Alright, fellow investors, let's dive into Ennis' (EBF) latest earnings report for the third quarter of 2025. The company, based in Midlothian, Texas, reported earnings per share (EPS) of $0.39, a slight increase from the $0.38 recorded in the same quarter last year. Now, let's break down what drove this change and explore the company's financial performance.



First, let's address the elephant in the room: Ennis' revenue decreased by 4.6% year-over-year, from $104.6 million in 3Q 2024 to $99.8 million in 3Q 2025. This decline can be attributed to increased competition in certain product lines and softening demand in some markets. However, Ennis managed to offset some of this attrition by acquiring a new business in late June 2024, which added $3.3 million in revenues and $0.02 in diluted earnings per share for the third quarter.



Now, let's talk about the silver lining: Ennis' gross profit margin improved slightly, from 29.2% in 3Q 2024 to 29.3% in 3Q 2025. This increase, along with careful cost management, helped the company maintain healthy margins despite the revenue decrease. Ennis' net profit margin also improved, from 9.5% in 3Q 2024 to 10.2% in 3Q 2025.

One of the key factors contributing to Ennis' EPS increase was its ability to manage costs effectively. The company reduced selling, general, and administrative costs by $1.1 million compared to the same quarter last year. This cost reduction, combined with improved earnings per diluted share, helped Ennis boost its profitability.



Another factor driving Ennis' EPS growth was the company's strong balance sheet. With no debt and significant cash reserves, Ennis was able to return $72.3 million to shareholders in dividends during the quarter, including a special dividend of $2.50 per share. This financial strength allows Ennis to continue operations, fund acquisitions, and maintain access to credit for larger opportunities.

In conclusion, while Ennis faced challenges in maintaining revenue growth, the company successfully managed its costs and improved profitability, leading to an increase in both gross and net profit margins. The acquisition of a new business in late June 2024 also played a significant role in offsetting the natural attrition of certain product lines and markets. As Ennis continues to focus on delivering profitability and returns to shareholders, investors should keep an eye on the company's future earnings reports to monitor its progress.