ENNIS, INC. Goodwill & Intangibles Disclosure
(8) Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized. Goodwill is tested for impairment at the single reporting unit level. The annual impairment test of goodwill and intangible assets is performed as of December 1 of each fiscal year.
The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of the reporting unit exceeds its carrying amount, including goodwill. Some of the qualitative factors considered in applying this test include consideration of macroeconomic conditions, industry and market conditions, cost factors affecting the business, overall financial performance of the business, and performance of the share price of the Company.
If qualitative factors are not deemed sufficient to conclude that the fair value of the reporting unit more likely than not exceeds its carrying value, then a quantitative assessment is performed. The quantitative evaluation utilizes multiple valuation methodologies, including a market approach (market price multiples of comparable companies) and an income approach (discounted cash flow analysis). The computations require management to make significant
estimates and assumptions, including, among other things, selection of comparable publicly traded companies, the discount rate applied to future earnings reflecting a weighted average cost of capital, and earnings growth assumptions. A discounted cash flow analysis requires management to make various assumptions about future sales, operating margins, capital expenditures, working capital, and growth rates. If the evaluation results in the fair value of the goodwill for the reporting unit being lower than the carrying value, an impairment charge is recorded. A goodwill impairment charge was not required for fiscal years 2026, 2025, or 2024.
Definite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances indicate that the asset may be impaired.
The carrying amount and accumulated amortization of the Company’s intangible assets at each balance sheet date are as follows (in thousands):
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Weighted |
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Average |
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Remaining |
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Gross |
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Life |
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Carrying |
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Accumulated |
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As of February 28, 2026 |
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(in years) |
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Amount |
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Amortization |
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Net |
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Definite-lived intangible assets |
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Trademarks and trade names |
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8.2 |
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$ |
34,056 |
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$ |
18,620 |
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$ |
15,436 |
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Customer lists |
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7.7 |
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93,772 |
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70,763 |
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23,009 |
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Non-compete |
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0.8 |
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289 |
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250 |
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39 |
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Technology |
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3.8 |
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650 |
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302 |
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348 |
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Total |
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7.9 |
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$ |
128,767 |
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$ |
89,935 |
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$ |
38,832 |
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As of February 28, 2025 |
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Definite-lived intangible assets |
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Trademarks and trade names |
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6.9 |
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$ |
30,911 |
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$ |
16,544 |
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$ |
14,367 |
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Customer lists |
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4.8 |
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83,303 |
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64,890 |
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18,413 |
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Non-compete |
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0.8 |
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261 |
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212 |
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49 |
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Technology |
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4.8 |
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650 |
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209 |
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441 |
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Total |
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5.7 |
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$ |
115,125 |
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$ |
81,855 |
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$ |
33,270 |
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Aggregate amortization expense for each of the fiscal years 2026, 2025 and 2024 was approximately $8.1 million, $7.7 million and $7.6 million, respectively.
The Company’s estimated amortization expense for the next five fiscal years is as follows (in thousands):
2027 |
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$ |
7,284 |
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2028 |
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$ |
5,760 |
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2029 |
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$ |
5,119 |
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2030 |
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$ |
3,904 |
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2031 |
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$ |
3,240 |
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Changes in the net carrying amount of goodwill for fiscal years 2026 and 2025 are as follows (in thousands):
Balance as of March 1, 2024 |
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$ |
94,349 |
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Goodwill acquired |
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— |
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Balance as of February 28, 2025 |
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94,349 |
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Goodwill acquired |
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12,237 |
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Balance as of February 28, 2026 |
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$ |
106,586 |
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During fiscal year 2026, $12.2 million was added to goodwill related to the acquisition of NEC and ESS. No goodwill was added related to the acquisition of CFC and PTI during fiscal year 2026 and 2025, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 8, 2026 | Showing above |
| 2025 | May 13, 2025 | |
| 2024 | May 10, 2024 | |
| 2023 | May 12, 2023 | |
| 2022 | May 9, 2022 | |
| 2021 | May 7, 2021 | |
| 2020 | May 4, 2020 | |
| 2019 | May 6, 2019 | |
| 2018 | May 11, 2018 | |
| 2017 | May 12, 2017 | |
| 2016 | May 11, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.