,952
    
    
    $
    5,525
    
    
    $
    93,764
    
    
    $
    23,605
 New Accounting Pronouncements
 FIN 48 .
 SAB 108
 22




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##### Table of Contents



FAS 157 .
 FAS 158.
 FAS 159 .
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
 Interest Rates
  Foreign Exchange
   23




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##### Table of Contents



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.
  MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   i.
    
    pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets of the
Company;ii.
    
    provide reasonable assurance that transactions are
recorded as necessary to permit preparation of
financial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the Company are being made only in
accordance with authorizations of management and
directors of the Company; andiii.
    
    provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or
dispositions of the Companys assets that could have
a material effect on the financial statements.
  24




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##### Table of Contents



Internal ControlIntegrated Framework
  
 ITEM 9B. OTHER INFORMATION
  25




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 ITEM 11. EXECUTIVE COMPENSATION
  
 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)
    
    
    593,432
    
    
    $
    11.08
    
    
    
    381,958Equity compensation plans not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    593,432
    
    
    $
    11.08
    
    
    
    381,958
 
 (1)
    
    Includes the 1998 Option and Restricted Stock Plan, amended and restated as of June 17, 2004
and the 1991 Incentive Stock Option Plan. Includes 39,919 shares of restricted stock. 26




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##### Table of Contents



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) Documents filed as a part of the report:
 (1)
    
    Index to Consolidated Financial Statements of the CompanyAn Index to Consolidated Financial Statements has been filed as a part of this Report
beginning on page F-1 hereof.(2)
    
    All schedules for which provision is made in the applicable accounting regulation
of the SEC have been omitted because of the absence of the conditions under which they
would be required or because the information required is included in the consolidated
financial statements of the Registrant or the notes thereto.(3)
    
    ExhibitsAn Index to Exhibits has been filed as a part of this Report beginning on page E-1 and
is herein incorporated by reference.
 27




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##### Table of Contents



SIGNATURES
  ENNIS, INC.Date: May 9, 2007
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, Chairman of the Board,Chief Executive Officer and PresidentDate: May 9, 2007
    BY:
    /s/ RICHARD L. TRAVIS, JR.Richard L. Travis, Jr.Vice President  Finance and CFO, Secretary and
Principal Financial and Accounting Officer  Date: May 9, 2007
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, ChairmanDate: May 9, 2007
    BY:
    /s/ RONALD M. GRAHAMRonald M. Graham, DirectorDate: May 9, 2007
    BY:
    /s/ JAMES B. GARDNERJames B. Gardner, DirectorDate: May 9, 2007
    BY:
    /s/ HAROLD W. HARTLEYHarold W. Hartley, DirectorDate: May 9, 2007
    BY:
    /s/ GODFREY M. LONG, JR.Godfrey M. Long, Jr., DirectorDate: May 9, 2007
    BY:
    /s/ THOMAS R. PRICEThomas R. Price, DirectorDate: May 9, 2007
    BY:
    /s/ KENNETH G. PRITCHETTKenneth G. Pritchett, DirectorDate: May 9, 2007
    BY:
    /s/ ALEJANDRO QUIROZAlejandro Quiroz, DirectorDate: May 9, 2007
    BY:
    /s/ JAMES C. TAYLORJames C. Taylor, Director 28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements
 Report of Independent Registered Public Accounting Firm
    
    
    F-2Report of Independent Registered Public Accounting Firm
    
    
    F-3Consolidated Balance Sheets  February 28, 2007 and 2006
    
    
    F-4Consolidated Statements of Earnings  Fiscal years ended 2007, 2006 and 2005
    
    
    F-6Consolidated Statements of Changes in Shareholders Equity and Comprehensive
Income  Fiscal years ended 2007, 2006 and 2005
    
    
    F-7Consolidated Statements of Cash Flows  Fiscal years ended 2007, 2006 and 2005
    
    
    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.
      /s/
Grant Thornton LLPDallas, Texas
May 9, 2007
 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
       /s/
Grant Thornton LLPDallas, Texas
May 9, 2007
 F-3




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
 February 28,2007
    
    
    2006AssetsCurrent assetsCash and cash equivalents
    
    $
    3,582
    
    
    $
    13,860Accounts receivable, net of allowance for doubtful receivables
of $2,698 at February 28, 2007 and $3,001 at February 28, 2006
    
    
    47,285
    
    
    
    41,686Prepaid expenses
    
    
    5,628
    
    
    
    4,425Inventories
    
    
    85,696
    
    
    
    89,155Deferred income taxes
    
    
    7,444
    
    
    
    6,935Assets held for sale
    
    
    1,881
    
    
    
    2,394Total current assets
    
    
    151,516
    
    
    
    158,455Property, plant and equipment, at costPlant, machinery and equipment
    
    
    127,521
    
    
    
    120,456Land and buildings
    
    
    40,680
    
    
    
    38,038Other
    
    
    22,506
    
    
    
    20,292Total property, plant and equipment
    
    
    190,707
    
    
    
    178,786Less accumulated depreciation
    
    
    127,650
    
    
    
    114,983Net property, plant and equipment
    
    
    63,057
    
    
    
    63,803Goodwill
    
    
    178,314
    
    
    
    178,280Trademarks and tradenames, net
    
    
    63,052
    
    
    
    61,941Customer lists, net
    
    
    20,287
    
    
    
    21,632Deferred finance charges, net
    
    
    1,382
    
    
    
    1,390Prepaid pension asset
    
    
    
    
    
    
    8,277Other assets
    
    
    620
    
    
    
    623Total assets
    
    $
    478,228
    
    
    $
    494,401
  F-4




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except for share amounts)
 February 28,2007
    
    
    2006Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    25,597
    
    
    $
    26,589Accrued expensesEmployee compensation and benefits
    
    
    15,799
    
    
    
    17,250Taxes other than income
    
    
    611
    
    
    
    1,488Federal and state income taxes payable
    
    
    973
    
    
    
    2,490Other
    
    
    5,615
    
    
    
    4,524Current installments of long-term debt
    
    
    652
    
    
    
    11,620Total current liabilities
    
    
    49,247
    
    
    
    63,961Long-term debt, less current installments
    
    
    88,971
    
    
    
    102,916Liability for pension benefits
    
    
    2,702
    
    
    
    Deferred income taxes
    
    
    19,603
    
    
    
    28,172Other liabilities
    
    
    1,302
    
    
    
    2,017Total liabilities
    
    
    161,825
    
    
    
    197,066Commitments 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 2007 and 2006
    
    
    75,134
    
    
    
    75,134Additional paid in capital
    
    
    122,305
    
    
    
    122,922Retained earnings
    
    
    207,190
    
    
    
    181,423Accumulated other comprehensive income (loss):Foreign currency translation
    
    
    25
    
    
    
    460Minimum pension liability
    
    
    (7,396
    )
    
    
    (7,371
    )
    
    
    460397,258
    
    
    
    379,939Treasury stockCost of 4,475,962 shares in 2007 and 4,574,329 shares in 2006
    
    
    (80,855
    )
    
    
    (82,604
    )Total shareholders equity
    
    
    316,403
    
    
    
    297,335Total liabilities and shareholders equity
    
    $
    478,228
    
    
    $
    494,401
  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 Ended2007
    
    
    2006
    
    
    2005Net sales
    
    $
    584,713
    
    
    $
    559,397
    
    
    $
    365,353Cost of goods sold
    
    
    438,776
    
    
    
    417,307
    
    
    
    274,596Gross profit
    
    
    145,937
    
    
    
    142,090
    
    
    
    90,757Selling, general and administrative
    
    
    72,579
    
    
    
    70,060
    
    
    
    51,159Income from operations
    
    
    73,358
    
    
    
    72,030
    
    
    
    39,598Other income (expense)Interest expense
    
    
    (6,936
    )
    
    
    (8,331
    )
    
    
    (2,755
    )Other income (expense), net
    
    
    (57
    )
    
    
    272
    
    
    
    622(6,993
    )
    
    
    (8,059
    )
    
    
    (2,133
    )Earnings before income taxes
    
    
    66,365
    
    
    
    63,971
    
    
    
    37,465Provision for income taxes
    
    
    24,764
    
    
    
    23,434
    
    
    
    14,506Net earnings
    
    $
    41,601
    
    
    $
    40,537
    
    
    $
    22,959Weighted average common shares outstandingBasic
    
    
    25,530,732
    
    
    
    25,452,582
    
    
    
    18,935,533Diluted
    
    
    25,758,948
    
    
    
    25,728,299
    
    
    
    19,259,550Per share amountsNet earnings  basic
    
    $
    1.63
    
    
    $
    1.59
    
    
    $
    1.21Net earnings  diluted
    
    $
    1.62
    
    
    $
    1.58
    
    
    $
    1.19Cash dividends per share
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
  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 2005, 2006, AND 2007
 (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 March 1, 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
    )
    
    
    297,335Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,601Foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (435
    )
    
    
    
    
    
    
    
    
    
    
    (435
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,166Adjustment to
initially apply
FAS 158, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,396
    )
    
    
    
    
    
    
    
    
    
    
    (7,396
    )Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,834
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,834
    )Excess tax benefit
of stock
option exercises
    
    
    
    
    
    
    
    
    
    
    169
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    169Stock based
compensation
    
    
    
    
    
    
    
    
    
    
    302
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302Exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    (1,088
    )
    
    
    
    
    
    
    
    
    
    
    98,367
    
    
    
    1,749
    
    
    
    661Balance February 28, 2007
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,305
    
    
    $
    207,190
    
    
    $
    (7,371
    )
    
    
    (4,475,962
    )
    
    $
    (80,855
    )
    
    $
    316,403
  F-7




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
  Fiscal Years Ended2007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net earnings
    
    $
    41,601
    
    
    $
    40,537
    
    
    $
    22,959Adjustments to reconcile net earnings to net cash provided
by operating activities:Depreciation
    
    
    14,670
    
    
    
    15,474
    
    
    
    10,367Amortization of deferred financing charges
    
    
    451
    
    
    
    495
    
    
    
    242Amortization of trademarks and customer lists
    
    
    1,957
    
    
    
    2,337
    
    
    
    709Gain on the sale of equipment
    
    
    (258
    )
    
    
    (188
    )
    
    
    (316
    )Bad debt expense
    
    
    1,390
    
    
    
    317
    
    
    
    893Stock based compensation
    
    
    302
    
    
    
    
    
    
    
    Excess tax benefit of stock option exercises
    
    
    (169
    )
    
    
    
    
    
    
    Deferred income taxes
    
    
    (4,963
    )
    
    
    456
    
    
    
    (833
    )Changes in operating assets and liabilities, net of the
effects of acquisitions:Accounts receivable
    
    
    (3,762
    )
    
    
    4,633
    
    
    
    (2,922
    )Prepaid expenses
    
    
    (1,225
    )
    
    
    761
    
    
    
    (1,315
    )Inventories
    
    
    5,797
    
    
    
    (9,332
    )
    
    
    (3,958
    )Other current assets
    
    
    
    
    
    
    334
    
    
    
    (2,084
    )Prepaid pension asset/liability for pension benefits
    
    
    3,255
    
    
    
    6
    
    
    
    (735
    )Other liabilities
    
    
    (734
    )
    
    
    1,144
    
    
    
    (1,403
    )Other assets
    
    
    (482
    )
    
    
    (2,320
    )
    
    
    5,078Accounts payable and accrued expenses
    
    
    (8,313
    )
    
    
    (7,227
    )
    
    
    (6,640
    )Net cash provided by operating activities
    
    
    49,517
    
    
    
    47,427
    
    
    
    20,042Cash flows from investing activities:Capital expenditures
    
    
    (4,999
    )
    
    
    (9,040
    )
    
    
    (6,143
    )Purchase of businesses, net of cash acquired
    
    
    (17,637
    )
    
    
    (1,196
    )
    
    
    (115,429
    )Proceeds from disposal of plant and property
    
    
    2,811
    
    
    
    294
    
    
    
    481Net cash used in investing activities
    
    
    (19,825
    )
    
    
    (9,942
    )
    
    
    (121,091
    )Cash flows from financing activities:Borrowings on debt
    
    
    15,647
    
    
    
    9,000
    
    
    
    114,200Repayment of debt
    
    
    (40,621
    )
    
    
    (28,508
    )
    
    
    (6,375
    )Dividends
    
    
    (15,834
    )
    
    
    (15,780
    )
    
    
    (11,574
    )Purchase of
treasury stock
    
    
    
    
    
    
    
    
    
    
    (2
    )Proceeds from exercise of stock options
    
    
    661
    
    
    
    393
    
    
    
    423Excess tax
benefit of stock option exercises
    
    
    169
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (39,978
    )
    
    
    (34,895
    )
    
    
    96,672Effect of exchange rate changes on cash
    
    
    8
    
    
    
    576
    
    
    
    4Net change in cash and cash equivalents
    
    
    (10,278
    )
    
    
    3,166
    
    
    
    (4,373
    )Cash and cash equivalents at beginning of period
    
    
    13,860
    
    
    
    10,694
    
    
    
    15,067Cash and cash equivalents at end of period
    
    $
    3,582
    
    
    $
    13,860
    
    
    $
    10,694
  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 assets held for sale assets held for sale
 Goodwill and Other Intangible Assets.
 F-9




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (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
 Income Taxes.
 F-10




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
 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
 1) Significant Accounting Policies and General Matters-continued
  2006
    
    
    2005Net earnings as reported
    
    $
    40,537
    
    
    $
    22,959Deduct: Stock-based employee compensation expense
not included in reported earnings, net of related
tax effect of $85 and $29, respectively
    
    
    (134
    )
    
    
    (47
    )Pro forma earnings
    
    $
    40,403
    
    
    $
    22,912Net earnings per shareBasic  as reported
    
    $
    1.59
    
    
    $
    1.21Basic  pro forma
    
    $
    1.59
    
    
    $
    1.21Diluted  as reported
    
    $
    1.58
    
    
    $
    1.19Diluted  pro forma
    
    $
    1.57
    
    
    $
    1.19
  New Accounting Pronouncements
 FIN 48 .
 SAB 108
 FAS 157 .
 F-12




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
 FAS 158.
 FAS 159 .
 Concentrations of Risk.
   (2) Due From Factors
    F-13




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (2) Due
From Factors (continued)
  2007
    
    
    2006Outstanding factored receivablesWithout recourse
    
    $
    18,766
    
    
    $
    19,762With recourse
    
    
    405
    
    
    
    1,099Advances from factors
    
    
    (16,088
    )
    
    
    (17,772
    )Due from factors
    
    $
    3,083
    
    
    $
    3,089
 (3) Accounts Receivable and Allowance for Doubtful Receivables
    2007
    
    
    2006
    
    
    2005Balance at beginning of period
    
    $
    3,001
    
    
    $
    3,567
    
    
    $
    1,771Bad debt expense
    
    
    1,390
    
    
    
    317
    
    
    
    893Other (1)
    
    
    
    
    
    
    3
    
    
    
    1,505Recoveries
    
    
    101
    
    
    
    67
    
    
    
    115Accounts written off
    
    
    (1,794
    )
    
    
    (953
    )
    
    
    (717
    )Balance at end of period
    
    $
    2,698
    
    
    $
    3,001
    
    
    $
    3,567
 
 (1)
    
    Principally the allowance established in connection with certain acquisitions. (4) Inventories
  2007
    
    
    2006Raw material
    
    $
    11,074
    
    
    $
    12,694Work-in-process
    
    
    16,694
    
    
    
    16,886Finished goods
    
    
    57,928
    
    
    
    59,575$
    85,696
    
    
    $
    89,155
  F-14




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5) Other Accrued Expenses
  2007
    
    
    2006Accrued interest
    
    $
    975
    
    
    $
    685Accrued taxes
    
    
    424
    
    
    
    329Accrued legal and professional fees
    
    
    267
    
    
    
    367Accrued utilities
    
    
    786
    
    
    
    428Factored receivables with recourse
    
    
    772
    
    
    
    Other accrued expenses
    
    
    2,391
    
    
    
    2,715$
    5,615
    
    
    $
    4,524
 (6) Long-Term Debt
  2007
    
    
    2006Revolving credit facility
    
    $
    88,500
    
    
    $
    62,500Term credit facility
    
    
    
    
    
    
    40,000Capital lease obligations
    
    
    784
    
    
    
    736Notes payable to finance companies
    
    
    314
    
    
    
    1,300Notes payable to former Alstyle Shareholders
    
    
    
    
    
    
    10,000Other
    
    
    25
    
    
    
    89,623
    
    
    
    114,536Less current installments
    
    
    652
    
    
    
    11,620Long-term debt
    
    $
    88,971
    
    
    $
    102,916
     F-15




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) Long-Term Debt-continued
  CapitalDebt
    
    
    Leases
    
    
    Total2008
    
    $
    326
    
    
    $
    358
    
    
    $
    6842009
    
    
    13
    
    
    
    265
    
    
    
    2782010
    
    
    
    
    
    
    215
    
    
    
    2152011
    
    
    88,500
    
    
    
    
    
    
    
    88,5002012
    
    
    
    
    
    
    
    
    
    
    88,839
    
    
    
    838
    
    
    
    89,677Less amount representing interest
    
    
    
    
    
    
    54
    
    
    
    54$
    88,839
    
    
    $
    784
    
    
    $
    89,623
 (7) Shareholders Equity
   (8) Stock Option Plans and Stock Based Compensation
  F-16




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (8) Stock Option Plans and Stock Based Compensation-continued
  2007Earnings before income taxes
    
    $
    302Net earnings
    
    
    190Basic and diluted net earnings per common share
    
    $
    0.01
   WeightedAverageNumber
    
    Weighted
    
    Remaining
    
    Aggregateof
    
    Average
    
    Contractual
    
    IntrinsicShares
    
    Exercise
    
    Life
    
    Value(a)(exact quantity)
    
    Price
    
    (in years)
    
    (in thousands)Outstanding at March 1, 2004
    
    
    699,425
    
    
    $
    9.23
    
    
    
    5.6Granted
    
    
    48,700
    
    
    
    16.05Terminated
    
    
    (12,000
    )
    
    
    10.42Exercised
    
    
    (40,550
    )
    
    
    9.61Outstanding at February 28, 2005
    
    
    695,575
    
    
    $
    9.67
    
    
    
    4.9Granted
    
    
    72,700
    
    
    
    18.51Terminated
    
    
    (750
    )
    
    
    10.25Exercised
    
    
    (79,675
    )
    
    
    9.02Outstanding at February 28, 2006
    
    
    687,850
    
    
    $
    10.63
    
    
    
    4.6Granted
    
    
    
    
    
    
    Terminated
    
    
    (22,500
    )
    
    
    11.13Exercised
    
    
    (111,837
    )
    
    
    8.33Outstanding at February 28, 2007
    
    
    553,513
    
    
    $
    11.08
    
    
    
    3.9
    
    
    $
    8,149Exercisable at February 28, 2007
    
    
    454,488
    
    
    $
    10.17
    
    
    
    3.2
    
    
    $
    7,103
 
   F-17




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (8) Stock Option Plans and Stock Based Compensation-continued
 2006
    
    2005Expected volatility
    
    
    23.85
    %
    
    
    23.59
    %Expected term (years)
    
    
    5
    
    
    
    5Risk free interest rate
    
    
    4.37
    %
    
    
    3.93
    %Dividend yield
    
    
    3.64
    %
    
    
    3.42
    %Weighted average grant-date fair value
    
    $
    3.52
    
    
    $
    2.86
  2007
    
    2006
    
    2005Total cash received
    
    $
    661
    
    
    $
    393
    
    
    $
    421Income tax benefits
    
    
    169
    
    
    
    86
    
    
    
    33Total grant-date fair value
    
    
    102
    
    
    
    87
    
    
    
    52Intrinsic value
    
    
    1,364
    
    
    
    593
    
    
    
    285
  WeightedAverageNumber
    
    Grant Dateof Options
    
    Fair ValueUnvested at March 1, 2006
    
    
    143,700
    
    
    $
    2.28New grants
    
    
    
    
    
    
    Vested
    
    
    (44,675
    )
    
    
    1.76Forfeited
    
    
    
    
    
    
    Unvested at February 28, 2007
    
    
    99,025
    
    
    $
    2.52
   Options Outstanding
    
    Options ExercisableWeighted Averaqge
    
    Weighted
    
    
    
    
    
    WeightedNumber
    
    Remaining Contractual
    
    Average
    
    Number
    
    AverageExercise Prices
    
    Outstanding
    
    Life (in Years)
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$7.0625
    
    to
    
    $
    8.6875
    
    
    
    239,613
    
    
    
    2.8
    
    
    $
    8.07
    
    
    
    239,613
    
    
    $
    8.0710.0625
    
    to
    
    
    11.6700
    
    
    
    163,750
    
    
    
    2.2
    
    
    
    10.42
    
    
    
    148,750
    
    
    
    10.2913.2800
    
    to
    
    
    16.4200
    
    
    
    112,450
    
    
    
    7.0
    
    
    
    15.56
    
    
    
    28,425
    
    
    
    14.6119.6900
    
    
    
    
    
    
    
    
    
    
    37,700
    
    
    
    9.0
    
    
    
    19.69
    
    
    
    37,700
    
    
    
    19.69553,513
    
    
    
    3.9
    
    
    
    11.08
    
    
    
    454,488
    
    
    
    10.17
 F-18




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (8) Stock Option Plans and Stock Based Compensation-continued
  WeightedAverageNumber of
    
    Grant DateShares
    
    Fair ValueOutstanding at March 1, 2006
    
    
    23,919
    
    
    $
    19.69Granted
    
    
    16,000
    
    
    
    19.64Terminated
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Outstanding at February 28, 2007
    
    
    39,919
    
    
    $
    19.67Exercisable at February 28, 2007
    
    
    7,970
    
    
    $
    19.69
  (9) Earnings per Share
  2007
    
    
    2006
    
    
    2005Basic weighted average common shares outstanding
    
    
    25,530,732
    
    
    
    25,452,582
    
    
    
    18,935,533Effect of dilutive options and unvested restricted stock
    
    
    228,216
    
    
    
    275,717
    
    
    
    324,017Diluted weighted average common shares outstanding
    
    
    25,758,948
    
    
    
    25,728,299
    
    
    
    19,259,550Per share amounts:Net earnings  basic
    
    $
    1.63
    
    
    $
    1.59
    
    
    $
    1.21Net earnings  diluted
    
    $
    1.62
    
    
    $
    1.58
    
    
    $
    1.19Cash dividends
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
 (10) Income Taxes
  2007
    
    
    2006
    
    
    2005Current:Federal
    
    $
    19,611
    
    
    $
    20,517
    
    
    $
    13,254State and local
    
    
    3,849
    
    
    
    2,900
    
    
    
    2,234Foreign
    
    
    1,624
    
    
    
    1,237
    
    
    
    Deferred
    
    
    (320
    )
    
    
    (1,220
    )
    
    
    (982
    )Total provision for income taxes
    
    $
    24,764
    
    
    $
    23,434
    
    
    $
    14,506
 F-19




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Income Taxes-continued
  2007
    
    2006
    
    2005Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Provision for state income taxes, net of Federal income tax benefit
    
    
    3.9
    
    
    
    3.0
    
    
    
    3.9Other
    
    
    (1.6
    )
    
    
    (1.4
    )
    
    
    (0.2
    )37.3
    %
    
    
    36.6
    %
    
    
    38.7
    %
  2007
    
    
    2006Current deferred tax assets related to:Allowance for doubtful receivables
    
    $
    1,052
    
    
    $
    1,170Inventories
    
    
    4,454
    
    
    
    3,417Employee compensation and benefits
    
    
    1,800
    
    
    
    1,957Other
    
    
    138
    
    
    
    391$
    7,444
    
    
    $
    6,935Noncurrent deferred tax liability related to:Property, plan and equipment
    
    $
    4,718
    
    
    $
    8,003Goodwill and other intangible assets
    
    
    18,238
    
    
    
    17,648Pension and noncurrent employee compensation benefits
    
    
    (1,949
    )
    
    
    2,309Net operating loss and foreign tax credits
    
    
    (1,503
    )
    
    
    Other
    
    
    99
    
    
    
    212$
    19,603
    
    
    $
    28,172
  (11) Employee Benefit Plans
  F-20




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
  2007
    
    2006Equity securities
    
    
    47
    %
    
    
    47
    %Debt securities
    
    
    44
    %
    
    
    43
    %Cash and cash equivalents
    
    
    9
    %
    
    
    10
    %Total
    
    
    100
    %
    
    
    100
    %
     Before
    
    
    
    
    
    AfterApplication
    
    
    
    
    
    Applicationof FAS 158
    
    Adjustment
    
    of FAS 158(in thousands)Prepaid pension asset
    
    $
    9,427
    
    
    $
    (9,427
    )
    
    $
    Total assets
    
    
    487,655
    
    
    
    (9,427
    )
    
    
    478,228Liability for pension benefits
    
    
    
    
    
    
    2,702
    
    
    
    2,702Deferred income taxes
    
    
    24,333
    
    
    
    (4,730
    )
    
    
    19,603Accumulated other comprehensive income (loss)
    
    
    25
    
    
    
    (7,396
    )
    
    
    (7,371
    )Total shareholders equity
    
    
    323,799
    
    
    
    (7,396
    )
    
    
    316,403Total liabilities and shareholders equity
    
    
    487,655
    
    
    
    (9,427
    )
    
    
    478,228
  2007
    
    
    2006
    
    
    2005Components of net periodic benefit cost
Service cost
    
    $
    1,440
    
    
    $
    1,422
    
    
    $
    1,470Interest cost
    
    
    2,440
    
    
    
    2,443
    
    
    
    2,417Expected return on plan assets
    
    
    (2,848
    )
    
    
    (2,771
    )
    
    
    (2,663
    )Amortization of:Prior service cost
    
    
    (145
    )
    
    
    (145
    )
    
    
    (145
    )Unrecognized net loss
    
    
    956
    
    
    
    1,057
    
    
    
    1,066Net periodic benefit cost
    
    $
    1,843
    
    
    $
    2,006
    
    
    $
    2,145
 F-21




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
  2007
    
    2006
    
    2005Weighted average discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.00
    %Earnings progression (net periodic pension cost)
    
    
    3.50
    %
    
    
    3.50
    %
    
    
    3.50
    %Earnings progression (benefit obligations)
    
    
    3.00
    %
    
    
    3.50
    %
    
    
    3.50
    %Expected long-term rate of return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %
  2007
    
    
    2006Change in benefit obligationProjected benefit obligation at beginning of year
    
    $
    42,542
    
    
    $
    42,578Service cost
    
    
    1,440
    
    
    
    1,422Interest cost
    
    
    2,440
    
    
    
    2,443Actuarial loss
    
    
    (763
    )
    
    
    (725
    )Benefits paid
    
    
    (2,799
    )
    
    
    (3,176
    )Projected benefit obligation at end of year
    
    $
    42,860
    
    
    $
    42,542Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    37,607
    
    
    $
    35,779Company contributions
    
    
    3,000
    
    
    
    2,000Investment earnings on plan assets
    
    
    2,350
    
    
    
    3,004Benefits paid
    
    
    (2,799
    )
    
    
    (3,176
    )Fair value of plan assets at end of year
    
    $
    40,158
    
    
    $
    37,607Funded status (benefit obligation less plan assets)
    
    $
    (2,702
    )
    
    $
    (4,935
    )Unrecognized losses
    
    
    13,373
    
    
    
    14,601Unrecognized prior service cost
    
    
    (1,244
    )
    
    
    (1,389
    )Prepaid pension asset (prior to adoption of FAS 158)
    
    
    9,427
    
    
    
    8,277Adjustment to initially apply FAS 158
    
    
    (12,129
    )
    
    
    Liability for pension benefits
    
    $
    (2,702
    )
    
    $
    Accumulated benefit obligation at end of year
    
    $
    36,902
    
    
    $
    36,586
   ProjectedYear
    
    Payments2008
    
    $
    3,0802009
    
    
    2,6122010
    
    
    2,5552011
    
    
    3,4992012
    
    
    4,1362013  2017
    
    
    19,017
 F-22




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
   (12) Acquisitions and Disposal
   Accounts receivable
    
    $
    2,492Inventories
    
    
    1,864Property, plant & equipment
    
    
    7,398Other assets
    
    
    152Deferred tax asset
    
    
    2,166Trademarks
    
    
    1,260Accounts payable and accrued liabilities
    
    
    (2,292
    )$
    13,040
  F-23




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Acquisitions and Disposal-continued
  Accounts receivable
    
    $
    826Inventories
    
    
    579Property, plant & equipment
    
    
    3,689Other assets
    
    
    5Deferred tax asset
    
    
    1,780Noncompete
    
    
    25Accounts payable and accrued liabilities
    
    
    (2,316
    )$
    4,588
  Accounts receivable
    
    $
    115Inventories
    
    
    186Property, plant & equipment
    
    
    900Other assets
    
    
    25Goodwill
    
    
    78Accounts payable and accrued liabilities
    
    
    (104
    )$
    1,200
  Unaudited2007
    
    2006Pro forma net sales
    
    $
    602,385
    
    
    $
    608,573Pro forma net earnings
    
    
    41,463
    
    
    
    40,512Pro forma earnings per share  diluted
    
    
    1.61
    
    
    
    1.57
  (13) Goodwill and Other Intangible Assets
  F-24




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (13) Goodwill and Other Intangible Assets-continued
   GrossCarrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetAs of February 28, 2007Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    442
    
    
    $
    792Purchased customer lists
    
    
    24,057
    
    
    
    3,770
    
    
    
    20,287Noncompete
    
    
    467
    
    
    
    417
    
    
    
    50$
    25,758
    
    
    $
    4,629
    
    
    $
    21,129As of February 28, 2006Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    293
    
    
    $
    941Purchased customer lists
    
    
    23,760
    
    
    
    2,128
    
    
    
    21,632Noncompete
    
    
    417
    
    
    
    251
    
    
    
    166$
    25,411
    
    
    $
    2,672
    
    
    $
    22,739
 February 28,2007
    
    
    2006Unamortized intangible assets
Trademarks
    
    $
    62,260
    
    
    $
    61,000
   2008
    
    $
    1,852,0002009
    
    
    1,827,0002010
    
    
    1,811,0002011
    
    
    1,810,0002012
    
    
    1,810,000
 F-25




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (13) Goodwill and Other Intangible Assets-continued
  Print
    
    
    ApparelSegment
    
    
    SolutionsTotal
    
    
    Group
    
    
    TotalBalance as of March 1, 2005
    
    $
    40,338
    
    
    $
    138,134
    
    
    $
    178,472Goodwill adjusted during year
    
    
    242
    
    
    
    (434
    )
    
    
    (192
    )Impairment losses
    
    
    
    
    
    
    
    
    
    
    Balance as of March 1, 2006
    
    
    40,580
    
    
    
    137,700
    
    
    
    178,280Goodwill adjusted during year
    
    
    34
    
    
    
    
    
    
    
    34Impairment losses
    
    
    
    
    
    
    
    
    
    
    Balance as of February 28, 2007
    
    $
    40,614
    
    
    $
    137,700
    
    
    $
    178,314
  (14) Segment Information and Geographic Information
    ® ®
    F-26




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Segment Information and Geographic Information-continued
   Print
    
    Apparel
    
    
    
    
    
    ConsolidatedSegment
    
    Segment
    
    Corporate
    
    TotalsFiscal year ended February 28, 2007:Net sales
    
    $
    325,679
    
    
    $
    259,034
    
    
    $
    
    
    
    $
    584,713Depreciation
    
    
    8,275
    
    
    
    5,745
    
    
    
    650
    
    
    
    14,670Amortization of identifiable intangibles
    
    
    384
    
    
    
    1,573
    
    
    
    
    
    
    
    1,957Segment earnings (loss) before
income taxes
    
    
    46,077
    
    
    
    33,321
    
    
    
    (13,033
    )
    
    
    66,365Segment assets
    
    
    151,746
    
    
    
    313,716
    
    
    
    12,766
    
    
    
    478,228Capital expenditures
    
    
    2,647
    
    
    
    1,038
    
    
    
    1,314
    
    
    
    4,999Fiscal year ended February 28, 2006:Net sales
    
    $
    321,410
    
    
    $
    237,987
    
    
    $
    
    
    
    $
    559,397Depreciation
    
    
    7,226
    
    
    
    7,604
    
    
    
    644
    
    
    
    15,474Amortization of identifiable intangibles
    
    
    361
    
    
    
    1,976
    
    
    
    
    
    
    
    2,337Segment earnings (loss) before
income taxes
    
    
    45,121
    
    
    
    30,085
    
    
    
    (11,235
    )
    
    
    63,971Segment assets
    
    
    155,457
    
    
    
    320,113
    
    
    
    18,831
    
    
    
    494,401Capital expenditures
    
    
    2,977
    
    
    
    5,061
    
    
    
    1,002
    
    
    
    9,040Fiscal year ended February 28, 2005:Net sales
    
    $
    309,308
    
    
    $
    56,045
    
    
    $
    
    
    
    $
    365,353Depreciation
    
    
    7,952
    
    
    
    1,878
    
    
    
    537
    
    
    
    10,367Amortization of identifiable intangibles
    
    
    283
    
    
    
    426
    
    
    
    
    
    
    
    709Segment earnings (loss) before
income taxes
    
    
    45,678
    
    
    
    3,575
    
    
    
    (11,788
    )
    
    
    37,465Segment assets
    
    
    169,694
    
    
    
    312,788
    
    
    
    14,764
    
    
    
    497,246Capital expenditures
    
    
    3,200
    
    
    
    237
    
    
    
    2,706
    
    
    
    6,143
 F-27




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Segment Information and Geographic Information-continued
  UnitedStates
    
    
    Canada
    
    
    Mexico
    
    
    Total2007Net sales to unaffiliated customersCustomersPrint Segment
    
    $
    325,679
    
    
    $
    
    
    
    $
    
    
    
    $
    325,679Apparel Segment
    
    
    241,477
    
    
    
    17,557
    
    
    
    
    
    
    
    259,034$
    567,156
    
    
    $
    17,557
    
    
    $
    
    
    
    $
    584,713Identifiable long-lived assetsPrint Segment
    
    $
    44,291
    
    
    $
    
    
    
    $
    
    
    
    $
    44,291Apparel Segment
    
    
    9,002
    
    
    
    102
    
    
    
    2,721
    
    
    
    11,825Corporate
    
    
    6,941
    
    
    
    
    
    
    
    
    
    
    
    6,941$
    60,234
    
    
    $
    102
    
    
    $
    2,721
    
    
    $
    63,0572006Net 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
    
    
    $
    69,562
 F-28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (15) Commitments and Contingencies
  OperatingLease
    
    
    SubleaseCommitments
    
    
    Income
    
    
    Net2008
    
    $
    8,060
    
    
    $
    (808
    )
    
    $
    7,2522009
    
    
    6,129
    
    
    
    (67
    )
    
    
    6,0622010
    
    
    2,755
    
    
    
    
    
    
    
    2,7552011
    
    
    1,765
    
    
    
    
    
    
    
    1,7652012
    
    
    404
    
    
    
    
    
    
    
    404Thereafter
    
    
    48
    
    
    
    
    
    
    
    48$
    19,161
    
    
    $
    (875
    )
    
    $
    18,286
    (16) Assets Held for Sale
  (17) Supplemental Cash Flow Information
  2007
    
    2006
    
    2005Interest paid
    
    $
    6,646
    
    
    $
    8,038
    
    
    $
    2,755Income taxes paid
    
    $
    26,657
    
    
    $
    22,957
    
    
    $
    13,273
  2007
    
    2006Fair value of assets acquired in acquisitions
    
    $
    19,276
    
    
    $
    1,226Liabilities assumed in acquisitions
    
    $
    1,648
    
    
    $
    104
 F-29




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (18) Subsequent Events
 1 2
 (19) Quarterly Consolidated Financial Information(Unaudited)
  For the Three Months Ended
    
    May 31
    
    August 31
    
    November 30
    
    February 28Fiscal year ended 2007:Net sales
    
    $
    145,113
    
    
    $
    151,718
    
    
    $
    151,743
    
    
    $
    136,139Gross profit
    
    
    37,815
    
    
    
    38,241
    
    
    
    37,973
    
    
    
    31,908Net earnings
    
    
    11,330
    
    
    
    11,643
    
    
    
    10,822
    
    
    
    7,806Dividends paid
    
    
    3,949
    
    
    
    3,959
    
    
    
    3,962
    
    
    
    3,964Per share of common stock:Basic net earnings
    
    $
    0.44
    
    
    $
    0.46
    
    
    $
    0.42
    
    
    $
    0.31Diluted net earnings
    
    $
    0.44
    
    
    $
    0.45
    
    
    $
    0.42
    
    
    $
    0.30Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155Fiscal 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
    
    
    $
    0.155
 Quarter-over-Quarter (current year)
  Current Quarter Compared to Same Quarter Last Year
  F-30




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    Description of DocumentExhibit 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.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
    
    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 10.8
    
    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 10.9
    
    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 10.10
    
    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 28, 2003.Exhibit 10.11
    
    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 10.12
    
    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.*
 E-1




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    Description of DocumentExhibit 10.13
    
    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
incorporated herein by reference to Exhibit 10.18 to the Registrants Form
10-K Annual Report for the fiscal year ended February 28, 2006.Exhibit 10.14
    
    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
incorporated herein by reference to Exhibit 10.19 to the Registrants Form
10-K Annual Report for the fiscal year ended February 28, 2006.Exhibit 21
    
    Subsidiaries of RegistrantExhibit 23
    
    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
 
 *
    
    Portions of Exhibit have been omitted pursuant to a request for confidential treatment filed with
the SEC. E-2