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<SEC-DOCUMENT>0000033002-02-000016.txt : 20020627
<SEC-HEADER>0000033002-02-000016.hdr.sgml : 20020627
<ACCEPTANCE-DATETIME>20020627112903
ACCESSION NUMBER:		0000033002-02-000016
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020531
FILED AS OF DATE:		20020627

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ENNIS BUSINESS FORMS INC
		CENTRAL INDEX KEY:			0000033002
		STANDARD INDUSTRIAL CLASSIFICATION:	MANIFOLD BUSINESS FORMS [2761]
		IRS NUMBER:				750256410
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0228

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05807
		FILM NUMBER:		02688518

	BUSINESS ADDRESS:	
		STREET 1:		1510 N HAMPTON SUITE 300
		CITY:			DESOTO
		STATE:			TX
		ZIP:			75115
		BUSINESS PHONE:		9722287801

	MAIL ADDRESS:	
		STREET 1:		1510 N HAMPTON SUITE 300
		CITY:			DESOTO
		STATE:			TX
		ZIP:			75115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ENNIS TAG & SALESBOOK CO
		DATE OF NAME CHANGE:	19700805
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>q10main.txt
<DESCRIPTION>10Q
<TEXT>
                            FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D. C. 20549

           QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended              MAY 31, 2002
                 ------------------------------------------------

Commission File Number            1-5807
                       ------------------------------------------

                        ENNIS BUSINESS FORMS, INC.
- -----------------------------------------------------------------
          (Exact name of registrant as specified in its charter)


               TEXAS                            75-0256410
- -----------------------------------------------------------------
     (State or other Jurisdiction of         (I. R. S. Employer
     Incorporation or organization)          Identification No.)

      1510 N. Hampton, Suite 300, DeSoto, TX         75115
- -----------------------------------------------------------------
     (Address of principal executive offices)      (Zip Code)


                           (972) 228-7801
- -----------------------------------------------------------------
       (Registrant's telephone number, including area code)


                               No Change
- -----------------------------------------------------------------
Former name, former address and former fiscal year, if changed
since last report.)


Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

                                                Yes  X   No
                                                    ----    ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.



           Class                     Outstanding at May 31, 2002
- ----------------------------------    ---------------------------
Common stock, par value $2.50                 16,272,938
  per share

<PAGE>
                   ENNIS BUSINESS FORMS, INC.

                              INDEX


Part I.   Financial information - unaudited

   Condensed Consolidated Balance Sheets --
     May 31, 2002 and February 28, 2002                 2 - 3

   Condensed Consolidated Statements of Earnings --
     Three Months Ended May 31, 2002 and 2001             4

   Condensed Consolidated Statements of Cash Flows --
     Three Months Ended May 31, 2002 and 2001             5

   Notes to Condensed Consolidated Financial
     Statements                                         6 - 9

   Management's Discussion and Analysis of Financial
     Condition and Results of Operations               10 - 13

Part II. Other Information                             14 - 15

Signatures                                               16

<PAGE>


                 PART I.  FINANCIAL INFORMATION

                   ENNIS BUSINESS FORMS, INC.
              CONDENSED CONSOLIDATED BALANCE SHEETS
                     (Dollars in Thousands)


                                              May 31,    February 28,
                                               2002          2002
                                               ----          ----
                                            (unaudited)

                         Assets
                         ------

Current assets:
   Cash and cash equivalents                  $ 19,122       $ 16,180
   Investment securities                         1,080          1,802
   Accounts receivable, net                     30,443         28,713
   Prepaid expenses                              1,530            814
   Inventories                                  12,015         12,222
   Contract costs in excess of billings            545            256
   Other current assets                          2,452          2,659
                                               -------        -------
              Total current assets              67,187         62,646
                                               -------        -------

Property, plant and equipment, net              49,531         51,343

Goodwill, net                                   21,945         21,951

Other assets                                     2,609          3,094
                                               -------        -------

                                              $141,272       $139,034
                                               =======        =======










                                                      (Continued)



                                2
<PAGE>

                   ENNIS BUSINESS FORMS, INC.
        CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                     (Dollars in Thousands)


                                              May 31,   February 28,
                                               2002         2002
                                               ----         ----
                                            (unaudited)
    Liabilities and Shareholders' Equity
    ------------------------------------

Current liabilities:
   Accounts payable                          $  6,008    $   5,568
   Accrued expenses:
      Employee compensation and benefits        6,258        4,770
      Taxes other than income                   1,124          970
      Other                                     3,068        3,623
   Federal and State income taxes payable       1,753           --
   Current installments of long-term debt       8,977        9,035
                                              -------      -------
              Total current liabilities        27,188       23,966
                                              -------      -------

Long-term debt, less current installments       7,320        9,170

Deferred credits, principally income taxes      9,859        9,863

Shareholders' equity:
   Preferred stock, at par value                  --            --
   Common stock, at par value                 53,125        53,125
   Additional paid in capital                  1,040         1,040
   Retained earnings                         133,472       132,694
   Accumulated other comprehensive loss         (309)         (401)
                                             -------       -------
                                             187,328       186,458
   Treasury stock                            (90,423)      (90,423)
                                             -------       -------

              Total shareholders' equity      96,905        96,035
                                             -------       -------

                                            $141,272      $139,034
                                             =======       =======




See accompanying notes to condensed consolidated financial
statements.



                                3
<PAGE>


                   ENNIS BUSINESS FORMS, INC.

          CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
         (Dollars in Thousands Except Per Share Amounts)
                           (Unaudited)


                                             Three Months Ended
                                                   May 31,
                                              2002         2001
                                              ----         ----

Net sales                                    $57,743      $59,823

Costs and expenses:
   Cost of sales                              42,739       43,742
   Selling, general and administrative
     expenses                                  9,351        9,854
                                              ------       ------

                                              52,090       53,596
                                              ------       ------

Earnings from operations                       5,653        6,227
                                              ------       ------

Other income (expense):
   Investment income                              72          173
   Interest expense                             (338)        (686)
   Other                                         (65)        (104)
                                              ------       ------

                                                (331)        (617)
                                              ------       ------

Earnings before income taxes                   5,322        5,610

Provision for income taxes                     2,022        2,202
                                              ------       ------

Net earnings                                 $ 3,300      $ 3,408
                                              ======       ======

Weighted average number of common shares
   outstanding - diluted                  16,493,293   16,299,564
                                          ==========   ==========

Per share amounts:
   Net earnings per share of common
     stock - basic and diluted                 $ .20        $ .21
                                               =====        =====

   Cash dividends                              $.155        $.155
                                               =====        =====


See accompanying notes to condensed consolidated financial
statements.


                                4

<PAGE>
                   ENNIS BUSINESS FORMS, INC.

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                           (Unaudited)

                                               Three Months Ended
                                                     May 31
                                                 2002       2001
                                                 ----       ----
Cash flows from operating activities:
   Net earnings                               $ 3,300     $ 3,408
   Adjustments to reconcile net earnings to
      net cash provided by operating
        activities:
          Depreciation                          2,248       2,202
          Amortization                             --         410
          (Gain) loss on sale of property,
            plant, and equipment                  (23)          2
          Changes in operating assets and
            liabilities:
             Receivables                       (1,730)     (1,323)
             Prepaid expenses                    (716)       (570)
             Inventories                          207       1,559
             Contract costs in excess of
               billings                          (289)        (61)
             Other current assets (net of
               deferred taxes)                    190         (50)
             Accounts payable and accrued
               expenses                         1,619         460
             Other assets and liabilities       2,251       2,375
                                               ------      ------

             Net cash provided by operating
               activities                       7,057       8,412
                                               ------      ------

Cash flows from investing activities:
   Capital expenditures                          (440)       (563)
   Redemption of investments                      722         372
   Proceeds from disposal of property              27          --
   Other                                            6          --
                                               ------      ------

           Net cash provided by (used in)
             investing activities                 315        (191)
                                               ------      ------

Cash flows from financing activities:
   Repayment of debt issued to finance
     Northstar acquisition                     (1,850)     (3,200)
   Dividends                                   (2,522)     (2,522)
   Other                                          (58)        (60)
                                               ------      ------

           Net cash used in financing
             activities                        (4,430)     (5,782)
                                               ------      ------

Net change in cash and cash equivalents         2,942       2,439
Cash and cash equivalents at beginning of
  period                                       16,180       8,964
                                               ------      ------

Cash and cash equivalents at end of period    $19,122     $11,403
                                               ======      ======

See accompanying notes to condensed consolidated financial
statements.



                                5

<PAGE>

                   ENNIS BUSINESS FORMS, INC.
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. Basis of Presentation
   ---------------------
   These  unaudited  condensed consolidated financial  statements
   of   Ennis   Business   Forms,  Inc.  and   its   subsidiaries
   (collectively  the  "Company" or  "Ennis"),  for  the  quarter
   ended  May  31,  2002  have been prepared in  accordance  with
   generally   accepted   accounting   principles   for   interim
   financial reporting.  Accordingly, they do not include all  of
   the  information and footnotes required by generally  accepted
   accounting  principles for complete financial  statements  and
   should  be  read in conjunction with the audited  consolidated
   financial  statements  and  notes  thereto  included  in   the
   Company's  Form  10-K for the year ended  February  28,  2002,
   from  which  the  accompanying condensed consolidated  balance
   sheet  at  February  28,  2002 was derived.   All  significant
   intercompany  balances and transactions have  been  eliminated
   in   consolidation.   In  the  opinion  of   management,   all
   adjustments  (consisting only of normal recurring adjustments)
   considered  necessary for a fair presentation of  the  interim
   financial  information have been included.    The  results  of
   operations   for  any  interim  period  are  not   necessarily
   indicative of the results of operations for a full year.

2. Stock Option Plans
   ------------------
   As  of  May 31, 2002, the Company has reserved 855,527  shares
   of  common stock under incentive stock option plans.   At  May
   31,   2002   and   2001,  71,250  and  290,400   of   options,
   respectively,  were not included in the diluted  earnings  per
   share  computation because their exercise price  exceeded  the
   average  fair  market  value of the Company's  stock  for  the
   period.

3. Inventories
   -----------
   The  Company  uses  the Last-In, First-Out  (LIFO)  method  of
   pricing  the  raw  material content of most  of  its  business
   forms  inventories, and the First-In, First-Out (FIFO)  method
   is   used  to  value  the  remainder.   The  following   table
   summarizes  the  components  of  inventory  at  the  different
   stages of production (in thousands of dollars):

                                 May 31,   February 28,
                                  2002         2002
                                  ----         ----

             Raw material        $ 5,931    $ 6,065
             Work-in-process       1,206      1,216
             Finished goods        4,878      4,941
                                  ------     ------

                                 $12,015    $12,222
                                  ======     ======

4. Accumulated other comprehensive loss
   ------------------------------------
   Accumulated   other  comprehensive  loss   consists   of   the
   effective unrealized portion of changes in the fair  value  of
   the  Company's  cash  flow  hedge.  Comprehensive  income  was
   approximately  $3,391,850 for the three months ended  May  31,
   2002 and $2,695,000 for the three months ended May 31, 2001.




                                6
<PAGE>

5. Segment Data
   ------------
   The  Company operates three business segments.  The Forms Solutions Group  is
   primarily  in  the business of manufacturing and selling business  forms  and
   other  printed business products to customers primarily located in the United
   States.   The  Promotional  Solutions Group is  comprised  of  Adams  McClure
   (design,  production  and  distribution of  printed  and  electronic  media),
   Admore   (presentation  products)  and  Wolfe  City  (flexographic  printing,
   advertising  specialties  and  Post-it (registered  trademark)  Notes).   The
   Financial Solutions Group is comprised of Northstar Computer Forms  which  is
   a  manufacturer  and  seller  of  official bank  checks,  money  orders,  and
   internal bank forms.  Corporate information is included to reconcile  segment
   data  to  the  consolidated  financial statements  and  includes  assets  and
   expenses   related  to  the  Company's  corporate  headquarters   and   other
   administrative costs.  Segment data for the three months ended May  31,  2002
   and 2001 were as follows (in thousands):

<TABLE>

<CAPTION>                     Forms     Promotional   Financial
                            Solutions    Solutions    Solutions              Consolidated
                              Group        Group        Group     Corporate     Totals
                              -----        -----        -----     ---------     ------
 <S>                        <C>         <C>           <C>         <C>        <C>
 Three months ended
   May 31, 2002:
   Net sales                 $27,436      $18,238     $12,069       $   --    $ 57,743
   Depreciation                  654          573         826          195       2,248
   Amortization                   --           --          --           --          --
   Segment earnings
     (loss) before
     income tax                4,369        1,718         875       (1,640)      5,322
   Segment assets             55,764       38,757      41,991        4,760     141,272
   Capital
     expenditures                122          174          69           75         440

 Three months ended
   May 31, 2001:
   Net sales                 $28,846      $19,237     $11,740       $   --    $ 59,823
   Depreciation                  613          600         853          136       2,202
   Amortization                   41           91         278           --         410
   Segment earnings
     (loss) before
     income tax                4,873        1,776         457       (1,496)      5,610
   Segment assets             49,737       39,676      46,617        5,383     141,413
   Capital
     expenditures                167          123          --          273         563
</TABLE>
"Post-it" is a registered trademark of 3M.











                                        7
<PAGE>


6. Derivative Financial Instruments and Hedging Activities
   -------------------------------------------------------
   Effective  March  1,  2001, the Company  adopted  Statement  of
   Financial   Accounting  Standards  No.  133,  "Accounting   for
   Derivative Instruments and Hedging Activities" (SFAS No.  133).
   This  statement establishes accounting and reporting  standards
   for   derivative  instruments,  including  certain   derivative
   instruments  embedded  in  other  contracts,  and  for  hedging
   activities.  It requires that all derivatives be recognized  on
   the  balance  sheet at fair value.  Changes in fair  values  of
   derivatives  are  accounted for based upon their  intended  use
   and designation.

   The  Company's interest rate swaps are held for purposes  other
   than trading.  The Company utilized swap agreements related  to
   its  term  and revolving loans to effectively fix the  interest
   rate  for  a specified principal amount of the loans.   Amounts
   receivable  or payable under interest rate swap agreements  are
   recorded  as  adjustments to interest expense.  This  swap  has
   been  designated as a cash flow hedge and the after-tax  effect
   of  the  mark-to-market valuation that relates to the effective
   amount  of  derivative financial instrument is recorded  as  an
   adjustment to accumulated other comprehensive income  with  the
   offset included in accrued expenses.

   The  Company utilized swap agreements related to the term  loan
   and  revolving credit facility to effectively fix the  interest
   rate  at  6.89%  for a pre-set principal amount of  the  loans.
   The  pre-set principal amount of the loans covered by the  swap
   agreements  declines  quarterly  in  connection  with  expected
   principal  reductions and totaled $15,050,000 at May 31,  2002.
   The  fair  value of the swap at May 31, 2002 was  approximately
   ($309,000)  and the change in the fair value of the  loss  from
   March   1,  2002,  net  of  tax,  has  been  charged  to  Other
   Comprehensive Income (Loss).


















                                8
  <PAGE>


7. Goodwill and Other Intangible Assets
   ------------------------------------
   In  June 2001, the Financial Accounting Standards Board (FASB)
   issued  Statements of Financial Accounting Standards No.  141,
   "Business   Combinations"  (SFAS  No.  141),  and   No.   142,
   "Goodwill   and   Other  Intangible  Assets"  (SFAS   No.142),
   effective for fiscal years beginning after December 15,  2001.
   Under the new rules, goodwill and intangible assets deemed  to
   have indefinite lives will no longer be amortized but will  be
   subject  to annual impairment tests.  Other intangible  assets
   will continue to be amortized over their useful lives.

   The  Company  adopted SFAS No. 142 effective  March  1,  2002.
   Upon   adoption  of  SFAS  No.  142,  the  Company  no  longer
   amortizes  goodwill.  The following table reflects net  income
   adjusted  to  exclude  amortization  expense  (including   any
   related  tax  effects)  recognized in  the  periods  presented
   related to goodwill.


   (In thousands)                       Three months ended
                                   May 31, 2002   May 31, 2001
                                   ------------   ------------

   Reported net income                $3,300         $3,408
   Goodwill amortization                  --            251
                                       -----          -----
   Adjusted net income                $3,300         $3,659
                                       =====          =====

   Diluted earnings per share:
     Reported net income              $  .20         $  .21
     Goodwill amortization                --            .01
                                       -----          -----

     Adjusted diluted earnings
       per share                      $  .20         $  .22
                                       =====          =====






















                                9
<PAGE>


        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS


Liquidity and Capital Resources
- -------------------------------
The  Company  has  maintained a strong  financial  position  with
working  capital at May 31, 2002, of $39,999,000, an increase  of
3.4%  from the beginning of the year, and a current ratio of  2.5
to  1.  The increase is due to cash flows provided from operating
activities - net income and better asset management.  The Company
has $19,122,000 in cash and cash equivalents, $1,080,000 in short
term  investments, and $7,320,000 in long-term debt, less current
installments. The Company made scheduled payments of $850,000 and
pre-paid  $1,000,000  of the debt financing  during  the  quarter
ended  May 31, 2002.  The Company anticipates repaying the  long-
term  debt  of  $1,850,000 per quarter through  June  2003.   The
Company  believes  current  inventory levels  are  sufficient  to
satisfy  customer demand and anticipates having adequate  sources
of  supply of raw materials to meet future business requirements.
Capital  expenditures for the quarter totaled $440,000.  For  the
full fiscal year, capital expenditures are expected to be between
$2,000,000  and  $5,000,000, which are expected  to  be  financed
through  internally  generated funds.   The  Company  expects  to
generate  sufficient cash flow from its operating  activities  to
more  than cover its operating and capital requirements  for  the
foreseeable future.


Accounting Standards
- --------------------
In  June  2001, the  Financial  Accounting Standards Board (FASB)
issued  Statements  of  Financial  Accounting  Standards No. 141,
"Business  Combinations"  (SFAS No. 141),  and No. 142, "Goodwill
and Other Intangible Assets" (SFAS No. 142), effective for fiscal
years  beginning  after  December 15, 2001.  Under the new rules,
goodwill  and  intangible assets  deemed to have indefinite lives
will  no  longer be  amortized  but  will  be  subject  to annual
impairment  tests.  Other  intangible  assets will continue to be
amortized  over their useful lives.  Effective March 1, 2002, the
Company adopted the provisions of SFAS No. 142.  Accordingly, the
Company stopped amortization of goodwill effective at the date of
adoption.  Adoption  of  SFAS No. 142, resulted in an increase to
after tax  earnings of $.01 per diluted share and is estimated to
increase  after-tax  earnings  by  approximately $.06 per diluted
share  for  the   fiscal  year  2003.   The  Company  tested  for
impairment using projected cash flows and representative earnings
multiples  for the industry on March 1, 2002.  Based on the test,
no impairment of goodwill was indicated or recorded.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
impairment or Disposal of Long-Lived Assets" (SFAS No. 144) which
is  effective  for   the   Company  beginning  March 1, 2002  and
supercedes,  "Accounting  for the impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of (SFAS No. 121).  SFAS
No. 144  provides  a  single  method of accounting for long-lived
assets  to  be disposed of and retains requirements found in SFAS
No. 121  with regard to the impairment of long-lived assets.  The
adoption of SFAS No.144 had no effect on the financial statements
for the quarter ended May 31, 2002.







                               10
<PAGE>

Results of Operations
- ---------------------
Net sales for the first quarter ended May 31, 2002 decreased 3.5%
from  the  corresponding period in the prior year.  This  results
from  a decrease in the consolidated net sales contribution  from
the  Forms Solutions Group of 2.3% due to declines in the general
economy  and  in the industry and from the Promotional  Solutions
Group  of 1.7% due to weakness in the general economy.  This  was
mitigated  by a .5% increase in contribution to consolidated  net
sales from the Financial Solutions Group.

Gross  profit  margins decreased from 26.9% in the first  quarter
ended  May 31, 2001 to 26.0% in the first quarter ended  May  31,
2002.   The  decrease is the result of a combination of  factors.
The  Forms  Solutions  Group gross profit margin  decreased  from
29.2%  in  the first quarter ended May 31, 2001 to 28.8%  in  the
first  quarter ended May 31, 2002.  The decrease is a  result  of
less  fixed cost absorption due to decreased sales.  The  general
weakness  in  the economy and the decline in the  forms  industry
contributed  to decreased sales volume and lower  prices  in  the
Forms  Solutions  Group.  The Promotional Solutions  Group  gross
profit margin decreased from 22.2% in the first quarter ended May
31,  2002 to 21.7% in the first quarter ended May 31, 2002.   The
decrease is a result of less fixed cost absorption resulting from
decreased  sales  volume  due  to the  weakness  in  the  general
economy.   The  Financial  Solutions Group  gross  profit  margin
decreased  from  29.0%  to  25.9%.  The  decrease  is  due  to  a
combination  of  lower  fixed  cost  absorption  resulting   from
decreased  sales volume in certain plants and a shift in  mix  to
lower margin products in the quarter.

Selling,  general  and  administrative  expenses  for  the  first
quarter  ended  May  31,  2002 decreased  5.1%  compared  to  the
corresponding period in the prior year. Effective cost  reduction
programs implemented in the Promotional Solutions Group  and  the
elimination  of goodwill expense resulting from the  adoption  of
SFAS   No.  142  accounted  for  2.9%  of  the  reduction.    The
elimination  of goodwill expense resulting from the  adoption  of
SFAS  No. 142 in the Financial Solutions Group accounted for 3.0%
of the decrease.  The remaining difference was primarily a result
of  increase in depreciation related to the Company's  Enterprise
Resource Planning Software (ERP) System.

Interest  expense  decreased from $686,000 in the  first  quarter
ended May 31, 2001 to $338,000 in the first quarter ended May 31,
2002 as a result of reductions of Northstar financing debt.

Investment and other income decreased from $69,000 in  the  first
quarter  ended May 31, 2001 to $7,000 in the first quarter  ended
May 31, 2002 due to decreases in interest rates.

The  effective rate of the Federal and state income  tax  expense
was  38.0% and 39.3% for the first quarter ended May 31, 2002 and
May  31, 2001, respectively.  The primary reason for the decrease
is  due to the elimination of non-deductible goodwill expense for
quarter  ended May 31, 2002 as a result of the adoption  of  SFAS
No. 142.








                               11
<PAGE>

Critical Accounting Policies and Judgments
- ------------------------------------------
In  preparing our 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
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 bad
debts,  inventory  valuations,  property,  plant  and  equipment,
intangible  assets 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 from these estimates.

We  exercise  judgment  in evaluating our long-lived  assets  for
impairment.   We believe our businesses will generate  sufficient
undiscounted  cash flow to more than recover the  investments  we
have  made  in  property, plant and equipment,  as  well  as  the
goodwill  and  other  intangibles recorded as  a  result  of  our
acquisitions.

Revenue  is  recognized upon shipment for all  printed  products.
Revenue   from   fixed  price  contracts  for  the   design   and
construction  of tools, dies and special machinery is  recognized
using the percentage of completion method of accounting.

Derivative  instruments are recognized on the  balance  sheet  at
fair  value. Changes in fair values of derivatives are  accounted
for based upon their intended use and designation.  The Company's
interest  rate  swaps are held for purposes other  than  trading.
The  Company  utilized swap agreements related to  its  term  and
revolving  loans  to  effectively fix the  interest  rate  for  a
specified  principal amount of the loans.  Amounts receivable  or
payable  under  interest  rate swap agreements  are  recorded  as
adjustments  to interest expense.  This swap has been  designated
as  a  cash  flow hedge and the after tax effect of the  mark-to-
market  valuation  that  relates  to  the  effective  amount   of
derivative  financial instrument is recorded as an adjustment  to
accumulated  other comprehensive income with the offset  included
in accrued expenses.


Market Risk
- -----------
The  Company  is exposed to market risk from changes in  interest
rates on debt.  A discussion of the Company's accounting policies
for derivative instruments is included in Note 6 of the Notes  to
the  Consolidated Financial Statements for period ended  May  31,
2002.

The  Company's net exposure to interest rate risk consists  of  a
floating  rate  debt instrument that is benchmarked  to  European
short-term  interest rates.  The Company may from  time  to  time
utilize interest rate swaps to manage overall borrowing costs and
reduce  exposure to adverse fluctuations in interest  rates.  The
Company does not use derivative instruments for trading purposes.
The  Company  is exposed to interest rate risk on short-term  and
long-term financial instruments carrying variable interest rates.
The  Company's variable rate financial instruments, including the
outstanding credit facilities, totaled $16.06 million at May  31,
2002. The impact on the Company's results of operations of a one-
point  interest  rate change on the outstanding  balance  of  the
variable  rate financial instruments as of May 31, 2002 would  be
immaterial.  This market risk discussion contains forward-looking
statements.   Actual  results  may differ  materially  from  this
discussion  based upon general market conditions and  changes  in
domestic and global financial markets.



                               12
<PAGE>

Certain Factors That May Affect Future Results
- ----------------------------------------------
The Forms Solutions Group sells a mature product line of business
forms  and other printed business products.  The demand for  this
product   line  may  decrease  with  increasing  electronic   and
paperless forms and filings.

The Promotional and Financial Solutions Groups are dependent upon
certain  major customers.  The loss of such customers may  affect
the revenue and earnings of the Groups.

The Company has various contracts with suppliers that are subject
to  change upon renewal and may not provide the same cost  ratios
for future periods.

Forward Looking Statement
- -------------------------
Management's   result  of  operations  contains   forward-looking
statements  that reflect the Company's current view with  respect
to future revenues and earnings.  These statements are subject to
numerous  uncertainties, including (but not limited to) the  rate
at   which   the  business  forms  market  is  contracting,   the
application  of  technology to the production of business  forms,
demand for the Company's products in the context of a contracting
market,  variability  in  the  prices  of  paper  and  other  raw
materials,  and  competitive conditions  in  the  business  forms
market.  Because of such uncertainties, readers are cautioned not
to place undue reliance on such forward-looking statements, which
speak only as of June 27, 2002.





























                               13
<PAGE>

                   PART II. OTHER INFORMATION



Item 4.  Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------

(a) The Company held its Annual Meeting of Shareholders on June
    20, 2002.

(b) Proxies  for  the  meeting  were  solicited  pursuant   to
    Regulation  14;  there was no solicitation  in  opposition  to
    management's nominees for directors listed in the Proxy Statement
    and all such nominee's were elected.

    Directors elected were:

      Nominees for Director    Votes Cast for   Votes Withheld
      ---------------------    --------------   --------------

      Keith S. Walters          14,118,894          848,757
      James B. Gardner          14,118,071          849,580
      Kenneth E. Overstreet     14,123,041          844,610

(c) Briefly  described below are the other matters voted  upon  at
    the  Annual  Meeting and the number of affirmative  votes  and
    negatives votes respectively.

    Selection of Ernst & Young LLP as independent auditors of  the
    Company for the fiscal year ending February 28, 2003.

               For                14,746,032
               Against                62,769
               Abstain               158,850
               Broker-non votes           --



















                               14
<PAGE>

Item 6.        Exhibits and Reports on Form 8-k
- -----------------------------------------------

          (b)  Reports on Form 8-K
               None












































                               15
<PAGE>

                           SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.


                                ENNIS BUSINESS FORMS, INC.


Date June 27, 2002              /s/Robert M. Halowec
     --------------------       --------------------------------
                                Robert M. Halowec
                                Vice President Finance
                                and Chief Financial Officer





Date June 27, 2002              /s/Harve Cathey
     --------------------       --------------------------------
                                Harve Cathey
                                Secretary and Treasurer
                                Principal Accounting Officer






















                               16
<PAGE>


</TEXT>
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</SEC-DOCUMENT>
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