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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended February 28, 2010
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number 1-5807
 
 ENNIS, INC.
  Texas
    
    75-0256410(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)2441 Presidential Pkwy., Midlothian, Texas
    
    76065(Address of Principal Executive Offices)
    
    (Zip code)
 (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
 o
  Large accelerated Filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ENNIS, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE PERIOD ENDED FEBRUARY 28, 2010
 TABLE OF CONTENTS
 PART I:Item 1 Business
    
    
    3Item 1A Risk Factors
    
    
    6Item 1B Unresolved Staff Comments
    
    
    11Item 2 Properties
    
    
    11Item 3 Legal Proceedings
    
    
    13Item 4 Submission of Matters to a Vote of Security Holders
    
    
    13PART II:Item 5 Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    13Item 6 Selected Financial Data
    
    
    15Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 7A Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 8 Consolidated Financial Statements and Supplementary Data
    
    
    26Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
    
    
    26Item 9A Controls and Procedures
    
    
    26Item 9B Other Information
    
    
    27PART III:Item 10 Directors, Executive Officers and Corporate Governance
    
    
    27Item 11 Executive Compensation
    
    
    28Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    28Item 13 Certain Relationships and Related Transactions, and Director Independence
    
    
    28Item 14 Principal Accountant Fees and Services
    
    
    28PART IV:Item 15 Exhibits and Financial Statement Schedules
    
    
    28Signatures
    
    
    29EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2
  2




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




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Apparel Segment
 ® ®
        4




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Patents, Licenses, Franchises and Concessions
  Intellectual Property
 ® SM ® ® ® ® ® ® ® ® SM ® ® ® ® ® ® SM ® ® ® ® ® SM SM SM
 Customers
  Backlog
  Research and Development
  Environment
  5




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##### Table of Contents



Employees
  Available Information
  
 ITEM 1A.
    
    RISK FACTORS
  Our results and financial condition are affected by global and local market conditions, and
competitors pricing strategies, which can adversely affect our sales, margins, and net income.
  
    
    Our ability to manage upward pressure on commodity prices and the impact of
government actions to manage national economic conditions such as consumer spending,
inflation rates and unemployment levels, particularly given the current volatility in
the global financial markets;
    
    The impact on our margins of labor costs given our labor-intensive business model,
the trend toward higher wages in both mature and developing markets and the potential
impact of union organizing efforts on day-to-day operations of our manufacturing
facilities.
 Declining economic conditions could negatively impact our business.
   6




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The terms and conditions of our credit facility impose certain restrictions on our operations. We
may not be able to raise additional capital, if needed, for proposed expansion projects.
   Declining financial market conditions could adversely impact the funding status of our pension
plan.
  In fiscal year 2009, we were required to write down goodwill and other intangible assets and we may
have similar charges in the future, which could cause our financial condition and results of
operations to be negatively affected in the future.
  Digital technologies will continue to erode the demand for our printed business documents.
    7




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Our distributors face increased competition from various sources, such as office supply
superstores. Increased competition may require us to reduce prices or to offer other incentives in
order to enable our distributors to attract new customers and retain existing customers.
  Technological improvements may reduce our competitive advantage over some of our competitors, which
could reduce our profits.
  We could experience labor disputes that could disrupt our business in the future.
  We obtain our raw materials from a limited number of suppliers, and any disruption in our
relationships with these suppliers, or any substantial increase in the price of raw materials or
material shortages could have a material adverse effect on us.
    8




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We face intense competition to gain market share, which may lead some competitors to sell
substantial amounts of goods at prices against which we cannot profitably compete.
  The apparel industry is heavily influenced by general economic cycles.
  Our apparel foreign operations could be subject to unexpected changes in regulatory requirements,
tariffs and other market barriers and political and economic instability in the countries where it
operates, which could negatively impact our operating results.
  Our apparel products are subject to foreign competition, which in the past have been faced with
significant U.S. government import restrictions.
    9




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Environmental regulations may impact our future operating results.
  Our construction of a new apparel manufacturing facility in Mexico is subject to multiple approvals
and uncertainties that could affect our ability to complete the project on schedule or at budgeted
cost.
  We are exposed to the risk of non-payment by our customers on a significant amount of our sales.
  Our business incurs significant freight and transportation costs.
  The price of energy is prone to significant fluctuations and volatility.
  10




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We rely on independent contract production for a portion of our apparel production.
  We depend upon the talents and contributions of a limited number of individuals, many of whom would
be difficult to replace.
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
  ®
     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
    
    
    
    Knoxville, Tennessee
    
    Manufacturing
    
    
    48,057
    
    
    
    Ft, Scott, Kansas
    
    Manufacturing
    
    
    86,660
    
    
    
    Portland, Oregon
    
    Manufacturing
    
    
    
    
    
    
    139,330
 11




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##### Table of Contents



Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    
    LeasedWolfe 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
    
    Facility Held for Sale
    
    
    70,196
    
    
    
    Denver, Colorado
    
    Four Manufacturing Facilities
    
    
    60,000
    
    
    
    101,600Oklahoma City. Oklahoma
    
    Sales Office
    
    
    
    
    
    
    460San Antonio, Texas
    
    Manufacturing
    
    
    47,426
    
    
    
    Brooklyn Park, Minnesota
    
    Manufacturing
    
    
    94,800
    
    
    
    Roseville, Minnesota
    
    Manufacturing
    
    
    
    
    
    
    42,500Arden Hills, Minnesota
    
    Warehouse
    
    
    
    
    
    
    31,684Nevada, Iowa
    
    Manufacturing
    
    
    232,000
    
    
    
    Bridgewater, Virginia
    
    Manufacturing
    
    
    
    
    
    
    27,000Columbus, Kansas
    
    Manufacturing
    
    
    201,000
    
    
    
    Leipsic, Ohio
    
    Manufacturing
    
    
    83,216
    
    
    
    El Dorado Springs, Missouri
    
    Manufacturing
    
    
    70,894
    
    
    
    Princeton, Illinois
    
    Two Manufacturing Facilities
    
    
    
    
    
    
    74,340Arlington, Texas
    
    Manufacturing
    
    
    69,935Mechanicsburg, Pennsylvania
    
    Warehouse
    
    
    
    
    
    
    7,500Rancho Cordova, California
    
    Administrative Offices
    
    
    
    
    
    
    108Tullahoma, Tennessee
    
    Manufacturing
    
    
    24,950Caledonia, New York
    
    Manufacturing
    
    
    138,730
    
    
    
    Sun City, California
    
    Manufacturing
    
    
    52,617
    
    
    
    Phoenix, Arizona
    
    Manufacturing and Warehouse
    
    
    
    
    
    
    59,0002,148,034
    
    
    
    547,272Apparel SegmentAnaheim, California
    
    Office and Distribution Center
    
    
    
    
    
    
    200,000Anaheim, California
    
    Manufacturing
    
    
    
    
    
    
    304,536Chicago, 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
    
    Three Manufacturing Facilities
    
    
    
    
    
    
    126,263Hermosillo, Mexico
    
    Yard Space
    
    
    
    
    
    
    19,685
 Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    
    LeasedHermosillo, Mexico
    
    Vacant
    
    
    
    
    
    
    8,432Hermosillo, Mexico
    
    Storage for Machines
    
    
    
    
    
    
    1,640112,622
    
    
    
    1,063,483Corporate OfficesEnnis, Texas
    
    Administrative Offices
    
    
    9,300
    
    
    
    Midlothian, Texas
    
    Executive and Administrative Offices
    
    
    28,000
    
    
    
    37,300
    
    
    
    Totals
    
    
    2,297,956
    
    
    
    1,610,755
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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 REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  Common Stock
    
    
    DividendsTrading Volume
    
    
    per share ofCommon Stock Price Range
    
    
    (number of shares
    
    
    CommonHigh
    
    
    Low
    
    
    in thousands)
    
    
    StockFiscal Year Ended February 28, 2010First Quarter
    
    $
    11.17
    
    
    $
    6.91
    
    
    
    3,844
    
    
    $
    0.155Second Quarter
    
    
    15.25
    
    
    
    10.35
    
    
    
    3,966
    
    
    $
    0.155Third Quarter
    
    
    17.34
    
    
    
    13.33
    
    
    
    2,766
    
    
    $
    0.155Fourth Quarter
    
    
    17.39
    
    
    
    13.75
    
    
    
    2,147
    
    
    $
    0.155Fiscal Year Ended February 28, 2009First Quarter
    
    $
    19.18
    
    
    $
    14.31
    
    
    
    5,173
    
    
    $
    0.155Second Quarter
    
    
    19.92
    
    
    
    13.55
    
    
    
    4,324
    
    
    $
    0.155Third Quarter
    
    
    18.16
    
    
    
    8.54
    
    
    
    5,357
    
    
    $
    0.155Fourth Quarter
    
    
    13.37
    
    
    
    8.01
    
    
    
    4,412
    
    
    $
    0.155
    13




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Stock Performance Graph
  COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
 
 
 *
    
    $100 invested on 2/28/05 in stock or index, including reinvestment of dividends.Fiscal year ending February 28 or February 29.Copyright© 2010 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. 2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010Ennis, Inc.
    
    
    100.00
    
    
    
    119.61
    
    
    
    161.12
    
    
    
    108.39
    
    
    
    55.07
    
    
    
    108.52S&P 500
    
    
    100.00
    
    
    
    108.40
    
    
    
    121.38
    
    
    
    117.01
    
    
    
    66.32
    
    
    
    101.88Russell 2000
    
    
    100.00
    
    
    
    116.59
    
    
    
    128.10
    
    
    
    112.16
    
    
    
    64.62
    
    
    
    105.95
 The stock price performance included in this graph is not necessarily indicative of future
stock price performance.
 14




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ITEM 6. SELECTED FINANCIAL DATA
  Fiscal Years Ended2010
    
    2009
    
    2008
    
    2007
    
    2006(Dollars and shares in thousands, except per share amounts)Operating results:Net sales
    
    $
    517,738
    
    
    $
    584,029
    
    
    $
    610,610
    
    
    $
    584,713
    
    
    $
    559,397Gross profit margin
    
    
    135,319
    
    
    
    143,476
    
    
    
    163,874
    
    
    
    156,322
    
    
    
    151,961SG&A expenses
    
    
    76,738
    
    
    
    86,217
    
    
    
    88,851
    
    
    
    83,121
    
    
    
    79,824Impairment of goodwill and trademarks
    
    
    
    
    
    
    67,851
    
    
    
    
    
    
    
    
    
    
    
    Net earnings (loss)
    
    
    35,206
    
    
    
    (32,768
    )
    
    
    44,590
    
    
    
    41,601
    
    
    
    40,537Earnings (loss) and dividends per share:Basic
    
    $
    1.37
    
    
    $
    (1.27
    )
    
    $
    1.74
    
    
    $
    1.63
    
    
    $
    1.59Diluted
    
    
    1.36
    
    
    
    (1.27
    )
    
    
    1.72
    
    
    
    1.62
    
    
    
    1.58Dividends
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62Weighted average shares outstanding:Basic
    
    
    25,769
    
    
    
    25,724
    
    
    
    25,697
    
    
    
    25,571
    
    
    
    25,453Diluted
    
    
    25,797
    
    
    
    25,790
    
    
    
    25,860
    
    
    
    25,759
    
    
    
    25,728Financial Position:Working capital
    
    $
    116,638
    
    
    $
    138,374
    
    
    $
    133,993
    
    
    $
    102,269
    
    
    $
    94,494Current assets
    
    
    166,439
    
    
    
    182,254
    
    
    
    185,819
    
    
    
    151,516
    
    
    
    158,455Total assets
    
    
    432,699
    
    
    
    436,380
    
    
    
    513,131
    
    
    
    478,228
    
    
    
    494,401Current liabilities
    
    
    49,801
    
    
    
    43,880
    
    
    
    51,826
    
    
    
    49,247
    
    
    
    63,961Long-term debt
    
    
    41,817
    
    
    
    76,185
    
    
    
    90,710
    
    
    
    88,971
    
    
    
    102,916Total liabilities
    
    
    119,439
    
    
    
    144,374
    
    
    
    164,652
    
    
    
    161,825
    
    
    
    197,066Equity
    
    
    313,260
    
    
    
    292,006
    
    
    
    348,479
    
    
    
    316,403
    
    
    
    297,335Current ratio
    
    
    3.34 to 1.0
    
    
    
    4.15 to 1.0
    
    
    
    3.59 to 1.0
    
    
    
    3.08 to 1.0
    
    
    
    2.48 to 1.0Long-term debt to equity
    
    
    .13 to 1.0
    
    
    
    .26 to 1.0
    
    
    
    .26 to 1.0
    
    
    
    .28 to 1.0
    
    
    
    .35 to 1.0
 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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
    
    Overview An overall discussion on our Company, the business challenges and
opportunities we believe are key to our success, and our plans for facing these
challenges.
    
    Critical Accounting Policies and Estimates A discussion of the accounting
policies that require our most critical judgments and estimates. This discussion
provides insight into the level of subjectivity, quality, and variability involved
in these judgments and estimates. This section also provides a summary of recently
adopted and recently issues accounting pronouncements that have or may materially
affect our business.
    
    Results of Operations An analysis of our consolidated results of operations
and segment results for the three years presented in our consolidated financial
statements. This analysis discusses material trends within our business and
provides important information necessary for an understanding of our operating
results.
    
    Liquidity and Capital Resources An analysis of our cash flows and a
discussion of our financial condition and contractual obligations. This section
provides information necessary to evaluate our ability to generate cash and to
meeting existing and known future cash requirements over both the short and long
term.
  Overview
 The Company 
 Our Print Business Challenges 
 
    
    Transformation of our portfolio of products
    
    Excess production capacity and price competition within our industry
    
    Economic uncertainties
  Transformation of our portfolio of products
 Excess production capacity and price competition within our industry
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Economic uncertainties
 Our Apparel Business Challenges 
 
    
    Cotton prices
    
    Completion of our new manufacturing facility
    
    Economic uncertainties
 Cotton prices
 Completion of new manufacturing facility nd rd
  Economic uncertainties
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Critical Accounting Policies and Estimates
     Carrying Value of
    
    Fair Value ofReporting Unit
    
    Invested Capital
    
    Invested CapitalApparel
    
    $
    237,675,000
    
    
    $
    256,000,000Print
    
    $
    140,212,000
    
    
    $
    252,000,000
    18




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Recent Accounting Pronouncements
  Results of Operations
  
    
    Consolidated Summary this section provides an overview of our consolidated results of
operations for fiscal years 2010, 2009 and 2008.
    
    Segment Operating Results this section provides an analysis of our net sales, gross
profit margin and operating income by segment.
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Consolidated Summary
 Fiscal Years EndedConsolidated Statements of Earnings - Data
    
    2010
    
    
    2009
    
    
    2008Net sales
    
    $
    517,738
    
    
    
    100.0
    %
    
    $
    584,029
    
    
    
    100.0
    %
    
    $
    610,610
    
    
    
    100.0
    %Cost of goods sold
    
    
    382,419
    
    
    
    73.9
    
    
    
    440,553
    
    
    
    75.4
    
    
    
    446,736
    
    
    
    73.2Gross profit margin
    
    
    135,319
    
    
    
    26.1
    
    
    
    143,476
    
    
    
    24.6
    
    
    
    163,874
    
    
    
    26.8Selling, general and administrative
    
    
    76,738
    
    
    
    14.8
    
    
    
    86,217
    
    
    
    14.8
    
    
    
    88,851
    
    
    
    14.5Impairment of goodwill and trademarks
    
    
    
    
    
    
    0.0
    
    
    
    67,851
    
    
    
    11.6
    
    
    
    
    
    
    
    0.0Gain from disposal of assets
    
    
    (1
    )
    
    
    0.0
    
    
    
    (514
    )
    
    
    (0.1
    )
    
    
    (757
    )
    
    
    (0.1
    )Income (loss) from operations
    
    
    58,582
    
    
    
    11.3
    
    
    
    (10,078
    )
    
    
    (1.7
    )
    
    
    75,780
    
    
    
    12.4Other expense, net
    
    
    (2,913
    )
    
    
    (0.5
    )
    
    
    (2,981
    )
    
    
    (0.5
    )
    
    
    (5,995
    )
    
    
    (1.0
    )Earnings (loss) before income taxes
    
    
    55,669
    
    
    
    10.8
    
    
    
    (13,059
    )
    
    
    (2.2
    )
    
    
    69,785
    
    
    
    11.4Provision for income taxes
    
    
    20,463
    
    
    
    4.0
    
    
    
    19,709
    
    
    
    3.4
    
    
    
    25,195
    
    
    
    4.1Net earnings (loss)
    
    $
    35,206
    
    
    
    6.8
    %
    
    $
    (32,768
    )
    
    
    -5.6
    %
    
    $
    44,590
    
    
    
    7.3
    %
 Net Sales.
 Cost of Goods Sold.
  Selling, general, and administrative expenses.
  20




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##### Table of Contents



Impairment of goodwill and trademarks.
 Gain from disposal of assets.
 Income from operations.
  Other income and expense.
 Provision for income taxes.
 Net earnings.
  Segment 

Operating Results
 Fiscal Years EndedNet Sales by Segment (in thousands)
    
    2010
    
    
    2009
    
    
    2008Print
    
    $
    282,308
    
    
    $
    327,034
    
    
    $
    345,042Apparel
    
    
    235,430
    
    
    
    256,995
    
    
    
    265,568Total
    
    $
    517,738
    
    
    $
    584,029
    
    
    $
    610,610
 Print Segment
  21




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##### Table of Contents



Apparel Segment
  Fiscal Years EndedGross Profit by Segment (in thousands)
    
    2010
    
    
    2009
    
    
    2008Print
    
    $
    77,789
    
    
    $
    85,295
    
    
    $
    93,767Apparel
    
    
    57,530
    
    
    
    58,181
    
    
    
    70,107Total
    
    $
    135,319
    
    
    $
    143,476
    
    
    $
    163,874
 Print Segment.
 Apparel Segment
   22




---



##### Table of Contents



Fiscal Years EndedProfit by Segment (in thousands)
    
    2010
    
    
    2009
    
    
    2008Print
    
    $
    46,047
    
    
    $
    51,553
    
    
    $
    56,012Apparel
    
    
    24,778
    
    
    
    (49,416
    )
    
    
    29,367Total
    
    
    70,825
    
    
    
    2,137
    
    
    
    85,379Less corporate expenses
    
    
    15,156
    
    
    
    15,196
    
    
    
    15,594Earnings (loss) before income taxes
    
    $
    55,669
    
    
    $
    (13,059
    )
    
    $
    69,785
 Print Segment
  Apparel Segment.
 Liquidity and Capital Resources
 Fiscal Years Ended(Dollars in thousands)
    
    2010
    
    2009
    
    ChangeWorking Capital
    
    $
    116,638
    
    
    $
    138,374
    
    
    
    -15.7
    %Cash
    
    $
    21,063
    
    
    $
    9,286
    
    
    
    126.8
    %
 Working Capital.
 Fiscal Years Ended(Dollars in thousands)
    
    2010
    
    2009
    
    ChangeNet Cash provided by operating activities
    
    $
    82,567
    
    
    $
    44,216
    
    
    
    86.7
    %Net Cash used in investing activities
    
    $
    (20,244
    )
    
    $
    (5,350
    )
    
    
    278.4
    %Net Cash used in financing activities
    
    $
    (50,488
    )
    
    $
    (32,464
    )
    
    
    55.5
    %
 23




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##### Table of Contents



Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
 Stock Repurchase 
 Credit Facility 
    24




---



##### Table of Contents



Pension 
 Inventories 
 Capital Expenditures 
  Contractual Obligations & Off-Balance Sheet Arrangements 
 Fiscal Years2015 toTotal
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2020Debt:Revolving credit facility
    
    $
    40,000
    
    
    $
    
    
    
    $
    
    
    
    $
    40,000
    
    
    $
    
    
    
    $
    Interest rate swap
    
    
    1,817
    
    
    
    
    
    
    
    1,817
    
    
    
    
    
    
    
    
    
    
    
    Debt and interest rate swap total
    
    
    41,817
    
    
    
    
    
    
    
    1,817
    
    
    
    40,000
    
    
    
    
    
    
    
    Other contractual commitments:Estimated pension benefit payments
    
    
    36,155
    
    
    
    1,575
    
    
    
    3,240
    
    
    
    3,510
    
    
    
    4,460
    
    
    
    23,370Letters of credit
    
    
    5,296
    
    
    
    5,296
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    13,056
    
    
    
    7,131
    
    
    
    3,519
    
    
    
    1,799
    
    
    
    582
    
    
    
    25Construction contract  Agua Prieta
    
    
    21,342
    
    
    
    21,342
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total other contractual commitments
    
    
    75,849
    
    
    
    35,344
    
    
    
    6,759
    
    
    
    5,309
    
    
    
    5,042
    
    
    
    23,395Total
    
    $
    117,666
    
    
    $
    35,344
    
    
    $
    8,576
    
    
    $
    45,309
    
    
    $
    5,042
    
    
    $
    23,395
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
 Cash
  25




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##### Table of Contents



Interest Rates
  Foreign Exchange
   
 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
  26




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##### Table of Contents



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.
  Internal ControlIntegrated Framework
  
 ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   27




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##### Table of Contents



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 plan approved by the security
holders (1)
    
    
    341,670
    
    
    $
    12.09
    
    
    
    370,213Equity
compensation plans not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    341,670
    
    
    $
    12.09
    
    
    
    370,213
 
 (1)
    
    The 2004 Long-Term Incentive Plan of Ennis, Inc., as amended
and restated on May 14, 2008, formerly the 1998 Option and Restricted Stock Plan, amended and restated as of June 17, 2004.
Includes 91,470 shares of restricted stock. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT 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.
 28




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##### Table of Contents



(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.
 
 SIGNATURES
  ENNIS, INC.
 Date: May 10, 2010
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, Chairman of the Board,Chief Executive Officer and PresidentDate: May 10, 2010
    BY:
    /s/ RICHARD L. TRAVIS, JR.Richard L. Travis, Jr.Senior Vice President  Finance and CFO, Secretary
and Principal Financial and Accounting Officer  Date: May 10, 2010
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, ChairmanDate: May 10, 2010
    BY:
    /s/ MICHAEL D. MAGILLMichael D. Magill, DirectorDate: May 10, 2010
    BY:
    /s/ FRANK D. BRACKENFrank D. Bracken, DirectorDate: May 10, 2010
    BY:
    /s/ GODFREY M. LONG, JR.Godfrey M. Long, Jr., DirectorDate: May 10, 2010
    BY:
    /s/ THOMAS R. PRICEThomas R. Price, DirectorDate: May 10, 2010
    BY:
    /s/ KENNETH G. PRITCHETTKenneth G. Pritchett, DirectorDate: May 10, 2010
    BY:
    /s/ ALEJANDRO QUIROZAlejandro Quiroz, DirectorDate: May 10, 2010
    BY:
    /s/ MICHAEL J. SCHAEFERMichael J. Schaefer, DirectorDate: May 10, 2010
    BY:
    /s/ JAMES C. TAYLORJames C. Taylor, Director 29




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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, 2010 and February 28, 2009.
    
    F-4Consolidated Statements of Earnings  Fiscal years ended 2010, 2009 and 2008.
    
    F-6Consolidated Statements of Changes in Shareholders Equity and Comprehensive
Income  Fiscal years ended 2010, 2009 and 2008.
    
    F-7Consolidated Statements of Cash Flows  Fiscal years ended 2010, 2009 and 2008
    
    F-8Notes to Consolidated Financial Statements.
    
    F-9
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Internal ControlIntegrated Framework )
 /s/ Grant Thornton LLP
 
 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated
Framework
    Internal
ControlIntegrated Framework
  /s/ Grant Thornton LLP
 
 F-3




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
 Fiscal Years Ended2010
    
    
    2009AssetsCurrent assetsCash
    
    $
    21,063
    
    
    $
    9,286Accounts receivable, net of allowance for doubtful receivables
of $4,446 at February 28, 2010 and $3,561 at February 28, 2009
    
    
    57,249
    
    
    
    57,467Prepaid expenses
    
    
    6,867
    
    
    
    3,780Prepaid income taxes
    
    
    
    
    
    
    4,826Inventories
    
    
    75,137
    
    
    
    101,167Deferred income taxes
    
    
    5,319
    
    
    
    5,728Assets held for sale
    
    
    804
    
    
    
    Total current assets
    
    
    166,439
    
    
    
    182,254Property, plant and equipment, at costPlant, machinery and equipment
    
    
    138,419
    
    
    
    133,300Land and buildings
    
    
    55,430
    
    
    
    43,150Other
    
    
    22,402
    
    
    
    22,679Total property, plant and equipment
    
    
    216,251
    
    
    
    199,129Less accumulated depreciation
    
    
    150,531
    
    
    
    144,457Net property, plant and equipment
    
    
    65,720
    
    
    
    54,672Goodwill
    
    
    117,341
    
    
    
    117,341Trademarks and tradenames, net
    
    
    58,897
    
    
    
    59,030Customer lists, net
    
    
    19,753
    
    
    
    22,007Deferred finance charges, net
    
    
    1,079
    
    
    
    486Other assets
    
    
    3,470
    
    
    
    590Total assets
    
    $
    432,699
    
    
    $
    436,380
 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)
 Fiscal Years Ended2010
    
    
    2009Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    27,463
    
    
    $
    24,723Accrued expensesEmployee compensation and benefits
    
    
    14,374
    
    
    
    12,919Taxes other than income
    
    
    1,539
    
    
    
    1,322Federal and state income taxes payable
    
    
    705
    
    
    
    Other
    
    
    5,720
    
    
    
    4,706Current installments of long-term debt
    
    
    
    
    
    
    210Total current liabilities
    
    
    49,801
    
    
    
    43,880Long-term debt, less current installments
    
    
    41,817
    
    
    
    76,185Liability for pension benefits
    
    
    7,132
    
    
    
    6,988Deferred income taxes
    
    
    19,821
    
    
    
    16,250Other liabilities
    
    
    868
    
    
    
    1,071Total liabilities
    
    
    119,439
    
    
    
    144,374Commitments and contingenciesShareholders equityPreferred stock $10 par value,
authorized 1,000,000 shares; none issued
    
    
    
    
    
    
    Common stock $2.50 par value, authorized 40,000,000 shares;
issued 30,053,443 shares in 2010 and 2009
    
    
    75,134
    
    
    
    75,134Additional paid in capital
    
    
    121,978
    
    
    
    122,448Retained earnings
    
    
    206,062
    
    
    
    186,857Accumulated other comprehensive income (loss):Foreign currency translation, net of taxes
    
    
    267
    
    
    
    (1,016
    )Unrealized
loss on derivative instruments, net of taxes
    
    
    (1,154
    )
    
    
    (1,387
    )Minimum pension liability, net of taxes
    
    
    (12,376
    )
    
    
    (12,107
    )(13,263
    )
    
    
    (14,510
    )389,911
    
    
    
    369,929Treasury stockCost of 4,292,080 shares in 2010 and 4,336,557 shares in 2009
    
    
    (76,651
    )
    
    
    (77,923
    )Total shareholders equity
    
    
    313,260
    
    
    
    292,006Total liabilities and shareholders equity
    
    $
    432,699
    
    
    $
    436,380
 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 Ended2010
    
    
    2009
    
    
    2008Net sales
    
    $
    517,738
    
    
    $
    584,029
    
    
    $
    610,610Cost of goods sold
    
    
    382,419
    
    
    
    440,553
    
    
    
    446,736Gross profit margin
    
    
    135,319
    
    
    
    143,476
    
    
    
    163,874Selling, general and administrative
    
    
    76,738
    
    
    
    86,217
    
    
    
    88,851Impairment of goodwill
    
    
    
    
    
    
    63,151
    
    
    
    Impairment of trademarks
    
    
    
    
    
    
    4,700
    
    
    
    Gain from disposal of assets
    
    
    (1
    )
    
    
    (514
    )
    
    
    (757
    )Income (loss) from operations
    
    
    58,582
    
    
    
    (10,078
    )
    
    
    75,780Other income (expense)Interest expense
    
    
    (2,627
    )
    
    
    (3,363
    )
    
    
    (5,678
    )Other, net
    
    
    (286
    )
    
    
    382
    
    
    
    (317
    )(2,913
    )
    
    
    (2,981
    )
    
    
    (5,995
    )Earnings (loss) before income taxes
    
    
    55,669
    
    
    
    (13,059
    )
    
    
    69,785Provision for income taxes
    
    
    20,463
    
    
    
    19,709
    
    
    
    25,195Net earnings (loss)
    
    $
    35,206
    
    
    $
    (32,768
    )
    
    $
    44,590Weighted average common shares outstandingBasic
    
    
    25,768,632
    
    
    
    25,724,150
    
    
    
    25,696,745Diluted
    
    
    25,796,553
    
    
    
    25,790,166
    
    
    
    25,860,358Per share amountsNet earnings (loss)  basic
    
    $
    1.37
    
    
    $
    (1.27
    )
    
    $
    1.74Net earnings (loss)  diluted
    
    $
    1.36
    
    
    $
    (1.27
    )
    
    $
    1.72Cash 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 2008, 2009, AND 2010
 (Dollars in thousands, except share and per share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury StockShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance March 1, 2007
    
    
    30,053,443
    
    
    
    75,134
    
    
    
    122,305
    
    
    
    207,190
    
    
    
    (7,371
    )
    
    
    (4,475,962
    )
    
    
    (80,855
    )
    
    
    316,403Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,590
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,590Foreign currency translation,
net of deferred tax of $526
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    904
    
    
    
    
    
    
    
    
    
    
    
    904Adjustment to pension
net of deferred tax of $584
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    946
    
    
    
    
    
    
    
    
    
    
    
    946Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    46,440Cumulative impact of a change in
accounting for income tax
uncertainties pursuant to ASC 740
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (240
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (240
    )Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,916
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,916
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    385
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    385Stock based compensation
    
    
    
    
    
    
    
    
    
    
    734
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    734Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (858
    )
    
    
    
    
    
    
    
    
    
    
    84,769
    
    
    
    1,531
    
    
    
    673Balance February 29, 2008
    
    
    30,053,443
    
    
    
    75,134
    
    
    
    122,566
    
    
    
    235,624
    
    
    
    (5,521
    )
    
    
    (4,391,193
    )
    
    
    (79,324
    )
    
    
    348,479Net earnings (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,768
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,768
    )Foreign currency translation,
net of deferred tax of $1,142
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,945
    )
    
    
    
    
    
    
    
    
    
    
    (1,945
    )Unrealized loss on
derivative instruments, net
of deferred tax of $797
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,387
    )
    
    
    
    
    
    
    
    
    
    
    (1,387
    )Adjustment to pension
net of deferred tax of $3,252
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,657
    )
    
    
    
    
    
    
    
    
    
    
    (5,657
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,757
    )Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,999
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,999
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    249
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249Stock based compensation
    
    
    
    
    
    
    
    
    
    
    993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,360
    )
    
    
    
    
    
    
    
    
    
    
    107,336
    
    
    
    2,000
    
    
    
    640Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,700
    )
    
    
    (599
    )
    
    
    (599
    )Balance February 28, 2009
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,448
    
    
    $
    186,857
    
    
    $
    (14,510
    )
    
    
    (4,336,557
    )
    
    $
    (77,923
    )
    
    $
    292,006Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,206
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,206Foreign currency translation,
net of deferred tax of $754
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,283
    
    
    
    
    
    
    
    
    
    
    
    1,283Unrealized gain on
derivative instruments, net
of deferred tax benefit of $137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    233Adjustment to pension
net of deferred tax of $158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (269
    )
    
    
    
    
    
    
    
    
    
    
    (269
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,453Dividends declared
($0.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,001
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,001
    )Excess tax benefit of stock
option exercises and restrictedstock grants
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Stock based compensation
    
    
    
    
    
    
    
    
    
    
    1,079
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,079Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,650
    )
    
    
    
    
    
    
    
    
    
    
    93,034
    
    
    
    1,758
    
    
    
    108Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,557
    )
    
    
    (486
    )
    
    
    (486
    )Balance February 28, 2010
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    121,978
    
    
    $
    206,062
    
    
    $
    (13,263
    )
    
    
    (4,292,080
    )
    
    $
    (76,651
    )
    
    $
    313,260
 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 Ended2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Net earnings (loss)
    
    $
    35,206
    
    
    $
    (32,768
    )
    
    $
    44,590Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Depreciation
    
    
    8,976
    
    
    
    9,993
    
    
    
    12,217Amortization of deferred finance charges
    
    
    438
    
    
    
    448
    
    
    
    448Amortization of tradenames and customer lists
    
    
    2,403
    
    
    
    2,419
    
    
    
    2,062Impairment of goodwill and trademarks
    
    
    
    
    
    
    67,851
    
    
    
    Gain from disposal of assets
    
    
    (1
    )
    
    
    (514
    )
    
    
    (757
    )Bad debt expense
    
    
    2,182
    
    
    
    3,609
    
    
    
    1,970Stock based compensation
    
    
    1,079
    
    
    
    993
    
    
    
    734Excess tax benefit of stock based compensation
    
    
    (101
    )
    
    
    (249
    )
    
    
    (385
    )Deferred income taxes
    
    
    2,705
    
    
    
    (4,265
    )
    
    
    682Changes in operating assets and liabilities, net of the
effects of acquisitions:Accounts receivable
    
    
    (1,614
    )
    
    
    10,580
    
    
    
    (22,854
    )Prepaid expenses
    
    
    1,867
    
    
    
    (5,313
    )
    
    
    2,239Inventories
    
    
    27,096
    
    
    
    (4,154
    )
    
    
    (10,148
    )Other current assets
    
    
    409
    
    
    
    2,058
    
    
    
    Other assets
    
    
    (3,927
    )
    
    
    (4
    )
    
    
    16Accounts payable and accrued expenses
    
    
    6,177
    
    
    
    (7,789
    )
    
    
    2,348Other liabilities
    
    
    (203
    )
    
    
    (270
    )
    
    
    (701
    )Prepaid pension asset/liability for pension benefits
    
    
    (125
    )
    
    
    1,591
    
    
    
    (2,017
    )Net cash provided by operating activities
    
    
    82,567
    
    
    
    44,216
    
    
    
    30,444Cash flows from investing activities:Capital expenditures
    
    
    (20,280
    )
    
    
    (6,399
    )
    
    
    (4,294
    )Purchase of businesses, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (14,638
    )Proceeds from disposal of plant and property
    
    
    36
    
    
    
    1,049
    
    
    
    1,647Net cash used in investing activities
    
    
    (20,244
    )
    
    
    (5,350
    )
    
    
    (17,285
    )Cash flows from financing activities:Borrowings on debt
    
    
    
    
    
    
    5,000
    
    
    
    18,000Repayment of debt
    
    
    (34,210
    )
    
    
    (21,755
    )
    
    
    (16,658
    )Dividends
    
    
    (16,001
    )
    
    
    (15,999
    )
    
    
    (15,916
    )Purchase of treasury stock
    
    
    (486
    )
    
    
    (599
    )
    
    
    Proceeds from exercise of stock options
    
    
    108
    
    
    
    640
    
    
    
    673Excess tax benefit of stock based compensation
    
    
    101
    
    
    
    249
    
    
    
    385Net cash used in financing activities
    
    
    (50,488
    )
    
    
    (32,464
    )
    
    
    (13,516
    )Effect of exchange rate changes on cash
    
    
    (58
    )
    
    
    (509
    )
    
    
    168Net change in cash
    
    
    11,777
    
    
    
    5,893
    
    
    
    (189
    )Cash at beginning of period
    
    
    9,286
    
    
    
    3,393
    
    
    
    3,582Cash at end of period
    
    $
    21,063
    
    
    $
    9,286
    
    
    $
    3,393
 See accompanying notes to
consolidated financial statements. 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.
 Accounts Receivable.
 Inventories.
 Property, Plant and Equipment
 Goodwill and Other Intangible Assets.
 Long-Lived 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
  Fair Value of Financial Instruments
 Treasury Stock
 Deferred Finance Charges
 Revenue Recognition
 Advertising Expenses
 Income Taxes.
 Earnings (Loss) Per Share
 Accumulated Other Comprehensive Income (Loss)
 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
  Derivative Instruments and Hedging Activities.
 Foreign Currency Translation.
  Estimates.
 Shipping and Handling Costs.
 Stock Based Compensation.
 Concentrations of Risk
   F-11




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (2) Accounts Receivable and Allowance for Doubtful Receivables
    2010
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    3,561
    
    
    $
    3,954
    
    
    $
    2,698Bad debt expense
    
    
    2,182
    
    
    
    3,609
    
    
    
    1,970Recoveries
    
    
    34
    
    
    
    24
    
    
    
    29Accounts written off
    
    
    (1,297
    )
    
    
    (4,026
    )
    
    
    (743
    )Foreign currency translation
    
    
    (34
    )
    
    
    
    
    
    
    Balance at end of period
    
    $
    4,446
    
    
    $
    3,561
    
    
    $
    3,954
 (3) Inventories
  2010
    
    
    2009Raw material
    
    $
    11,089
    
    
    $
    13,357Work-in-process
    
    
    14,280
    
    
    
    13,090Finished goods
    
    
    49,768
    
    
    
    74,720$
    75,137
    
    
    $
    101,167
  (4) Goodwill and Other Intangible Assets
  F-12




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (4) Goodwill and Other Intangible Assets-continued
     GrossCarrying
    
    

    AccumulatedAmount
    
    
    Amortization
    
    
    NetAs of February 28, 2010Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    875
    
    
    $
    359Customer lists
    
    
    29,908
    
    
    
    10,155
    
    
    
    19,753Noncompete
    
    
    500
    
    
    
    483
    
    
    
    17$
    31,642
    
    
    $
    11,513
    
    
    $
    20,129As of February 28, 2009Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    742
    
    
    $
    492Customer lists
    
    
    29,908
    
    
    
    7,901
    
    
    
    22,007Noncompete
    
    
    500
    
    
    
    467
    
    
    
    33$
    31,642
    
    
    $
    9,110
    
    
    $
    22,532
 Fiscal years ended2010
    
    
    2009Non-amortizing intangible assets (in thousands)Trademarks
    
    $
    58,538
    
    
    $
    58,538
   2011
    
    $
    2,397,0002012
    
    
    2,391,0002013
    
    
    2,347,0002014
    
    
    2,254,0002015
    
    
    2,136,000
 F-13




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (4) Goodwill and Other Intangible Assets-continued
  Print
    
    
    ApparelSegment
    
    
    SegmentTotal
    
    
    Total
    
    
    TotalBalance as of March 1, 2008
    
    $
    40,688
    
    
    $
    137,700
    
    
    $
    178,388Goodwill acquired
    
    
    2,104
    
    
    
    
    
    
    
    2,104Goodwill impairment
    
    
    
    
    
    
    (63,151
    )
    
    
    (63,151
    )Balance as of March 1, 2009
    
    
    42,792
    
    
    
    74,549
    
    
    
    117,341Goodwill acquired
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    Balance as of February 28, 2010
    
    $
    42,792
    
    
    $
    74,549
    
    
    $
    117,341
  (5) Other Accrued Expenses
  February 28,
    
    
    February 28,2010
    
    

2009Accrued taxes
    
    $
    265
    
    
    $
    332Accrued legal and professional fees
    
    
    392
    
    
    
    430Accrued interest
    
    
    114
    
    
    
    129Accrued utilities
    
    
    1,322
    
    
    
    1,499Accrued repairs and maintenance
    
    
    547
    
    
    
    410Accrual-earn out agreements
    
    
    594
    
    
    
    225Other accrued expenses
    
    
    2,486
    
    
    
    1,681$
    5,720
    
    
    $
    4,706
 (6) Derivative Instruments and Hedging Activities
   (7) Fair Value Financial Instruments
  F-14




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (7) Fair Value Financial Instruments-continued
  Level 1   Inputs utilize quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access.Level 2   Inputs utilize data points that are observable such as quoted prices,
interest rates and yield curves.Level 3   Inputs are unobservable data points for the asset or liability, and
include situations where there is little, if any, market activity for the asset or
liability.
   Fair Value Measurements UsingQuotedPricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableFebruary 28,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative liability (Swap)
    
    $
    (1,817
    )
    
    $
    
    
    
    $
    (1,817
    )
    
    $
    $
    (1,817
    )
    
    $
    
    
    
    $
    (1,817
    )
    
    $
    
 Fair Value Measurements UsingQuotedPricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableFebruary 28,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative liability (Swap)
    
    $
    (2,185
    )
    
    $
    
    
    
    $
    (2,185
    )
    
    $
    $
    (2,185
    )
    
    $
    
    
    
    $
    (2,185
    )
    
    $
    
 F-15




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (8)
    
    Long-Term Debt  February 28, 2010
    
    
    February 28, 2009Revolving credit facility
    
    $
    40,000
    
    
    $
    74,000Interest rate swap
    
    
    1,817
    
    
    
    2,185Capital lease obligation
    
    
    
    
    
    
    21041,817
    
    
    
    76,395Less current installments
    
    
    
    
    
    
    210Long-term debt
    
    $
    41,817
    
    
    $
    76,185
    Debt2011
    
    $
    2012
    
    
    1,8172013
    
    
    40,000$
    41,817
 (9) Shareholders Equity
   (10) Stock Option Plan and Stock Based Compensation
  F-16




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Stock Option Plan and Stock Based Compensation-continued
   Stock Options
  WeightedNumber
    
    
    Weighted
    
    
    Average
    
    
    Aggregateof
    
    
    Average
    
    
    Remaining
    
    
    IntrinsicShares
    
    
    Exercise
    
    
    Contractual
    
    
    Value(a)(exact quantity)
    
    
    Price
    
    

Life (in years)
    
    
    (in thousands)Outstanding at March 1, 2007
    
    
    553,513
    
    
    $
    11.08
    
    
    
    3.9Granted
    
    
    
    
    
    
    Terminated
    
    
    (20,500
    )
    
    
    15.15Exercised
    
    
    (63,500
    )
    
    
    10.60Outstanding at February 29, 2008
    
    
    469,513
    
    
    $
    10.97
    
    
    
    2.9Granted
    
    
    
    
    
    
    Terminated
    
    
    (46,450
    )
    
    
    12.31Exercised
    
    
    (104,500
    )
    
    
    10.34Outstanding at February 28, 2009
    
    
    318,563
    
    
    $
    10.98
    
    
    
    2.4Granted
    
    
    105,000
    
    
    
    8.94Terminated
    
    
    (115,000
    )
    
    
    8.69Exercised
    
    
    (58,363
    )
    
    
    7.06Outstanding at February 28, 2010
    
    
    250,200
    
    
    $
    12.09
    
    
    
    6.0
    
    
    $
    1,003Exercisable at February 28, 2010
    
    
    140,200
    
    
    $
    14.29
    
    
    
    3.7
    
    
    $
    328
 
 (a)
    
    Intrinsic value is measured as the excess fair market value of the Companys Common
Stock as reported on the
New York Stock Exchange over the applicable exercise price.
  Expected volatility
    
    
    32.35
    %Expected term (years)
    
    
    4Risk free interest rate
    
    
    2.01
    %Dividend yield
    
    
    4.74
    %Weighted average grant-date fair value
    
    $
    1.583
 F-17




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Stock Option Plan and Stock Based Compensation-continued
  Fiscal years ended2010
    
    
    2009
    
    
    2008Total cash received
    
    $
    108
    
    
    $
    640
    
    
    $
    673Income tax benefits
    
    
    101
    
    
    
    249
    
    
    
    385Total grant-date fair value
    
    
    42
    
    
    
    134
    
    
    
    83Intrinsic value
    
    
    408
    
    
    
    536
    
    
    
    611
  WeightedAverageNumber
    
    
    Grant Dateof Options
    
    
    Fair ValueUnvested at February 28, 2009
    
    
    18,425
    
    
    $
    2.85New grants
    
    
    105,000
    
    
    
    1.58Vested
    
    
    (13,425
    )
    
    
    2.85Forfeited
    
    
    
    
    
    
    Unvested at February 28, 2010
    
    
    110,000
    
    
    $
    1.64
   Options Outstanding
    
    
    Options ExercisableWeighted Average
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Remaining Contractual
    
    
    Average
    
    
    Number
    
    
    AverageExercise Prices
    
    Outstanding
    
    
    Life (in Years)
    
    
    Exercise Price
    
    
    Exercisable
    
    
    Exercise Price$7.0625 to $8.9400
    
    
    141,250
    
    
    
    7.1
    
    
    $
    8.67
    
    
    
    36,250
    
    
    $
    7.9011.6700 to 13.2800
    
    
    18,750
    
    
    
    2.7
    
    
    
    12.42
    
    
    
    18,750
    
    
    
    12.4214.8200 to 16.4200
    
    
    57,700
    
    
    
    4.5
    
    
    
    16.05
    
    
    
    52,700
    
    
    
    16.0219.6900
    
    
    32,500
    
    
    
    6.0
    
    
    
    19.69
    
    
    
    32,500
    
    
    
    19.69250,200
    
    
    
    6.0
    
    
    
    12.09
    
    
    
    140,200
    
    
    
    14.29
 F-18




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10)
    
    Stock Option Plan and Stock Based Compensation-continued Restricted Stock
  WeightedAverageNumber of
    
    
    Grant DateShares
    
    
    Fair ValueOutstanding at March 1, 2007
    
    
    39,919
    
    
    $
    19.67Granted
    
    
    56,600
    
    
    
    26.79Terminated
    
    
    (1,334
    )
    
    
    19.64Vested
    
    
    (21,269
    )
    
    
    19.68Outstanding at February 29, 2008
    
    
    73,916
    
    
    $
    25.12Granted
    
    
    75,080
    
    
    
    15.67Terminated
    
    
    (15,236
    )
    
    
    19.89Vested
    
    
    (30,669
    )
    
    
    24.05Outstanding at February 28, 2009
    
    
    103,091
    
    
    $
    19.33Granted
    
    
    44,800
    
    
    
    8.94Terminated
    
    
    
    
    
    
    Vested
    
    
    (56,421
    )
    
    
    17.48Outstanding at February 28, 2010
    
    
    91,470
    
    
    $
    15.38
   (11) Employee Benefit Plans
   2010
    
    
    2009Equity securities
    
    
    54
    %
    
    
    42
    %Debt securities
    
    
    42
    %
    
    
    48
    %Cash and cash equivalents
    
    
    4
    %
    
    
    10
    %Total
    
    
    100
    %
    
    
    100
    %
 F-19




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
  Asset Class
    
    Target Allocation PercentageMoney Market
    
    
    0-3
    %Bonds
    
    
    43-47
    %Stocks
    
    
    45-50
    %
   Fair Value Measurements Using:QuotedPricesin Active
    
    
    SignificantAssets
    
    
    Markets for
    
    
    Other
    
    
    SignificantMeasured at
    
    
    Identical
    
    
    Observable
    
    
    UnobservableFair Value
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    at 2/28/10
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    1,354
    
    
    $
    1,354
    
    
    $
    
    
    
    $
    Government bonds
    
    
    9,750
    
    
    
    
    
    
    
    9,750
    
    
    
    Corporate bonds
    
    
    6,750
    
    
    
    
    
    
    
    6,750
    
    
    
    Domestic equities
    
    
    17,706
    
    
    
    17,706
    
    
    
    
    
    
    
    Foreign equities
    
    
    3,562
    
    
    
    3,562
    
    
    
    
    
    
    
    $
    39,122
    
    
    $
    22,622
    
    
    $
    16,500
    
    
    $
    
   F-20




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
 Level 1 -
    
    Quoted prices in active markets for identical assets or liabilities.Level 2 -
    
    Observable inputs other than Level 1 prices such as quoted prices for
similar assets or liabilities; quotes prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.Level 3 -
    
    Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
  2010
    
    
    2009
    
    
    2008Components of net periodic benefit costService cost
    
    $
    1,138
    
    
    $
    1,341
    
    
    $
    1,430Interest cost
    
    
    2,741
    
    
    
    2,627
    
    
    
    2,505Expected return on plan assets
    
    
    (2,423
    )
    
    
    (3,249
    )
    
    
    (3,079
    )Amortization of:Prior service cost
    
    
    (145
    )
    
    
    (145
    )
    
    
    (145
    )Unrecognized net loss
    
    
    1,698
    
    
    
    766
    
    
    
    905Net periodic benefit cost
    
    
    3,009
    
    
    
    1,340
    
    
    
    1,616Other changes in Plan Assets and Projected Benefit Obligation
Recognized in Other comprehensive IncomeNet actuarial loss (gain)
    
    
    1,688
    
    
    
    9,529
    
    
    
    (818
    )Amortization of net actuarial loss
    
    
    (1,698
    )
    
    
    (766
    )
    
    
    (905
    )Amortization of prior service credit
    
    
    145
    
    
    
    145
    
    
    
    145135
    
    
    
    8,908
    
    
    
    (1,578
    )Total recognized in net periodic pension cost and
other comprehensive income
    
    $
    3,144
    
    
    $
    10,248
    
    
    $
    38
  2010
    
    
    2009
    
    
    2008Weighted average discount rate (net periodic pension cost)
    
    
    7.15
    %
    
    
    6.40
    %
    
    
    6.00
    %Earnings progression (net periodic pension cost)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %Expected long-term rate of return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Weighted average discount rate (benefit obligations)
    
    
    6.05
    %
    
    
    7.15
    %
    
    
    6.40
    %Earnings progression (benefit obligations)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
 F-21




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
  2010
    
    
    2009Change in benefit obligationProjected benefit obligation at beginning of year
    
    $
    38,951
    
    
    $
    42,311Service cost
    
    
    1,138
    
    
    
    1,341Interest cost
    
    
    2,741
    
    
    
    2,626Actuarial loss
    
    
    7,926
    
    
    
    (3,623
    )Benefits paid
    
    
    (4,502
    )
    
    
    (3,704
    )Projected benefit obligation at end of year
    
    $
    46,254
    
    
    $
    38,951Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    31,963
    
    
    $
    42,571Company contributions
    
    
    3,000
    
    
    
    3,000Gains on plan assets
    
    
    8,661
    
    
    
    (9,904
    )Benefits paid
    
    
    (4,502
    )
    
    
    (3,704
    )Fair value of plan assets at end of year
    
    $
    39,122
    
    
    $
    31,963Funded status (benefit obligation less plan assets)
    
    $
    (7,132
    )
    
    $
    (6,988
    )Accumulated benefit obligation at end of year
    
    $
    40,852
    
    
    $
    33,957
   ProjectedYear
    
    Payments2011
    
    $
    1,5752012
    
    
    3,2402013
    
    
    3,5102014
    
    
    4,4602015
    
    
    4,0002016  2020
    
    
    19,370
   F-22




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Income Taxes
  2010
    
    
    2009
    
    
    2008Current:Federal
    
    $
    16,357
    
    
    $
    14,723
    
    
    $
    20,144State and local
    
    
    3,104
    
    
    
    3,444
    
    
    
    2,787Foreign
    
    
    857
    
    
    
    573
    
    
    
    2,147Deferred
    
    
    145
    
    
    
    969
    
    
    
    117Total provision for income taxes
    
    $
    20,463
    
    
    $
    19,709
    
    
    $
    25,195
  2010
    
    
    2009
    
    
    2008Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Provision for state income taxes, net of
Federal income tax benefit
    
    
    3.7
    
    
    
    (18.4
    )
    
    
    2.6Impairment of goodwill
    
    
    
    
    
    
    (169.3
    )
    
    
    Other
    
    
    (1.9
    )
    
    
    1.8
    
    
    
    (1.5
    )36.8
    %
    
    
    (150.9
    )%
    
    
    36.1
    %
  2010
    
    
    2009Current deferred tax assets related to:Allowance for doubtful receivables
    
    $
    1,718
    
    
    $
    1,366Inventories
    
    
    1,916
    
    
    
    2,739Employee compensation and benefits
    
    
    1,625
    
    
    
    1,661Other
    
    
    60
    
    
    
    (38
    )$
    5,319
    
    
    $
    5,728Noncurrent deferred tax liability (asset) related to:Property, plant and equipment
    
    $
    3,891
    
    
    $
    4,787Goodwill and other intangible assets
    
    
    20,898
    
    
    
    20,084Pension and noncurrent employee compensation benefits
    
    
    (3,816
    )
    
    
    (3,644
    )Net operating loss and foreign tax credits
    
    
    (378
    )
    
    
    (3,143
    )Interest rate swap
    
    
    (702
    )
    
    
    (838
    )Other
    
    
    (72
    )
    
    
    (996
    )$
    19,821
    
    
    $
    16,250
 F-23




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Income Taxes-continued
    2010
    
    
    2009Balance at beginning of year
    
    $
    243
    
    
    $
    201Additions (reductions) based on tax positions related to the current year
    
    
    (15
    )
    
    
    109Reductions due to lapses of statutes of limitations
    
    
    (81
    )
    
    
    (67
    )Balance at end of year
    
    $
    147
    
    
    $
    243
    F-24




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (13) Earnings (loss) per Share-continued
 2010
    
    
    2009
    
    
    2008Basic weighted average
common shares outstanding
    
    
    25,768,632
    
    
    
    25,724,150
    
    
    
    25,696,745Effect of dilutive options
    
    
    27,921
    
    
    
    66,016
    
    
    
    163,613Diluted
weighted average common shares outstanding
    
    
    25,796,553
    
    
    
    25,790,166
    
    
    
    25,860,358Per share amounts:Net earnings  basic
    
    $
    1.37
    
    
    $
    (1.27
    )
    
    $
    1.74Net earnings  diluted
    
    $
    1.36
    
    
    $
    (1.27
    )
    
    $
    1.72Cash dividends
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
  (14) Segment Information and Geographic Information
   ® SM ® SM SM ® ® SM SM ® ® ® ® SM ® ® ® ®
   F-25




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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, 2010:Net sales
    
    $
    282,308
    
    
    $
    235,430
    
    
    $
    
    
    
    $
    517,738Depreciation
    
    
    5,970
    
    
    
    2,168
    
    
    
    838
    
    
    
    8,976Amortization of identifiable intangibles
    
    
    937
    
    
    
    1,466
    
    
    
    
    
    
    
    2,403Impairment of goodwill and trademarks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Segment earnings (loss) before
income tax
    
    
    46,047
    
    
    
    24,778
    
    
    
    (15,156
    )
    
    
    55,669Segment assets
    
    
    140,734
    
    
    
    270,680
    
    
    
    21,285
    
    
    
    432,699Capital expenditures
    
    
    2,522
    
    
    
    17,661
    
    
    
    97
    
    
    
    20,280Fiscal year ended February 28, 2009:Net sales
    
    $
    327,034
    
    
    $
    256,995
    
    
    $
    
    
    
    $
    584,029Depreciation
    
    
    6,406
    
    
    
    2,640
    
    
    
    947
    
    
    
    9,993Amortization of identifiable intangibles
    
    
    952
    
    
    
    1,467
    
    
    
    
    
    
    
    2,419Impairment of goodwill and trademarks
    
    
    
    
    
    
    67,851
    
    
    
    
    
    
    
    67,851Segment earnings (loss) before
income tax
    
    
    51,553
    
    
    
    (49,416
    )
    
    
    (15,196
    )
    
    
    (13,059
    )Segment assets
    
    
    152,971
    
    
    
    267,499
    
    
    
    15,910
    
    
    
    436,380Capital expenditures
    
    
    5,973
    
    
    
    324
    
    
    
    102
    
    
    
    6,399Fiscal year ended February 29, 2008:Net sales
    
    $
    345,042
    
    
    $
    265,568
    
    
    $
    
    
    
    $
    610,610Depreciation
    
    
    8,009
    
    
    
    3,306
    
    
    
    902
    
    
    
    12,217Amortization of identifiable intangibles
    
    
    595
    
    
    
    1,467
    
    
    
    
    
    
    
    2,062Segment earnings (loss) before
income tax
    
    
    56,012
    
    
    
    29,367
    
    
    
    (15,594
    )
    
    
    69,785Segment assets
    
    
    157,979
    
    
    
    347,861
    
    
    
    7,291
    
    
    
    513,131Capital expenditures
    
    
    2,939
    
    
    
    1,275
    
    
    
    80
    
    
    
    4,294
 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
  United States
    
    
    Canada
    
    
    Mexico
    
    
    Total2010Net sales to unaffiliated customersPrint Segment
    
    $
    282,308
    
    
    $
    
    
    
    $
    
    
    
    $
    282,308Apparel Segment
    
    
    217,442
    
    
    
    15,183
    
    
    
    2,805
    
    
    
    235,430$
    499,750
    
    
    $
    15,183
    
    
    $
    2,805
    
    
    $
    517,738Identifiable long-lived assetsPrint Segment
    
    $
    37,984
    
    
    $
    
    
    
    $
    
    
    
    
    37,984Apparel Segment
    
    
    9,508
    
    
    
    33
    
    
    
    13,602
    
    
    
    23,143Corporate
    
    
    4,593
    
    
    
    
    
    
    
    
    
    
    
    4,593$
    52,085
    
    
    $
    33
    
    
    $
    13,602
    
    
    $
    65,7202009Net sales to unaffiliated customersPrint Segment
    
    $
    327,034
    
    
    $
    
    
    
    $
    
    
    
    $
    327,034Apparel Segment
    
    
    240,798
    
    
    
    14,913
    
    
    
    1,284
    
    
    
    256,995$
    567,832
    
    
    $
    14,913
    
    
    $
    1,284
    
    
    $
    584,029Identifiable long-lived assetsPrint Segment
    
    $
    42,272
    
    
    $
    
    
    
    $
    
    
    
    
    42,272Apparel Segment
    
    
    5,856
    
    
    
    38
    
    
    
    1,173
    
    
    
    7,067Corporate
    
    
    5,333
    
    
    
    
    
    
    
    
    
    
    
    5,333$
    53,461
    
    
    $
    38
    
    
    $
    1,173
    
    
    $
    54,6722008Net sales to unaffiliated customersPrint Segment
    
    $
    345,042
    
    
    $
    
    
    
    $
    
    
    
    $
    345,042Apparel Segment
    
    
    248,431
    
    
    
    17,137
    
    
    
    
    
    
    
    265,568$
    593,473
    
    
    $
    17,137
    
    
    $
    
    
    
    $
    610,610Identifiable long-lived assetsPrint Segment
    
    $
    43,004
    
    
    $
    
    
    
    $
    
    
    
    
    43,004Apparel Segment
    
    
    7,698
    
    
    
    74
    
    
    
    2,092
    
    
    
    9,864Corporate
    
    
    6,120
    
    
    
    
    
    
    
    
    
    
    
    6,120$
    56,822
    
    
    $
    74
    
    
    $
    2,092
    
    
    $
    58,988
 F-27




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (15) Commitments and Contingencies
  OperatingLeaseCommitments2011
    
    $
    7,1312012
    
    
    3,5192013
    
    
    1,7992014
    
    
    5822015
    
    
    25Thereafter
    
    
    $
    13,056
    (16) Supplemental Cash Flow Information
  2010
    
    
    2009
    
    
    2008Interest paid
    
    $
    2,641
    
    
    $
    3,838
    
    
    $
    6,048Income taxes paid
    
    $
    15,539
    
    
    $
    24,522
    
    
    $
    25,208
  2010
    
    
    2009
    
    
    2008Fair value of assets acquired in acquisitions
    
    $
    
    
    
    $
    
    
    
    $
    15,752Liabilities assumed in acquisitions
    
    $
    
    
    
    $
    
    
    
    $
    614
 F-28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (17) Quarterly Consolidated Financial Information (Unaudited)
  For the Three Months Ended
    
    May 31
    
    
    August 31
    
    
    November 30
    
    
    February 28Fiscal year ended 2010:Net sales
    
    $
    130,830
    
    
    $
    137,767
    
    
    $
    127,756
    
    
    $
    121,385Gross profit margin
    
    
    30,984
    
    
    
    35,822
    
    
    
    34,300
    
    
    
    34,213Net earnings
    
    
    6,635
    
    
    
    9,546
    
    
    
    9,191
    
    
    
    9,834Dividends paid
    
    
    4,002
    
    
    
    3,994
    
    
    
    4,003
    
    
    
    4,002Per share of common stock:Basic net earnings
    
    $
    0.26
    
    
    $
    0.37
    
    
    $
    0.36
    
    
    $
    0.38Diluted net earnings
    
    $
    0.26
    
    
    $
    0.37
    
    
    $
    0.36
    
    
    $
    0.38Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155Fiscal year ended 2009:Net sales
    
    $
    163,200
    
    
    $
    161,050
    
    
    $
    142,453
    
    
    $
    117,326Gross profit margin
    
    
    40,452
    
    
    
    39,238
    
    
    
    37,857
    
    
    
    25,929Net earnings (loss)
    
    
    10,936
    
    
    
    9,341
    
    
    
    9,876
    
    
    
    (62,921
    )Dividends paid
    
    
    3,987
    
    
    
    3,998
    
    
    
    4,007
    
    
    
    4,007Per share of common stock:Basic net earnings (loss)
    
    $
    0.43
    
    
    $
    0.36
    
    
    $
    0.38
    
    
    $
    (2.44
    )Diluted net earnings (loss)
    
    $
    0.42
    
    
    $
    0.36
    
    
    $
    0.38
    
    
    $
    (2.44
    )Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
 Current Quarter Compared to Same Quarter Last Year
   (18) Concentrations of Risk
   F-29




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (18) Concentrations of Risk-continued
  (19) Subsequent Events
  1 2
 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 Annual
Report on Form 10-K for the fiscal year ended February 28, 1993.Exhibit 3.1(b)
    
    Amendment to articles of Incorporation dated June 17, 2004 incorporated
herein incorporated herein by reference to Exhibit 3.1(b) to the Registrants
Annual Report on Form 10-K for the fiscal year ended February 28, 2007.Exhibit 3.2(a)
    
    Bylaws of the Registrant as amended through October 15, 1997 incorporated
herein by reference to Exhibit 3(ii) to the Registrants Quarterly Report on
Form 10-Q for the quarter ended November 30, 1997.Exhibit 3.2(b)
    
    First amendment to Bylaws of the Registrant dated December 20, 2007
incorporated herein by reference to Exhibit 3.1 to the Registrants Current
Report on Form 8-K filed on December 20, 2007.Exhibit 10.1
    
    Second Amended and Restated Credit Agreement between Ennis, Inc., each of the
other co-borrowers who are parties, Bank of America, N.A. as Administrative
Agent, Swing Line Lender and L/C Issuer, Compass Bank, as Syndication Agent,
Wells Fargo Bank, N.A., as Documentation Agent, the other lenders who are
parties and Banc of America Securities, LLC, as Sole Lead Arranger and Sole
Book Manager, dated as of August 18, 2009 herein incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on August 20, 2009.Exhibit 21
    
    Subsidiaries of Registrant*Exhibit 23
    
    Consent of Independent Registered Public Accounting Firm*Exhibit 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 2002*Exhibit 32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith E-1