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Stock Based Compensation | 3 Months Ended
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May 31, 2025
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. At May 31, 2025, the Company had one stock option plan, the 2021 Long-Term Incentive Plan of Ennis, Inc., adopted by the Board April 16, 2021 and affirmed by vote of the shareholders July 15, 2021 (the “Plan”). The plan authorized 1,033,648 shares of common stock for awards and expires June 30, 2031 and all unissued stock will expire on that date. May 31, 2025, the Company has 290,261 shares of unissued common stock reserved under the Plan for issuance. The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company 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 May 31, 2025 and May 31, 2024, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $0.7 million and $1.8 million, respectively. Stock Options The Company had the following stock option activity for the three months ended May 31, 2025.
|  |  |  |  |  |  |  | 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, 2025 |  |  | 31,251 |  |  | $ | 19.88 |  |  |  | 9.0 |  |  |  | — |
Granted |  |  | 10,809 |  |  |  | 17.27 |  |  |  |  |  |  |
Terminated |  |  | — |  |  |  | — |  |  |  |  |  |  |
Exercised |  |  | (2,500 | ) |  |  | 17.27 |  |  |  |  |  |  |
Outstanding at May 31, 2025 |  |  | 39,560 |  |  | $ | 19.33 |  |  |  | 8.3 |  |  | $ | 11.7 |
Exercisable at May 31, 2025 |  |  | 26,222 |  |  | $ | 19.05 |  |  |  | 8.5 |  |  | $ | 11.7 |
A summary of the status of the Company’s unvested stock options at May 31, 2025 and the changes during the three months ended May 31, 2025 are presented below:
|  |  |  | Weighted
|  |  |  | Average
|  | Number |  | Grant Date
|  | of Options |  | Fair Value
Unvested at March 1, 2025 |  | 26,669 |  | 2.47
New grants |  | 10,809 |  | 2.41
Vested |  | (24,140) |  | 2.44
Forfeited |  | — |  | —
Unvested at May 31, 2025 |  | 13,338 |  | 2.47
As of May 31, 2025, 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 0.9 years. Restricted Stock The following activity occurred with respect to the Company’s restricted stock awards for the three months ended May 31, 2025:
|  |  |  | Weighted |
|  |  |  | Average |
| Number of |  |  | Grant Date |
| Shares |  |  | Fair Value |
Outstanding at March 1, 2025 |  | 41,667 |  |  | $ | 21.68 |
Granted |  | — |  |  |  | — |
Terminated |  | — |  |  |  | — |
Vested |  | (667 | ) |  |  | 17.58 |
Outstanding at May 31, 2025 |  | 41,000 |  |  | $ | 21.68 |
As of May 31, 2025, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.1 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.5 years. Restricted Stock Units During the three months ended May 31, 2025, no performance-based or time-based RSUs were granted under the 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. Holders of RSUs receive cash dividends equal to the dividends we declare and pay on our common stock, which are included in dividends paid in the Condensed Consolidated Financial Statements. 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 three months ended May 31, 2025:
| 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, 2025 (1) |  | 101,961 |  |  | $ | 19.43 |  |  |  | 198,827 |  |  | $ | 19.97 |
Granted |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Change due to performance achievement |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Terminated |  | (5,403 | ) |  |  | 19.43 |  |  |  | — |  |  |  | — |
Vested |  | (28,582 | ) |  |  | 19.43 |  |  |  | — |  |  |  | — |
Outstanding at May 31, 2025 |  | 67,976 |  |  | $ | 19.43 |  |  |  | 198,827 |  |  | $ | 19.97 |
(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 includes an estimate 55,037 of additional RSUs 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 May 31, 2025, the total remaining unrecognized compensation cost of time-based RSUs was approximatel y $2.3 million over a weighted average remaining requisite service period of 1.9 years. As of May 31, 2025, the total remaining unrecognized compensation of performance-based RSUs was approximately $5.3 million over a weighted average remaining requisite service period of 1.9 years.

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