Breaking Down Ennis, Inc. (EBF) Financial Health: Key Insights for Investors

You're trying to square the circle on Ennis, Inc.'s (EBF) recent performance, and honestly, the headline numbers are a little contraversial. For the six months ended August 31, 2025, the company's revenue actually slipped to $195.9 million, a -3.1% year-over-year dip, which typically signals trouble for a mature business. But here's the twist: management's focus on efficiency is clearly paying off, as net earnings for that same period climbed to a solid $23.0 million, translating to $0.89 per diluted share. That's the power of margin discipline. We need to dig into how they are sustaining a 30.8% gross profit margin despite the sales pressure, especially when you consider the near-term risk of a carbonless paper mill closure potentially tightening supply. This disconnect-falling sales but rising profit-is the core of the investment thesis right now, and it's what will defintely determine your next move.

Revenue Analysis

You need to know where Ennis, Inc. (EBF) is making its money, and the simple truth is that the company is a printing services powerhouse, but its top-line revenue is contracting. For the fiscal year (FY) ending February 28, 2025, Ennis, Inc. reported annual revenue of $394.62 million, which was a year-over-year decline of -6.07%. This downward trend continued into the first half of the current fiscal year, though the pace of decline has slowed.

The core of Ennis, Inc.'s revenue stream is its extensive catalog of custom-engineered business products, which falls under its dominant printing services segment. This isn't a complex, multi-segment conglomerate; it's a focused operation. Honestly, about 96% of their product offerings are custom-made, which is a significant factor in their pricing power and margin stability, even as sales volume dips.

Here's the quick math on the recent near-term trend: while the full FY 2025 saw a sharp drop, the quarterly figures for the first half of the current year (FY 2026) show the decline is moderating.

• Q1 2026 Revenue (ended May 31, 2025): $97.2 million, down 5.7% year-over-year.
• Q2 2026 Revenue (ended August 31, 2025): $98.7 million, down just 0.3% year-over-year.

The core product mix is what drives this revenue, and it's a wide net of printed materials for businesses.

A key change in the revenue composition for the current year is the impact of strategic acquisitions. To be fair, these deals are helping to offset the weaker volume demand from legacy plants. The acquisition of Northeastern Envelope Company (NEC), completed in the first quarter of the current year, contributed approximately $11.0 million in revenues for the six-month period ending August 31, 2025. This shows management is defintely using M&A to shore up the top line against market headwinds.

For a deeper dive into the company's valuation and strategic outlook, you should check out the full analysis: Breaking Down Ennis, Inc. (EBF) Financial Health: Key Insights for Investors.

Next step: Focus your analysis on the gross margin improvement-the company is holding a high gross profit margin of 30.5% in Q2 2026 despite the revenue pressure, which is a strong sign of pricing discipline.

Profitability Metrics

You need to know if Ennis, Inc. (EBF) is generating profit efficiently, especially as the commercial printing industry faces headwinds. The short answer is yes-Ennis, Inc. maintains a remarkably stable and high gross margin that significantly outperforms the broader manufacturing sector, but its operating and net margins show the pressure of overhead and a declining top line.

For the first six months of fiscal year 2025 (ending August 31, 2025), Ennis, Inc. reported net earnings of $23.0 million on revenues of $195.9 million. This translates to a net profit margin of approximately 11.74%, which is a strong result given the industry's secular decline. Here's the quick math on the key profitability ratios based on the latest 2025 quarterly data:

The gross profit margin (gross profit divided by revenue) is the standout. Ennis, Inc.'s margin consistently hovered between 29.3% and 31.1% across the first three quarters of 2025. This is excellent, sitting at the high end of the general Manufacturing industry benchmark, which typically ranges from 25% to 35%. This stability shows their effective pricing power and cost-of-goods-sold control, defintely a core strength.

However, the trend in profitability over time shows a slight, but important, compression. The gross margin dipped from 31.1% in Q1 2025 to 29.3% in the estimated Q3 2025, indicating that rising material costs or pricing pressure are starting to bite. Still, management has done a strong job of cost management, reporting a decrease in Selling, General, and Administrative (SG&A) expenses in Q3 2025, which helped keep the net profit margin stable around 10.2%. This focus on the bottom line is clearly part of their Mission Statement, Vision, & Core Values of Ennis, Inc. (EBF).

When you compare the Net Profit Margin of 11.74% for the six-month period to the broader Commercial Printing industry average-which has been cited around 4.5%-Ennis, Inc. is a clear outperformer. Their projected annual operating income of $52.0 million on $394.6 million in revenue for 2025, yielding a 13.18% operating margin, is also superior to the Paper/Forest Products industry average of roughly 10.13%. This is a business with a high degree of operational efficiency (operating profit divided by revenue), so their core operations are very healthy, even as revenues decline year-over-year.

The key takeaway here is that while the market for traditional business forms is shrinking, Ennis, Inc.'s operational efficiency is allowing them to capture a higher percentage of each revenue dollar than their peers. They are managing costs aggressively, but the near-term risk remains the revenue decline, which was -3.1% for the first six months of 2025 compared to the prior year. This means the primary action for investors is to watch for whether their acquisitions can offset the core business's volume weakness.

Debt vs. Equity Structure

You want to know how Ennis, Inc. (EBF) finances its operations and growth, and the answer is simple: they barely use debt. This is a company with a defintely conservative approach to its balance sheet, which is a major factor in its stability, especially in a mature industry like printing.

As of the quarter ending August 2025, Ennis, Inc.'s total debt is minimal. The company reported a total of approximately $10.98 million in debt. This is split between short-term debt and capital lease obligations of about $4.3 million and long-term debt and capital lease obligations of about $6.7 million.

Here's the quick math on how that debt stacks up against what shareholders own (equity):

• Total Debt (Aug. 2025): $10.98 Million
• Total Stockholders' Equity (Aug. 2025): $305.4 Million

This conservative structure means Ennis, Inc. has a near-pristine Debt-to-Equity (D/E) ratio (a measure of financial leverage, showing how much debt is used to finance assets relative to shareholder equity). For the quarter ending August 2025, the D/E ratio stood at a remarkably low 0.04. A ratio of 1.0 is generally considered safe, meaning the company has $1 of debt for every $1 of equity. Ennis, Inc. has just 4 cents of debt for every dollar of equity.

To put that 0.04 D/E ratio into perspective, the average for the Commercial Printing industry is typically around 0.33. Ennis, Inc. is operating with significantly less financial leverage than its peers. This low ratio is a clear signal of financial strength and minimal risk for a company that has been described as having an 'essentially zero debt' and a 'net cash position' in its fiscal year 2025 results.

The company's strategy is to avoid borrowing for growth. Instead of debt issuances or major refinancing, Ennis, Inc. uses its strong cash flow and existing cash reserves-including a reported $72.48 million in cash in FY2025-to fund its strategy of accretive acquisitions and to return capital to shareholders. This financial flexibility allows them to execute deals, like the acquisition of CFC Print & Mail in November 2025, without needing to take on new debt. This is a low-risk, cash-driven model. You can dive deeper into the ownership structure in Exploring Ennis, Inc. (EBF) Investor Profile: Who's Buying and Why?

What this estimate hides is the opportunity cost: a company with this much borrowing capacity could theoretically use more debt to accelerate growth or acquisitions, but Ennis, Inc. intentionally chooses stability over aggressive leverage. The balance is heavily weighted toward equity funding, which makes the stock attractive to income-focused investors who prioritize security and steady dividends.

Liquidity and Solvency

You need to know if Ennis, Inc. (EBF) can cover its short-term bills, and the answer is a resounding yes. The company's liquidity position is defintely strong, showing ample cash and easily convertible assets to meet its current obligations, a clear sign of financial stability. This strength is rooted in high current and quick ratios, plus consistently positive operating cash flow.

The most recent quarterly data, for the period ended August 31, 2025 (Q3 2025), paints a very healthy picture. Ennis, Inc. (EBF) operates with a significant buffer, which is exactly what you want to see in a mature, industrials-segment company. This is a very low-risk liquidity profile.

Current and Quick Ratios: A Robust Buffer

The company's key liquidity metrics are excellent, far exceeding the typical 1.0x benchmark for a healthy company. The Current Ratio, which measures current assets against current liabilities, stood at a remarkable 4.72 in Q3 2025. This means Ennis, Inc. (EBF) has $4.72 in current assets for every $1.00 of short-term debt.

Even stripping out inventory-which gives us the Quick Ratio (or Acid-Test Ratio)-the position remains exceptionally strong at 3.50. This high Quick Ratio shows the company can cover its current liabilities more than three times over with just its most liquid assets, like cash and accounts receivable. That's a huge margin of safety.

Working Capital and Cash Flow Trends

Working capital-the difference between current assets and current liabilities-is substantial, reflecting the high ratios. Here's the quick math: with current liabilities at approximately $41.154 million in Q3 2025, the current assets are estimated at about $194.23 million (4.72 $41.154 million). This leaves a working capital surplus of around $153.08 million.

The cash flow statement confirms this strength, particularly in the core business operations. For the trailing twelve months (TTM) ended February 28, 2025, Ennis, Inc. (EBF) generated $49.34 million in cash from operations.

• Operating Cash Flow (CFO): Consistently positive, with $18.16 million generated in Q3 2025 alone. This is the lifeblood of the company, showing it reliably turns sales into cash.
• Investing Cash Flow (CFI): This is typically negative for a growing or maintaining business, as it represents capital expenditures (CapEx) or acquisitions. For the TTM ended February 28, 2025, it was -$16.98 million, a manageable outflow that is well-covered by CFO.
• Financing Cash Flow (CFF): This is dominated by shareholder returns. The company paid out a substantial $72.3 million in dividends during Q3 2025. This significant distribution is a key reason for a negative net change in cash for the quarter, but it signals a commitment to shareholders, backed by the strong operating cash flow.

Liquidity Strengths and Investor Action

The primary strength is the sheer amount of liquidity, which mitigates near-term risk almost entirely. The company has a net cash position of approximately $44.9 million (net debt negative), meaning its cash on hand exceeds its total debt. This financial flexibility allows for strategic actions like the recent acquisition of Northeastern Envelope Company (NEC).

What this estimate hides is the potential for inefficient capital allocation-a high current ratio can sometimes mean too much cash sitting idle. Still, for an investor, this stability is a huge plus. You can read more about what drives this financial philosophy in the Mission Statement, Vision, & Core Values of Ennis, Inc. (EBF).

Next Step: Review the latest 10-Q filing to confirm the exact breakdown of current assets, particularly the cash and equivalents balance, to assess if the working capital is being deployed efficiently.

Valuation Analysis

You're looking at Ennis, Inc. (EBF) and wondering if the market has it right. My take is that the stock is currently priced as a stable, high-yield income play in a mature industry, suggesting it is reasonably valued on an earnings basis but may have limited growth upside.

The core of the valuation story lies in its low multiples compared to the broader market, which is a classic sign of a value stock. The stock is defintely not a growth story, but it offers a secure income stream for patient investors.

Here's the quick math on Ennis, Inc.'s valuation ratios as of November 2025:

• Price-to-Earnings (P/E) Ratio: The trailing twelve months (TTM) P/E ratio sits at about 10.05. This is significantly lower than the Industrials sector average, which often trades above 20x. You are paying just over ten dollars for every dollar of Ennis, Inc.'s earnings, which signals a potential undervaluation or, more likely, a market pricing in slower future growth.
• Price-to-Book (P/B) Ratio: The TTM P/B ratio is around 1.40. This means the stock is trading at a modest premium to its net tangible assets. For a company with a strong balance sheet and little debt, this ratio is healthy and doesn't scream overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The TTM EV/EBITDA is approximately 6.25. This is a very attractive multiple, especially when you consider the company's net cash position. It suggests the business itself is cheap relative to its operating cash flow (earnings before interest, taxes, depreciation, and amortization).

The stock price trend over the last 12 months tells a story of market skepticism. Ennis, Inc.'s stock price has fallen by about 18.27% over the past year, trading recently around $16.77 per share. The 52-week trading range of $16.30 to $22.01 shows that the stock is currently near its annual low. This drop reflects the broader challenges in the commercial printing industry, where digital solutions continue to erode traditional business.

Dividend Strength and Analyst Outlook

The dividend is a major pillar of the investment thesis here. Ennis, Inc. is a reliable dividend payer, and its current TTM Dividend Yield is a strong 6.11%. The annualized dividend is $1.00 per share, which is paid quarterly. The payout ratio is manageable, sitting around 61.3%, which leaves enough room for the company to reinvest in the business or handle minor earnings fluctuations without jeopardizing the dividend.

What this estimate hides is the lack of a strong consensus from Wall Street. Analyst coverage is thin, which is common for a small-cap company like Ennis, Inc. (EBF). The few analysts who cover the stock have a mixed view, with some rating it a 'Hold' and others a 'Strong Buy.' The consensus price target is a notable $23.00, suggesting a significant upside from the current price.

The bottom line: Ennis, Inc. is a classic value-and-income stock. Its low valuation multiples suggest it is not overvalued, but the stock price decline shows the market is worried about its industry future. Your next step should be to read Exploring Ennis, Inc. (EBF) Investor Profile: Who's Buying and Why? to understand the institutional money's conviction.

Risk Factors

You're looking at Ennis, Inc. (EBF) and seeing a strong balance sheet, but you need to understand the structural headwinds that are defintely impacting its core business. The biggest risk isn't a sudden financial shock; it's the slow, steady erosion of their market. Ennis is a profitable company, still, it operates in a fundamentally shrinking industry-commercial printing-which means revenue decline is the baseline risk you must monitor.

The company's financial health is strong, with essentially zero debt and a current ratio of 4.59x as of Q4 2025, but the external market conditions are tough. In its core segment, the shift to digital solutions means declining demand for traditional products like business forms and checks. This secular decline puts persistent pressure on the top line, evidenced by the full-year FY2025 total sales reaching only $394.6 million, a decline of just over 6% from the previous year. That's the reality of the print market today.

Here's the quick math on the near-term operational and financial risks:

• Revenue Contraction: Q4 2025 revenue was $92.70 million, a 4.8% decrease year-over-year.
• Competitive Margin Pressure: Analysts note persistent margin compression due to intense competition and low entry barriers in the printing space.
• Non-Core Earnings Reliance: Increased interest income is a concern because it can mask underlying operational weaknesses in the core business.

The company is doing what it can to fight this trend, but the core business is still facing significant challenges. You can check out more on the shareholder base at Exploring Ennis, Inc. (EBF) Investor Profile: Who's Buying and Why?

The primary mitigation strategy is strategic acquisitions (M&A) to diversify and stabilize revenue. For example, the acquisition of Northeastern Envelope Company (NEC) in Q1 2025 helped, adding approximately $5.5 million in revenues in Q2 2026. Plus, management is focused on operational efficiencies, which helped reduce Selling, General, and Administrative expenses to $16.3 million in Q3 2025 from $17.4 million in the prior year's quarter. They are also using the strong balance sheet-which included a robust $56.2 million in levered free cash flow in FY2025-to fund a regular quarterly dividend of $0.25 per share and a special dividend of $2.50 per share in 2025.

What this estimate hides is the risk of integrating those new acquisitions. If the integration takes 14+ days, churn risk rises, and the acquired revenue doesn't stick. The company's ability to successfully integrate these new businesses and continue to find accretive deals is critical to offsetting the core decline and sustaining its annual EPS of $1.54 (FY2025).

Growth Opportunities

You're looking for a clear path forward for Ennis, Inc. (EBF), and the simple truth is that their growth strategy is a deliberate, debt-free execution of market consolidation. The company isn't chasing risky new ventures; they are doubling down on their core strength: being the largest trade printer in the United States, a title they held in 2025.

Their primary growth engine is a disciplined acquisition strategy, which is defintely a smart move in a mature industry. This approach immediately adds revenue and market share. For example, the November 2025 acquisition of CFC Print & Mail, a key competitor and the 15th largest trade printer, significantly bolsters their wholesale business-document printing and mailing services. Earlier in the year, the purchase of Northeastern Envelope (NEC) also expanded their commercial envelope manufacturing capabilities.

Here's the quick math on how these deals are already impacting the bottom line: in the first quarter of fiscal 2026 (ended May 31, 2025), recent acquisitions contributed approximately $5.5 million in revenue and added $0.03 to diluted earnings per share (EPS). This bolt-on strategy is working because Ennis, Inc. has a strong balance sheet with no debt, allowing them to fund these routine acquisitions without financial strain.

The company's competitive advantage goes beyond just size. They operate as a vertically integrated powerhouse, meaning they control the manufacturing and distribution of a diverse range of products, from custom business forms and checks to commercial printing and packaging solutions. This extensive network of production facilities across the U.S. allows them to cater to both high-volume, standardized orders and highly specialized, niche requirements. You can see how this plays out in their operational efficiency; their gross profit margin actually increased to 31.1% in Q1 2025, up from 30.0% the prior year, even with a slight sales dip. That's strong cost management.

What this estimate hides, however, is the potential for supply chain friction. The company has noted an impending supply disruption from a carbonless paper mill closure as a challenge ahead. Still, the successful integration of prior acquisitions, like Printing Technologies, Inc. (PTI), into their Enterprise Resource Planning (ERP) systems shows they can handle the complexity of integrating new businesses. This is a crucial strategic initiative that supports future growth. For more detail on the ownership structure and market sentiment, you should read Exploring Ennis, Inc. (EBF) Investor Profile: Who's Buying and Why?

• Acquisitions are the clear growth catalyst.
• No debt provides significant financial flexibility.
• Operational efficiency is improving gross margins.