Ennis Inc delivered solid quarterly profitability and robust cash generation in Q4 2025, even as revenue declined versus prior periods. Revenue of $92.70 million represents a YoY reduction of approximately 4.9% and a QoQ drop of about 7.1%, driven by weaker demand in the business forms and related segments during a seasonally softer quarter. Despite top-line pressure, Ennis posted a favorable gross margin of 29.5% and an operating margin of 12.96%, resulting in net income of $9.02 million and earnings per share of $0.35 for the quarter. Operating cash flow came in at $12.76 million and free cash flow was $11.12 million, underscoring the company’s ability to convert earnings into meaningful liquidity. At quarter-end, Ennis held cash and equivalents of roughly $67.0 million with a net debt position of approximately negative $57.5 million, reflecting a conservative balance sheet, ample liquidity, and a strong cash-generating profile relative to current liabilities.
The quarterly performance benefited from disciplined cost management and favorable working capital dynamics, as evidenced by a cash conversion cycle that remains manageable in the low- to mid-90 days, and a current ratio of 4.59x. The company sustains a high dividend payout ratio (about 74.6% of earnings), consistent with a track record of returning capital to shareholders while preserving balance sheet flexibility. Looking ahead, the key questions for investors are whether Ennis can stabilize revenue in a declining market, whether gross and operating margins can be sustained or expanded in the face of competitive pricing pressures, and how cash generation can be leveraged to fund strategic growth initiatives or selective acquisitions within its niche of business forms and labels.