FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended MAY 31, 1995
Commission File Number 1-5807
ENNIS BUSINESS FORMS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-0256410
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
107 N. Sherman Street, Ennis, TX 75119
(Address of principal executive offices) (Zip Code)
(214) 872-3100
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed since last
report.)
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 prior that the
registrant was required to file such report), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common sock, as the latest practicable date.
Class Outstanding at May 31, 1995
Common stock, par value $2.50 per share 16,439,695
ENNIS BUSINESS FORMS, INC.
INDEX
Part I. Financial Information
Consolidated Condensed Balance Sheet --
May 31, 1995 and February 28, 1995 2
Consolidated Condensed Statements of Earnings --
Three Months Ended May 31, 1995 and 1994 3
Consolidated Condensed Statements of Cash
Flows --Three Months Ended May 31, 1995
and 1994 4
Notes to Consolidated Condensed Financial
Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Part II. Other Information 6
PART I. FINANCIAL INFORMATION
ENNIS BUSINESS FORMS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
May 31, February 28,
1995 1995
Assets
Current assets
Cash and equivalents $ 10,848 10,541
Temporary investments 17,821 17,600
Accounts receivable, net 17,474 18,284
Inventories 11,517 10,301
Other current assets 3,676 2,539
Total current assets 61,336 59,265
Property, plant and equipment, net 20,222 19,521
Cost of purchased businesses in excess of amounts
allocated to tangible net assets 4,302 4,356
Other assets and deferred charges 1,583 1,849
Total assets $ 87,443 84,991
Liabilities and Stockholders' Equity
Current liabilities
Current installments of long-term debt $ 75 75
Accounts payable 4,035 5,014
Accrued expenses 5,770 6,807
Federal and state income taxes payable 3,583 1,080
Total current liabilities 13,463 12,976
Long-term debt, less current installments 360 360
Deferred credits, principally Federal income taxes 2,186 2,317
Stockholders' equity
Common stock, at par value 53,125 53,125
Additional capital 1,040 1,040
Retained earnings 109,206 107,100
Cumulative foreign currency
translation adjustments (131) (125)
163,240 161,140
Less:
Treasury stock 91,806 91,802
Total stockholders' equity 71,434 69,338
Total liabilities and
stockholders' equity $87,443 84,991
See accompanying notes to consolidated condensed financial statements.
ENNIS BUSINESS FORMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
Three Months Ended
May 31,
1995 1994
Net sales $35,109 34,041
Costs and expenses:
Cost of sales 22,275 21,009
Selling, general and administrative expenses 6,056 5,450
Interest expense 24 22
28,355 26,481
Earnings from operations 6,754 7,560
Investment and other income 445 355
Earnings before income taxes 7,199 7,915
Provision for income taxes 2,709 2,940
Net earnings $4,490 4,975
Weighted average number of common shares
outstanding 16,439,820 16,438,906
Per share amounts:
Net earnings $ .27 .30
Cash dividends $.145 . 14
See accompanying notes to consolidated condensed financial statements.
ENNIS BUSINESS FORMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
May 31,
1995 1994
Cash flows from operating activities:
Net earnings $ 4,490 4,975
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 921 887
Changes in assets and liabilities (919) (510)
Other (7) (63)
Net cash provided by operating activities 4,485 5,289
Cash flows from investing activities:
Capital expenditures (1,569) (742)
Purchases of investments (6,064) --
Maturities of investments 5,843 --
Other -- 172
Net cash used in investing activities (1,790) (570)
Cash flows from financing activities:
Dividends declared (2,384) (2,302)
Other (4) 8
Net cash used in financing activities (2,388) (2,294)
Net changes in cash and equivalents 307 2,425
Cash and equivalents at beginning of period 10,541 21,577
Cash and equivalents at end of period $10,848 24,002
See accompanying notes to consolidated condensed financial statements.
ENNIS BUSINESS FORMS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The information included herein reflects all adjustments which, in the
opinion of the Company, are necessary to a fair statement of the
financial position as of May 31, 1995 and February 28, 1995, and the
results of operations and cash flows for the three months ended May 31,
1995 and 1994.
2. Earnings per common share amounts are based on the weighted average
number of shares outstanding during the period. Common stock
equivalents (options see Note 3) have not been included in determining
earnings per common share amounts because their inclusion, either for
purposes of computing primary or fully diluted earnings per share,
would not produce sufficient incremental shares (using the treasury
stock method) to reduce the per share amounts shown.
3. As of May 31, 1995, the Company has reserved 378,958 shares of common
stock under incentive stock options plans.
4. The Company uses the Last-In, First-Out (LIFO) method of pricing the
raw material content of its inventories, and the First-In, First-Out
(FIFO) method is used to value the remainder. The following table
summarizes the components of inventory at the different stages of
production (in thousands of dollars):
May 31, February 28,
1995 1995
Raw material $ 7,542 6,746
Work-in-process 1,077 963
Finished goods 2,898 2,592
$11,517 10,301
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION, RESULTS OF OPERATIONS
AND OUTLOOK FOR THE FUTURE
Liquidity and Capital Resources
At May 31, 1995, the Company's financial position continues to be
strong. Working capital increased from $46,289,000 at February 28, 1995 to
$47,873,000 at May 31, 1995. The increase is due to cash provided by
operating activities. The Company's cash flow from operations continues to
be adequate to sustain operations, meet debt repayment requirements and
fund capital additions. No liquidity problems are anticipated.
Results of Operations
Net sales for the quarter ended May 31, 1995 increased 3.1% from the
same quarter in the prior year. Gross margins decreased 1.5% in the
current year period over the same period in the prior year. Because of
competitive market conditions and the amount and frequency of raw material
price increases, our selling price increases have lagged behind cost
increases. We have recently instituted additional price increases which
should improve profits if they hold in the currently competitive business
forms market. Selling, general, and administrative expenses increased
11.1% in the current year quarter, from the prior year quarter due to
increases in selling
and marketing efforts, costs associated with improving customer service,
and start-up expenses of our Mexico operation. Investment and other income
increased in the current year quarter compared to the prior year quarter
due to increased amounts of funds available for investments and higher
interest rates. The overall effective income tax rate remained
substantially unchanged from the prior period.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its Annual Meeting on June 15, 1995.
(b) Proxies for the meeting were solicited pursuant to Regulation 14; there
was no solicitation in opposition to management's nominees for
directors as listed in the Proxy Statement and all such nominees were
elected.
Directors elected were: Harold W. Hartley, Pat G. Sorrells, and
Kenneth A. McCrady
(c) Briefly described below is the only other matter voted upon at the
Annual Meeting and the number of affirmative votes and negatives votes
respectively.
(1) Selection of KPMG Peat Marwick LLP as independent auditors of
the Company for the fiscal year ending February 29, 1996.
For 14,473,315
Against 27,255
Abstain 31,533
Item 6. Exhibits
Exhibit:
(27) Financial Data Schedule
SIGNATURES
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.
ENNIS BUSINESS FORMS, INC.
Date July 7, 1995 /s/Harve Cathey
Harve Cathey
Vice President - Finance
Principal Financial Officer
Date July 7, 1995 /s/Victor V. DiTommaso
Victor V. DiTommaso
Treasurer
Principal Accounting Officer