Business Context and Reporting Period
Company: Ennis Business Forms, Inc.
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended February 29, 2004
Industry: Manufacturing and distribution of business forms, promotional media, and financial documents.
Ennis operates through three segments: Forms Solutions (business forms), Promotional Solutions (printed/electronic media, advertising specialties), and Financial Solutions (secure bank forms). Approximately 97% of products are custom or semi-custom. The company operates 30 manufacturing locations across 12 states and distributes primarily through independent dealers. No single customer accounts for more than 10% of consolidated net sales.
Key Financial Metrics
Note: Specific revenue, profit, cash flow, and margin figures are incorporated by reference to the 2004 Annual Report to Shareholders (Exhibit 13) and are not explicitly detailed in the provided text.
- Stock Performance: Common stock traded on the NYSE. Fiscal 2004 price range: $10.90 - $17.00. Last sale price (April 15, 2004): $16.21.
- Dividends: $0.155 per share paid quarterly throughout fiscal 2004.
- Shareholders: 1,446 shareholders of record as of April 15, 2004.
- Outstanding Shares: 16,393,157 shares as of April 15, 2004.
- Market Value: Aggregate market value of non-affiliate voting stock was approximately $261.9 million as of April 15, 2004.
- Allowance for Doubtful Receivables: Ended at $1,771,000 (up from $1,294,000 in 2003).
Material Changes and Backlog
While specific year-over-year revenue changes are not listed in the text, the order backlog shows mixed results compared to the prior year (February 28, 2003):
- Business Forms Backlog: Decreased to $5,355,000 from $6,177,000.
- Promotional Media Backlog: Decreased to $12,300,000 from $14,850,000. Approximately $7,000,000 of this backlog is not expected to be filled in fiscal 2004.
- Financial Forms Backlog: Increased to $2,315,000 from $1,961,000.
- Tools/Dies Backlog: Significantly decreased to $182,000 from $1,571,000.
Accounting Change: In 2003, the Company changed its method of accounting for goodwill.
Outlook, Risks, and Management Commentary
- Market Conditions: General economic conditions and the contraction of the traditional business forms industry are cited as predominant factors in volume fluctuations.
- Customer Concentration Risk: The Promotional and Financial Solutions Groups depend on certain major customers; the loss of such customers could have a material adverse effect.
- Operational Capacity: Plants are operating at normal productive capacity. No substantial expansion or refurbishing is anticipated in the near future.
- Controls: Management concluded that disclosure controls and procedures were effective as of February 29, 2004.
- Legal/Environmental: No material pending legal proceedings or material environmental compliance effects reported.
Investor Verification Checklist
- Financial Details: Verify specific revenue, net income, and cash flow figures in the 2004 Annual Report to Shareholders (Exhibit 13), as they are not present in the 10-K text body.
- Backlog Quality: Investigate the $7 million portion of the promotional media backlog not expected to be filled in the current fiscal year.
- Customer Concentration: Review the identity and stability of major customers in the Promotional and Financial Solutions segments.
- Goodwill Accounting: Assess the impact of the 2003 change in goodwill accounting methods on current financial ratios.
- Debt and Liquidity: Confirm current debt levels and liquidity ratios from the Consolidated Balance Sheets referenced in the filing.