EBF · Ennis, Inc.

Ennis, Inc. reported mixed fourth-quarter results with revenue growth driven entirely by acquisitions, while organic volumes declined. The company's $8.8 million in acquisition-related sales contributed to the 4.0% quarterly revenue increase, but this was partially offset by lower organic demand. Gross margin compression from 29.5% to 29.2% year-over-year reflects the impact of these acquisitions and inventory management efforts, though full-year margin improved to 30.7% from 29.7%. Management highlighted the successful integration of Northeastern Envelope Company into ERP systems, which is expected to enhance cost management and support margin consistency. The company proactively managed inventory levels, reducing them from $60.8 million to $54.9 million during the quarter as it converted inventory to sales following earlier stockpiling due to supply chain concerns. Ennis maintains a strong financial position with no debt and $34.6 million in cash, though cash balances declined from $67.0 million a year ago due to $44.8 million in investing activities (including $8.0 million for facility purchase) and $40.3 million in financing activities (primarily share repurchases). The company repurchased approximately 793,000 shares for $14.5 million during the year and expects cash balances to increase steadily in coming quarters. Management expressed confidence in the company's ability to pursue acquisitions without debt reliance while maintaining access to credit for larger initiatives.