NYSE:EBF
ENNIS, INC.
A specialized manufacturer delivering high-precision motor components to strategic industries like aerospace and defense with a strong balance sheet and consistent profitability.
Key Metrics
Investment Thesis
Bull Case
EBF offers an attractive income play for conservative investors given its consistent profitability and strong cash generation despite recent revenue declines. The company's massive liquidity position ($67M cash) and low leverage provide a substantial safety margin against economic volatility in the aerospace sector. Furthermore, the high dividend yield relative to earnings suggests a mature, cash-rich business that could stabilize or grow if underlying demand recovers.
Bear Case
The stock is underpinned by a clear secular decline in revenue and earnings over the past three years, raising concerns about the sustainability of current market share. Significant exposure to goodwill and the lack of new growth initiatives following recent acquisitions pose long-term value risks. Additionally, the heavy reliance on dividend payouts ($92M) may become unsustainable if operating cash flows do not rebound quickly enough to offset declining top-line performance.
About ENNIS, INC.
ENNIS, INC. (EBF) is a leading global provider of precision-engineered components and assemblies for high-performance motors and actuators, serving critical markets including aerospace, industrial automation, and consumer electronics.
Analysis
Management Discussion
ENNIS has navigated a challenging period characterized by revenue compression of nearly 8% over the last three years, with net income also declining from $47.3M to $40.2M. Despite this top-line weakness, the company maintains strong operational cash flow generation and a healthy liquidity position, though the aggressive return of capital via dividends ($92M) combined with financing outflows suggests management prioritizes yield over expansion. The reduction in accounts receivable and inventory levels indicates improved working capital efficiency, but investors must scrutinize whether current demand softening is cyclical or structural.
Industry Overview
The global motor and actuator components industry is highly competitive yet specialized, dominated by players with deep engineering capabilities serving capital-intensive sectors like aerospace and defense. Market dynamics are currently influenced by supply chain constraints, shifting demand patterns in commercial aviation, and the transition toward electrification which creates both opportunities for new entrants and threats to legacy manufacturers.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $431.8M | $420.1M | $394.6M |
| Cost of Revenue | $300.8M | $294.8M | $277.3M |
| Gross Profit | $131.1M | $125.3M | $117.3M |
| Operating Expenses | $64.9M | $68.9M | $65.3M |
| Operating Income | $66.2M | $56.5M | $52.0M |
| G&A | $70.8M | $68.8M | $65.4M |
| Stock-Based Comp | $2.8M | $1.2M | $4.0M |
| Depreciation | $10.2M | $9.9M | $8.8M |
| Amortization | $7.2M | $7.6M | $7.7M |
| Other OpEx | $-5.9M | $53.0K | $-58.0K |
| Non-Operating Income | $-1.2M | $2.7M | $3.5M |
| Interest Expense | $0 | $-4.0M | — |
| Interest Income | — | — | $4.9M |
| Pre-Tax Income | $64.9M | $59.1M | $55.5M |
| Income Tax | $17.6M | $16.5M | $15.2M |
| Continuing Ops | $47.3M | $42.6M | $40.2M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $47.3M | $42.6M | $40.2M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $47.3M | $42.6M | $40.2M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $196.6M | $201.4M | $152.7M |
| Cash & Equivalents | $94.0M | $81.6M | $67.0M |
| Marketable Securities | — | $29.3M | $5.5M |
| Accounts Receivable | $53.5M | $47.2M | $38.8M |
| Inventory | $46.8M | $40.0M | $38.8M |
| Other Current Assets | $2.3M | $3.2M | $2.7M |
| Long-Term Assets | $197.2M | $197.8M | $196.2M |
| PP&E (Net) | $47.8M | $55.0M | $52.6M |
| Intangibles | $44.1M | $38.3M | $33.3M |
| Goodwill | $91.8M | $94.3M | $94.3M |
| Operating Leases | $13.1M | $9.8M | $9.8M |
| Other LT Assets | $380.0K | $340.0K | $6.2M |
| Total Assets | $393.8M | $399.2M | $348.9M |
| Current Liabilities | $41.2M | $33.8M | $33.3M |
| Accounts Payable | $18.3M | $11.8M | $13.8M |
| Current Leases | $4.8M | $4.4M | $4.2M |
| Taxes Payable | — | $626.0K | $567.0K |
| Other Current Liab | $0 | $-626.0K | $-567.0K |
| Long-Term Liabilities | $21.2M | $15.5M | $13.7M |
| LT Operating Leases | $8.2M | $5.2M | $5.3M |
| Other LT Liab | $13.0M | $10.4M | $8.3M |
| Total Liabilities | $62.4M | $49.3M | $47.0M |
| Shareholders' Equity | $331.4M | $349.8M | $302.0M |
| Retained Earnings | $219.5M | $236.2M | $184.4M |
| Treasury Stock | $74.9M | $74.7M | $71.6M |
| Total L&E | $393.8M | $399.2M | $348.9M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $47.3M | $42.6M | $40.2M |
| Non-Cash Adjustments | $-21.5M | $53.4M | $35.5M |
| Working Capital Changes | $21.0M | $-27.0M | $-9.8M |
| Cash from Operations | $46.8M | $69.1M | $65.9M |
| Cash from Investing | $-11.5M | $-55.0M | $13.2M |
| Share Buybacks | $1.1M | $586.0K | $1.8M |
| Dividends Paid | $25.8M | $25.9M | $92.0M |
| Cash from Financing | $-27.0M | $-26.4M | $-93.7M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $8.4M | $-12.4M | $-14.6M |
| Beginning Cash | $85.6M | $94.0M | $81.6M |
| Ending Cash | $94.0M | $81.6M | $67.0M |
Frequently Asked Questions
How does ENNIS, INC. make money?
The company derives revenue primarily from precision-engineered parts for electric motors and actuators used in aerospace, commercial aviation, industrial automation, and consumer electronics applications. Financial data indicates a focus on high-margin manufacturing operations supported by significant goodwill from strategic acquisitions, alongside substantial cash reserves enabling continued investment or shareholder returns.
What are the main risks for EBF?
1. Revenue Decline Trend: The company has experienced a clear downward trajectory in both revenue (from $431.8M in 2023 to $394.6M in 2025) and net income, which could signal losing market share or headwinds in the aerospace sector. 2. High Capitalization on Acquisitions: A significant portion of total assets is tied up in goodwill ($94.3M), making the stock vulnerable to write-downs if acquired businesses underperform. 3. Limited Growth Visibility: The consistent year-over-year decline in top-line revenue and earnings suggests a lack of new growth drivers or successful integration of recent acquisitions ($6.2M). 4. Shareholder Return Pressure: While dividends are paid, the massive cash flow from financing outflows (-$93.7M) and high dividend payments ($92.0M) may limit internal reinvestment capacity for R&D or expansion.
What is EBF's competitive advantage?
1. Specialized Expertise in High-Performance Motors: EBF possesses deep technical knowledge in designing and manufacturing complex components for demanding aerospace and defense applications where failure is not an option. 2. Strong Balance Sheet and Liquidity: With $67M in cash and equivalents and a current ratio well above 4, the company has robust liquidity to weather economic downturns and fund growth initiatives without excessive debt reliance. 3. Consistent Profitability Margins: The firm demonstrates resilient operating performance with operating profits exceeding $50M annually despite revenue contraction, suggesting effective cost management and pricing power.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.