Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~December 30, 2020,~~September 24, 2021, there were ~~26,069,543~~26,121,463 shares of the Registrant’s common stock outstanding.

											Accumulated
					Additional						Other																		Accumulated
	Common Stock				Paid-in			Retained			Comprehensive			Treasury Stock											Additional				Other
	Shares		Amount		Capital			Earnings			Income (Loss)			Shares			Amount			Total			Common Stock			Paid-in		Retained		Comprehensive		Treasury Stock
Balance August 31, 2020		30,053,443	$	75,134	$	122,430		$	192,685		$	(24,340	)		(4,089,345	)	$	(71,597	)	$	294,312
																							Shares	Amount	Capital		Earnings		Income (Loss)		Shares		Amount	Total
Balance May 31, 2021																							30,053,443	$75,134	$122,746		$195,874		$(19,983)		(4,021,466)		$(70,319)	$303,452
Net earnings		—		—		—			8,363			—			—			—			8,363		—	—	—		7,460		—		—		—	7,460
Adjustment to pension, net of deferred tax of $144		—		—		—			—			433			—			—			433
Dividends paid ($0.225 per share)		—		—		—			(5,871	)		—			—			—			(5,871	)
Adjustment to pension, net of deferred tax of $95																							—	—	—		—		298		—		—	298
Dividends paid ($0.25 per share)																							—	—	—		(6,525)		—		—		—	(6,525)
Stock based compensation																							—	—	636		—		—		—		—	636
Exercise of stock options and restricted stock																							—	—	(266)		—		—		15,198		266	—
Balance August 31, 2021																							30,053,443	$75,134	$123,116		$196,809		$(19,685)		(4,006,268)		$(70,053)	$305,321

Balance February 28, 2021																							30,053,443	$75,134	$123,017		$194,436		$(20,282)		(4,103,630)		$(71,756)	$300,549
Net earnings																							—	—	—		14,764		—		—		—	14,764
Adjustment to pension, net of deferred tax of $199																							—	—	—		—		597		—		—	597
Dividends paid ($0.475 per share)																							—	—	—		(12,391)		—		—		—	(12,391)
Stock based compensation																							—	—	1,802		—		—		—		—	1,802
Exercise of stock options and restricted stock																							—	—	(1,703)		—		—		97,362		1,703	—
Balance August 31, 2021																							30,053,443	$75,134	$123,116		$196,809		$(19,685)		(4,006,268)		$(70,053)	$305,321

Balance May 31, 2020																							30,053,443	$75,134	$122,266		$192,130		$(24,773)		(4,098,607)		$(71,759)	$292,998
Net earnings																							—	—	—		6,421		—		—		—	6,421
Adjustment to pension, net of deferred tax of $145																							—	—	—		—		433		—		—	433
Dividends paid ($0.225 per share)																							—	—	—		(5,866)		—		—		—	(5,866)
Stock based compensation		—		—		269			—			—			—			—			269		—	—	326		—		—		—		—	326
Exercise of stock options and restricted stock		—		—		—			—			—			—			—			—		—	—	(162)		—		—		9,262		162	—
Common stock repurchases		—		—		—			—			—			(51,524	)		(812	)		(812	)	—	—	—		—		—		—		—	—
Balance November 30, 2020		30,053,443	$	75,134	$	122,699		$	195,177		$	(23,907	)		(4,140,869	)	$	(72,409	)	$	296,694
Balance August 31, 2020																							30,053,443	$75,134	$122,430		$192,685		$(24,340)		(4,089,345)		$(71,597)	$294,312

Balance February 29, 2020		30,053,443	$	75,134	$	123,052		$	193,809		$	(25,206	)		(4,136,286	)	$	(72,460	)	$	294,329		30,053,443	$75,134	$123,052		$193,809		$(25,206)		(4,136,286)		$(72,460)	$294,329
Net earnings		—		—		—			18,969			—			—			—			18,969		—	—	—		10,606		—		—		—	10,606
Adjustment to pension, net of deferred tax of $433		—		—		—			—			1,299			—			—			1,299
Dividends paid ($0.675 per share)		—		—		—			(17,601	)		—			—			—			(17,601	)
Adjustment to pension, net of deferred tax of $289																							—	—	—		—		866		—		—	866
Dividends paid ($0.45 per share)																							—	—	—		(11,730)		—		—		—	(11,730)
Stock based compensation		—		—		933			—			—			—			—			933		—	—	664		—		—		—		—	664
Exercise of stock options and restricted stock		—		—		(1,286	)		—			—			73,413			1,286			—		—	—	(1,286)		—		—		73,413		1,286	—
Common stock repurchases		—		—		—			—			—			(77,996	)		(1,235	)		(1,235	)	—	—	—		—		—		(26,472)		(423)	(423)
Balance November 30, 2020		30,053,443	$	75,134	$	122,699		$	195,177		$	(23,907	)		(4,140,869	)	$	(72,409	)	$	296,694

Balance August 31, 2019		30,053,443	$	75,134	$	122,359		$	186,417		$	(16,248	)		(4,094,674	)	$	(71,645	)	$	296,017
Net earnings		—		—		—			10,553			—			—			—			10,553
Adjustment to pension, net of deferred tax of $74		—		—		—			—			221			—			—			221
Dividends paid ($0.225 per share)		—		—		—			(5,871	)		—			—			—			(5,871	)
Stock based compensation		—		—		353			—			—			—			—			353
Exercise of stock options and restricted stock		—		—		(11	)		—			—			667			11			—
Common stock repurchases		—		—		—			—			—			(42,279	)		(826	)		(826	)
Balance November 30, 2019		30,053,443	$	75,134	$	122,701		$	191,099		$	(16,027	)		(4,136,286	)	$	(72,460	)	$	300,447

Balance February 28, 2019		30,053,443	$	75,134	$	123,065		$	179,003		$	(16,704	)		(4,097,099	)	$	(71,371	)	$	289,127
Net earnings		—		—		—			29,718			—			—			—			29,718
Adjustment to pension, net of deferred tax of $226		—		—		—			—			677			—			—			677
Dividends paid ($0.675 per share)		—		—		—			(17,622	)		—			—			—			(17,622	)
Stock based compensation		—		—		1,018			—			—			—			—			1,018
Exercise of stock options and restricted stock		—		—		(1,382	)		—			—			87,143			1,382			—
Common stock repurchases		—		—		—			—			—			(126,330	)		(2,471	)		(2,471	)
Balance November 30, 2019		30,053,443	$	75,134	$	122,701		$	191,099		$	(16,027	)		(4,136,286	)	$	(72,460	)	$	300,447
Balance August 31, 2020																							30,053,443	$75,134	$122,430		$192,685		$(24,340)		(4,089,345)		$(71,597)	$294,312

1. Significant Accounting Policies and General Matters

Basis of Presentation

These unaudited consolidated financial statements of Ennis, Inc. and its subsidiaries (collectively referred to as the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) for the period ended ~~November 30, 2020~~August 31, 2021 have been prepared in accordance with generally accepted accounting principles for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February ~~29, 2020,~~28, 2021, from which the accompanying consolidated balance sheet at February ~~29, 2020~~28, 2021 was derived. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included and are of a normal recurring nature. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the disclosure and reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis, including those related to bad debts, inventory valuations, property, plant and equipment, intangible assets, pension plan, accrued liabilities, and income taxes. The Company bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year, especially in light of the uncertainties surrounding the impact of the novel coronavirus (COVID-19) pandemic.

Recent Accounting Pronouncements

Recently Adopted Accounting Updates

In ~~August 2018,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“~~ASU”) No. 2018-13,~~ ~~Fair Value Measurement (Topic 820)~~ (“~~ASU 2018-13~~”). The standard is effective for public business entities in fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Early adoption is permitted, including during an interim period. This new standard requires changes to disclosure requirements for fair value measurements for certain Level 3 items, and specifies that some of the changes must be applied prospectively, while others should be applied retrospectively. The Company adopted ASU 2018-13 as of March 1, 2020 and the adoption of this standard had no impact on the Company’s financial statement disclosures.

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ (“~~ASU 2016-13~~”), which changes the impairment model for most financial assets and certain other instruments. Unlike the new guidance, entities will be required to measure expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable forecasts. The Company adopted ASU 2016-13 as of March 1, 2020 and the adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

~~Recently Issued Accounting Updates~~

~~In March 2020, the FASB issued ASU No. 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting~~ (“~~ASU 2020-04~~”), which provides companies with optional guidance, including expedients and exceptions for applying generally accepted accounting principles to contracts and other transaction affected by reference rate reform, such as the London Interbank Offered Rate (“~~LIBOR~~”). This new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the impact of ASU 2020-04 on its consolidated financial statements.

~~In December 2019, the FASB issued Accounting Standards Update ASU~~ASU” No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include removal of certain exceptions to the general principles of Topic 740, Income Taxes, and simplification in several other areas. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020, and interim periods therein. The Company ~~is currently evaluating the impact of~~adopted ASU 2019-12 as of March 1, 2021, and the adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Updates

In ~~August 2018,~~March 2020, the FASB issued ASU No. ~~2018-14,~~ 2020-04, ~~Compensation-Retirement Benefits-Defined Benefit Plans-General~~Reference Rate Reform (Topic ~~715-20)~~848): ~~Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans~~Facilitation of Effects of Reference Rate Reform on Financial Reporting (“(“ASU ~~2018-14~~2020-04”), which ~~removes~~

~~ENNIS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED NOVEMBER 30, 2020~~

~~certain disclosures that are no longer cost beneficial~~provides companies with optional guidance, including expedients and ~~also includes additional disclosures~~exceptions for applying generally accepted accounting principles to ~~improve~~contracts and other transactions affected by reference rate reform, such as the ~~overall usefulness of the disclosure requirements~~London Interbank Offered Rate (“LIBOR”). This new standard was effective upon issuance and generally can be applied to ~~financial statement users. ASU 2018-14 is effective for fiscal years ending after~~applicable contract modifications through December ~~15, 2020, and earlier adoption is permitted.~~31, 2022. The Company is currently evaluating ~~the~~ASU 2020-04, but does not expect it to have a significant impact ~~of ASU 2018-14~~ on ~~the~~its consolidated financial statements.

The pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the period presented.

6. Leases

6. ~~Leases~~

The Company leases certain of its facilities and equipment under operating leases, which are recorded as right-of-use assets and lease liabilities. The Company’s leases generally have terms of 1 – 5 years, with certain leases including renewal options to extend the leases for additional periods at the Company’s discretion. At lease inception, all renewal options reasonably certain to be exercised are considered when determining the lease term. The Company currently does not have leases that include options to purchase or provisions that would automatically transfer ownership of the leased property to the Company.

Operating lease expense is recognized on a straight-line basis over the lease term, and variable lease payments are expensed as incurred. The Company had 0 variable lease costs for the ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020.

The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment.

Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates based on the ~~information available~~BBB Corporate Bond Rate at lease commencement date as rates are not implicitly stated in most leases.

1312

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED ~~NOVEMBER 30, 2020~~AUGUST 31, 2021

Components of lease expense for the three and ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020 ~~and November 30, 2019~~ were as follows (in thousands):


	Three months ended				Nine months ended				Three months ended				Six months ended
	November 30, 2020		November 30, 2019		November 30, 2020		November 30, 2019		August 31, 2021		August 31, 2020		August 31, 2021		August 31, 2020
Operating lease cost	$	1,572	$	1,675	$	4,773	$	4,874	$	1,595	$	1,574	$	3,234	$	3,201

Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,568	$	1,663	$	4,743	$	4,849	$	1,586	$	1,563	$	3,216	$	3,175

Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	138	$	1,494	$	194	$	4,359	$	838	$	56	$	3,441	$	56


Weighted Average Remaining Lease Terms
Operating leases	4 Years

Weighted Average Discount Rate
Operating leases		~~4.32~~3.66	%

Future minimum lease commitments under non-cancelable operating leases for each of the fiscal years ending are as follows (in thousands):


	Operating
	Lease
	Commitments
2022 (remaining 6 months)	$	2,598
2023		5,816
2024		4,423
2025		3,655
2026		2,164
2027		765
Thereafter		3
Total future minimum lease payments	$	19,424
Less imputed interest		1,253
Present value of lease liabilities	$	18,171

Operating

Lease

Commitments

2021 (remaining 3 months)

$
1,021

2022

5,299

2023

4,251

2024

2,952

2025

2,160

2026

883

Thereafter

660

Total future minimum lease payments

$
17,226

Less imputed interest

1,388

Present value of lease liabilities

$
15,838

7. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized. Goodwill and other intangible assets are tested for impairment at a reporting unit level. ~~Historically, the Company has performed its~~The annual impairment test as of ~~November 30, the last day of the third quarter, but beginning in fiscal year 2020, the Company~~goodwill and intangible assets is performed ~~its annual impairment test as of December 1, the first day of the fourth quarter. Accordingly, the annual impairment test was performed as of November 30 and updated~~ as of December 1 of each fiscal ~~year 2020, in each case with no impact on the financial statements. The change to the Company’s impairment testing date did not accelerate, delay, avoid or cause an impairment charge, nor~~

~~ENNIS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED NOVEMBER 30, 2020~~

year.

did the change result in adjustments to the Company’s previously issued financial statements. The Company’s impairment tests indicated significant cushion between its carrying value and fair market value.

Subsequent to the December 1, 2019 assessment, the novel coronavirus (COVID-19) pandemic began to cause major economic disruption and significant volatility in the stock market. As a result, the Company updated the assessment performed for fiscal year 2020 through February 29, 2020. NaN impairment charge to the Company’s recorded goodwill was deemed required as a result of this updated assessment. For the nine months ended November 30, 2020, given the continued economic impact of COVID-19, the Company reviewed the assumptions used in the previous assessment and found them to still be materially accurate.

The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors used in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.

If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things,

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED AUGUST 31, 2021

selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded.

Definite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances indicate that the asset may be impaired.

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

	Weighted
	Average								Weighted
	Remaining		Gross						Average
	Life		Carrying		Accumulated				Remaining		Gross
As of November 30, 2020	(in years)		Amount		Amortization		Net
									Life		Carrying		Accumulated
As of August 31, 2021									(in years)		Amount		Amortization		Net
Amortized intangible assets
Trademarks and trade names		11.9	$	26,161	$	7,485	$	18,676		11.4	$	28,107	$	9,313	$	18,794
Customer lists		6.7		73,102		41,334		31,768		6.4		76,424		45,695		30,729
Non-compete		1.3		767		632		135		3.5		877		744		133
Patent		—		783		783		—		—		783		783		—
Total		8.6	$	100,813	$	50,234	$	50,579		8.3	$	106,191	$	56,535	$	49,656

As of February 29, 2020
As of February 28, 2021
Amortized intangible assets
Trademarks and trade names		12.6	$	26,161	$	5,811	$	20,350		11.9	$	27,561	$	8,194	$	19,367
Customer lists		7.4		73,102		37,161		35,941		6.8		75,862		42,726		33,136
Non-compete		1.8		767		501		266		3.1		877		668		209
Patent		—		783		783		—		—		783		783		—
Total		9.2	$	100,813	$	44,256	$	56,557		8.7	$	105,083	$	52,371	$	52,712

Aggregate amortization expense for the ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020 ~~and November 30, 2019~~ was ~~$6.0~~$4.2 million and ~~$5.8~~$3.9 million, respectively.

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

2021	$	8,081

2022		7,568	$	8,077
2023		6,541		7,052
2024		6,504		7,010
2025		6,329		6,835
2026				6,221

~~ENNIS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED NOVEMBER 30, 2020~~

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

Balance as of March 1, 2019

$
81,634

Goodwill acquired

893

Balance as of February 29, 2020

82,527

Balance as of November 30, 2020

$
82,527


Balance as of March 1, 2020	$	82,527
Goodwill acquired		6,120
Balance as of February 28, 2021		88,647
Goodwill acquired		14
Balance as of August 31, 2021	$	88,661

During ~~the nine months ended November 30, 2019, $0.9~~fiscal year 2021, $6.1 million was added to goodwill related to the acquisition of ~~Integrated.~~Infoseal.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED AUGUST 31, 2021

8. Accrued Expenses

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


	November 30,		February 29,		August 31,		February 28,
		2020		2020		2021		2021
Employee compensation and benefits	$	13,010	$	13,171	$	11,861	$	11,742
Taxes other than income		973		464		1,465		467
Accrued legal and professional fees		256		190		329		272
Accrued interest		92		78		84		79
Accrued utilities		90		90		108		90
Accrued acquisition related obligations		179		240		92		164
Accrued credit card fees		—		195
Income taxes payable		—		—		1,005		1,528
Other accrued expenses		850		641		1,073		613
	$	15,450	$	15,069	$	16,017	$	14,955

9. Long-Term Debt

The Company is party to a Second Amended and Restated Credit Agreement, which has been amended from time to time, pursuant to which a credit facility has been extended to the Company until November 11, 2021 (the “Credit Facility”). The Credit Facility provides the Company and its subsidiaries with up to ~~$100.0~~$100.0 million in revolving credit, as well as a ~~$20.0~~$20.0 million sublimit for the issuance of letters of credit and a ~~$15.0~~$15.0 million sublimit for swing-line loans. Under the Credit Facility, the Company or any of its subsidiaries can request up to three increases in the aggregate commitments in an aggregate amount not to exceed ~~$50.0~~$50.0 million. Under the Credit Facility: (i) the Company’s consolidated net leverage ratio may not exceed ~~3.00:~~3.00:1.00, (ii) the Company’s fixed charge coverage ratio may not be less than ~~1.25:~~1.25:1.00, and (iii) the Company may make dividends or distributions to shareholders so long as (A) no event of default has occurred and is continuing and (B) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than ~~2.50:~~2.50:1.00. All calculations are made based on U.S. Generally Accepted Accounting Principles existing at the time the Credit Facility was entered into. As of ~~November 30, 2020,~~August 31, 2021, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at LIBOR plus a spread ranging from ~~1.85%~~1.85% to ~~2.5%~~2.5%. The Company had 0no outstanding long-term debt under the revolving credit line as of ~~November 30, 2020.~~August 31, 2021. The rate is determined by the Company’s fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). As of ~~November 30, 2020,~~August 31, 2021, the Company had ~~$0.6~~$0.6 million outstanding under standby letters of credit arrangements, leaving approximately ~~$99.4~~$99.4 million in available borrowing capacity. The Credit Facility is secured by substantially all of the Company’s assets (other than real property), as well as all capital securities of each of the Company’s subsidiaries. The Company is considering the nonrenewal of the credit facility or renewing with a smaller line of credit limit

10. Shareholders’ Equity

The Company’s board of directors (the “Board”) has authorized the repurchase of the Company’s outstanding common stock through a stock repurchase program, which authorized amount is currently up to ~~$40.0~~$40.0 million in the aggregate. Under the repurchase program, purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors. Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations. These repurchases may be commenced or suspended at any time or from time to time without prior notice.

~~ENNIS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED NOVEMBER 30, 2020~~

During the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021, the Company ~~repurchased 77,996~~did 0t repurchase any shares of common stock under the ~~program at an average price of $15.84 per share.~~program. Since the program’s inception in October 2008, there have been 1,894,350 common shares repurchased at an average price of ~~$15.91~~$15.91 per share. As of ~~November 30, 2020, $9.9~~August 31, 2021, $9.9 million remained available to repurchase shares of the Company’s common stock under the program.

11. ~~Stock Option Plan and~~ Stock Based Compensation

The Company grants stock options, restricted stock and restricted stock units (“RSUs”) to key executives, managerial employees and non-employee directors. ~~At November~~Prior to June 30, ~~2020,~~2021, the Company had one stock ~~option~~incentive plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of May 18, 2008 and was further amended on June 30, 2011 (the “~~Plan~~”“Old Plan”). The Company ~~has 470,888~~

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED AUGUST 31, 2021

had 177,436 shares of unissued common stock reserved under the Old Plan for issuance as of ~~November~~May 31, 2021. The Old Plan expired June 30, ~~2020.~~ 2021 and all remaining unused shares expired. Subject to the affirmative vote of the shareholders, the Board adopted the 2021 Long-Term Incentive Plan of Ennis, Inc. (the “New Plan”) on April 16, 2021 authorizing 1,033,648 shares of common stock for awards. The New Plan was approved by the shareholders at the Annual Meeting on July 15, 2021 by a majority vote. The New Plan expires June 30, 2031 and all unissued stock will expire on that date.

The exercise price of each stock option granted under ~~the Plan~~either plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten ~~years.~~years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five ~~years.~~years. RSUs can be either time vested or vested based upon the attainment of certain performance metrics over a certain time period. Performance conditions generally are tied to attainment of certain financial targets such as return on invested capital, EBITDA or other similar measures. Awards granted under the Old Plan generally have a performance or vesting period of three years from the date of grant. RSUs are eligible to receive tandem dividend equivalent rights that will allow the award holder to receive dividends at the same time other shareholders receive dividends. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense based on the grant date fair value of the award for stock options, ~~and~~ restricted stock grants and RSUs on a straight-line basis over the requisite service period. The estimated number of shares to be achieved for performance based RSUs is updated each reporting period. For the three months ended ~~November 30,~~August 31, 2021 and August 31, 2020, ~~and November 30, 2019,~~ the Company included in selling, general and administrative expenses, compensation expense related to share-based compensation of ~~$0.2~~$0.6 million and ~~$0.3~~$0.4 million, respectively. For the ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020, ~~and November 30, 2019,~~ the Company included in selling, general and administrative expenses, compensation expense related to share-based compensation of ~~$0.9~~$1.8 million and ~~$1.0~~$0.7 million, respectively.

Stock Options

~~As of November 30, 2020, the~~The Company had 0 outstanding vested or unvested stock ~~options. The Company had no stock option activity for~~options at any time during the ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020.

NaN stock options were granted during the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 and ~~November 30, 2019.~~August 31, 2020.

~~The Company had 0 unvested stock options outstanding at any time during the nine months ended November 30, 2020.~~

Restricted Stock

The following activity occurred with respect to the Company’s restricted stock awards for the ~~nine~~six months ended ~~November 30, 2020:~~August 31, 2021 of which 18,179 shares were granted under the New Plan:

				Weighted
				Average					Weighted
	Number of			Grant Date					Average
��	Shares			Fair Value
Outstanding at March 1, 2020		143,926		$	19.79
						Number of			Grant Date
						Shares			Fair Value
Outstanding at March 1, 2021							119,729		$	18.90
Granted		59,315			17.09		51,920			20.31
Terminated		(10,099	)		19		—			—
Vested		(73,413	)		19.16		(97,362	)		19.77
Outstanding at November 30, 2020		119,729		$	18.90
Outstanding at August 31, 2021							74,287		$	18.73

As of ~~November 30, 2020,~~August 31, 2021, the total remaining unrecognized compensation cost related to unvested restricted stock granted under the Old Plan was approximately ~~$1.6~~$1.2 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.7 years.

Restricted Stock Units

During the six months ended August 31, 2021, 177,977 performance-based RSUs and 44,494 time-based RSUs were granted under the Old Plan. The fair value of the time-based RSUs was estimated based on the fair market value of the Company’s stock on the date of grant of $20.38 per unit. The fair value of the performance-based RSUs, using a Monte Carlo valuation model was $23.17 per unit. The performance measures include a threshold, target and maximum performance level providing the grantees an opportunity to receive more or less shares than targeted depending on actual financial performance. The award will be based on the Company’s return on equity, EBITDA and adjusted for the Company’s Relative Shareholder Return as measured against a defined peer group.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED AUGUST 31, 2021

The performance-based RSUs vest on the third anniversary from the date of grant and the time-based RSUs vest ratably over three years from the date of grant.

The following activity occurred with respect to the Company’s restricted stock units for the six months ended August 31, 2021:


	Time-based				Performance-based
			Weighted				Weighted
			Average				Average
	Number of		Grant Date		Number of		Grant Date
	Shares		Fair Value		Shares		Fair Value
Outstanding at March 1, 2021		—	$	—		—	$	—
Granted		44,494		20.38		177,977		23.17
Terminated		—		—		—		—
Vested		—		—		—		—
Outstanding at August 31, 2021		44,494	$	20.38		177,977	$	23.17

As of August 31, 2021, the total remaining unrecognized compensation cost of time-based RSUs was approximately $0.8 million over a weighted average remaining requisite service period of 2.6 years. The total remaining unrecognized compensation of performance-based RSUs was approximately $3.6 million over a weighted average remaining requisite service period of 2.6 years.

12. Pension Plan

The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately ~~19%~~12% of the Company’s aggregate employees. Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination.

~~ENNIS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED NOVEMBER 30, 2020~~

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


	Three months ended						Nine months ended						Three months ended						Six months ended
	November 30,						November 30,						August 31,						August 31,
	2020			2019			2020			2019			2021			2020			2021			2020
Components of net periodic benefit cost
Service cost	$	318		$	272		$	954		$	816		$	268		$	318		$	537		$	636
Interest cost		438			564			1,315			1,691			421			439			841			877
Expected return on plan assets		(1,019	)		(1,049	)		(3,056	)		(3,148	)		(930	)		(1,018	)		(1,861	)		(2,037	)
Amortization of:
Unrecognized net loss		840			509			2,519			1,527			640			839			1,280			1,679
Net periodic benefit cost	$	577		$	296		$	1,732		$	886		$	399		$	578		$	797		$	1,155

The Company is required to make contributions to the Pension Plan. These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a ~~25-year~~25-year average of interest rates plus or minus a corridor. The Company’s minimum required contribution to the Pension Plan is 0 for the Pension Plan year ending February 28, ~~2021.~~2022. Assuming a stable funding status, the Company would expect to make a cash contribution to the Pension Plan of between ~~$1.5~~$1.5 million and ~~$3.0~~$3.0 million per year. However, changes in actual investment returns or in discount rates could change this amount significantly. At ~~November 30, 2020,~~August 31, 2021, we had an unfunded pension liability recorded on our balance sheet of ~~$8.9~~$6.3 million. Management estimates the future lump-sum payments will exceed the settlement threshold resulting in a probable pension settlement charge of approximately $2.3 million. The settlement charges are non-cash charges that accelerate the recognition of unrecognized pension benefit costs, that would have been incurred in subsequent periods, when lump sum payments exceed a threshold of service and interest cost for the period.

ENNIS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED AUGUST 31, 2021

13. Earnings Per Share

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

~~As of November 30, 2020 and November 30, 2019, 0 options were outstanding. The~~The following table sets forth the computation for basic and diluted earnings per share for the periods indicated:


	Three months ended		Six months ended
	August 31,		August 31,
	2021	2020		2021	2020
Basic weighted average common shares outstanding	26,080,121	25,974,412		26,055,056	25,965,370
Effect of dilutive RSUs	90,275	—		91,365	—
Diluted weighted average common shares outstanding	26,170,396	25,974,412		26,146,421	25,965,370
Earnings per share
Net earnings - basic	$0.29	$0.25		$0.57	$0.41
Net earnings - diluted	$0.29	$0.25		$0.57	$0.41
Cash dividends	$0.250	$0.225		$0.475	$0.450

The Company treats unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share. Our unvested restricted shares participate on an equal basis with common shares; therefore, there is 0 difference in undistributed earnings allocated to each participating security. Accordingly, the presentation above is prepared on a combined basis. NaN options were outstanding for the six months ended August 31, 2021 and August 31, 2020.

Three months ended

Nine months ended

November 30,

November 30,

2020

2019

2020

2019

Basic weighted average common shares outstanding

25,974,006

26,010,571

25,978,461

26,034,617

Effect of dilutive options

—

—

—

—

Diluted weighted average common shares outstanding

25,974,006

26,010,571

25,978,461

26,034,617

Earnings (loss) per share

Net earnings - basic

$
0.32

$
0.41

$
0.73

$
1.14

Net earnings - diluted

$
0.32

$
0.41

$
0.73

$
1.14

Cash dividends

$
0.225

$
0.225

$
0.675

$
0.675

~~ENNIS, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED NOVEMBER 30, 2020~~

14. Concentrations of Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and trade receivables. Cash is placed with high-credit quality financial institutions. ~~Although bad debt expense increased during the quarter due to the economic impact of COVID-19, the~~The Company believes its credit risk with respect to trade receivables is limited due to industry and geographic diversification. As disclosed on the consolidated balance sheets, the Company maintains an allowance for doubtful receivables to cover the Company’s estimate of credit losses associated with accounts receivable.

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

For the purposes of the consolidated statements of cash flows, the Company considers cash to include cash on hand and in bank accounts. The Federal Deposit Insurance Corporation insures accounts up to ~~$250,000.~~$250,000. At ~~November 30, 2020,~~August 31, 2021, cash balances included ~~$88.2~~$81.0 million that was not federally insured because it represented amounts in individual accounts above the federally insured limit for each such account. This at-risk amount is subject to fluctuation on a daily basis. While management does not believe there is significant risk with respect to such deposits, no assurance can be made that the Company will not experience losses on the Company’s deposits.

On ~~December~~September 17, ~~2020,~~2021 the Board declared a quarterly dividend on the ~~Company’s~~Company's common stock of ~~22.5~~25.0 cents per share, which will be paid on ~~February 4,~~November 5, 2021 to shareholders of record as of ~~January 7, 2021.~~October 8, 2021. The expected payout for this dividend is approximately ~~$5.9~~$6.5 million.

On December 29, 2020, the Company issued a press release announcing that one of its wholly-owned subsidiaries entered into a Letter of Intent to acquire the assets of Infoseal LLC in Roanoke, Virginia, with a closing expected effective close of business December 31, 2020. The contemplated transaction was in fact signed and closed as of December 31, 2020.

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

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read together with the unaudited consolidated financial statements and related notes of Ennis, Inc. (collectively with its subsidiaries, the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”), included in Part 1, Item 1 of this report, and with the audited consolidated financial statements and the related notes of the Company included in our Annual Report on Form 10-K for the fiscal year ended February ~~29, 2020.~~ 28, 2021.

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

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

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

We believe these forward-looking statements are based upon reasonable assumptions. All such statements involve risks and uncertainties, and as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including but not limited to: general economic, business and labor conditions and the potential impact on our operations; our ability to implement our strategic initiatives and control our operational costs; dependence on a limited number of key suppliers; our ability to recover the rising cost of raw materials and other costs (i.e., energy, freight, labor, benefit costs, etc.) in markets that are highly price competitive and volatile; uninsured losses, including those from natural disasters, catastrophes, pandemics, theft or sabotage; the impact of the novel coronavirus (COVID-19) pandemic or future pandemics on the U.S. and local economies, our business operations, our workforce, our supply chain and our customer base; our ability to timely or adequately respond to technological changes in the industry; the impact of the Internet and other electronic media on the demand for forms and printed materials; the impact of foreign competition, tariffs, trade regulations and import restrictions; ~~changes in economic conditions;~~ customer credit risk; competitors’ pricing strategies; a decline in business volume and profitability could result in an impairment in our reported goodwill negatively impacting our operational results; our ability to retain key management personnel; our ability to identify, manage or integrate acquisitions; ~~our ability to protect our information systems from cybercrime or other disruptions;~~ and changes in government ~~regulations.~~regulations including measures intended to minimize the impact of COVID-19. In addition to the factors indicated above, you should carefully consider the risks described in and incorporated by reference herein and in the risk factors in our Annual Report on Form 10-K for the fiscal year ended February ~~29, 2020 and our Quarterly Report on Form 10-Q for the quarter ended May 31, 2020~~28, 2021 before making an investment in our common stock.

Ennis, Inc. (formerly Ennis Business Forms, Inc.) (collectively with its subsidiaries, “the “Company,” “Registrant,” Ennis,” or “we,” “us,” or “our”) was organized under the laws of Texas in 1909. ~~The Company~~We and ~~its~~our subsidiaries print and manufacture a broad line of business forms and other business products. We distribute business products and forms throughout the United States primarily through independent distributors. This distributor channel encompasses independent print distributors, commercial printers, direct mail, fulfillment companies, payroll and accounts payable software companies, and advertising agencies, among others. We also sell products to our competitors, from time to time, to satisfy their customers’ needs.

For a discussion regarding the impact of the ongoing novel coronavirus (COVID-19) pandemic on our business, please see Business Challenges—COVID-19 Pandemic and Results of Operations, below.

Our management believes we are the largest provider of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders to independent distributors in the United States.

We are in the business of manufacturing, designing, and selling business forms and other printed business products primarily to distributors located in the United States. We operate 57 manufacturing plants throughout the United States in 20 strategically located ~~states.~~states as one reportable segment. Approximately ~~94%~~92% of the business products we manufacture are custom and semi-custom products, constructed in a wide variety of sizes, colors, number of parts, and quantities on an individual job basis, depending upon the customers’ specifications.

The products we sell include snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure sensitive products in short, medium and long runs under the following labels: Ennis®, Royal Business Forms®, Block Graphics®, Specialized Printed Forms®, 360º Custom LabelsSM, ColorWorx®, Enfusion®, Uncompromised Check Solutions®, VersaSeal®, Ad ConceptsSM, FormSource LimitedSM, Star Award Ribbon Company®, Witt Printing®, B&D Litho®, Genforms®, PrintGraphics®, Calibrated Forms®, PrintXcel®, Printegra®, Falcon Business FormsSM, Forms ManufacturersSM, Mutual Graphics®, TRI-C Business FormsSM, Major Business SystemsSM, Independent PrintingSM, Hoosier Data Forms®, Hayes Graphics®, Wright Business GraphicsSM, Wright 360SM, Integrated Print & GraphicsSM, the Flesh CompanySM, Impressions DirectSM, Ace FormsSM, and ~~Ace Forms~~^AmeriPrintSM. We also sell the Adams McClure® brand (which provides Point of Purchase advertising for large franchise and fast food chains as well as kitting and fulfillment); the Admore®, Folder Express®, and Independent Folders® brands (which provide presentation folders and document folders); Ennis Tag & LabelSM (which provides custom printed, high performance labels and custom and stock tags); Allen-Bailey Tag & LabelSM, Atlas Tag & Label®, Kay Toledo Tag®, and Special Service Partners® (SSP) (which provides custom and stock tags and labels); Trade Envelopes®, Block Graphics®, Wisco®, and National Imprint Corporation® (which provide custom and imprinted envelopes) and Northstar® and General Financial Supply® (which provide financial and security documents); InfosealSM and PrintXcel® (which provide custom and stock pressure seal documents). We sell predominantly through independent distributors, as well as ~~occasional sales~~to many of ~~our products to~~ our competitors. Northstar Computer Forms, Inc., one of our wholly-owned subsidiaries, also sells direct to a small number of customers, generally large banking organizations (where a distributor is not acceptable or available to the end-user). Adams McClure, LP, a wholly-owned subsidiary, also sells direct to a small number of customers, where sales are generally through advertising agencies.

The printing industry generally sells its products either predominantly to end users, a market dominated by a few large manufacturers, such as R.R. Donnelley and Sons, Staples, Inc., Standard Register Co. (a subsidiary of Taylor Corporation), and Cenveo, Inc., or, like the Company, through a variety of independent distributors and distributor groups. While it is not possible, because of the lack of adequate public statistical information, to determine the Company’s share of the total business products market, management believes the Company is the largest producer of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders in the United States distributing primarily through independent distributors.

There are a number of competitors that operate in this segment, ranging in size from single employee-owned operations to multi-plant organizations. We believe our strategic locations and buying power permit us to compete on a favorable basis within the distributor market on competitive factors, such as service, quality, and price.

Distribution of business forms and other business products throughout the United States is primarily done through independent distributors, including business forms distributors, resellers, direct mail, commercial printers, payroll and accounts payable software companies, and advertising agencies.

Raw materials principally consist of a wide variety of weights, widths, colors, sizes, and qualities of paper for business products purchased primarily from one major supplier at favorable prices based on the volume of business.

Business products usage in the printing industry is generally not seasonal. General economic conditions and contraction of the traditional business forms industry are the predominant factors in quarterly volume fluctuations.

We have completed ~~two~~a number of acquisitions in ~~fiscal~~recent years. In the prior year ~~2020. On July 15, 2019,~~on December 31, 2020, we acquired ~~all~~ the ~~outstanding stock~~assets of ~~The Flesh Company~~Infoseal LLC (“~~Flesh~~”Infoseal”) for approximately $9.9 million (which includes potential earn-out consideration of up to $500,000) plus the assumption of trade payables, subject to final working capital and certain other adjustments. The earn-out consideration is capped at $500,000 and is payable over the four years following the closing if certain minimum operating income levels are achieved. We recorded intangible assets with definite lives of approximately $1.2 million in ~~connection with the transaction. Flesh, together with its~~

~~wholly owned subsidiary, Impressions Direct, Inc. (“Impressions Direct~~”), is a printing company with two locations, with the St. Louis, Missouri location containing Flesh’s corporate office and the direct mail operations of Impressions Direct, and the Parsons, Kansas location containing Flesh’s main manufacturing facility and warehouse.Roanoke, Virginia. The acquisition of ~~Flesh,~~Infoseal, which prior to the acquisition generated approximately ~~$31.0 million in sales for its fiscal year ended September 30, 2018, expanded our operations with respect to business forms, checks, direct mail services, integrated products and labels.~~

~~On March 16, 2019, we acquired the assets of Integrated Print & Graphics (“Integrated~~”), which is based in South Elgin, Illinois, for $8.9 million in cash plus the assumption of trade payables, subject to certain adjustments. Goodwill of $893,000 recognized as a part of the acquisition is deductible for tax purposes. We also recorded intangible assets with definite lives of approximately $1.8 million in connection with the transaction. The acquisition of Integrated, which prior to the acquisition generated approximately $20.0$19.2 million in sales for its fiscal year ended December 31, ~~2018, created~~2020, creates additional capabilities ~~within~~and expertise to our ~~high color commercial print~~product offering including our existing VersaSeal pressure seal product line.

On June 1, 2021, we acquired the assets and business of AmeriPrint in Harvard, Illinois. The acquisition of Ameriprint, which prior to the acquisition generated approximately $6.5 million in sales for its fiscal year ended December 31, 2020, brings added capabilities and expertise to our expanding product offering including barcoding and variable imaging.

Our industry is currently experiencing consolidation of traditional supply channels, product obsolescence, paper supplier capacity adjustments, and increased pricing and potential supply allocations due to demand/supply curve imbalance. Technology advances have made electronic distribution of documents, internet hosting, digital printing and print-on-demand valid, cost-effective alternatives to traditional custom-printed documents and customer communications. Improved equipment has become more accessible to our competitors due to the continued low interest rate environment. We face highly competitive conditions throughout our supply chain in an already over-supplied, price-competitive print industry. The challenges of our business include the following:

COVID-19 Pandemic – The global spread of the novel strain of COVID-19 has significantly impacted health and economic conditions throughout the United States and the world, including the markets in which we operate. In response to COVID-19, federal, state and local authorities have recommended social distancing and have imposed various restrictions, including quarantine and isolation measures, mandatory closures of businesses deemed “non-essential” in certain jurisdictions. As of the date of this report, our plants continue to be deemed “essential,” largely due to our business’s support of many important sectors of the economy, including healthcare, government, food and beverage and banking. The U.S. economy continues to be significantly impacted by the COVID-19 pandemic and parts of the economy have started to re-open as vaccinations become more prevalent, but remain subject to ongoing surges and local shutdowns, creating a very fluid economic environment. ~~As a recent indicator, according to the Bureau of Labor Statistics (“BLS”), total nonfarm payroll employment rose by 245,000~~Current governmental statistics have indicated an increase in ~~November, reflecting a degree of resumption of~~ economic activity that had previously been curtailed due to the COVID-19 pandemic and efforts to contain it. According to the BLS report, in November notable job gains occurred in transportation and warehousing, professional and business services, and health care, whereas employment levels declined in government and retail trade. These ~~BLS~~ statistics provide evidence that various sectors continue to improve, while others have not, which we believe was reflected in our sequential sales increase and improvements in our gross profit margin and operational margin during the ~~third~~first quarter. ~~Even so, we expect the pandemic to continue to have a negative impact on our financial condition and operational results, on a comparative basis, until at least the end of this fiscal year.~~ While the impacts of the pandemic have been significant, ~~they~~our results of operations were within our forecasted parameters for the period ended ~~November 30, 2020.~~August 31, 2021.

The following is a summary of our recent and anticipated actions in response to COVID-19 and its impact on our business.

We believe our strong liquidity position will help us mitigate the ongoing adverse impacts of COVID-19. On ~~November 30, 2020~~August 31, 2021, we had ~~$89.4~~$82.1 million in cash, in addition to $99.4 million available under our credit facility, if needed. During the period, our cash position increased by ~~$21.1~~$6.9 million ~~($5.5 million from August 31, 2020),~~ and our working capital position increased by ~~$15.6~~$8.4 million from February ~~29, 2020 ($6.9 million from August 31, 2020).~~28, 2021. In addition, our liquidity and debt ratios have ~~all improved since the start of~~remained stable throughout the pandemic with our current ratio (calculated by dividing our current assets by our current liabilities) ~~increasing from 3.95 to 4.89,~~of 4.0 at August 31, 2021 and 4.20 at February 28, 2021, and our quick ratio (calculated by dividing our current assets less inventories by our current liabilities) ~~increasing from 3.03 to 3.91,~~of 3.01 at August 31, 2021 and ~~our~~3.29 at February 28, 2021. Our net debt to equity ratio (after application of cash) ~~decreasing from .01 to -.09.~~-.05 at August 31, 2021 and -.04 at February 28, 2021.

We continue to closely monitor and manage our outstanding trade receivables and inventories. During the ~~third~~current quarter, our days’ sales in our receivables ~~remained fairly constant at about~~decreased from 39 days to 35 days, ~~and~~ while our days’ sales of inventory ~~(33 days)~~

increased ~~slightly~~ from ~~February 29, 2020 (30 days), it decreased from August 31, 2020 (35 days).~~34 to 37 days. The Company continues to monitor incoming orders and is adjusting its raw material purchases accordingly.

To date, COVID-19 has not materially impacted, nor do we currently expect it to materially impact, the supply chain for the products we sell. Most of our products are sourced domestically from suppliers deemed “essential” by the government, and therefore currently remain in ~~operation, and we have been able to switch from impacted suppliers to non-impacted suppliers in several instances since the outbreak.~~operation. However, if one or more of our major suppliers are negatively impacted by the COVID-19 pandemic, through plant closures, deteriorating financial condition, or otherwise, it could adversely affect our operational results and financial condition.

COVID-19 has severely impacted global economic activity, including the printing industry in the United States. ~~To date,~~In response to the sales impact of the COVID-19 pandemic, we made modifications to our ~~traditional tag~~cost structure by reducing employee cost, ceasing operations at an under-utilized facility, as well as exiting two facilities with expiring leases and ~~folder operations, have been impacted more severely than~~moving production to our ~~specialty products operations, including those that service~~other facilities. We are in the ~~medical, banking~~process of consolidating three underperforming manufacturing facilities into existing

locations with excess capacity to reduce future costs and ~~other related industries.~~improve our operational efficiency. We will continue to monitor incoming order volume so that we can proactively adjust our costs accordingly. ~~While economic activity remains depressed due to the pandemic, we will continue to monitor projected sales and our cost structure.~~ We believe the modifications to our cost structure in response to the sales impact of the COVID-19 pandemic will not materially impact our ability to service increased customer demand ~~when~~as economic conditions improve. During the ~~third quarter,~~six months ended August 31, 2021, our gross profit margin improved to ~~30.4% from our sequential quarter of 29.0% and~~29.4% from the prior year’s ~~third quarter~~period of ~~29.5%.~~27.9% and our operating margin improved to ~~12.5% from our sequential quarter of 10.3% and~~10.8% from the prior year’s ~~third quarter~~period of ~~12.3%~~8.4%.

We continue to make capital expenditures for operational maintenance purposes, as may be required. Additionally, we will carefully review and make new capital expenditures for equipment to the extent such expenditures make economic sense by improving our operations and not jeopardizing our strong liquidity position.

There ~~continues~~continue to be many uncertainties regarding the impact of the COVID-19 pandemic, including the scope of scientific and health issues. We continue to closely monitor the impact of the COVID-19 pandemic, including emerging variants, on all aspects of our business, including how it is affecting our employees, customers, supply chain and distribution network. The ~~recent approval~~overall magnitude of ~~two vaccines in~~ the ~~U.S. have improved the likelihood that there is a solution to improve or resolve~~impact of the pandemic ~~but~~on our operating and financial results remains uncertain and will largely depend on the ~~logistics of immunizing the U.S. population appear to be challenging amount the many lockdowns occurring in parts of the country. It is likely that the anticipated~~ duration of the pandemic ~~may not be~~and the measures implemented in response, as ~~long~~well as ~~previously feared with~~ the ~~arrival~~effect on our customers and suppliers. Given these factors, we are unable to reliably forecast the ultimate impact of ~~viable vaccines, but that benefit might be delayed~~COVID-19 on our business, including due to factors discussed under the ~~extent~~caption “Risk Factors” in Item 1A of ~~local, regional and economic, social, and political disruption occurring as~~our Annual Report on Form 10-K for the ~~confirmed cases grow.~~fiscal year ended February 28, 2021. For further information, please see “Cautionary Note Regarding Forward Looking Statements,” above and “Risk Factors” contained within our Annual Report on Form 10-K for the fiscal year ended February ~~29, 2020 and Quarterly Report on Form 10-Q for the quarter ended May 31, 2020.~~

Transformation of our portfolio of products – While traditional business documents are essential in order to conduct business, many are being replaced through the use of cheaper paper grades or imported paper, or devalued with advances in digital technologies, causing steady declines in demand for a portion of our current product line. In addition, the impact of COVID-19 on the speed of this transformation is unknown, but it is expected to accelerate the decline for some of our products. Transforming our product offerings in order to continue to provide innovative, valuable solutions through lower labor and fixed charges to our customers on a proactive basis will require us to make investments in new and existing technology and to develop key strategic business relationships, such as print-on-demand services and product offerings that assist customers in their transition to digital business environments. In addition, we will continue to look for new market opportunities and niches through acquisitions, such as the addition of our envelope offerings, tag offerings, folder offerings, healthcare wristbands, specialty packaging, direct mail, pressure seal products, secure document solutions, innovative in-mold label offerings and long-run integrated products with high color web printing, which provide us with an opportunity for growth and differentiate us from our competition. The ability to make investments in new and existing technology and/or to acquire new market opportunities through acquisitions is dependent on the Company’s liquidity and operational results. While currently the pandemic has not materially impacted our liquidity and it is not currently expected to, a protracted delay in the economy recovering could have a negative impact on our continued ability to make the aforementioned investments or to doconsummate acquisitions.

Production capacity and price competition within our industry – Changes in the value of the U.S. dollar can have ~~a significant~~an impact on the pricing and supply of paper. The weakening of the U.S. dollar will usually result in the dissipation of any pricing advantage that foreign imports have over domestic suppliers, which typically results in lower levels of imported papers and an increase in domestic exports. With increased pricing power, domestic paper producers can better control the supply of paper by eliminating capacity or changing the products produced on their large paper machines. The strengthening of the U.S. dollar usually has the opposite effect: more cheap imported paper; less domestic exports; and lower pricing power in the hands of domestic paper producers. Domestic paper suppliers typically seek to balance supply and demand, including by (if possible) taking capacity out of the market, whether by taking production off-line or switching production to alternative paper products. Generally, if mills are running at high capacity, suppliers are able to raise prices. ~~For the latter part of fiscal~~

Paper production declined last year 2020, with the strengthening of the U.S. dollar, imports began to flow back into the domestic marketplace. This development, along with continued slowing of domestic demand, resulted in renewed marketing of certain paper grades that previously had been placed on allocation. Consequently, spot pricing had become very competitive earlier this year. The uncoated paper market was relatively balanced this quarter as overall capacity reductions has improved operating rates, and inventories have declined. U.S. mills have moved back to more normal operating levels. Coated paper has shown some improvement due to ~~several major closures, causing~~the pandemic and, as the economy improved, increased demand initially was satisfied with existing inventory at the paper mills. While paper mills now are operating ~~rates~~at a very high capacity, they are basically producing to ~~climb.~~fill orders rather than stock inventory, which is contributing to the tight market in some grades of paper. Paper prices have also increased due to global logistics issues that have delayed and reduced imports that have typically filled gaps in domestic supply. While the availability of paper in the North American market is very low, our strong vendor relationship with our paper supplier allows us to meet customer demand for their business product needs. We have been adjusting our pricing to cover paper inflation during the year, but the impact of inflation with most of our other vendors, as well as the labor market, has had a slight impact on gross profit margin. We

anticipate additional pricing adjustments to cover all aspects of our supply chain and our labor force to maintain our gross profit margins at their historical levels. As such, pricing during the second half of fiscal ~~2021 and into the beginning of fiscal~~ 2022 ~~was~~is currently expected to ~~be relatively stable.~~ increase.

The COVID-19 pandemic has reduced the demand for both coated and uncoated papers faster than previously expected in the first quarter of fiscal 2021 and paper companies have idled some of their mills or converted to linerboard products to adjust supply and reduce inventory levels. As the economy has ~~begun to improve,~~improved, demand has increased in ~~the third quarter~~2021 for coated and uncoated freesheet papers which has reduced the excess inventory in the ~~market. It is unclear whether this is a temporary situation or not.~~market along with the reduction in supply from the closing of several paper mills. Regardless of these factors, many of which are cyclical, we continue to believe paper pricing will remain in a range which will not unfavorably impact our ~~margins.~~margins over the long term. Additionally, the possibility of paper shortages in the market is not a major concern due to our primary material supplier’s commitment to the Company. Consistent with our historical practice, we intend to continue to focus on effectively managing and controlling our product costs through the use of forecasting, production and costing models, as well as working closely with our domestic suppliers to ~~reduce~~manage our procurement and logistics costs, in order to minimize effects on our operational results. In addition, we will continue to look for ways to reduce and leverage our fixed ~~costs.~~costs as we consolidate plants where leases expire and sell unused real estate where we have the opportunity to relocate the business to another facility.

Continued consolidation of our customers – Our customers are distributors, many of which are consolidating or are being acquired by competitors. We continue to maintain a majority of the business we have had with our customers historically, but it is possible that these consolidations and acquisitions, which we expect to continue in the future, ultimately will impact our margins and sales.

In preparing our consolidated financial statements, we are required to make estimates and assumptions that affect the disclosures and reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and judgments on an ongoing basis, including those related to allowance for doubtful receivables, inventory valuations, property, plant and equipment, intangible assets, pension plan obligations, accrued liabilities and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We believe our accounting policies related to the aforementioned items are the most critical due to their effect on our more significant estimates and judgments used in preparation of our consolidated financial statements. For additional information, reference is made to the Critical Accounting Policies and Estimates section of our Annual Report on Form 10-K for the fiscal year ended February ~~29, 2020.~~28, 2021.

The discussion that follows provides information which we believe is relevant to an understanding of our results of operations and financial condition. The discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto, which are incorporated herein by reference. The operating results of the Company for the three and ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 and the comparative period for ~~2019~~2020 are set forth in the unaudited consolidated financial information included in the tables below.


Unaudited Consolidated Statements of	Three Months Ended November 30,									Nine Months Ended November 30,									Three Months Ended August 31,										Six Months Ended August 31,
Operations - Data (in thousands)	2020					2019				2020					2019				2021					2020					2021					2020
Net sales	$	92,443		100.0	%	$	114,860	100.0	%	$	268,051		100.0	%	$	331,709	100.0	%	$	100,451		100.0	%	$	86,612		100.0	%	$	197,381		100.0	%	$	175,608		100.0	%
Cost of goods sold		64,355		69.6			81,024	70.5			190,901		71.2			232,719	70.2			71,550		71.2			61,457		71.0			139,294		70.6			126,546		72.1
Gross profit margin		28,088		30.4			33,836	29.5			77,150		28.8			98,990	29.8			28,901		28.8			25,155		29.0			58,087		29.4			49,062		27.9
Selling, general and administrative		16,690		18.1			19,751	17.2			51,348		19.2			59,098	17.8			18,095		18.0			16,535		19.1			37,010		18.8			34,658		19.7
(Gain) loss from disposal of assets		(159	)	(0.2	)		4.0	—			(571	)	(0.2	)		4.0	—			1		—			(300	)	(0.4	)		(276	)	(0.1	)		(412	)	(0.2	)
Income from operations		11,557		12.5			14,081	12.3			26,373		9.8			39,888	12.0			10,805		10.8			8,920		10.3			21,353		10.8			14,816		8.4
Other income (expense)		(255	)	(0.3	)		180	0.1			(739	)	(0.2	)		271	0.1			(148	)	(0.1	)		(243	)	(0.3	)		(262	)	(0.1	)		(484	)	(0.3	)
Earnings before income taxes		11,302		12.2			14,261	12.4			25,634		9.6			40,159	12.1			10,657		10.6			8,677		10.0			21,091		10.7			14,332		8.1
Provision for income taxes		2,939		3.2			3,708	3.2			6,665		2.5			10,441	3.1			3,197		3.2			2,256		2.6			6,327		3.2			3,726		2.1
Net earnings	$	8,363		9.0	%	$	10,553	9.2	%	$	18,969		7.1	%	$	29,718	9.0	%	$	7,460		7.4	%	$	6,421		7.4	%	$	14,764		7.5	%	$	10,606		6.0	%

Three months ended ~~November 30, 2020~~August 31, 2021 compared to three months ended ~~November 30, 2019~~August 31, 2020

Net Sales. Our net sales were ~~$92.4~~$100.5 million for the quarter ended ~~November 30, 2020,~~August 31, 2021, compared to ~~$114.9~~$86.6 million for the same quarter in the prior year, ~~a decrease~~an increase of ~~$22.5~~$13.9 million, or ~~19.6%~~16.0%. Our net sales increased on a sequential quarter basis as well, $3.5 million or 3.6% from $96.9 million for the quarter ~~were significantly~~ended May 31, 2021 to $100.5 million for the current quarter. While our revenues continue to be impacted ~~by economic conditions driven~~ by the COVID-19 pandemic, ~~While down versus prior~~some of our customers are seeing sales return to normalized levels. Infoseal, our acquisition in January of last fiscal year ~~third quarter~~and AmeriPrint, our acquisition from June 1, 2021, added $6.7 million in sales ~~increased 6.7% from~~for the ~~second quarter 2020. As indicated earlier, various segments of the economy were trending up and that growth impact was reflected in the sequential quarter sales growth.~~current quarter.

Cost of Goods Sold and Gross Profit Margin. Our cost of goods sold ~~decreased $16.6~~increased $10.1 million, or ~~20.5%~~16.4%, from ~~$81.0~~$61.5 million for the three months ended ~~November 30, 2019~~August 31, 2020 to ~~$64.4~~$71.6 million for the three months ended November 30, 2020. While our plants were deemed “essential” and as such have remained open, our sales for the quarter continued to be significantly impacted by reduced economic activity due to COVID-19 resulting in a $5.7 decrease of our gross profit margin.August 31, 2021. Our gross profit margin was ~~$28.1~~$28.9 million for the quarter ended ~~November 30, 2020~~August 31, 2021 compared to ~~$33.8~~$25.2 million for the same quarter in the prior year. Our modification to our cost structure in response to the sales impact of the COVID-19 pandemic and the integration of our recent acquisitions resulted in improvements in our gross profit margin as a percentage of sales. During the thirdsecond quarter ~~our~~ gross profit margin percentage ~~improved~~slightly decreased from 29.0% in 2020 to ~~30.4% from our sequential quarter of 29.0% and from the prior year’s third quarter of 29.5%.~~ 28.8% in 2021 due primarily to higher inflationary factors.

Selling, general, and administrative expense. For the three months ended ~~November 30, 2020,~~August 31, 2021, our selling, general, and administrative (“SG&A”) expenses were ~~$16.7~~$18.1 million compared to ~~$19.8~~$16.5 million for the three months ended ~~November 30, 2019, a~~

~~decrease~~ an increase of ~~$3.1~~$1.6 million, or ~~15.7%~~9.4%. As a percentage of net sales, SG&A expenses for the current quarter were ~~18.1%~~18.0% and ~~17.2%~~19.1% for the three months ended ~~November 30,~~August 31, 2021 and August 31, 2020, respectively. Our acquisition of Infoseal and ~~November 30, 2019, respectively.~~AmeriPrint impacted our SG&A expenses by approximately $0.7 million. As part of our on-going corporate strategy, we continue to look for ways to reduce and more fully leverage our SG&A expenses.

Gain from disposal of assets. The ~~$0.2~~$0.3 million net gain from disposal of assets during the ~~current~~prior year quarter is primarily attributed to the sale of underutilized land and buildings. Remaining product from these facilities ~~has been~~was transitioned to another Company facility.

Income from operations. ~~Our~~Primarily due to factors described above, our income from operations ~~during the quarter was significantly impacted by the decline in demand in our products due to COVID-19. For~~for the three months ended ~~November 30, 2020 our income from operations~~August 31, 2021 was ~~$11.6~~$10.8 million, or ~~12.5%~~10.8% of net sales, as compared to ~~$14.1~~$8.9 million, or ~~12.3%~~10.3% of net sales, for the three months ended ~~November 30, 2019. While down on a comparable basis, our operating income is up significantly~~August 31, 2020 and increased on a sequential quarter basis as well from ~~$8.9~~$10.5 million ~~or 10.3%~~for the quarter ended May 31, 2021.

Other expense. Other expense was $0.1 million for the three months ended August 31, ~~2020.~~

~~Other income (expense).~~ ~~Other~~2021 compared to expense ~~was $255,000~~of $0.2 million for the three months ended ~~November 30, 2020 compared to income of $180,000 for the three months ended November 30, 2019.~~August 31, 2020. This ~~increase~~decrease was primarily due to a decrease in our ~~interest income of $200,000 and an increase in our~~ pension expense of ~~$235,000~~$0.1 million over the comparable quarter. ~~Our interest expense for the current quarter was negligible due to the payoff of amounts borrowed under our credit facility during the 2020 fiscal year.~~

Provision for income taxes. Our effective tax rate was 30.0% for the three months ended August 31, 2021 as compared to 26.0% for the three months ended ~~November 30, 2020 and~~August 31, 2020. The primary reason for the ~~three months ended November 30, 2019.~~increase in the effective tax rate is permanent non-deductible expense resulting from probable distributions this year from our deferred compensation plan which was terminated last fiscal year.

Net earnings. Net earnings, due to the factors above, were ~~$8.4~~$7.5 million for the three months ended ~~November 30, 2020~~August 31, 2021 as compared to ~~$10.6~~$6.4 million for the comparable quarter in the prior year, ~~a decrease~~an increase of ~~$2.2~~$1.0 million. Net earnings per diluted share for the three months ended ~~November 30, 2020~~August 31, 2021 was ~~$0.32,~~$0.29, compared to ~~$0.41~~$0.25 for the same quarter in the prior year. Our acquisition of Infoseal and AmeriPrint added $0.02 to our diluted earnings per share.

Net Sales. Our net sales were $197.4 million for the six-month period ended August 31, 2021, compared to $175.6 million for same period last year, or an increase of 12.4%. While our ~~comparable earnings~~revenues continue to be impacted by the COVID-19 pandemic, ~~we did increase~~some of our ~~earnings~~customers are seeing sales return to normalized levels. Infoseal, our acquisition in January of last fiscal year and AmeriPrint our acquisition in June 1, 2021, added $11.9 million in sales during the ~~current quarter by $0.07 per diluted share, or 28% over our sequential quarter’s result of $0.25 per diluted share.~~

~~Nine~~six months ended ~~November 30, 2020 compared to nine months ended November 30, 2019~~

~~Net Sales.~~ Our net sales were $268.1 million for the nine-month period ended November 30, 2020, compared to $331.7 million for same period last year, or a decrease of 19.2%. Our sales for the period were significantly impacted by economic conditions driven by the COVID-19 pandemic and resulted in a decrease in sales volume. Our previous year acquisitions impacted our comparable net sales by approximately $10.2 million during the nine months ended November 30, 2020.August 31, 2021.

Cost of Goods ~~Sold.~~ Sold and Gross Profit Margin. Our cost of goods sold was ~~$190.9~~$139.3 million for the ~~nine~~six months ended ~~November 30, 2020,~~August 31, 2021, compared to ~~$232.7~~$126.5 million for the same period last year, a ~~decrease~~increase of ~~$41.8~~$12.8 million, or ~~18.0%~~10.1%. Our ~~gross profit~~ margin was ~~$77.2~~$58.1 million for the ~~nine-month~~six-month period ended ~~November 30, 2020,~~August 31, 2021, or ~~28.8%~~29.4%. This compares to 29.8% for the same nine-month period last year. While our plants have been deemed “essential” and as such have remained open, our sales for the period were significantly impacted by reduced economic activity due to COVID-19. As such, our reduced production levels adversely impacted our factory utilization and efficiency factors during the first and second quarter. Our modification to our cost structure inIn response to the sales impact of the COVID-19 pandemic, we made modifications to our cost structure by reducing employee cost, ceasing operations at an under-utilized facility, as well as exiting two facilities with expiring leases and ~~the integration of~~moving production to our ~~recent acquisitions~~other facilities. These modifications to our cost structure resulted in improvements into our gross profit margin ~~as a percentage of sales during~~from 27.9% for the ~~third quarter.~~same six-month period last year.

Selling, general, and administrative ~~expense~~expense. . Our SG&A expenses were ~~$51.3~~$37.0 million for the ~~nine~~six months ended ~~November 30, 2020,~~August 31, 2021, compared to ~~$59.1~~$34.7 million for the same period last year, or ~~a decrease~~an increase of ~~13.2%~~6.8%. As a percentage of sales, the SG&A expenses were ~~19.2%~~18.8% and ~~17.8%~~19.7% for the ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020, ~~and November 30, 2019,~~ respectively. As part of our ~~on-going~~ongoing corporate strategy, we continue to look for ways to reduce and more fully leverage our SG&A expenses. During the period, the Board approved a change to our “Long-Term Incentive Equity Awards” program to a three-year performance period from a one-year performance period. A bridge award of restricted stock was granted during the transition and resulted in the recognition of an additional $0.8 million in restricted stock expense. Our acquisition of Infoseal and AmeriPrint impacted our SG&A expenses by approximately $1.3 million.

Gain from disposal of assets. The ~~$0.6~~$0.3 million net gain from disposal of assets during the ~~nine~~six months ended ~~November 30,~~August 31, 2021 is primarily attributed to the sale of a previously held-for-sale facility that had transferred its operations to another facility. The $0.4 million net gain from disposal of assets during the six months ended August 31, 2020 is primarily attributed to the sale of manufacturing underutilized equipment, land and buildings.

Income from operations. Our income from continuing operations for the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 was ~~$26.4~~$21.4 million, or ~~9.8%~~10.8% of sales, as compared to ~~$39.9~~$14.8 million, or ~~12.0%~~8.4% of sales, for the ~~nine~~six months ended ~~November 30, 2019.~~August 31, 2020.

Other ~~income (expense).~~expense. Other expense for the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 was ~~$0.7~~$0.3 million as compared to ~~income of $0.3~~$0.5 million expense for the ~~nine~~six months ended ~~November 30, 2019.~~August 31, 2020. This ~~increase~~decrease was primarily due to the ~~increase~~decrease in pension expense ~~of $0.7 million and a decrease in interest income of $0.9 million offset by a decrease in interest expense of $0.6 million~~ for the current fiscal year. ~~Interest expense for the current quarter was negligible due to the payoff of amounts borrowed under our credit facility during the 2020 fiscal year.~~

Provision for income taxes. Our effective tax rate was 30.0% for the six months ended August 31, 2021 as compared to 26.0% for the ~~nine~~six months ended ~~November 30, 2020 and~~August 31, 2020. The primary reason for the ~~nine months ended November 30, 2019.~~increase in the effective tax rate is permanent non-deductible expense resulting from probable distributions this year from our deferred compensation plan which was terminated last fiscal year.

Net earnings. Net earnings ~~which continue to be significantly impacted by COVID-19 pandemic,~~ were ~~$19.0~~$14.8 million for the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 as compared to ~~$29.7~~$10.6 million for the comparable period last year, ~~a decrease~~an increase of ~~$10.7~~$4.2 million. Net earnings per diluted share for the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 was ~~$0.73,~~$0.57, compared to ~~$1.14~~$0.41 for the same ~~nine-month~~six-month period last year. Our acquisition of Infoseal and AmeriPrint added $0.04 to our diluted earnings per share.

We rely on our cash flows generated from operations and the borrowing capacity under our credit facility extended pursuant to our Second Amended and Restated Credit Agreement, as amended from time to time (the “Credit Facility”), to meet cash requirements of our business. The primary cash requirements of our business are payments to vendors in the normal course of business, capital expenditures, debt repayments and related interest payments, contributions to our noncontributory defined benefit retirement plan, which covers approximately ~~19%~~12% of our aggregate employees (the “Pension Plan”), and the payment of dividends to our shareholders. We expect to generate sufficient cash flows from operations, supplemented by our Credit Facility as necessary, to cover our operating and capital requirements for the foreseeable future.

We are unable to estimate the full impact of COVID-19 on our financial condition and results of operations given numerous uncertainties associated with the pandemic, including the prolonged shutdown of business activity. The recent enactment, however, of additional funds from the U.S. Congress may provide additional stimulus to artificially support the economy. The vaccinations currently being initiated may provide for earlier improvement of conditions and stimulate an ongoing and growing economy as we move into our 2022 fiscal year. Although, the Company believes it is unlikely, if our cash flows from operations and our funds available under the Credit Facility are insufficient to meet our capital requirements, we could pursue debt or equity financings. There can be no assurance that any such financings, if deemed necessary, will be available on terms not unduly dilutive to our shareholders and otherwise satisfactory to us.26

Working Capital. Our working capital increased ~~$15.6~~$8.4 million or ~~13.9%~~7.4%, from ~~$111.9~~$113.0 million at February ~~29, 2020~~28, 2021 to ~~$127.5~~$121.4 million at ~~November 30, 2020.~~August 31, 2021. Our current ratio, calculated by dividing our current assets by our current liabilities, ~~increased~~decreased from 4.2 to 1.0 at February 28, 2021 to 4.0 to 1.0 at ~~February 29, 2020 to 4.9 to 1.0 at November 30, 2020. Our~~August 31, 2021. The increase in working capital ~~and current ratio were positively impacted by a $21.1 million~~primarily reflects the increase in cash and ~~$5.1 million in reduction of accounts payable and employee compensation and benefits. These positive increases were~~inventory partially offset by ~~a $9.3 million reduction~~the increase in ~~receivables and $2.8 million reduction in inventories.~~our accounts payable.

Cash flows from operating activities. Cash provided by operating activities decreased ~~by $3.6 million~~ from ~~$44.4~~$28.2 million for the ~~nine~~six months ended ~~November 30, 2019~~August 31, 2020 to ~~$40.8~~$24.5 million for the ~~nine~~six months ended ~~November 30, 2020.~~August 31, 2021. Our decreased operational cash flows in comparison to the comparable period in the prior year was primarily the result of a ~~$10.7~~$8.5 million ~~decrease in operational earnings. This decrease was offset by a $11.2 million decrease~~increase in our accounts receivable and ~~$4.5~~a $7.5 million ~~decrease~~increase in our inventories. These increases were offset by a $4.2 million increase in our operational earnings, in addition to a $7.2 million increase in our accounts payable and accrued expenses.

Cash flows from investing activities. Cash used in investing activities ~~decreased $20.6~~increased from $0.4 million ~~from $21.5 million~~cash used to ~~$0.8~~$5.2 million used for the ~~nine~~six months ended ~~November 30, 2019~~August 31, 2020 and ~~November 30, 2020,~~August 31, 2021, respectively. This was primarily due to

~~$18.7~~ the $3.9 million ~~less used for purchase of~~cost to acquire businesses and ~~$1.7 million from disposal of property, in addition~~additional capital expenditures during the six months ended August 31, 2021 as compared to ~~costs associated with~~ the ~~purchase of Integrated and Flesh in the first two quarters of fiscal year~~six months ended August 31, 2020.

Cash flows from financing activities. We used ~~$31.3~~$0.2 million less in cash from financing activities during the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 compared to the same period in the prior year. The decrease in ~~our~~ cash used during the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 compared to the ~~nine~~six months ended ~~November 30, 2019~~August 31, 2020 resulted from ~~two factors: (i)~~no common stock being repurchased under our stock repurchase program in the ~~pay-off of $30.0 million in long-term debt during the nine months ended November 30, 2019; and (ii) $2.5~~current period compared to $0.4 million to repurchase our common stock ~~under our stock repurchase program~~ during the ~~nine~~six months ended ~~November 30, 2019, compared to $1.2 million to repurchase shares of our common stock during the nine months ended November 30,~~August 31, 2020.

Credit Facility. The Company’s Credit Facility, pursuant to which a credit facility has been extended to the Company until November 11, 2021, provides the Company and its subsidiaries with up to $100.0 million in revolving credit, as well as a $20.0 million sublimit for the issuance of letters of credit and a $15.0 million sublimit for swing-line loans. Under the Credit Facility, the Company or any of its subsidiaries can request up to three increases in the aggregate commitments in an aggregate amount not to exceed $50.0 million. The terms and conditions of the Credit Facility impose certain restrictions on our ability to incur additional debt, make capital expenditures, acquisitions and asset dispositions, as well as impose other customary covenants, such as requiring that our fixed charge coverage ratio not be less than 1.25:1.00 and our total leverage ratio not exceed 3.00:1.00. The Company may make dividends or distributions to shareholders so long as (i) no event of default has occurred and is continuing and (ii) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than 2.50:1.00. All calculations are made based on U.S. Generally Accepted Accounting Principles existing at the time the Credit Facility was entered into. As of ~~November 30, 2020,~~August 31, 2021, the Company was in compliance with all terms and conditions of the Credit Facility.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.85% to 2.5%. The rate is determined by our fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“~~EBITDA~~”EBITDA”). As of ~~November 30, 2020,~~August 31, 2021, the Company had no outstanding debt, and the Company had~~$0.6~~ $0.6 million outstanding under standby letters of credit arrangements, leaving approximately $99.4 million available in borrowing capacity under the Credit Facility. The Credit Facility is secured by substantially all of our assets (other than real property), as well as all capital securities of each of our subsidiaries.

It is anticipated that ~~availability under the Credit Facility is~~our cash and funds from operating cash flows will be sufficient to ~~cover~~fund anticipated future expenditures. We are considering the ~~Company’s working capital requirements for~~nonrenewal of the ~~foreseeable future, should it be required.~~facility or renewing with a smaller line of credit limit during the third quarter.

Pension Plan – We are required to make contributions to our Pension Plan. These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). Due to the enactment of the Highway and Transportation Funding Act (HATFA) in August 2014, which effectively raises the discount rates mandated for determining the value of a plan’s benefit liability and annual cost of accruals, our minimum required contribution to the Pension Plan is zero for the Pension Plan year ending February 28, ~~2021.~~2022. Assuming a stable funding status, we would expect that our future contributions to be between ~~$1.5~~$1.0 million and $3.0 million per year. However, changes in actual investment returns or in discount rates could change this amount significantly. WeThere was no contribution required or made ~~contributions totaling $3.0 million~~ to our Pension Plan ~~during~~in fiscal year ~~2020.~~2021. As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funding status, associated liabilities recorded and future required minimum contributions. At ~~November 30, 2020,~~August 31, 2021, we had an unfunded pension liability recorded on our balance sheet of ~~$8.9~~$6.3 million.

Inventories – We believe our inventory levels are sufficient to satisfy our customer demands and we anticipate having adequate sources of raw materials to meet future business requirements. We have long-term contracts in effect with paper suppliers that govern prices, but do not require minimum purchase commitments. Certain of our rebate programs do, however, require minimum purchase volumes. Management anticipates meeting the required volumes or to be able to get the required volumes temporarily waived given the COVID-19 pandemic.

Capital Expenditures – We expect our capital requirements for our current fiscal year, exclusive of capital required for possible acquisitions, will be within our historical levels of between $3.0 million and $5.0 million. For the ~~period,~~quarter, we have spent approximately ~~$2.5~~$2.1 million on capital expenditures. We expect to fund these expenditures through existing cash flows.

Contractual Obligations ~~& Off-Balance Sheet Arrangements~~ – There have been no significant changes in our contractual obligations since February ~~29, 2020~~28, 2021 that have, or are reasonably likely to have, a material impact on our results of operations or financial condition. ~~We had no off-balance sheet arrangements in place as of November 30, 2020.~~

From time to time, we are exposed to interest rate risk on short-term and long-term financial instruments carrying variable interest rates. We may from time to time utilize interest rate swaps to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates. We do not use derivative instruments for trading purposes. While we had no variable rate financial instruments outstanding at ~~November 30, 2020~~August 31, 2021 given no outstanding debt under the Credit Facility, we will be exposed to interest rate risk if we borrow under the Credit Facility in the future.

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

Evaluation of Disclosure Controls and Procedures. A review and evaluation were carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our ~~Interim~~ Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q, pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that review and evaluation, the Chief Executive Officer and the ~~Interim~~ Chief Financial Officer have concluded that our disclosure controls and procedures as of ~~November 30, 2020~~August 31, 2021 are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive and financial officers as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations of control systems, not all misstatements may be detected. Those inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes.

Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people. Our controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

There have been no changes in our internal control over financial reporting (as defined in Rule 13a–15(f) or Rule 15d–15(f) of the Exchange Act) that occurred during the ~~nine~~six months ended ~~November 30, 2020~~August 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

There have been no material changes in our Risk Factors as previously discussed in our Annual Report on Form 10-K for the year ended February ~~29, 2020 and our Quarterly Report on Form 10-Q for the quarter ended May 31, 2020.~~28, 2021.

In October 2008, the Board authorized the repurchase of the Company’s outstanding common stock through a stock repurchase program, which authorized amount is currently up to $40.0 million in the aggregate. Under the repurchase program, purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors. Such purchases, if any, will be made in accordance with applicable insider trading rules and other securities laws and regulations. These repurchases may be commenced or suspended at any time or from time to time without prior notice.

During the ~~nine~~six months ended ~~November 30, 2020,~~August 31, 2021, the Company ~~under the program, repurchased 77,996~~did not repurchase any shares of common stock ~~at an average price of $15.84 per share.~~under the program. As of ~~November 30, 2020,~~August 31, 2021, $9.9 million remained available to repurchase shares of the Company’s common stock under the program.

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

~~Texas~~		~~75-0256410~~
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)


PART I: FINANCIAL INFORMATION

	Item 1. Financial Statements		3

	Unaudited Consolidated Balance Sheets at ~~November 30, 2020~~August 31, 2021 and February ~~29, 2020~~28, 2021		3

	Unaudited Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020 ~~and November 30, 2019~~	5

	Unaudited Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020 ~~and November 30, 2019~~		6

	Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the three and ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020 ~~and November 30, 2019~~		7

	Unaudited Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~November 30,~~August 31, 2021 and August 31, 2020 ~~and November 30, 2019~~		8

	Notes to Unaudited Consolidated Financial Statements		9

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2120

	Item 3. Quantitative and Qualitative Disclosures About Market Risk		3028

	Item 4. Controls and Procedures		3028

PART II: OTHER INFORMATION

	Item 1. Legal Proceedings		3029

	Item 1A. Risk Factors		3029

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3029

	Item 3. Defaults Upon Senior Securities		3129

	Item 4. Mine Safety Disclosures		3129

	Item 5. Other Information		3129

	Item 6. Exhibits		3130

SIGNATURES			3231


	November 30,		February 29,		August 31,		February 28,
	2020		2020		2021		2021
Assets
Current assets
Cash	$	89,358	$	68,258
Accounts receivable, net of allowance for doubtful receivables of $951 at November 30, 2020 and $715 at February 29, 2020		33,799		43,086
Cash and cash equivalents					$	82,101	$	75,190
Accounts receivable, net of allowance for doubtful receivables of $1,016 at August 31, 2021 and $961 at February 28, 2021						37,928		37,891
Prepaid expenses		1,600		1,541		1,689		1,605
Prepaid income taxes		3,076		2,164
Inventories		31,999		34,835		40,151		32,906
Assets held for sale		482		—		—		482
Total current assets		160,314		149,884		161,869		148,074
Property, plant and equipment
Plant, machinery and equipment		150,203		155,744		157,800		157,737
Land and buildings		56,245		57,887		57,166		56,185
Computer equipment and software		19,185		19,312		18,792		19,336
Other		4,808		4,873		4,521		4,808
Total property, plant and equipment		230,441		237,816		238,279		238,066
Less accumulated depreciation		180,396		181,414		183,987		182,682
Net property, plant and equipment		50,045		56,402		54,292		55,384
Operating lease right-of-use assets		16,066		20,068		18,382		19,187
Goodwill		82,527		82,527		88,661		88,647
Intangible assets, net		50,579		56,557		49,656		52,712
Other assets		260		261		385		384
Total assets	$	359,791	$	365,699	$	373,245	$	364,388


	November 30,			February 29,			August 31,			February 28,
	2020			2020			2021			2021
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	12,293		$	17,235		$	18,827		$	14,759
Accrued expenses		15,450			15,069			16,017			14,955
Current portion of operating lease liabilities		5,057			5,665			5,599			5,338
Total current liabilities		32,800			37,969			40,443			35,052
Liability for pension benefits		8,936			8,936			6,299			6,299
Deferred income taxes		9,182			8,749			7,877			7,677
Operating lease liabilities, net of current portion		10,781			14,200			12,572			13,567
Other liabilities		1,398			1,516			733			1,244
Total liabilities		63,097			71,370			67,924			63,839
Commitments and contingencies
Shareholders’ equity
Preferred stock $10 par value, authorized 1,000,000 shares; NaN issued		—			—
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at November 30, 2020 and February 29, 2020		75,134			75,134
Preferred stock $10 par value, authorized 1,000,000 shares; NaN issued								—			—
Common stock $2.50 par value, authorized 40,000,000 shares; issued 30,053,443 shares at August 31, 2021 and February 28, 2021								75,134			75,134
Additional paid-in capital		122,699			123,052			123,116			123,017
Retained earnings		195,177			193,809			196,809			194,436
Accumulated other comprehensive loss:
Accumulated other comprehensive income (loss):
Minimum pension liability, net of taxes		(23,907	)		(25,206	)		(19,685	)		(20,282	)
Total accumulated other comprehensive income (loss)								(19,685	)		(20,282	)
Treasury stock		(72,409	)		(72,460	)		(70,053	)		(71,756	)
Total shareholders’ equity		296,694			294,329			305,321			300,549
Total liabilities and shareholders' equity	$	359,791		$	365,699		$	373,245		$	364,388


	Nine months ended						Six months ended
	November 30,						August 31,
		2020			2019			2021			2020
Cash flows from operating activities:
Net earnings	$	18,969		$	29,718		$	14,764		$	10,606
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		7,289			7,834			5,132			4,897
Amortization of deferred finance charges		—			47
Amortization of intangible assets		5,978			5,798			4,164			3,924
(Gain) Loss from disposal of assets		(571	)		4
Gain from disposal of assets								(276	)		(412	)
Bad debt expense, net of recoveries		933			(68	)		159			780
Stock based compensation		933			1,018			1,802			664
Net pension expense		1,732			886			797			1,155
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable		8,354			(151	)		221			8,783
Prepaid expenses and income taxes		(971	)		256			(84	)		(736	)
Inventories		2,836			1,535			(6,013	)		1,519
Other assets		1			42			(15	)		1
Accounts payable and accrued expenses		(4,561	)		(2,387	)		4,296			(2,906	)
Other liabilities		(143	)		(99	)		(440	)		(121	)
Net cash provided by operating activities		40,779			44,433			24,507			28,154
Cash flows from investing activities:
Capital expenditures		(2,541	)		(2,738	)		(2,108	)		(1,289	)
Purchase of businesses, net of cash acquired		—			(18,733	)		(3,922	)		0
Proceeds from disposal of plant and property		1,698			2			825			936
Net cash used in investing activities		(843	)		(21,469	)		(5,205	)		(353	)
Cash flows from financing activities:
Repayment of debt		—			(30,000	)
Dividends paid		(17,601	)		(17,622	)		(12,391	)		(11,730	)
Common stock repurchases		(1,235	)		(2,471	)		0			(423	)
Net cash used in financing activities		(18,836	)		(50,093	)		(12,391	)		(12,153	)
Net change in cash		21,100			(27,129	)		6,911			15,648
Cash at beginning of period		68,258			88,442			75,190			68,258
Cash at end of period	$	89,358		$	61,313		$	82,101		$	83,906


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

Accounts receivable	$	2,480
Inventories		1,343
Other assets		191
Right-of-use asset		715
Property, plant & equipment		7,065
Customer lists		337
Trademarks		880
Non-compete		20
Accounts payable and accrued liabilities		(2,251	)
Operating lease liability		(700	)
Deferred income taxes		(206	)
	$	9,874


Accounts receivable	$	1,971		$	1,966
Inventories		1,322			1,758
Other assets		72
Right-of-use asset					3,865
Property, plant & equipment		3,828			7,000
Right-of-use asset		2,041
Customer lists		896
Trademarks		896
Non-compete		25
Goodwill		893
Goodwill and intangibles					9,889
Accounts payable and accrued liabilities		(1,044	)		(1,411	)
Operating lease liability		(2,041	)		(3,865	)
	$	8,859		$	19,202


	Three months ended		Six months ended
	Aug 31, 2021	Aug 31, 2020	Aug 31, 2021	Aug 31, 2020
Pro forma net sales	$100,451	$93,040	$199,049	$188,465
Pro forma net earnings	7,460	6,642	14,727	11,049
Pro forma earnings per share - diluted	$0.29	$0.26	$0.56	$0.43

Balance as of March 1, 2019	$	81,634
Goodwill acquired		893
Balance as of February 29, 2020		82,527
Balance as of November 30, 2020	$	82,527


	Nine months ended November 30,						Six months ended August 31,
(Dollars in thousands)	2020			2019			2021			2020
Net cash provided by operating activities	$	40,779		$	44,433		$	24,507		$	28,154
Net cash used in investing activities	$	(843	)	$	(21,469	)	$	(5,205	)	$	(353	)
Net cash used in financing activities	$	(18,836	)	$	(50,093	)	$	(12,391	)	$	(12,153	)

					Total Number
	Total				of Shares		Maximum Amount
	Number		Average		Purchased as		that May Yet Be Used
	of Shares		Price Paid		Part of Publicly		to Purchase Shares
Period	Purchased		per Share		Announced Programs		Under the Program
September 1, 2020 - September 30, 2020		—	$	—		—	$	10,671,106
October 1, 2020 - October 31, 2020		28,692	$	15.76		28,692	$	10,218,787
November 1, 2020 - November 30, 2020		22,832	$	15.73		22,832	$	9,859,644
Total		51,524	$	15.75		51,524	$	9,859,644


Exhibit Number		Description

Exhibit 3.1(a)		Restated Articles of Incorporation, as amended through June 23, 1983 with attached amendments dated June 20, 1985, July 31, 1985, June 16, 1988 and November 4, 1998, incorporated herein by reference to Exhibit 3.1(a) to the Registrant’s Form 10-Q filed on October 6, 2017 (File No. 001-05807).

Exhibit 3.1(b)		Amendment to Articles of Incorporation, dated June 17, 2004, incorporated herein by reference to Exhibit 3.1(b) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007 filed on May 9, 2007 (File No. 001-05807).

Exhibit 3.2		Fourth Amended and Restated Bylaws of Ennis, Inc., dated July 10, 2017, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 10, 2017 (File No. 001-05807).

Exhibit 31.1		Certification Pursuant to Rule 13a-14(a) of Chief Executive Officer.*

Exhibit 31.2		Certification Pursuant to Rule 13a-14(a) of Chief Financial Officer.*

Exhibit 32.1		Section 1350 Certification of Chief Executive Officer.**

Exhibit 32.2		Section 1350 Certification of Chief Financial Officer.**

Exhibit 101		The following information from Ennis, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~November 30, 2020,~~August 31, 2021, filed on ~~January 6,~~October 1, 2021, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.*

Exhibit 104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


		ENNIS, INC.

Date: ~~January 6,~~October 1, 2021		/s/ Keith S. Walters
		Keith S. Walters
		Chairman, Chief Executive Officer and President

Date: ~~January 6,~~October 1, 2021		/s/ Vera Burnett
		Vera Burnett
		~~Interim CFO,~~Chief Financial Officer, Treasurer and
		Principal Financial and Accounting Officer