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, 1996
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, 1996
Common stock, par value $2.50 per share 16,439,223
ENNIS BUSINESS FORMS, INC.
INDEX
Part I. Financial Information
Consolidated Condensed Balance Sheet --
May 31, 1996 and February 29, 1996 2
Consolidated Condensed Statements of Earnings --
Three Months Ended May 31, 1996 and 1995 3
Consolidated Condensed Statements of Cash
Flows --Three Months Ended May 31, 1996
and 1995 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 29,
1996 1996
Assets
Current assets
Cash and equivalents $30,058 38,606
Accounts receivable, net 18,900 16,975
Inventories 9,109 8,298
Other current assets 4,059 3,665
Total current assets 62,126 67,544
Property, plant and equipment, net 26,447 21,857
Cost of purchased businesses in excess of amounts
allocated to tangible net assets 6,093 3,861
Other assets and deferred charges 2,526 400
Total assets $97,192 93,662
Liabilities and Stockholders' Equity
Current liabilities
Current installments of long-term debt $ 80 80
Accounts payable 5,763 5,144
Accrued expenses 6,092 6,843
Federal and state income taxes payable 3,030 987
Total current liabilities 14,965 13,054
Long-term debt, less current installments 280 280
Deferred credits, principally Federal income taxes 2,006 2,133
Stockholders' equity
Common stock, at par value 53,125 53,125
Additional capital 1,040 1,040
Retained earnings 117,691 115,935
Cumulative foreign currency translation adjustments (103) (97)
171,753 170,003
Less:
Treasury stock 91,812 91,808
Total stockholders' equity 79,941 78,195
Total liabilities and stockholders' equity $97,192 93,662
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,
1996 1995
Net sales $36,924 35,109
Costs and expenses:
Cost of sales 24,151 22,275
Selling, general and administrative expenses 6,462 6,056
Interest expense 23 24
30,636 28,355
Earnings from operations 6,288 6,754
Investment and other income 483 445
Earnings before income taxes 6,771 7,199
Provision for income taxes 2,549 2,709
Net earnings $4,222 4,490
Weighted average number of common shares
outstanding 16,439,283 16,439,820
Per share amounts:
Net earnings $ .26 .27
Cash dividends $ .15 .145
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,
1996 1995
Cash flows from operating activities:
Net earnings $4,222 4,490
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,125 921
Changes in assets and liabilities (1,383) (919)
Other (146) (7)
Net cash provided by operating activities 3,818 4,485
Cash flows from investing activities:
Capital expenditures (2,946) (1,569)
Purchases of operating assets (6,959) --
Purchases of investments -- (6,064)
Maturities of investments -- 5,843
Other 9 --
Net cash used in investing activities (9,896) (1,790)
Cash flows from financing activities:
Dividends declared (2,466) (2,384)
Other (4) (4)
Net cash used in financing activities (2,470) (2,388)
Net changes in cash and equivalents (8,548) 307
Cash and equivalents at beginning of period 38,606 10,541
Cash and equivalents at end of period $30,058 10,848
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, 1996 and
February 29, 1996, and the results of operations and cash
flows for the three months ended May 31, 1996 and 1995.
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, 1996, 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 29,
1996 1996
Raw material $5,756 5,073
Work-in-process 356 679
Finished goods 2,997 2,546
$9,109 8,298
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION, RESULTS OF OPERATIONS
AND OUTLOOK FOR THE FUTURE
Liquidity and Capital Resources
At May 31, 1996, the Company's financial position continues
to be strong. Working capital decreased from $54,490,000 at
February 29, 1996 to $47,161,000 at May 31, 1996. The decrease
is primarily due to the April 1, 1996 purchase of the operating
assets of two businesses including non-compete agreements with
principals of the selling companies. 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, 1996 increased 5.2%
from the same quarter in the prior year due to the two
acquisitions on April 1, 1996. Gross margins decreased .5% in
the current year period over the same period in the prior year.
Gross margins decreased while sales increased because of lower
selling prices which prevailed during the fiscal quarter ending
in May 1996 compared to the prior year because of competitive
conditions in the business forms industry. Selling, general, and
administrative expenses increased 6.7% in the current year
quarter, from the prior year quarter due to the operating
expenses of the two new businesses and costs associated with
implementing a new management information system. 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 20, 1996.
(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: Harry M. Cornell, Jr., James B.
Gardner, and Charles F. Ray.
(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 28, 1997.
For 14,837,170
Against 138,977
Abstain 37,314
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 10, 1996 /s/Harve Cathey
Harve Cathey
Vice President - Finance
Principal Financial Officer
Date: July 10, 1996 /s/Victor V. DiTommaso
Victor V. DiTommaso
Treasurer
Principal Accounting Officer