# Ennis, Inc.: Form 10-K for the period ended Feb 28, 2019

- Company: [Ennis, Inc.](/companies/ebf.md) (CIK 33002)
- Form: 10-K
- Filed: 2019-05-06
- Accepted by EDGAR: May 6, 2019, 18:46 ET
- Period: 2019-02-28
- Accession: 0001564590-19-015928
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/33002/000156459019015928/ebf-10k_20190228.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/33002/000156459019015928/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2019-02-28.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2018-12-01 to 2019-02-28 | $100.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 12 months, 2018-03-01 to 2019-02-28 | $400.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 12 months, 2018-03-01 to 2019-02-28 | $277.4m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2018-12-01 to 2019-02-28 | $29.1m | us-gaap:GrossProfit |
| Gross profit | 12 months, 2018-03-01 to 2019-02-28 | $123.4m | us-gaap:GrossProfit |
| Selling, general and administrative | 12 months, 2018-03-01 to 2019-02-28 | $73.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 12 months, 2018-03-01 to 2019-02-28 | $50.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2018-03-01 to 2019-02-28 | $1.2m | us-gaap:InterestExpense |
| Income tax | 12 months, 2018-03-01 to 2019-02-28 | $12.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2018-12-01 to 2019-02-28 | $8.2m | us-gaap:NetIncomeLoss |
| Net income | 12 months, 2018-03-01 to 2019-02-28 | $37.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2018-12-01 to 2019-02-28 | $0.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2018-12-01 to 2019-02-28 | $0.32 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 12 months, 2018-03-01 to 2019-02-28 | 25,842,179 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 12 months, 2018-03-01 to 2019-02-28 | $51.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 12 months, 2018-03-01 to 2019-02-28 | $4.8m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 3 months, 2018-12-01 to 2019-02-28 | $5.9m | us-gaap:PaymentsOfDividendsCommonStock |
| Dividends paid | 12 months, 2018-03-01 to 2019-02-28 | $22.6m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 12 months, 2018-03-01 to 2019-02-28 | $4.8m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2019-02-28 | $88.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2019-02-28 | $166.2m | us-gaap:AssetsCurrent |
| Total assets | at 2019-02-28 | $363.1m | us-gaap:Assets |
| Current liabilities | at 2019-02-28 | $31.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2019-02-28 | $74.0m | us-gaap:Liabilities |
| Long-term debt | at 2019-02-28 | $30.0m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2019-02-28 | $289.1m | us-gaap:StockholdersEquity |

## Business

As filed, 12,147 characters.

### Overview

Ennis, Inc. (formerly Ennis Business Forms, Inc.) (collectively with its subsidiaries, the “Company,” “Registrant,” “Ennis,” or “we,” “us,” or “our”) was organized under the laws of Texas in 1909. We and our subsidiaries print and manufacture a broad line of business forms and other business products. We distribute business products and forms throughout the United States primarily through independent dealers. This distributor channel encompasses independent print distributors, commercial printers, direct mail, fulfillment companies, payroll and accounts payable software companies, and advertising agencies, among others. We also sell products to many of our competitors to satisfy their customers’ needs.

On July 31, 2018, we issued an aggregate of 829,126 shares of our common stock, par value $2.50 per share (the “Shares”), to the former stockholders of Wright Business Forms, Inc., d/b/a Wright Business Graphics (“Wright” or “WBG”), as partial consideration for the acquisition by us of all of the outstanding equity interests of WBG by way of a merger of a wholly-owned subsidiary of ours with and into WBG pursuant to the Agreement and Plan of Merger, dated July 16, 2018 (the “Merger Agreement”). The Shares issued to the former stockholders of WBG represent aggregate consideration under the Merger Agreement equal to approximately $16.2 million. An additional $19.7 million was paid in cash to the stockholders of Wright, subject to a final working capital adjustment, and $2.6 million was paid to pay-off outstanding debt. The sale of the Shares was exempt from registration pursuant to Section 4(a)(2) under the Securities Act of 1993, as amended, and Regulation D promulgated thereunder. The goodwill recognized as a part of the merger is not deductible for tax purposes. Wright is a printing company headquartered in Portland, Oregon with additional locations in Washington and California. The business produces forms, pressure seal, packaging, direct mail, checks, statement processing and commercial printing and sells mainly through distributors and resellers. Wright, which generated approximately $58.0 million in sales for its fiscal year ended March 31, 2018, continues to operate under its brand names.

On April 30, 2018, we acquired the assets of Allen-Bailey Tag & Label (“ABTL”), a tag and label operation located in New York for $4.7 million in cash plus the assumption of trade payables, subject to a working capital adjustment. In addition, contingent consideration of up to $500,000 is payable to the sellers if certain sales levels are maintained over the next three years. On July 7, 2017, we acquired the assets of a separate tag operation located in Ohio for $1.4 million in cash plus the assumption of certain accrued liabilities. Management considers both of these acquisitions immaterial.

On January 27, 2017, we completed the acquisition of Independent Printing Company, Inc. and its related entities (collectively “Independent”) for $17.7 million in cash consideration, in a stock purchase transaction. Independent’s main facility located in DePere, Wisconsin. The business produces presentation folders, checks, wide format and commercial print. Independent operates under its brand name and generated approximately $37.0 million in sales during the 2016 calendar year. Independent sells mainly through distributors and resellers. We now have four folder facilities located in Michigan, Kansas, California and Wisconsin, as well as wide format capabilities in Colorado and Wisconsin.

### Business Overview

Our management believes we are the largest provider of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders to independent distributors in the United States.

We are in the business of manufacturing, designing and selling business forms and other printed business products primarily to distributors located in the United States. We operate 60 manufacturing plants throughout the United States in 21 strategically located states as one reportable segment. Approximately 95% of the business products we manufacture are custom and semi-custom products, constructed in a wide variety of sizes, colors, number of parts and quantities on an individual job basis, depending upon the customers’ specifications.

The products we sell include snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure sensitive products in short, medium and long runs under the following labels: Ennis®, Royal Business Forms®, Block Graphics®, Specialized Printed Forms®, 360º Custom LabelsSM, ColorWorx®, Enfusion®, Uncompromised Check Solutions®, VersaSeal®, Ad ConceptsSM, FormSource LimitedSM, Star Award Ribbon Company®, Witt Printing®, B&D Litho®, Genforms®, PrintGraphics®, Calibrated Forms®, PrintXcel®, Printegra®, Falcon Business FormsSM, Forms ManufacturersSM, Mutual GraphicsSM, TRI-C Business FormsSM, Major Business SystemsSM, Independent PrintingSM, Hoosier Data Forms®, Hayes Graphics®, Wright Business GraphicsSM and Wright 360SM. We also sell the Adams McClure® brand (which provides Point of Purchase advertising for large franchise and fast food chains as well as kitting and fulfillment); the Admore®, Folder Express® and Independent Folders® brands (which provide presentation folders and document folders); Ennis Tag & LabelSM (which provides custom printed, high performance labels and custom and stock tags); Allen-Bailey Tag & LabelSM, Atlas Tag & Label®, Kay Toledo Tag® and Special Service Partners® (SSP) (which provides custom and stock tags and labels); Trade Envelopes®, Block Graphics®, Wisco® and National Imprint Corporation® (which provide custom and imprinted envelopes) and Northstar® and General Financial Supply® (which provide financial and security documents).

We sell predominantly through private printers and independent distributors, as well as to many of our competitors. Northstar Computer Forms, Inc., our wholly-owned subsidiary, also sells direct to a small number of customers, generally large banking organizations (where a distributor is not acceptable or available to the end-user). Adams McClure, LP, a wholly-owned subsidiary, also sells direct to a small number of customers, where sales are generally through advertising agencies.

The printing industry generally sells its products either predominantly to end users, a market dominated by a few large manufacturers, such as R.R. Donnelley and Sons, Staples, Inc., Standard Register Co. (a subsidiary of Taylor Corporation), and Cenveo, Inc., or, like the Company, through a variety of independent distributors and distributor groups. While it is not possible, because of the lack of adequate public statistical information, to determine the Company’s share of the total business products market, management believes the Company is the largest producer of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders in the United States distributing primarily through independent dealers.

There are a number of competitors that operate in this segment, ranging in size from single employee-owned operations to multi-plant organizations. We believe our strategic locations and buying power permit us to compete on a favorable basis within the distributor market on competitive factors, such as service, quality, and price.

Distribution of business forms and other business products throughout the United States is primarily done through independent dealers, including business forms distributors, resellers, direct mail, commercial printers, payroll and accounts payable software companies, and advertising agencies.

Raw materials principally consist of a wide variety of weights, widths, colors, sizes, and qualities of paper for business products purchased primarily from one major supplier at favorable prices based on the volume of business.

Business products usage in the printing industry is generally not seasonal. General economic conditions and contraction of the traditional business forms industry are the predominant factors in quarterly volume fluctuations.

### Patents, Licenses, Franchises and Concessions

Outside of the patent for our VersaSeal® product, we do not have any significant patents, licenses, franchises, or concessions.

### Intellectual Property

We market our products under a number of trademarks and trade names. The protection of our trademarks is important to our business. We believe that our registered and common law trademarks have significant value and these trademarks are important to our ability to create and sustain demand for our products. We have registered trademarks in the United States for Ennis®, EnnisOnlineSM, B&D Litho of AZ®, B&D Litho®, ACR®, Block Graphics®, Enfusion®, 360º Custom LabelsSM, Admore®, CashManagementSupply.comSM, Securestar®, Northstar®, MICRLink®, MICR ConnectionTM, Ennisstores.comTM, General Financial Supply®, Calibrated Forms®, PrintXcelSM, Printegra®, Trade Envelopes®, Witt Printing®, Genforms®, Royal Business Forms®, Crabar/GBFSM, BF&SSM, Adams McClure®, Advertising ConceptsTM, ColorWorx®, Allen-Bailey Tag & LabelSM, Atlas Tag & Label®, PrintgraphicsSM, Uncompromised Check Solutions®, VersaSeal®, VersaSeal SecureX®, Folder Express®, Wisco®, National Imprint Corporation®, Star Award Ribbon®, Kay Toledo Tag®, Falcon Business FormsSM, Forms ManufacturersSM, Mutual GraphicsSM, TRI-C Business FormsSM, SSP®, EOSTouchpoint®, Printersmall®, Check Guard®, Envirofolder®, Independent®, Independent Checks®, Independent Folders®, Independent Large Format Solutions®, Wright Business GraphicsSM, Wright 360SM and variations of these brands as well as other trademarks. We have similar trademark registrations internationally.

### Customers

No single customer accounts for as much as five percent of our consolidated net sales or accounts receivable.

### Backlog

At February 28, 2019, our backlog of orders was approximately $22.5 million, as compared to approximately $17.4 million at February 28, 2018.

### Research and Development

While we seek new products to sell through our distribution channel, there have been no material amounts spent on research and development in fiscal years 2019, 2018 or 2017.

### Environment

We are subject to various federal, state, and local environmental laws and regulations concerning, among other things, wastewater discharges, air emissions and solid waste disposal. Our manufacturing processes do not emit substantial foreign substances into the environment. We do not believe that our compliance with federal, state, or local statutes or regulations relating to the protection of the environment has any material effect upon capital expenditures, earnings or our competitive position. There can be no assurance, however, that future changes in federal, state, or local regulations, interpretations of existing regulations or the discovery of currently unknown problems or conditions will not require substantial additional expenditures. Similarly, the extent of our liability, if any, for past failures to comply with laws, regulations, and permits applicable to our operations cannot be determined.

### Employees

At February 28, 2019, we had 2,470 employees. 252 employees are represented by labor unions under collective bargaining agreements, which are subject to periodic negotiations. We believe we have a good working relationship with all of the unions that represent our employees.

### Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are available free of charge under the Investors Relations page on our website, www.ennis.com, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). Information on our website is not included as a part of, or incorporated by reference into, this report. Our SEC filings are also available through the SEC’s website, www.sec.gov.

## Risk factors

As filed, 24,137 characters.

You should carefully consider the risks described below, as well as the other information included or incorporated by reference in this Annual Report on Form 10-K, before making an investment in our common stock. The risks described below are not the only ones we face in our business. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. If any of the following risks occur, our business, financial condition or operating results could be materially harmed. In such an event, our common stock could decline in price and you may lose all or part of your investment.

***Our results and financial condition are affected by global and local market conditions, and competitors’ pricing strategies, which can adversely affect our sales, margins, and net income.***

Our results of operations can be affected by local, national and worldwide market conditions. The consequences of domestic and international economic uncertainty or instability, volatility in commodity markets, and domestic or international policy uncertainty, all of which we have seen in the past, can all impact economic activity. Unfavorable conditions can depress the demand for our products and thus sales in a given market and may prompt competitor’s pricing strategies that adversely affect our margins or constrain our operating flexibility. Certain macroeconomic events, such as the past crisis in the financial markets, could have a more wide-ranging and prolonged impact on the general business environment, which could also adversely affect us. Whether we can manage these risks effectively depends mainly on the following:

- Our ability to manage movements in commodity prices and the impact of government actions to manage national economic conditions such as consumer spending, inflation rates and unemployment levels, particularly given the past volatility in the global financial markets; and
- The impact on our margins of labor costs given our labor-intensive business model, the trend toward higher wages in both mature and developing markets and the potential impact of union organizing efforts on day-to-day operations of our manufacturing facilities.

***The terms and conditions of our credit facility impose certain restrictions on our operations. We may not be able to raise additional capital, if needed, for proposed expansion projects.***

The terms and conditions of our credit facility impose certain restrictions on our ability to incur additional debt, make capital expenditures, acquisitions and asset dispositions, as well as impose other customary covenants, such as requiring that our fixed charge coverage ratio not be less than 1.25:1.00 and our total leverage ratio not exceed 3.00:1:00. Our ability to comply with the covenants may be affected by events beyond our control, such as distressed and volatile financial and/or consumer markets. A breach of any of these covenants could result in a default under our credit facility. In the event of a default, the bank could elect to declare the outstanding principal amount of our credit facility, all interest thereon, and all other amounts payable under our credit facility to be immediately due and payable. As of February 28, 2019, we were in compliance with all terms and conditions of our credit facility, which matures on August 11, 2020, and have cash on hand in excess of 2.9 times our current outstanding debt level.

***Declining financial market conditions and continued decline in long-term interest rates could adversely impact the funded status of our pension plan.***

We maintain a noncontributory defined benefit retirement plan (the “Pension Plan”) covering approximately 17% of our employees. Included in our financial results are Pension Plan costs that are measured using actuarial valuations. The actuarial assumptions used may differ from actual results. In addition, as our Pension Plan assets are invested in marketable securities, severe fluctuations in market values could potentially negatively impact our funded status, recorded pension liability, and future required minimum contribution levels. A decline in long-term debt interest rates puts downward pressure on the discount rate used by plan sponsors to determine their pension liabilities. Each 10 basis point change in the discount rate impacts our computed pension liability by about $900,000. Similar to fluctuations in market values, a drop in the discount rate could potentially negatively impact our funded status, recorded pension liability and future contribution levels. Also, continued changes in the mortality tables could potentially impact our funded status. As of February 28, 2019, the Pension Plan was 101.0% funded on a projected benefit obligation (PBO) basis and 109.4% on an accumulated benefit obligation (ABO) basis.

***We may be unable to identify or to complete acquisitions or to successfully integrate the businesses we acquire.***

We have evaluated, and may continue to evaluate, potential acquisition transactions. We attempt to address the potential risks inherent in assessing the attractiveness of acquisition candidates, as well as other challenges such as retaining the employees and integrating the operations of the businesses we acquire. Integrating acquired operations involves significant risks and uncertainties, including maintenance of uniform standards, controls, policies and procedures; diversion of management’s attention from normal business operations during the integration process; unplanned expenses associated with integration efforts; and unidentified issues not discovered in due diligence, including legal contingencies. Due to these risks and others, there can be no guarantee that the businesses we acquire will lead to the cost savings or increases in net sales that we expect or desire. Additionally, there can be no assurance that suitable acquisition opportunities will be available in the future, which could harm our business plan.

***We may be required to write down goodwill and other intangible assets, which could cause our financial condition and results of operations to be negatively affected in the future.***

When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets. The amount of the purchase price which is allocated to goodwill and other intangible assets is the excess of the purchase price over the net identifiable tangible assets acquired. The annual impairment test is based on several factors requiring judgment. An impairment may be caused by any number of factors outside our control, such as a decline in market conditions caused by a recession, or protracted recovery there-from, or other factors like competitor’s pricing strategies, which may be tied to such economic events. To date, we have not been required to take an impairment charge relating to our print business, but continued sale-side pressures due to technology transference, competitor pricing pressures, and economic uncertainties could result in a determination that a portion of the recorded value of goodwill and intangible assets may be required to be written down. Although such a charge would be a noncash expense, it would impact our reported operating results and financial position. The Company has mitigated some of this risk by changing from indefinite lives to definite lives accounting for all intangibles assets. Under definite lives accounting, the value of intangible assets is gradually amortized over time, instead of being left on the Company’s books in full and only being written down when an impairment event is deemed to have occurred. At February 28, 2019, our consolidated goodwill and other intangible assets were approximately $81.6 million and $61.3 million, respectively.

***Digital technologies will continue to erode the demand for our printed business documents.***

The increasing sophistication of software, internet technologies, and digital equipment combined with our customers’ general preference, as well as governmental influences for paperless business environments will continue to reduce the number of traditional printed documents sold. Moreover, the documents that will continue to coexist with software applications will likely contain less value-added print content.

Many of our custom-printed documents help companies control their internal business processes and facilitate the flow of information. These applications will increasingly be conducted over the internet or through other electronic payment systems. The predominant method of our customers’ communication to their customers is by printed information. As their customers become more accepting of internet communications, our clients may increasingly opt for what is perceived to be less costly electronic option, which would reduce our revenue. The pace of these trends is difficult to predict. These factors will tend to reduce the industry-wide demand for printed documents and require us to gain market share to maintain or increase our current level of print-based revenue which could place pressure on our operating margins.

In response to the gradual obsolescence of our standardized forms business, we continue to develop our capability to provide custom and full-color products. If new printing capabilities and new product introductions do not continue to offset the obsolescence of our standardized business forms products, and we are unable to increase our market share, our sales and profits will be affected. Decreases in sales of our standardized business forms and products due to obsolescence could also reduce our gross margins or impact the value of our recorded goodwill and intangible assets. This reduction could in turn adversely impact our profits, unless we are able to offset the reduction through the introduction of new high margin products and services or realize cost savings in other areas.

***Our distributor customers may be acquired by other manufacturers who redirect business within their plants.***

Some of our customers are being absorbed by the distribution channels of some of our manufacturing competitors. However, we do not believe this will significantly impact our business model. We have continued to sell to some of these customers even after they were absorbed by our competition because of the breadth of our product line and our geographic diversity.

***Our distributors face increased competition from various sources, such as office supply superstores. Increased competition may require us to reduce prices or to offer other incentives in order to enable our distributors to attract new customers and retain existing customers.***

Low price, high value office supply chain stores offer standardized business forms, checks and related products. Because of their size, these superstores have the buying power to offer many of these products at competitive prices. These superstores also offer the convenience of “one-stop” shopping for a broad array of office supplies that our distributors do not offer. In addition, superstores have the financial strength to reduce prices or increase promotional discounts to expand market share. This could result in us reducing our prices or offering incentives in order to enable our distributors to attract new customers and retain existing customers, which could reduce our profits.

***Technological improvements may reduce our competitive advantage over some of our competitors, which could reduce our profits.***

Improvements in the cost and quality of digital print technology is enabling some of our competitors to gain access to products of complex design and functionality at competitive costs. Increased competition from these competitors could force us to reduce our prices in order to attract and retain customers, which could reduce our profits.

***We could experience labor disputes that could disrupt our business in the future.***

As of February 28, 2019, approximately 10% of our employees are represented by labor unions under collective bargaining agreements, which are subject to periodic negotiations. While we believe we have a good working relationship with all of the unions, there can be no assurance that any future labor negotiations will prove successful, which may result in a significant increase in the cost of labor, or may break down and result in the disruption of our business or operations.

***We obtain our raw materials from a limited number of suppliers, and any disruption in our relationships with these suppliers, or any substantial increase in the price of raw materials or material shortages could have a material adverse effect on us.***

We purchase our paper products from a limited number of sources, which meet stringent quality and on-time delivery standards under long-term contracts. However, fluctuations in the quality of our paper, unexpected price changes or other factors that relate to our paper products could have a material adverse effect on our operating results.

Paper is a commodity that is subject to periodic increases or decreases in price, which are sometimes quite significant. There is no effective market of derivative instruments to insulate us against unexpected changes in price of paper in a cost-effective manner, and negotiated purchase contracts provide only limited protection against price increases. Generally, when paper prices are increased, we attempt to recover the higher costs by raising the prices of our products to our customers. In the price-competitive marketplaces in which we operate, we may not always be able to pass through any or all of the higher costs. As such, any significant increase in the price of paper or shortages in its availability, could have a material adverse effect on our results of operations. During the last fiscal year, paper prices experienced increases due to higher pulp prices, reduced domestic capacity (which has been caused by capacity being taken off-line (planned or unplanned) or transferred to different paper types) and fewer imports due to the weakening of the U.S. dollar during the latter part of fiscal 2018 and first half of fiscal 2019. Fewer imports and less domestic capacity generally allowed domestic paper suppliers to pass along multiple price increases during the last fiscal year and, in some cases, to impose allocation restrictions on certain paper grades. This put significant pressure on many manufacturer’s operating margins. Recently, with a strengthening U.S. dollar, foreign imports generally have increased to meet domestic demand. Increasing imports, coupled with weaker domestic demand, has historically meant downward pressure on paper pricing. It is difficult to project future pricing, however, which may be affected by many factors, including recent changes in ownership at a number of major mills.

***We face intense competition to gain market share, which may lead some competitors to sell substantial amounts of goods at prices against which we cannot profitably compete.***

Our marketing strategy is to differentiate ourselves by providing quality service and quality products to our customers. Even if this strategy is successful, the results may be offset by reductions in demand or price declines due to competitors’ pricing strategies or other micro or macro-economic factors. We face the risk of our competition following a strategy of selling its products at or below cost in order to cover some amount of fixed costs, especially in stressed economic times.

### Environmental regulations may impact our future operating results.

We are subject to extensive and changing federal, state and foreign laws and regulations establishing health and environmental quality standards, concerning, among other things, wastewater discharges, air emissions and solid waste disposal, and may be subject to liability or penalties for violations of those standards. We are also subject to laws and regulations governing remediation of contamination at facilities currently or formerly owned or operated by us or to which we have sent hazardous substances or wastes for treatment, recycling or disposal. We may be subject to future liabilities or obligations as a result of new or more stringent interpretations of existing laws and regulations. In addition, we may have liabilities or obligations in the future if we discover any environmental contamination or liability at any of our facilities, or at facilities we may acquire.

### We are subject to taxation related risks.

Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are applied. On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act includes significant changes to the U.S. corporate income tax system including, among other things, a federal corporate rate reduction from 35% to 21%; limitations on the deductibility of interest expense and executive compensation and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system. In the future, we may be subject to increased taxes under the Tax Act, including due to the aforementioned limitations on deductions. Also, we may be required to make material adjustments to provisional items recorded. There can be no assurance that U.S. tax laws, including the corporate income tax rate, which the Tax Act lowered to 21%, would not undergo additional changes in the future. The final impact of the Tax Act on the Company may differ from the estimates previously reported, possibly materially, due to such factors as changes in interpretations and assumptions made, additional guidance that may be issued, and actions taken by the Company as a result of the Tax Act, among other factors. All of these factors and uncertainties may adversely affect our results of operations, financial position and cash flows.

***We are exposed to the risk of non-payment by our customers on a significant amount of our sales.***

Our extension of credit involves considerable judgment and is based on an evaluation of each customer’s financial condition and payment history. We monitor our credit risk exposure by periodically obtaining credit reports and updated financials on our customers. We generally see a heightened amount of bankruptcies by our customers during economic downturns. While we maintain an allowance for doubtful receivables for potential credit losses based upon our historical trends and other available information, in times of economic turmoil, there is heightened risk that our historical indicators may prove to be inaccurate. The inability to collect on sales to significant customers or a group of customers could have a material adverse effect on our results of operations.

### Our business incurs significant freight and transportation costs.

We incur transportation expenses to ship our products to our customers. Significant increases in the costs of freight and transportation could have a material adverse effect on our results of operations, as there can be no assurance that we could pass on these increased costs to our customers. Recently, due to imposed government regulations, the availability of drivers has become a significant challenge in the industry. Costs to employ drivers have increased and transportation shortages have become more prevalent.

***We depend upon the talents and contributions of a limited number of individuals, many of whom would be difficult to replace.***

The loss or interruption of the services of our Chief Executive Officer, Executive Vice President or Chief Financial Officer could have a material adverse effect on our business, financial condition or results of operations. Although we maintain employment agreements with these individuals, it cannot be assured that the services of such individuals will continue.

***If our internal controls are found to be ineffective, our financial results or our stock price could be adversely affected.***

We believe that we currently have adequate internal control procedures in place. However, increased risk of internal control breakdowns generally exists in a business environment that is decentralized. In addition, if our internal control over financial reporting is found to be ineffective, investors may lose confidence in the reliability of our financial statements, which may adversely affect our stock price.

***Our services depend on the reliability of computer systems we and our vendors maintain. If these systems fail, our operations may be adversely affected.***

We depend on information technology and data processing systems to operate our business, and a significant malfunction or disruption in the operation of our systems may disrupt our business and adversely affect our ability to operate and compete in the markets we serve. These systems include systems that we own and operate, as well as systems of our vendors. Such systems are susceptible to malfunctions and interruptions. We also periodically upgrade and install new systems, which if installed or programmed incorrectly, may cause significant disruptions. The disruptions could interrupt our operations and adversely affect our results of operations, financial condition and cash flows.

***We may suffer a data breach of sensitive information, which may result in significant costs to investigate and remediate the breach, litigation expenses and government enforcement actions and penalties, all of which could have an adverse effect on our operations and reputation.***

It is critically important for us to maintain the confidentiality, integrity and availability of our systems, software and solutions. Many of our clients provide us with information they consider confidential or sensitive, and many of our client’s industries have established standards for safeguarding the confidentiality, integrity and availability of information relating to their businesses and customers. Confidential and sensitive information stored in our systems or available through web portals are susceptible to cybercrime or intentional disruption, which generally have increased across all industries in terms of sophistication and frequency. Disclosure of confidential information maintained on our systems or available through web portals due to human error, breach of our systems through cybercrime, a leak of confidential information due to employee misconduct or similar events may damage our reputation, subject us to regulatory enforcement action and cause significant reputational harm for our clients. Any of these outcomes may adversely affect our results of operations, financial condition and cash flows.

***Increases in the cost of employee benefits could impact our financial results and cash flow.***

Our expenses relating to employee health benefits are significant. Unfavorable changes in the cost of such benefits could impact our financial results and cash flow. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform could result in significant changes to the U.S. healthcare system. While the Company has various cost controls measures in place and employs an outside oversight review on larger claims, employee health benefits have been and are expected to continue to be a significant cost to the Company. During fiscal year 2017, the Company incurred a significant increase to its medical costs which was in excess of the increase that was anticipated. As such, effective with the start of calendar year 2017, the Company made significant changes to its medical reimbursement program. The program to date has not only been extremely successful in stemming the increasing tide associated with medical costs to the Company, but has reduced the trend line down to be more in line with historical levels. Even so, medical costs are and will continue to be a significant expense to the Company and subject to increases outside the Company’s control.

## Properties

As filed, 5,113 characters.

Our corporate headquarters are located in Midlothian, Texas. We operate manufacturing facilities throughout the United States. See the table below for additional information on our locations.

All of the properties are used for the production, warehousing and shipping of the following: business forms, flexographic printing, advertising specialties and Post-it® Notes (Wolfe City, Texas); presentation products (Macomb, Michigan; De Pere, Wisconsin and Columbus, Kansas); printed and electronic promotional media (Denver, Colorado); envelopes (Portland, Oregon; Columbus, Kansas; Tullahoma, Tennessee and Claysburg, Pennsylvania); financial forms (Minneapolis/St. Paul, Minnesota; Nevada, Iowa and Bridgewater, Virginia); pressure seal products (Visalia, California; Chino, California and Clarksville, Tennessee) and other business products.

Our plants are operated at production levels required to meet our forecasted customer demands. Production levels fluctuate with market demands and depend upon the product mix at any given point in time. Equipment is added as existing machinery becomes obsolete or not repairable, and as new equipment becomes necessary to meet market demands; however, at any given time, these additions and replacements are not considered to be material additions to property, plant and equipment, although such additions or replacements may increase a plant’s efficiency or capacity.

All of the foregoing facilities are considered to be in good condition. We do not anticipate that substantial expansion, refurbishing, or re-equipping will be required in the near future.

All of the rented property is held under leases with original terms of one or more years, expiring at various times through February 2027. No difficulties are presently foreseen in maintaining or renewing leases as they expire.

The accompanying list contains each of our owned and leased locations:

| Location | General Use | Approximate Square Footage Owned | Leased |
| --- | --- | ---: | ---: |
| Ennis, Texas | Three Manufacturing Facilities \* | 325,118 | — |
| Chatham, Virginia | Two Manufacturing Facilities | 127,956 | — |
| Paso Robles, California | Manufacturing | 94,120 | — |
| DeWitt, Iowa | Two Manufacturing Facilities | 95,000 | — |
| Ft. Scott, Kansas | Manufacturing | 86,660 | — |
| Portland, Oregon | Two Manufacturing Facilities | — | 261,765 |
| Wolfe City, Texas | Two Manufacturing Facilities | 119,259 | — |
| Coshocton, Ohio | Manufacturing | 24,750 | — |
| Macomb, Michigan | Manufacturing | 56,350 | — |
| Denver, Colorado | Four Manufacturing Facilities | 60,000 | 117,575 |
| Brooklyn Park, Minnesota | Manufacturing | 94,800 | — |
| Coon Rapids, Minnesota | Warehouse | — | 4,800 |
| Roseville, Minnesota | Manufacturing | — | 41,300 |
| Nevada, Iowa | Two Manufacturing Facilities | 232,000 | — |
| Nevada, Iowa | Held for Sale | 58,752 | — |
| Bridgewater, Virginia | Manufacturing | — | 27,000 |
| Columbus, Kansas | Two Manufacturing Facilities and Warehouse | 174,089 | — |
| Leipsic, Ohio | Manufacturing | 83,216 | — |
| El Dorado Springs, Missouri | Manufacturing | 70,894 | — |
| Princeton, Illinois | Manufacturing | — | 44,190 |
| Arlington, Texas | Two Manufacturing Facilities | 69,935 | — |
| Tullahoma, Tennessee | Two Manufacturing Facilities | 142,061 | — |
| Caledonia, New York | Manufacturing | 191,730 | — |
| Sun City, California | Two Manufacturing Facilities | 52,617 | — |
| Livermore, California | Sales Office | — | 650 |

12

| Location | General Use | Approximate Square Footage Owned | Leased |
| --- | --- | ---: | ---: |
| Perris, California | Warehouse | — | 6,788 |
| Chino, California | Manufacturing | — | 63,016 |
| Phoenix, Arizona | Manufacturing and Warehouse | — | 59,000 |
| Neenah, Wisconsin | Two Manufacturing Facilities & One Warehouse | 72,354 | 97,161 |
| West Chester, Pennsylvania | Sales Office | — | 1,150 |
| Claysburg, Pennsylvania | Manufacturing | — | 69,000 |
| Vandalia, Ohio | Held for Sale | 47,820 | — |
| Fairport, New York | Two Manufacturing Facilities | — | 40,800 |
| Indianapolis, Indiana | Two Manufacturing Facilities | — | 38,000 |
| Smyrna, Georgia | Manufacturing | — | 65,000 |
| Clarksville, Tennessee | Manufacturing | 51,900 | — |
| Fairhope, Alabama | Manufacturing | 65,000 | — |
| Toledo, Ohio | Three Manufacturing Facilities | 120,947 | — |
| Visalia, California | Manufacturing | — | 56,000 |
| Corsicana, Texas | Manufacturing | 39,685 | — |
| Girard, Kansas | Manufacturing | 69,474 | — |
| Powell, Tennessee | Manufacturing | 43,968 | — |
| Houston, Texas | Manufacturing | — | 29,668 |
| DePere, Wisconsin | Manufacturing & One Warehouse | — | 142,347 |
| Mosinee, Wisconsin | Manufacturing & One Warehouse | — | 5,700 |
| Kent, Washington | Manufacturing | — | 48,789 |
|  |  | 2,670,455 | 1,219,699 |
| **Corporate Offices** |  |  |  |
| Ennis, Texas | Administrative Offices | 9,300 | — |
| Midlothian, Texas | Executive and Administrative Offices | 28,000 | — |
|  |  | 37,300 | — |
|  | **Totals** | **2,707,755** | **1,219,699** |

\* 7,000 square feet of Ennis, Texas location leased

## Legal proceedings

As filed, 268 characters.

From time to time we are involved in various litigation matters arising in the ordinary course of our business. We do not believe the disposition of any current matter will have a material adverse effect on our consolidated financial position or results of operations.

## Management's discussion and analysis

As filed, 43,816 characters.

This Management’s Discussion and Analysis provides material historical and prospective disclosures intended to enable investors and other users to assess our financial condition and results of operations. Statements that are not historical are forward-looking and involve risk and uncertainties, including those discussed under the caption “Risk Factors” in Item 1A of this Annual Report on Form 10-K and elsewhere in this Report. You should read this discussion and analysis in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Report. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. We believe these forward-looking statements are based upon reasonable assumptions. All such statements involve risks and uncertainties, and as a result, actual results could differ materially from those projected, anticipated, or implied by these statements.

In view of such uncertainties, investors should not place undue reliance on our forward-looking statements since such statements may prove to be inaccurate and speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This Management’s Discussion and Analysis includes the following sections and is for the continuing operations of the Company, which is comprised of the production and sale of business forms and other business products, and excludes the discontinued operations of the Company’s apparel business, consisting of Alstyle Apparel, LLC and its subsidiaries (the “Apparel Segment”), which the Company sold to Gildan Activewear Inc. in May 2016:

- *Overview –* An overall discussion on our Company, the business challenges and opportunities we believe are key to our success, and our plans for facing these challenges relating to our continuing operations.
- *Critical Accounting Policies and Estimates –* A discussion of the accounting policies that require our most critical judgments and estimates relating to our continuing operations. This discussion provides insight into the level of subjectivity, quality, and variability involved in these judgments and estimates. This section also provides a summary of recently adopted and recently issued accounting pronouncements that have or may materially affect our business.
- *Results of Operations –* An analysis of our consolidated results of operations and segment results for the three years presented in our consolidated financial statements. This analysis discusses material trends within our continuing business and provides important information necessary for an understanding of our continuing operating results.
- *Liquidity and Capital Resources -* An analysis of our cash flows and a discussion of our financial condition and contractual obligations. This section provides information necessary to evaluate our ability to generate cash and to meet existing and known future cash requirements over both the short and long term.

References to 2019, 2018 and 2017 refer to the fiscal years ended February 28, 2019, February 28, 2018 and February 28, 2017, respectively.

### Overview

***The Company –*** Our management believes we are the largest provider of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders to independent distributors in the United States.

***Our Business Challenges -*** We are engaged in an industry experiencing consolidation of some of our traditional channels, product obsolescence, paper supplier capacity adjustments, and increased pricing and potential supply allocations due to demand/supply curve imbalance. Technology advances have made electronic distribution of documents, internet hosting, digital printing and print-on-demand valid, cost-effective alternatives to traditional custom-printed documents and customer communications. Improved equipment has become more accessible to our competitors due to the continued low interest rate environment. We face highly competitive conditions throughout the supply chain in an already over-supplied, price-competitive print industry. In addition to the risk factors discussion under the caption “Risk Factors” in Item 1A of this Annual Report, some of the key challenges of our business include the following:

**Transformation of our portfolio of products –** While traditional business documents are essential in order to conduct business, many are being replaced through the use of cheaper paper grades or imported paper, or devalued with advances in digital technologies, causing steady declines in demand for a portion of our current product line. Transforming our product offerings in order to continue to provide innovative, valuable solutions through lower labor and fixed charges to our customers on a proactive basis will require us to make investments in new and existing technology and to develop key strategic business relationships, such as print-on-demand services and product offerings that assist customers in their transition to digital business environments. In addition, we will continue to look for new market opportunities and niches through acquisitions, such as the addition of our envelope offerings, tag offerings, folder offerings, healthcare wristbands, specialty packaging, direct mail, pressure seal products, secure document solutions, innovative in-mold label offerings and long-run integrated products with high color web printing, which provide us with an opportunity for growth and differentiate us from our competition.

**Production capacity and price competition within our industry –** The strong U.S. dollar during the first half of fiscal 2018 attracted cheaper material into the United States, notwithstanding the imposition of trade tariffs, which impaired the price advantage larger suppliers had over smaller competitors and helped to maintain pricing. However, with the subsequent weakening of the U.S. dollar during the latter portion of fiscal 2018 and first half of fiscal 2019, the price advantage of foreign imports for the most part dissipated during most of fiscal 2019, which has led to lower volumes of imported paper and an increase in domestic exports. Meanwhile, a significant amount of capacity came out of the market this time, either planned or unplanned, as through the bankruptcy filing of several mills. In addition, some mills moved capacity formerly used for coated production to uncoated production due to their ability to get higher margins on these products. Even with shrinking demand, this led to a supply/demand imbalance with most mills running in excess of 90% of capacity across all grades during fiscal 2019. At this level, suppliers have historically raised prices in the marketplace, and fiscal year 2019 was no exception, with suppliers raising prices multiple times across all facets of the manufacturing process, from raw materials to supplies. In the past, price increases have been less frequent which allowed manufacturers to make pricing adjustments in a timely manner. The size and number of increases this past fiscal year impacted the ability of manufacturers to timely pass along the required price adjustments to the end users. Additionally, some paper grades this past fiscal year were placed on allocations given the tight supply environment. Given our long-term relationship with our major paper supplier, our financial strength and our size, we were able to avoid any potential disruptions in our supply chain this past fiscal year. Some of these challenges have started to change recently. With the strengthening U.S. dollar, imports into the domestic marketplace have begun to increase. This development, along with continued slowing domestic demand, has resulted in increased marketing of certain paper grades that previously were placed on allocation. Historically, this would result in the normalization of pricing and costs in the marketplace at more typical levels, but with the change in ownership of several of the larger domestic paper mills, this historical pendulum swing in pricing may not occur and manufacturer’s margins may continue to be negatively impacted. Regardless of these factors, many of which are cyclical, we intend to continue to focus on effectively managing and controlling our product costs, through the use of forecasting, production and costing models, as well as working closely with our domestic suppliers to reduce our procurement costs, in order to minimize effects on our operational results. In addition, we will continue to look for ways to reduce and leverage our fixed costs.

**Continued consolidation of our customers –** Many of our customers, which are distributors, are consolidating or are being acquired by competitors. Some customers may demand better pricing and services, and other customers may be forced to relocate their business to their new parent company’s manufacturing facilities. While we continue to maintain a majority of the historical business of these customers, it is possible that these consolidations and acquisitions, which we expect to continue in the future, will impact our margins and sales.

### Critical Accounting Policies and Estimates

In preparing our consolidated financial statements, we are required to make estimates and assumptions that affect the disclosures and reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and judgments on an ongoing basis, including those related to allowance for doubtful receivables, inventory valuations, property, plant and equipment, intangible assets, pension plan obligations, accrued liabilities and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We believe the following accounting policies are the most critical due to their effect on our more significant estimates and judgments used in preparation of our consolidated financial statements.

We maintain the Pension Plan for employees. Included in our financial results are Pension Plan costs that are measured using actuarial valuations. The actuarial assumptions used may differ from actual results. As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funding status and associated liability recorded.

Amounts allocated to intangibles and goodwill are determined based on valuation analysis for our acquisitions. Amortizable intangibles are amortized over their expected useful lives. We evaluate these amounts periodically (at least once a year) to determine whether a triggering event has occurred during the year that would indicate potential impairment.

We exercise judgment in evaluating our goodwill for impairment. We assess the impairment of goodwill as of November 30 of each fiscal year or earlier if events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.

If qualitative factors are not deemed sufficient to conclude that it is more likely than not that the fair value of the reporting unit exceeds its carrying value, then a one-step approach is applied in making an evaluation. The evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded. A goodwill impairment charge was not required for the fiscal years ended February 28, 2019 or February 28, 2018.

We recognize revenues from product sales upon shipment to the customer if the terms of the sale are freight on board (“FOB”) shipping point (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon shipping) or, to a lesser extent, upon delivery to the customer if the terms of the sale are FOB destination (and therefore title and all risks of ownership, including risk of loss, passes to the customer upon delivery). Net sales consist of gross sales invoiced to customers, less certain related charges, including discounts, returns and other allowances. Returns, discounts and other allowances have historically been insignificant. In some cases and upon customer request, we print and store custom print product for customer specified future delivery, generally within twelve months. In this case, risk of loss from obsolescence passes to the customer, the customer is invoiced under normal credit terms and revenue is recognized when manufacturing is complete. Approximately $10.3 million, $9.7 million, and $10.7 million of revenue were recognized under these agreements during fiscal years ended February 28, 2019, February 28, 2018, and February 28, 2017, respectively.

We maintain an allowance for doubtful receivables to reflect estimated losses resulting from the inability of customers to make required payments. On an on-going basis, we evaluate the collectability of accounts receivable based upon historical collection trends, current economic factors, and the assessment of the collectability of specific accounts. We evaluate the collectability of specific accounts using a combination of factors, including the age of the outstanding balances, evaluation of customers’ current and past financial condition and credit scores, recent payment history, current economic environment, discussions with our sales managers, and discussions with the customers directly.

Our inventories are valued at the lower of cost or net realizable value. We regularly review inventory values on hand, using specific aging categories, and write down inventory deemed obsolete and/or slow-moving based on historical usage and estimated future usage to its estimated net realizable value. As actual future demand or market conditions may vary from those projected by management, adjustments to inventory valuations may be required.

As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each jurisdiction in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and financial reporting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered based on our history of earnings expectations for future taxable income including taxable income in prior carry-back years, as well as future taxable income. To the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance, we must include an expense within the tax provision in the consolidated statements of operations. In the event that actual results differ from these estimates, our provision for income taxes could be materially impacted.

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act includes significant changes to the U.S. corporate income tax system including, among other things, a federal corporate rate reduction from 35% to 21%; limitations on the deductibility of interest expense and executive compensation and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system. A majority of the provisions in the Tax Act are effective January 1, 2018. In response to the Tax Act, the SEC staff issued guidance on accounting for the tax effects of the Tax Act. The guidance provides a one-year measurement period for companies to complete the accounting. We reflected the income tax effects of those aspects of the Tax Act for which the accounting is complete. To the extent our accounting for certain income tax effects of the Tax Act is incomplete but we are able to determine a reasonable estimate, we recorded a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. As a result of the reduction of the corporate tax rate to 21%, we re-valued our deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment. This change in the statutory tax rate resulted in reduction in income tax expense being recognized of $3.6 million in the fourth quarter of fiscal year 2018 due to the adjustment of deferred tax liabilities based on the expected prevailing tax rate at the expected time of their realization.

In addition to the above, we also have to make assessments as to the adequacy of our accrued liabilities, more specifically our liabilities recorded in connection with our workers compensation and health insurance, as these plans are self-funded. To help us in this evaluation process, we routinely get outside third-party assessments of our potential liabilities under each plan.

In view of such uncertainties, investors should not place undue reliance on our forward-looking statements since such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

### Results of Operations

The discussion that follows provides information which we believe is relevant to an understanding of our results of operations and financial condition. The discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto, which are incorporated herein by reference. Unless otherwise indicated, this financial overview is for the continuing operations of the Company, which are comprised of the production and sales of business forms and other business products, and exclude the discontinued operations of the Apparel Segment, which we sold in May 2016. The operating results of the Company for fiscal year 2019 and the comparative fiscal years 2018 and 2017 are included in the tables below.

### Consolidated Summary

*except per share amounts)*

| Consolidated Statements of Operations - Data (in thousands, | Fiscal years ended 2019 |  | 2018 |  | 2017 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $400,782 | 100.0% | $370,171 | 100.0% | $356,888 | 100.0% |
| Cost of goods sold | 277,422 | 69.2 | 252,969 | 68.3 | 252,158 | 70.7 |
| Gross profit margin | 123,360 | 30.8 | 117,202 | 31.7 | 104,730 | 29.3 |
| Selling, general and administrative | 73,490 | 18.3 | 69,222 | 18.8 | 62,537 | 17.5 |
| (Gain) loss from disposal of assets | (217) | (0.1) | 162 | — | 278 | 0.1 |
| Income from operations | 50,087 | 12.4 | 47,818 | 12.9 | 41,915 | 11.7 |
| Other expense, net | (153) | — | (909) | (0.2) | (1,882) | (0.5) |
| Earnings from continuing operations before income taxes | 49,934 | 12.4 | 46,909 | 12.7 | 40,033 | 11.2 |
| Provision for income taxes | 12,497 | 3.1 | 14,151 | 3.8 | 13,616 | 3.8 |
| Earnings from continuing operations | 37,437 | 9.3% | 32,758 | 8.9% | 26,417 | 7.4% |
| Earnings (loss) from discontinued operations, net of tax | — | — | 147 | — | (24,637) | (6.9) |
| Net earnings | $37,437 | 9.3% | $32,905 | 8.9% | $1,780 | 0.5% |
| Earnings (loss) per share - diluted |  |  |  |  |  |  |
| Continuing operations | $1.45 |  | $1.29 |  | $1.03 |  |
| Discontinued operations | — |  | 0.01 |  | (0.96) |  |
| Net earnings | $1.45 |  | $1.30 |  | $0.07 |  |

*Net Sales.* Our net sales increased from $370.2 million for the fiscal year ended February 28, 2018 to $400.8 million for the fiscal year ended February 28, 2019, an increase of 8.3%. The market continues to be fairly soft with competitive pricing pressures. However, during the current fiscal year the value of the U.S. dollar made domestic paper production more attractive internationally. The attractiveness of domestic paper production, coupled with the shrinking domestic mill capacity, resulted in an environment conducive for paper and other material price increases domestically. Those increases, if able to be timely passed along to customers, would help offset some of the normal industry sales attrition. The acquisitions of Wright, which was completed in July 2018, and ABTL, which was completed in April 2018, are integral parts of our strategy to offset normal industry revenue declines due to print attrition and other changes. These two acquisitions contributed over $44.7 million in net sales during the current fiscal year.

Our net sales increased from $356.9 million for the fiscal year ended February 28, 2017 to $370.2 million for the fiscal year ended February 28, 2018, an increase of 3.7%. The market was fairly soft with competitive pricing pressures. However, the reversal of some of the U.S. dollar’s strength made domestic paper production more attractive. This factor, along with the shrinking of some domestic mill capacity, resulted in paper price increases. The acquisition of Independent Printing Company, Inc. and its related entities (“Independent”), which was completed in January 2017, had a comparative impact of approximately $39.3 million on our net sales last fiscal year. This acquisition remains an integral part of our strategy to offset normal industry print attrition and other factors.

*Cost of Goods Sold.* Our manufacturing costs increased from $253.0 million for the fiscal year 2018 to $277.4 million for the fiscal year 2019, or 9.6%. Our gross profit margin (“margin”) decreased from 31.7% for the fiscal year 2018 to 30.8% for the fiscal year 2019. Our margin during the period was impacted primarily by the increased cost of raw materials, and to a lesser extent by the acquisition of ABTL and Wright, which had a dilutive impact on the Company’s reported margin. The industry continues to be challenged by raw material and freight cost increases. The tight supply conditions during the current fiscal year allowed for multiple price increases on raw materials, as well as other items in the manufacturing process. Historical price increases were less frequent, which allowed manufacturers the ability to pass the required pricing adjustments through to the marketplace in a timely manner. However, this year the size and number of increases have impacted manufacturers’ ability to timely pass these price adjustments to the end-users. These price increases will continue to have a negative impact on margins until they are able to be passed through to the marketplace, or costs start to decline due to the recent increase in foreign imports or weakening domestic demand. As mentioned earlier, the acquisition of Wright and ABTL had a dilutive impact on our margins as neither of these organizations had margins approaching our level. We believe once we have the opportunity to fully analyze the business cost structures and implement our costs systems, their margins will improve to more normalized levels.

Our manufacturing costs increased slightly from $252.2 million for the fiscal year 2017 to $253.0 million for the fiscal year 2018, or 0.3%. Our gross margin increased from 29.3% for the fiscal year 2017 to 31.7% for the fiscal year 2018. In fiscal year 2017, our margin was negatively impacted by increased medical expenses due to our medical claims exceeding historical levels. We implemented a new cost reimbursement program, as well as other changes to our health plan, at the start of calendar year 2017. We believe the program positively impacted our margin by over $4.0 million during fiscal year 2018.

*Selling, general, and administrative expenses.* For fiscal year 2019, our selling, general, and administrative (“SG&A”) expenses increased approximately 6.2%, from $69.2 million for the fiscal year 2018 to $73.5 million for the fiscal year 2019. As a percentage of sales, SG&A expenses declined from 18.8% in fiscal year 2018 to 18.3% for fiscal year 2019. The acquisitions of Wright and ABTL added approximately $5.7 million and $1.7 million, respectively, in SG&A expenses during fiscal year 2019. We continue to look for ways to reduce SG&A expenses after acquisitions through the implementation of our systems and processes, which allows us to integrate many of the acquired companies’ back-office processes.

For fiscal year 2018, our SG&A expenses increased approximately $6.7 million, or 10.7%, from $62.5 million for the fiscal year 2017 to $69.2 million for the fiscal year 2018. As a percentage of sales, SG&A expenses were 18.8% and 17.5% for the fiscal years 2018 and 2017, respectively. The acquisition of Independent added approximately $8.0 million in SG&A expenses during fiscal year 2018, or 20.3% of its respective net sales. As we continue to integrate this acquisition into our culture and systems, we will continue to look for ways to reduce these expenses to be more in line with our historical SG&A percentage. In addition, the Company (i) changed its accounting practice for handling its trademarks/trade names from an indefinite life to a finite life method on March 1, 2017 which added approximately $0.8 million to SG&A expense during the period, (ii) paid a special bonus to our non-management level employees of $500 per employee in December 2017 in connection with the enactment of the Tax Act which impacted our SG&A expense by $1.2 million, and (iii) paid approximately $1.8 million more in performance related bonuses in fiscal year 2018 in connection with its operating performance.

*(Gain) loss from disposal of assets.* The $0.2 million gain from disposal of assets for fiscal year 2019 is primarily attributed to the sale of an unused manufacturing facility and manufacturing equipment. The $0.2 million loss from disposal of assets for fiscal year 2018 related primarily to the sale of manufacturing equipment as well as the closing and consolidation of manufacturing facilities. The $0.3 million loss from disposal of assets for fiscal year 2017 related primarily to the $0.5 million loss on the sale of an unused manufacturing facility and its associated property offset by the $0.2 million gain on the sale of a second unused manufacturing facility and manufacturing equipment.

*Income from operations.* As a result of the above factors, our income from continuing operations for fiscal year 2019 was $50.1 million, or 12.4% of net sales, as compared to $47.8 million, or 12.9% of net sales, for fiscal year 2018. The acquisitions of Wright and ABTL contributed approximately $3.4 million and $1.1 million, respectively, to our operational income during the current fiscal year, or 8.8%.

Our income from continuing operations for fiscal year 2018 was $47.8 million, or 12.9% of net sales, as compared to $41.9 million, or 11.7% of net sales, for fiscal year 2017. The acquisition of Independent positively impacted our operational results for fiscal year 2018 by approximately $4.9 million.

*Other expense.* Other expense was $0.2 million for fiscal year 2019 as compared to $0.9 million for fiscal year 2018. This decrease related primarily to the increase of investment income in fiscal year 2019. Other expense was $0.9 million for fiscal year 2018 as compared to $1.9 million for fiscal year 2017. This decrease related primarily to the increase of investment income in fiscal year 2018 as well as the reclassification of pension expense from cost of goods sold and SG&A expense to other expense-net of $0.5 million and $1.4 million for fiscal years 2018 and 2017, respectively.

*Provision for income taxes.* Our effective tax rates for fiscal years 2019, 2018 and 2017 were 25.03%, 30.2%, and 34.0%, respectively. The lower effective tax rate for fiscal year 2019 was primarily due to the Tax Act. The lower effective tax rate for fiscal year 2018 as compared to fiscal year 2017 was primarily due to the enactment of the Tax Act, despite the Tax Act only being in effect for a small portion of the fiscal year.

*Net earnings (loss).* Our net earnings from continuing operations were $26.4 million, or $1.03 per diluted share for fiscal year 2017, $32.8 million, or $1.29 per diluted share for fiscal year 2018 and $37.4 million, or $1.45 per diluted share for fiscal year 2019. Net earnings from discontinued operations for fiscal year 2018 was $0.01 per diluted share, which consisted of a write-off of a $2.0 million receivable ($1.4 million, net of tax) relating to the escrowed purchase price from the sale of our Apparel Segment and a $1.6 million tax benefit related to the determination of the final tax basis on assets sold in the sale of the Apparel Segment. Net loss from discontinued operations for fiscal year 2017 was ($0.96) per diluted share, which consisted of the net earnings prior to the sale of the Apparel Segment of $0.09 per diluted share and the net loss from the sale of $27.1 million, net of tax, or ($1.05) per diluted share. The loss from the sale included the write-off of the balance of foreign currency translation adjustments of $16.1 million, or $10.7 million, net of taxes. Overall, the Company realized net earnings of $37.4 million, or $1.45 per diluted share, for fiscal year 2019, $32.9 million, or $1.30 per diluted share, for fiscal year 2018 and $1.8 million, or $0.07 per diluted share, for fiscal year 2017.

### Liquidity and Capital Resources

*(Dollars in thousands)*

|  | Fiscal Years Ended 2019 | 2018 | 2017 |
| --- | ---: | ---: | ---: |
| Working Capital | $134,542 | $133,773 | $119,282 |
| Cash | $88,442 | $96,230 | $80,466 |

***Working Capital.*** Our working capital increased by approximately $0.8 million, or 0.6%, from $133.8 million at February 28, 2018 to $134.5 million at February 28, 2019. The increase was primarily due to the increase in our accounts receivable and inventories by $13.6 million, offset by a decrease in cash and prepaid income taxes of $11.2 million, as well as an increase in our accounts payable of $1.6 million. Our current ratio, calculated by dividing our current assets by our current liabilities, decreased from 5.5-to-1.0 for the fiscal year 2018 to 5.3-to-1.0 for the fiscal year 2019.

Our working capital increased by approximately $14.5 million, or 12.1%, from $119.3 million at February 28, 2017 to $133.8 million at February 28, 2018. Our working capital increased primarily due to the increase in our cash. Our current ratio, calculated by dividing our current assets by our current liabilities, increased from 5.0-to-1.0 for the fiscal year 2017 to 5.5-to-1.0 for the fiscal year 2018. Our current ratio increased primarily as a result of the increase in our cash.

### Cash Flow Components

*(Dollars in thousands)*

|  | Fiscal years ended 2019 | 2018 | 2017 |
| --- | ---: | ---: | ---: |
| Net cash provided by operating activities | $51,335 | $45,290 | $58,887 |
| Net cash provided by (used in) investing activities | $(31,770) | $(3,953) | $86,090 |
| Net cash used in financing activities | $(27,353) | $(25,573) | $(72,468) |

24

***Cash flows from operating activities.*** Cash provided by operating activities was $51.3 million for the fiscal year 2019 compared to $45.3 million for the fiscal year 2018 and $58.9 million for the fiscal year 2017, or an increase of $6.0 million in 2019 over 2018 and a decrease of $13.6 million in 2018 over 2017.

Our increased operational cash flows in fiscal year 2019 in comparison to fiscal year 2018 was primarily the result of three factors: (i) a $4.5 million increase in net earnings; (ii) a $1.5 million decrease in our accounts receivable; and (iii) a $3.4 million decrease in our prepaid expenses and income taxes. These three positive factors were offset by two negative factors: (i) an increase in inventories of $3.6 million; and (ii) a $2.4 million decrease in accounts payable and accrued expenses.

Our decreased operational cash flows in fiscal year 2018 in comparison to fiscal year 2017 was primarily the result of four factors: (i) a decrease in operating cash flows related to our Apparel Segment of $34.8 million; (ii) a decrease in our deferred taxes of $6.2 million; (iii) an increase in our prepaid income taxes of $2.7 million; and (iv) increased earnings of $31.1 million.

***Cash flows from investing activities.*** Cash provided by (used in) investing activities was $31.8 million used in fiscal year 2019 compared to $4.0 million used in fiscal year 2018 and $86.1 million provided in fiscal year 2017. The $27.8 million increase in cash used in fiscal year 2019 compared to fiscal year 2018 was primarily due to the a $2.2 million increase in capital expenditures and the $26.0 million increase in the purchases of businesses. The decrease in cash in fiscal year 2018 as compared to fiscal year 2017 was primarily due to the net proceeds of $107.4 million from the sale of the Apparel Segment which took place on May 25, 2016, offset by a decrease of $17.2 million in cash used for the purchases of businesses.

***Cash flows from financing activities.*** Cash used in financing activities was $27.4 million in the fiscal year 2019 compared to $25.6 million used in fiscal year 2018 and $72.5 million used in fiscal year 2017.

The increase in our cash used in fiscal year 2019 as compared to fiscal year 2018 resulted from two factors: (i) $0.4 million more in dividends were paid in fiscal year 2019 compared to fiscal year 2018; and (ii) $1.5 million more was used to repurchase our common stock under the board-approved repurchase program.

The decrease in our cash used in the fiscal year 2018 as compared to the fiscal year 2017 resulted from three factors: (i) no debt was paid down in the fiscal year 2018 compared to $10.0 million paid down in 2017; (ii) $34.9 million less in dividends were paid in the fiscal year 2018 compared to 2017, which included a special one-time dividend of $1.50 per share that was paid as a result of the sale of the Apparel Segment; and (iii) $5.1 million less was used to repurchase our common stock under the board-approved repurchase program in the fiscal year 2018 as compared to 2017.

***Stock Repurchase –*** The Board has authorized the repurchase of the Company’s outstanding common stock through a stock repurchase program, which authorized amount is currently up to $40.0 million. Under the repurchase program, share purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors. Such purchases are made in accordance with applicable insider trading and other securities laws and regulations. These repurchases may be commenced or suspended at any time or from time to time without prior notice. During our fiscal year ended February 28, 2019, the Company repurchased 247,788 shares of common stock under the program at an average price of $19.42 per share. Since the program’s inception in October 2008, there have been 1,690,024 common shares repurchased at an average price of $15.64 per share. As of February 28, 2019 there was $13.6 million available to repurchase shares of the Company’s common stock under the program. Unrelated to the stock repurchase program, the Company purchased 15 shares of its common stock during the fiscal year ended February 28, 2019. The Company expects to continue to repurchase its shares under its repurchase program during fiscal year 2020 as it determines such repurchases to be in its and its shareholders best interest.

***Credit Facility –*** The Company is party to a Second Amended and Restated Credit Agreement, which has been amended from time to time, pursuant to which a credit facility has been extended to the Company ( the “Credit Facility”). The Credit Facility, which matures on August 11, 2020, provides the Company and its subsidiaries with up to $100.0 million in revolving credit, as well as a $20.0 million sublimit for the issuance of letters of credit and a $15.0 million sublimit for swing-line loans. Under the Credit Facility, the Company or any of its subsidiaries also can request up to three increases in the aggregate commitments in an aggregate amount not to exceed $50.0 million. The terms and conditions of the Credit Facility impose certain restrictions on our ability to incur additional debt, make capital expenditures, acquisitions and asset dispositions, as well as imposing other customary covenants, such as requiring that our fixed charge coverage ratio not be less than 1.25:1.00 and our total leverage ratio not exceed 3.00:1.00. The Company may make dividends or distributions to shareholders so long as (i) no event of default has occurred and is continuing and (ii) the Company’s net leverage ratio both before and after giving effect to any such dividend or distribution is equal to or less than 2.50:1.00.

The Credit Facility bears interest at the LIBOR rate plus a spread ranging from 1.0% to 2.0%, which rate was 3.6% (3 month LIBOR + 1.0%) at February 28, 2019 and 3.0% (3 month LIBOR + 1.0%) at February 28, 2018. The rate is determined by our fixed charge coverage ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). As of February 28, 2019, we had $30.0 million of borrowings under the revolving credit line and $0.7 million outstanding under standby letters of credit arrangements, leaving approximately $69.3 million available in borrowing capacity. The Credit Facility is secured by substantially all of our assets (other than real property), as well as all capital securities of each of our subsidiaries.

We did not pay any additional amounts on the revolving credit line for fiscal year 2019. It is anticipated that the available line of credit is sufficient to cover, should it be required, our working capital needs for the foreseeable future.

***Pension Plan –*** We are required to make contributions to our Pension Plan. These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). Due to the recent enactment of the Moving Ahead for Progress in the 21st Century (“MAP-21”) in July 2012, plan sponsors can calculate the discount rate used to measure the Pension Plan liability using a 25-year average of interest rates plus or minus a corridor. Prior to MAP-21, the discount rate used in measuring the pension liability was based on the 24-month average of interest rates. We made contributions of $3.0 million to our Pension Plan during each of our last three fiscal years. However, given our current funding status as of February 28, 2019 and absent any significant negative event, we anticipate that our future contributions will be in line with our expected service costs, which are between $1.0 million to $1.5 million per year. As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our funded status, associated liabilities recorded, and future required minimum contributions. At February 28, 2019, we had a prepaid pension asset recorded on our balance sheet of $0.6 million. During fiscal year 2019, we increased the discount rate we used to calculate our pension liability to 4.1% from 4.05% used in fiscal year 2018, which decreased our recorded pension liability by approximately $0.4 million (each 10 basis point change in the discount rate potentially impacts our computed pension liability by approximately $900,000). In addition, we adopted the new MP-2018 mortality improvement scale associated with the RP-2014 mortality tables (which were adopted four years ago), which reduced our recorded pension liability by approximately $0.1 million. The updated mortality improvement scale MP-2018 reflects slightly lower projected mortality experience improvement in the future compared to the previous scale MP-2017 utilized in fiscal year 2018’s valuation of liabilities. The projected return on our pension assets remained at 7.5% for fiscal year 2019.

***Inventories –*** We believe our current inventory levels are sufficient to satisfy our customer demands and we anticipate having adequate sources of raw materials to meet future business requirements. We have long-term contracts in effect with paper suppliers that govern prices, but do not require minimum purchase commitments. Certain of our rebate programs do, however, require minimum purchase volumes. Management anticipates meeting the required volumes.

***Capital Expenditures –*** We expect our capital expenditure requirements for fiscal year 2020, exclusive of capital required for possible acquisitions, will be in line with our historical levels of between $3.0 million and $5.0 million. We expect to fund these expenditures through existing cash flows. We expect to generate sufficient cash flows from our operating activities to cover our operating and other normal capital requirements for the foreseeable future.

***Contractual Obligations & Off-Balance Sheet Arrangements –*** There have been no significant changes in our contractual obligations since February 28, 2019 that have, or are reasonably likely to have, a material impact on our results of operations or financial condition. We had no off-balance sheet arrangements in place as of February 28, 2019. The following table represents our contractual commitments as of February 28, 2019 (in thousands).

| Debt: | Total | Due in less than 1 year | Due in 1-3 years | Due in 4-5 years | Due in more than 5 years |
| --- | ---: | ---: | ---: | ---: | ---: |
| Revolving credit facility | $30,000 | $— | $30,000 | $— | $— |
| **Other contractual commitments:** |  |  |  |  |  |
| Estimated pension benefit payments to Pension Plan participants | 40,800 | 3,500 | 8,500 | 7,800 | 21,000 |
| Letters of credit | 652 | 652 | — | — | — |
| Operating leases | 18,134 | 5,586 | 6,390 | 3,727 | 2,431 |
| Total other contractual commitments | 59,586 | 9,738 | 14,890 | 11,527 | 23,431 |
| Total | $89,586 | $9,738 | $44,890 | $11,527 | $23,431 |

We expect future interest payments of $1.1 million for the fiscal year ending February 29, 2020 and $0.5 million for the fiscal year ending February 28, 2021, assuming interest rates and debt levels remain the same throughout the remaining term of the facility.

## Market risk

As filed, 703 characters.

### Market Risk

### Interest Rates

We are exposed to interest rate risk on short-term and long-term financial instruments carrying variable interest rates. We may from time to time utilize interest rate swaps to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates. We do not use derivative instruments for trading purposes. Our variable rate financial instruments totaled $30.0 million at February 28, 2019 and are subject to fluctuations in the LIBOR rate. The impact on our results of operations of a one-point interest rate change on the outstanding balance of the variable rate financial instruments as of February 28, 2019 would be approximately $0.3 million.

## Controls and procedures

As filed, 4,884 characters.

### Disclosure Controls and Procedures

A review and evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act of 1934, as amended (the “Exchange Act”)) as of February 28, 2019. Based upon that review and evaluation, we have concluded that our disclosure controls and procedures were effective as of February 28, 2019.

In conducting our evaluation, we excluded the assets and liabilities and results of operations of Wright Business Graphics, which we acquired on July 31, 2018, in accordance with the SEC’s guidance concerning the reporting of internal controls over financial reporting in connection with a material acquisition. The assets and revenues resulting from this acquisition constituted approximately 14 and 9 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended February 28, 2019.

### Management’s Report on Internal Control over Financial Reporting

The financial statements, financial analysis and all other information in this Annual Report on Form 10-K were prepared by management, who is responsible for their integrity and objectivity and for establishing and maintaining adequate internal controls over financial reporting.

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that:

i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company;

ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or dispositions of the Company’s assets that could have a material effect on the financial statements.

There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurances with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal controls may vary over time.

Management assessed the design and effectiveness of the Company’s internal control over financial reporting as of February 28, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 *Internal Control—Integrated Framework (“*2013 COSO framework”). Based on management’s assessment using those criteria, we believe that, as of February 28, 2019, the Company’s internal control over financial reporting is effective.

In conducting our evaluation, we excluded the assets and liabilities and results of operations of Wright Business Forms, Inc., which we acquired on July 31, 2018, in accordance with the SEC’s guidance concerning the reporting of internal controls over financial reporting in connection with a material acquisition. The assets and revenues resulting from this acquisition constituted approximately 14 and 9 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended February 28, 2019.

### Changes in Internal Controls

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Grant Thornton LLP, an independent registered public accounting firm, has audited the consolidated financial statements of the Company for the fiscal year ended February 28, 2019 and has attested to the effectiveness of the Company’s internal control over financial reporting as of February 28, 2019. Their report on the effectiveness of internal control over financial reporting is presented on page F-3 of this Annual Report on Form 10-K.

Filed May 6, 2019.
Source: SEC EDGAR, the filing index for accession 0001564590-19-015928. Last ingested by Listed: Oct 24, 2026, 14:52 ET. No prices; not investment advice.