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Acquisitions | 3 Months Ended
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May 31, 2025
Business Combination [Abstract] |
Acquisitions | 6. Acquisitions The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values with certain limited exceptions permitted under US GAAP. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets and liabilities assumed, is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed in the period incurred. Acquisition of Northeastern Envelope Company and Envelope Superstore On April 11, 2025 the Company acquired the net assets and business of Northeastern Envelope Company ("NEC"), which is based in Old Forge, Pennsylvania, and Envelope Superstore ("ESS") which is based in Hiram, Georgia, for approximately $34.9 million in cash. The Company performed a preliminary allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on the estimated fair values prepared by management using the information available as of the acquisition date. All goodwill of $12.4 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives ranging from 2 to 13 years of approximately $11.5 million in connection with the transaction, which are also deductible for tax purposes. This allocation is preliminary and subject to change, which may be material. The acquisition of NEC and ESS strengthens our production capabilities to serve our customers in the Northeast United States. The following table summarizes the Company's purchase price allocation for NEC and ESS as of the acquisition date (in thousands):
Accounts receivable | $ | 1,585 |
Inventories |  | 2,514 |
Right-of-use asset |  | 601 |
Property, plant and equipment |  | 7,371 |
Goodwill |  | 12,407 |
Intangibles |  | 11,498 |
Operating lease liability |  | (601 | )
Accounts payable and accrued liabilities |  | (444 | )
Acquisition price | $ | 34,931 |
Acquisition of Printing Technologies On June 26, 2024, the Company acquired the assets and business of Printing Technologies, Inc. ("PTI"), which is based in Indianapolis, Indiana, for approximately $5.5 million in cash. The Company performed an allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on the estimated fair values using the information available as of the acquisition date. The Company recorded intangible assets with definite lives of approximately $2.0 million in connection with the transaction, which are deductible for tax purposes. The acquisition of PTI strengthens our production capabilities and diversifies our product offerings to enable us to better serve our broad customer base. The following table summarizes the Company's purchase price allocation for PTI subsequent to the acquisition date (in thousands):
Accounts receivable |  | $ | 1,339 |
Inventories |  |  | 1,826 |
Other assets |  |  | 100 |
Right-of-use asset |  |  | 847 |
Property, plant and equipment |  |  | 887 |
Intangibles |  |  | 2,012 |
Operating lease liability |  |  | (847 | )
Accounts payable and accrued liabilities |  |  | (633 | )
Acquisition price |  | $ | 5,531 |
The results of operations for PTI, NEC and ESS are included in the Company’s condensed consolidated financial statements from the respective dates of acquisition. The following table sets forth certain operating information on a pro forma basis as though each acquisition had occurred as of the beginning of the comparable prior period (that is, March 1, 2024). The following pro forma information includes the estimated impact of adjustments such as amortization of intangible assets, depreciation expense and interest expense and related tax effects (in thousands, except per share amounts).
|  | Three months ended |  |
|  | May 31, 2025 |  |  | May 31, 2024 |  |
Pro forma net sales |  | $ | 99,283 |  |  | $ | 110,506 |  |
Pro forma net earnings |  |  | 10,064 |  |  |  | 11,175 |  |
Pro forma earnings per share - diluted |  | $ | 0.39 |  |  | $ | 0.43 |  |
The pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the full duration of the comparative periods presented.

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