Executive Summary
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.
Key Performance Indicators
QoQ: -3.64% | YoY:-10.03%
QoQ: -4.01% | YoY:-10.36%
Key Insights
Revenue: $99.038 million in Q2 2025, down 7.23% YoY and 3.95% QoQ. Gross Profit: $29.779 million with gross margin of 30.07% (YoY -10.03%; QoQ -3.64%). Operating Income: $13.183 million (margin 13.31%; YoY -10.36%; QoQ -4.01%). Net Income: $10.308 million (net margin 10.41%; YoY -5.52%; QoQ -3.55%). EPS: $0.40 (YoY -4.76%; QoQ -2.44%). EBITDA: $17.409 million (EBITDA margin ~17.58%). Diluted shares: ~26.05 million.
Liquidity and cash flow: Operating cash flow $11.836 million; free cash flow $1...
Financial Highlights
Revenue: $99.038 million in Q2 2025, down 7.23% YoY and 3.95% QoQ. Gross Profit: $29.779 million with gross margin of 30.07% (YoY -10.03%; QoQ -3.64%). Operating Income: $13.183 million (margin 13.31%; YoY -10.36%; QoQ -4.01%). Net Income: $10.308 million (net margin 10.41%; YoY -5.52%; QoQ -3.55%). EPS: $0.40 (YoY -4.76%; QoQ -2.44%). EBITDA: $17.409 million (EBITDA margin ~17.58%). Diluted shares: ~26.05 million.
Liquidity and cash flow: Operating cash flow $11.836 million; free cash flow $10.728 million; cash at end of period $99.977 million; net debt is negative (net cash) ~$91.823 million. Capital expenditures $1.108 million; acquisitions net cash outflow $5.617 million; dividends paid $6.496 million; net cash from financing activities $(6.497) million; net change in cash +$8.614 million.
Balance sheet highlights: Total assets $406.814 million; total liabilities $48.445 million; total stockholders’ equity $358.369 million. Cash and cash equivalents plus short-term investments total $122.632 million, reflecting a strong liquidity position. Current ratio 6.27; quick ratio 5.03; cash ratio 2.95. Dividend yield 1.04%.
Valuation and efficiency: P/E 15.1x, P/BV 1.74x, P/Sales 6.28x; dividend payout ~63%. Operating cash flow to sales 12.0%; FCF to operating cash flow 0.91x; net debt to EBITDA negative, signaling a comfortable balance sheet.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
99.04M |
-7.23% |
-3.95% |
| Gross Profit |
29.78M |
-10.03% |
-3.64% |
| Operating Income |
13.18M |
-10.36% |
-4.01% |
| Net Income |
10.31M |
-5.52% |
-3.55% |
| EPS |
0.40 |
-4.76% |
-2.44% |
Key Financial Ratios
operatingProfitMargin
13.3%
operatingCashFlowPerShare
$0.46
freeCashFlowPerShare
$0.41
Management Commentary
No earnings call transcript or management quotes were provided in the dataset. As a result, there are no verbatim management quotes to group by themes (strategy, operations, market conditions). The analysis relies on reported results and published ratios to infer management focus and outlook.
Forward Guidance
Management did not publish formal forward guidance in the supplied data. In the current context, the outlook hinges on revenue stabilization in core forms businesses and ongoing cost discipline. Investors should monitor: (1) quarterly revenue trajectory in H2 2025 and any signs of stabilization or acceleration in higher-margin labeling and customization segments; (2) ongoing cost controls, including SG&A and manufacturing efficiency; (3) the pace and success of any acquisitions or strategic investments and their integration; (4) macro demand for business forms and related materials in the US market. Given Ennis’ strong liquidity and modest leverage, the company appears capable of funding capex, dividends, and potential tuck-in acquisitions if growth opportunities materialize. The key factor to watch is whether revenue momentum can turn positive or at least stabilize while preserving current margin discipline and cash flow generation.