Ennis Inc reported a modestly softer quarter to start the second half of 2025, with revenue of $99.0 million, down 7.2% year over year and 3.9% quarter over quarter. The company delivered solid profitability with gross margins near 30.1% and an operating margin of 13.3%, culminating in net income of $10.31 million and earnings per share of $0.40. EBITDA stood at $17.41 million, translating to an EBITDA margin of roughly 17.6%. Cash generation remained a material strength, as operating cash flow was $11.84 million and free cash flow was $10.73 million, underpinning a robust balance sheet and ample liquidity.
Ennis continues to exhibit a conservative capital structure with a net cash position (net debt of approximately $91.8 million) and very strong liquidity metrics (current ratio 6.27, quick ratio 5.03, cash ratio 2.95). This financial flexibility supports ongoing shareholder-friendly actions (dividends) and potential strategic options (acquisitions or buybacks) if growth catalysts emerge. However, top-line pressure persists, as evidenced by the YoY revenue decline and modest sequential improvement in margin discipline. Absent a formal management forecast in the dataset, investors should monitor unit volume trends, mix shifts toward higher-margin labeling and specialty products, and cost containment in the coming quarters to determine the sustainability of earnings and cash generation.
Overall, Ennis remains a cash-generative, low-leverage industrials play with a defensive balance sheet in a volatile US business forms environment. The key question for investors is whether revenue momentum can stabilize and margins can remain resilient amid ongoing competitive and macro headwinds. If management can execute margin protection while stabilizing revenue, the company could sustain its current earnings trajectory and continued cash returns to shareholders.