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, 1997
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)
(972) 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, 1997
Common stock, par value $2.50 per share 16,438,229
ENNIS BUSINESS FORMS, INC.
INDEX
Part I. Financial Information
Consolidated Condensed Balance Sheet --
May 31, 1997 and February 28, 1997 2
Consolidated Condensed Statements of Earnings --
Three Months Ended May 31, 1997 and 1996 3
Consolidated Condensed Statements of Cash
Flows --Three Months Ended May 31, 1997
and 1996 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,
1997 1997
Assets
Current assets
Cash and equivalents $18,020 18,494
Accounts receivable, net 18,217 18,600
Inventories 9,610 10,500
Other current assets 4,015 5,033
Total current assets 49,862 52,627
Property, plant and equipment, net 36,837 33,560
Cost of purchased businesses in excess of amounts
allocated to tangible net assets 6,066 5,942
Other assets and deferred charges 2,731 2,828
Total assets $95,496 94,957
Liabilities and Shareholders' Equity
Current liabilities
Current installments of long-term debt $ 179 85
Accounts payable 4,687 5,234
Accrued expenses 5,732 4,988
Total current liabilities 10,598 10,307
Long-term debt, less current installments 373 195
Deferred credits, principally Federal income taxes 3,150 2,869
Shareholders' equity
Common stock, at par value 53,125 53,125
Additional capital 1,040 1,040
Retained earnings 119,110 119,318
Cumulative foreign currency translation adjustments (78) (76)
173,197 173,407
Less:
Treasury stock 91,822 91,821
Total shareholders' equity 81,375 81,586
Total liabilities and shareholders' equity $95,496 94,957
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,
1997 1996
Net sales $37,896 36,924
Costs and expenses:
Cost of sales 27,020 24,151
Selling, general and administrative expenses 7,414 6,462
Interest expense 18 23
34,452 30,636
Earnings from operations 3,444 6,288
Investment and other income 286 483
Earnings before income taxes 3,730 6,771
Provision for income taxes 1,390 2,549
Net earnings $ 2,340 4,222
Weighted average number of common shares
outstanding 16,438,279 16,439,283
Per share amounts:
Net earnings $ .14 .26
Cash dividends $.155 .15
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,
1997 1996
Cash flows from operating activities:
Net earnings $2,340 4,222
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,460 1,125
Changes in assets and liabilities 2,339 (1,383)
Other 504 (146)
Net cash provided by operating activities 6,643 3,818
Cash flows from investing activities:
Capital expenditures (4,861) (2,946)
Purchases of operating assets -- (6,959)
Other 21 9
Net cash used in investing activities (4,840) (9,896)
Cash flows from financing activities:
Dividends declared (2,548) (2,466)
Proceeds from capital lease financing 289 --
Other (18) (4)
Net cash used in financing activities (2,277) (2,470)
Net changes in cash and equivalents (474) (8,548)
Cash and equivalents at beginning of period 18,494 38,606
Cash and equivalents at end of period $18,020 30,058
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 (none of which
were other than normal recurring accruals) which, in the opinion of the
Company, are necessary to a fair statement of the financial position as
of May 31, 1997 and February 28, 1997, and the results of operations
and cash flows for the three months ended May 31, 1997 and 1996.
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, 1997, 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,
1997 1997
Raw material $5,852 6,394
Work-in-process 1,032 1,127
Finished goods 2,726 2,979
$9,610 10,500
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION, RESULTS OF OPERATIONS
AND OUTLOOK FOR THE FUTURE
Liquidity and Capital Resources
At May 31, 1997, the Company's financial position continues to be
strong. Working capital decreased from $42,320,000 at February 28, 1997 to
$39,264,000 at May 31, 1997. The decrease is primarily due to capital
expenditures. 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, 1997 increased 2.6% from the
corresponding period in the prior year. Gross profit margins decreased
14.9% in the current year compared to the same period in the prior year.
The gross profit margins decline was the result of lower selling prices
coupled with higher costs associated with an increase in the number of
employees required to produce more orders and to improve service time.
Selling, general and administrative expenses increased 14.7% in the current
year compared to the prior year. The increase is because of costs
associated with a new management information system and an increase in
customer service personnel to accommodate an increase in customer orders.
Investment and other income decreased in the current year from the prior
year due to decreased amounts of funds available for investments. Funds
available for investment have decreased because of capital expenditures.
The effective rate of Federal and state income tax expense is 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 19, 1997.
(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: Robert L. Mitchell, Thomas R. Price and Ewell
L. Tankersley.
(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, 1998.
For 15,107,842
Against 96,215
Abstain 33,789
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, 1997 /s/Victor V.DiTommaso
Victor V. DiTommaso
Vice President - Finance, Secretary & Treasurer
Principal Financial and Accounting Officer
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, 1997
Victor V. DiTommaso
Vice President - Finance, Secretary & Treasurer
Principal Financial and Accounting Officer
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