Ennis, Inc. Reports Results for the First Quarter Ended May 31, 2009

Ennis, Inc. (the "Company"), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2009.

Highlights

• Consolidated revenues for the quarter were $130.8 million compared to $163.2 million for the same quarter last year, and $117.3 million for the previous quarter.

• Diluted earnings per share for the quarter were $0.26 per share compared to $0.42 per share for the same quarter last year, and $0.23 per share for the previous quarter on a pre-impairment pro-forma basis.
• Generated $25.2 million in cash from operations during the quarter, and improved cash position by $20.5 million.

Financial Overview

For the quarter, our consolidated net sales decreased by $32.4 million, or 19.8%, from $163.2 million for the quarter ended May 31, 2008 to $130.8 million for the quarter ended May 31, 2009. Our Print sales for the quarter were $71.7 million, compared to $85.3 million for the same quarter last year, or a decrease of 15.9%. Apparel sales for the quarter were $59.1 million, compared to $77.9 million for the same quarter last year, or a decrease of 24.1%. Our overall gross profit margins ("margins") decreased from 24.8% to 23.7% for the quarter ended May 31, 2008 and May 31, 2009, respectively. Our Print margins decreased from 27.8% to 26.4% and our Apparel margins decreased from 21.5% to 20.4%, for the quarters ended May 31, 2008 and May 31, 2009, respectively. Our earnings for the quarter decreased from $10.9 million for the quarter ended May 31, 2008 to $6.6 million for the quarter ended May 31, 2009. Our diluted EPS decreased from $.42 per share to $.26 per share for the quarters ended May 31, 2008 and May 31, 2009, respectively. Both the decrease in our earnings and our earnings per share related directly to the reduction in our sales during the quarter.

During the quarter, the Company generated $14.3 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $21.7 million for the comparable quarter last year. Operational cash flows increased from $16.7 million for the quarter ended May 31, 2008 to $25.2 million for the quarter ended May 31, 2009.

Keith Walters, Chairman, President & CEO, commented by saying, "Fiscal year 2010 continues to be a challenging year and our results continue to be significantly impacted by the economic recession. However, despite the economic environment, we are pleased with our ability to maintain our margins within 110 basis points of last year, given the significant decline in sales, which is a testament to the costs controls we have in place. We continued to maintain a strong balance sheet, with excellent liquidity and leverage ratios. During the quarter, we were able to generate $25.2 million in cash from operations and increase our overall cash position by $20.5 million. We have recently broken ground on our new apparel manufacturing facilities in Agua Prieta, Mexico, which once completed, should significantly reduce our manufacturing and distribution costs. While these economic times are difficult on all of us, we continue to feel confident with our ability to navigate these challenging times and believe we are starting to see some encouraging signs as our sales and profits both increased when compared to the most recent quarter.”

About Ennis

Ennis, Inc. (www.ennis.com) is primarily engaged in the production of and sale of business forms, apparel and other business products. The Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, the Company has production and distribution facilities strategically located throughout the United States of America, Mexico and Canada, to serve the Company’s national network of distributors. The Company, together with its subsidiaries, operates in two business segments: the Print Segment ("Print") and Apparel Segment ("Apparel"). The Print Segment is primarily engaged in the business of manufacturing and selling business forms, other printed business products, printed and electronic media, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, secure and negotiable documents, envelopes and other custom products. The Apparel Segment manufactures T-Shirts and distributes T-Shirts and other active-wear apparel through six distribution centers located throughout North America.

Safe Harbor Under The Private Securities Litigation Reform Act of 1995

Certain statements contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words "anticipate,” "preliminary,” "expect,” "believe,” "intend” and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These statements are subject to numerous uncertainties, which include, but are not limited to, the Company’s ability to effectively manage its business functions while growing its business in a rapidly changing environment, the Company’s ability to adapt and expand its services in such an environment, the variability in the prices of paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission. The Company undertakes no obligation to revise any forward-looking statements or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

Reconciliation of GAAP to Non-GAAP measure - EBITDA

Proforma Pre-impairment Results