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Stock Based Compensation | 6 Months Ended
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Aug. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation | 12. Stock Based Compensation The Company grants stock options, restricted stock and restricted stock units ("RSUs") to key executives and managerial employees and non-employee directors. Prior to June 30, 2021, the Company had one stock incentive plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of May 18, 2008 and was further amended on June 30, 2011 (the "Old Plan"). The Old Plan expired June 30, 2021 and all remaining unused shares expired. Subject to the affirmative vote of the shareholders, the Board adopted the 2021 Long-Term Incentive Plan of Ennis, Inc. (the "New Plan") on April 16, 2021 authorizing 1,033,648 shares of common stock for awards. The New Plan was approved by the shareholders at the Annual Meeting on July 15, 2021 by a majority vote. The New Plan expires June 30, 2031 and all unissued stock will expire on that date. At August 31, 2024, the Company has 225,440 shares of unissued common stock reserved under the New Plan for issuance and uses treasury stock to satisfy option exercises and restricted stock awards. The Company recognizes compensation expense for stock options and restricted stock grants based on the grant date fair value of the award for stock options, restricted stock grants and RSUs on a straight-line basis over the requisite service period. The estimated number of shares to be achieved for performance based RSUs is updated each reporting period. For the three months ended August 31, 2024 and August 31, 2023, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $0.7 million and $0.7 million, respectively. For the six months ended August 31, 2024 and August 31, 2023, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $2.5 million and $1.4 million, respectively. Stock Options The Company had the following stock option activity for the six months ended August 31, 2024.
|  |  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  | Weighted |  |  | Average |  |  | Aggregate |
|  | Number |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  | of Shares |  |  | Exercise |  |  | Contractual |  |  | Value(a) |
|  | (exact quantity) |  |  | Price |  |  | Life (in years) |  |  | (in thousands) |
Outstanding at March 1, 2024 |  |  | 52,500 |  |  | $ | 19.88 |  |  |  | 10.0 |  |  |  | — |
Granted |  |  | — |  |  |  | — |  |  |  |  |  |  |
Terminated |  |  | — |  |  |  | — |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |
Outstanding at August 31, 2024 |  |  | 52,500 |  |  | $ | 19.88 |  |  |  | 8.6 |  |  | $ | 211.6 |
Exercisable at August 31, 2024 |  |  | 17,497 |  |  | $ | 19.88 |  |  |  | 8.6 |  |  | $ | 70.5 |
A summary of the status of the Company’s unvested stock options at August 31, 2024 and the changes during the six months ended August 31, 2024 are presented below:
|  |  |  | Weighted
|  |  |  | Average
|  | Number |  | Grant Date
|  | of Options |  | Fair Value
Unvested at March 1, 2024 |  | 52,500 |  | 2.47
New grants |  | — |  | —
Vested |  | (17,497) |  | 2.47
Forfeited |  | — |  | —
Unvested at August 31, 2024 |  | 35,003 |  | 2.47
As of August 31, 2024, there was $0.1 million of unrecognized compensation cost related to unvested stock options granted under the Plan. The weighted average remaining requisite service period of the unvested stock options was 1.6 years. Restricted Stock The following activity occurred with respect to the Company’s restricted stock awards for the six months ended August 31, 2024:
|  |  |  | Weighted |
|  |  |  | Average |
| Number of |  |  | Grant Date |
| Shares |  |  | Fair Value |
Outstanding at March 1, 2024 |  | 42,131 |  |  | $ | 20.11 |
Granted |  | 19,880 |  |  |  | 23.24 |
Terminated |  | — |  |  |  | — |
Vested |  | (20,344 | ) |  |  | 20.08 |
Outstanding at August 31, 2024 |  | 41,667 |  |  | $ | 21.61 |
As of August 31, 2024, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $0.8 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 2.2 years. Restricted Stock Units During the six months ended August 31, 2024, 183,457 performance-based RSUs and 122,303 time-based RSUs were granted under the New Plan. The fair value of the time-based RSUs was estimated based on the fair market value of the Company’s stock on the date of grant of $19.43 per unit. The fair value of the performance-based RSUs, using a Monte Carlo valuation model, was $19.97 per unit. The performance measures include a threshold, target and maximum performance level providing the grantees an opportunity to receive more or less shares than targeted depending on actual financial performance of the Company. The award will be based on the Company’s return on equity, EBITDA and adjusted for the Company’s Relative Shareholder Return as measured against a defined peer group. The performance-based RSUs vest on the third anniversary from the date of grant and the time-based RSUs vest ratably over three years from the date of grant. The following activity occurred with respect to the Company’s restricted stock units for the six months ended August 31, 2024:
| Time-based |  |  | Performance-based |
|  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  | Average |  |  |  |  |  | Average |
| Number of |  |  | Grant Date |  |  | Number of |  |  | Grant Date |
| Shares |  |  | Fair Value |  |  | Shares |  |  | Fair Value |
Outstanding at March 1, 2024 |  | 16,639 |  |  | $ | 20.11 |  |  |  | 152,572 |  |  | $ | 23.17 |
Granted (1) |  | 122,303 |  |  |  | 19.43 |  |  |  | 238,494 |  |  |  | 19.97 |
Change due to performance achievement |  | — |  |  |  | — |  |  |  | 61,337 |  |  |  | 17.81 |
Terminated |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested |  | (16,639 | ) |  |  | 20.11 |  |  |  | (213,909 | ) |  |  | 22.72 |
Outstanding at August 31, 2024 |  | 122,303 |  |  | $ | 19.43 |  |  |  | 238,494 |  |  | $ | 20.37 |
(1) The number of shares of time-based grants may, upon vesting, convert 50% into common stock and the remaining 50% into two incentive stock options for each RSU with an exercise price equal to the closing price of the Company's stock on that date for employees who have not met their stock ownership requirements. The number of shares of performance-based grants represents awards granted by the Company at the maximum achievement level of 130% of target payout. Actual shares that may be issued can range from 0% to 130% of target. As of August 31, 2024, the total remaining unrecognized compensation cost of time-based RSUs was approximately $2.1 million over a weighted average remaining requisite service period of 2.6 years. As of August 31, 2024, the total remaining unrecognized compensation of performance-based RSUs was approximately $4.1 million over a weighted average remaining requisite service period of 2.6 years.

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