ENNIS INC

Previous wording

We are in the business of manufacturing, designing, and selling business forms and other printed business products primarily to distributors located in the United States. As of August 31, 2024, we operate 58 manufacturing plants throughout the United States in 20 strategically located states as one reportable segment. Approximately 94% of the business products we manufacture are custom and semi-custom products, constructed in a wide variety of sizes, colors, number of parts, and quantities on an individual job basis, depending upon the customers’ specifications.

Current wording

We are in the business of manufacturing, designing, and selling business forms and other printed business products primarily to distributors located in the United States. As of November 30, 2024, we operate 57 manufacturing plants throughout the United States in 20 strategically located states as one reportable segment. Approximately 94% of the business products we manufacture are custom and semi-custom products, constructed in a wide variety of sizes, colors, number of parts, and quantities on an individual job basis, depending upon the customers’ specifications.

Previous wording

The products we sell include snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure sensitive products in short, medium and long runs under the following labels: Ennis®, Royal Business Forms®, Block Graphics®, 360º Custom Labels SM, ColorWorx®, Enfusion®, Uncompromised Check Solutions®, VersaSeal®, Ad Concepts SM, FormSource Limited SM, Star Award Ribbon Company®, Witt Printing®, B&D Litho®, Genforms®, PrintGraphics®, Calibrated Forms®, PrintXcel®, Printegra®, Forms Manufacturers SM, Mutual Graphics®, TRI-C Business Forms SM, Major Business Systems SM, Independent Printing SM, Hoosier Data Forms®, Hayes Graphics®, Wright Business Graphics SM, Wright 360 SM, Integrated Print & Graphics SM, the Flesh Company SM, Impressions Direct SM, AmeriPrint SM; Stylecraft SM, UMC Print SM; Eagle Graphics SM, Diamond Graphics SM, Printed Technologies SM, Printed Solutions SM and Partek Solutions SM We also sell the Adams McClure® brand (which provides Point of Purchase advertising); the Admore®, Folder Express®, and Independent Folders® brands (which provide presentation folders and document folders); Ennis Tag & Label SM (which provides custom printed, high performance labels and custom and stock tags); Allen-Bailey Tag & Label SM, Atlas Tag & Label®, Kay Toledo Tag®, and Special Service Partners® (SSP) (which provides custom and stock tags and labels); Trade Envelopes®, Block Graphics®, Wisco®, and National Imprint Corporation® (which provide custom and imprinted envelopes) and Northstar® and General Financial Supply® (which provide financial and security documents); InfosealSM and PrintXcel® (which provide custom and stock pressure seal documents). School Photo Marketing is a one-stop shop for over 1,400 school portrait photographers and professional photo labs nationwide, providing them with a complete array of products and services that reach over 15 million families and 30,000 schools, primarily in the K-8 market. We sell predominantly through independent distributors, as well as to many of our competitors. Northstar Computer Forms, Inc., one of our wholly-owned subsidiaries, also sells direct to a small number of customers, generally large banking organizations (where a distributor is not acceptable or available to the end-user). Adams McClure, LP, a wholly-owned subsidiary, also sells direct to a small number of customers, where sales are generally through advertising agencies.

Current wording

The products we sell include snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure sensitive products in short, medium and long runs under the following labels: Ennis®, Royal Business Forms®, Block Graphics®, 360º Custom Labels SM, ColorWorx®, Enfusion®, Uncompromised Check Solutions®, VersaSeal®, Ad Concepts SM, FormSource Limited SM, Star Award Ribbon Company®, Witt Printing®, B&D Litho®, Genforms®, PrintGraphics®, Calibrated Forms®, PrintXcel®, Printegra®, Forms Manufacturers SM, Mutual Graphics®, TRI-C Business Forms SM, Major Business Systems SM, Independent Printing SM, Hoosier Data Forms®, Hayes Graphics®, Wright Business Graphics SM, Wright 360 SM, Integrated Print & Graphics SM, the Flesh Company SM, Impressions Direct SM, AmeriPrint SM; Stylecraft SM, UMC Print SM; Eagle Graphics SM, Diamond Graphics SM, Printing Technologies SM, Paper Solutions SM and Partek Solutions SM We also sell the Adams McClure® brand (which provides Point of Purchase advertising); the Admore®, Folder Express®, and Independent Folders® brands (which provide presentation folders and document folders); Ennis Tag & Label SM (which provides custom printed, high performance labels and custom and stock tags); Allen-Bailey Tag & Label SM, Atlas Tag & Label®, Kay Toledo Tag®, and Special Service Partners® (SSP) (which provides custom and stock tags and labels); Trade Envelopes®, Block Graphics®, Wisco®, and National Imprint Corporation® (which provide custom and imprinted envelopes) and Northstar® and General Financial Supply® (which provide financial and security documents); InfosealSM and PrintXcel® (which provide custom and stock pressure seal documents). School Photo Marketing is a one-stop shop for over 1,400 school portrait photographers and professional photo labs nationwide, providing them with a complete array of products and services that reach over 15 million families and 30,000 schools, primarily in the K-8 market. We sell predominantly through independent distributors, as well as to many of our competitors. Northstar Computer Forms, Inc., one of our wholly-owned subsidiaries, also sells direct to a small number of customers, generally large banking organizations (where a distributor is not acceptable or available to the end-user). Adams McClure, LP, a wholly-owned subsidiary, also sells direct to a small number of customers, where sales are generally through advertising agencies.

Previous wording

Production capacity and price competition within our industry – Industry supply of paper products is subject to fluctuation as changing industry conditions influence producers to idle or permanently close individual machines or mills, and/or convert them to different product lines, such as packaging to offset a decline in demand. Paper mill shipments were down across the board through the first half of 2023 as buyers worked through elevated inventories of their products. Producers responded to the sluggish demand conditions with heavy downtime rather than permanent closures keeping prices mostly stable. While our supply of paper in the first and second quarter of 2024 has remained stable, margins remain under pressure due to the resulting weak volumes and competitive pricing, we intend to continue to focus on effectively managing and controlling our product costs through the use of forecasting, production and costing models, as well as working closely with our domestic suppliers to reduce our procurement costs, in order to minimize effects on our operational results. In addition, we will continue to look for ways to reduce and leverage our fixed costs and focus on maintaining our margins.

Current wording

Production capacity and price competition within our industry – Industry supply of paper products is subject to fluctuation as changing industry conditions influence producers to idle or permanently close individual machines or mills, and/or convert them to different product lines, such as packaging to offset a decline in demand. Paper mill shipments were down across the board through the first half of 2023 as buyers worked through elevated inventories of their products. Producers responded to the sluggish demand conditions with heavy downtime rather than permanent closures keeping prices mostly stable. While our supply of paper during the current fiscal year to date has remained stable, margins remain under pressure due to the resulting weak volumes and competitive pricing, we intend to continue to focus on effectively managing and controlling our product costs through the use of forecasting, production and costing models, as well as working closely with our domestic suppliers to reduce our procurement costs, in order to minimize effects on our operational results. In addition, we will continue to look for ways to reduce and leverage our fixed costs and focus on maintaining our margins.

Previous wording

The following discussion provides information which we believe is relevant to understanding our results of operations and financial condition. The discussion and analysis should be read in conjunction with the accompanying interim unaudited consolidated financial statements and notes included in this filing. The operating results of the Company for the three and six months ended August 31, 2024 and the comparative period for 2023 are set forth in the tables below.

Current wording

The following discussion provides information which we believe is relevant to understanding our results of operations and financial condition. The discussion and analysis should be read in conjunction with the accompanying interim unaudited consolidated financial statements and notes included in this filing. The operating results of the Company for the three and nine months ended November 30, 2024 and the comparative period for 2023 are set forth in the tables below.

Previous wording

Cost of Goods Sold and Gross Profit Margin. As a result of decreased sales volume, our cost of goods sold decreased $4.4 million, or 6.0%, from $73.7 million for the three months ended August 31, 2023 to $69.3 million for the three months ended August 31, 2024. Our gross profit was $29.8 million or 30.1% of revenue for the quarter ended August 31, 2024 compared to $33.1 million or 31.0% of revenue for the same quarter in the prior year. Our gross profit margin remained relatively flat compared to the immediately preceding quarter ending May 31, 2024 at 30.0%. We continue to take mitigating actions through our cost management and pricing strategies to maintain our margins and offset continued pressure from soft market conditions and increased competition on price.

Current wording

Cost of Goods Sold and Gross Profit Margin. As a result of decreased sales volume, our cost of goods sold decreased $3.6 million, or -4.8%, from $74.1 million for the three months ended November 30, 2023 to $70.5 million for the three months ended November 30, 2024. Our gross profit was $29.2 million or 29.3% of revenue for the quarter ended November 30, 2024 compared to $30.5 million or 29.2% of revenue for the same quarter in the prior year. Our gross profit margin for the quarter of 29.3% showed an 80 basis-point decline compared to the immediately preceding quarter ending August 31, 2024 at 30.1% and remained relatively flat compared to 29.2% in the same prior year quarter. Softening demand and more competitive pricing in some of our markets put downward pressure on operating margins. We continue to take mitigating actions through our cost management and pricing strategies to maintain our margins and offset continued pressure from soft market conditions and increased competition on price.

Previous wording

Selling, general, and administrative expense. For the three months ended August 31, 2024, our selling, general, and administrative ("SG&A") expenses were $16.6 million compared to $18.3 million for the three months ended August 31, 2023, a decrease of $1.8 million, or 9.7%. As a percentage of net sales, SG&A expenses for the current quarter were 16.7% and 17.2% for the three months ended August 31, 2024 and August 31, 2023, respectively. Our SG&A expense decreased as a result of operational efficiencies.

Current wording

Selling, general, and administrative expense. For the three months ended November 30, 2024, our selling, general, and administrative ("SG&A") expenses were $16.3 million compared to $17.4 million for the three months ended November 30, 2023, a decrease of $1.1 million, or -6.1%. As a percentage of net sales, SG&A expenses for the current quarter were 16.4% and 16.6% for the three months ended November 30, 2024 and November 30, 2023, respectively. Our SG&A expense decreased as a result of operational efficiencies.

Previous wording

Loss from disposal of assets. The $39,000 and $52,000 net loss from disposal of assets during the three-month period ended August 31, 2024 and 2023, respectively, was primarily attributed to the sale of equipment.

Current wording

Gain and loss from disposal of assets. The $138,000 net gain and $1,000 net loss from disposal of assets during the three month period ended November 30, 2024 and 2023, respectively, was primarily attributed to the sale of equipment.

Previous wording

Income from operations. Primarily due to factors described above, our income from operations for the three months ended August 31, 2024 was $13.2 million, or 13.3% of net sales, as compared to $14.7 million, or 13.8% of net sales, for the three months ended August 31, 2023, a decrease of $1.5 million. Income from operations declined on a sequential quarter basis by $0.5 million and was $13.7 million for the quarter ended May 31, 2024.

Current wording

Income from operations. Primarily due to factors described above, our income from operations for the three months ended November 30, 2024 was $13.0 million, or 13.1% of net sales, remained relatively flat compared to $13.1 million, or 12.5% of net sales, for the three months ended November 30, 2023. Income from operations declined on a sequential quarter basis by $0.2 million and was $13.2 million for the quarter ended August 31, 2024.

Previous wording

Other income (expense). Other income was $1.0 million for the three months ended August 31, 2024 compared to $0.6 million for the three months ended August 31, 2023. Our increase in income was primarily from an increase in interest income from the increase in balance and rates received on money market accounts and short-term investments in the current quarter, $1.4 million for the three months ended August 31, 2024 compared to $0.9 million for the three months ended August 31, 2023.

Current wording

Other income (expense). Other income was $1.0 million for the three months ended November 30, 2024 compared to $0.7 million for the three months ended November 30, 2023. Our increase in income was primarily from an increase in interest income from the increase in balance and rates received on money market accounts and short-term investments in the current quarter, $1.4 million for the three months ended November 30, 2024 compared to $1.0 million for the three months ended November 30, 2023.

Previous wording

Provision for income taxes. Our effective tax rate was 27.5% and 28.6% for the three months ended August 31, 2024 and 2023, respectively. The decrease in our overall tax rate this period as compared to last period is due to a decrease in our overall expected state tax rate due to changes in state apportionment.

Current wording

Provision for income taxes. Our effective tax rate was 27.5% and 28.3% for the three months ended November 30, 2024 and 2023, respectively. The decrease in our overall tax rate this period as compared to last period is due to a decrease in our overall expected state tax rate due to changes in state apportionment.

Previous wording

Net earnings. Net earnings, due to the factors above, were $10.3 million for the three months ended August 31, 2024 as compared to $10.9 million for the comparable quarter in the prior year. Net earnings were impacted by decreased revenues for the three months ended August 31, 2024 compared to the three months ended August 31, 2023. After-tax earnings per diluted share for the three months ended August 31, 2024 were $0.40, compared to $0.42 for the same quarter last year.

Current wording

Net earnings. Net earnings, due to the factors above, were $10.2 million for the three months ended November 30, 2024 as compared to $9.9 million for the comparable quarter in the prior year. Net earnings were impacted by decreased revenues for the three months ended November 30, 2024 compared to the three months ended November 30, 2023. After-tax earnings per diluted share for the three months ended November 30, 2024 were $0.39, compared to $0.38 for the same quarter last year.

Previous wording

Cost of Goods Sold and Gross Profit Margin. Our cost of goods sold decreased $9.5 million, or 6.3%, from $150.9 million for the six months ended August 31, 2023 to $141.5 million for the six months ended August 31, 2024. Our gross profit was $60.7 million for the six-month period ended August 31, 2024 compared to $67.1 million for the same period in the prior year. Our gross profit margin of 30.0% for the current six-month period, decreasing from the prior year six-month period of 30.8%, is within our target range. Our gross profit margin as a percentage of sales was higher in the prior year six-month period ending August 31, 2023 due to a higher absorption of fixed costs driven from greater volumes shipped. We continue to take mitigating actions through our cost management and pricing strategies to maintain our margins and offset continued pressure from soft market conditions and increased competition on price.

Current wording

Cost of Goods Sold and Gross Profit Margin. Our cost of goods sold decreased $13.0 million, or -5.8%, from $225.0 million for the nine months ended November 30, 2023 to $212.0 million for the nine months ended November 30, 2024. Our gross profit was $89.9 million for the nine month period ended November 30, 2024 compared to $97.7 million for the same period in the prior year. Our gross profit margin of 29.8% for the current nine month period, decreasing from the prior year nine month period of 30.3%, is within our target range. Our gross profit margin as a percentage of sales was higher in the prior year nine month period ending November 30, 2023 due to a higher absorption of fixed costs driven from greater volumes shipped. We continue to take mitigating actions through our cost management and pricing strategies to maintain our margins and offset continued pressure from soft market conditions and increased competition on price.

Previous wording

Selling, general, and administrative expense. For the six months ended August 31, 2024, our SG&A expenses were $33.7 million compared to $36.7 million for the six months ended August 31, 2023, a decrease of $2.9 million, or 8.1%. As a percentage of net sales, SG&A expenses for the period were 16.7% and 16.8% for the six months ended August 31, 2024 and 2023, respectively. Our SG&A expense decreased as a result of operational efficiencies.

Current wording

Selling, general, and administrative expense. For the nine months ended November 30, 2024, our SG&A expenses were $50.1 million compared to $54.1 million for the nine months ended November 30, 2023, a decrease of $4.0 million, or -7.4%. As a percentage of net sales, SG&A expenses for the period were 16.6% and 16.8% for the nine months ended November 30, 2024 and 2023, respectively. Our SG&A expense decreased as a result of operational efficiencies.

Previous wording

Loss from disposal of assets. The $43,000 and $52,000 net loss from disposal of assets during the six-month period ended August 31, 2024 and 2023, respectively were primarily attributed to the sale of equipment.

Current wording

Gain and loss from disposal of assets. The $95,000 net gain and $53,000 net loss from disposal of assets during the nine month period ended November 30, 2024 and 2023, respectively, was primarily attributed to the sale of equipment.

Previous wording

Income from operations. Primarily due to factors described above, our income from operations for the six months ended August 31, 2024 was $26.9 million, or 13.3% of net sales, as compared to $30.4 million, or 13.9% of net sales, for the six months ended August 31, 2023.

Current wording

Income from operations. Primarily due to factors described above, our income from operations for the nine months ended November 30, 2024 was $40.0 million, or 13.2% of net sales, as compared to $43.5 million, or 13.5% of net sales, for the nine months ended November 30, 2023.

Previous wording

Other income (expense). Other income was $2.0 million for the six months ended August 31, 2024 compared to $1.0 million for the six months ended August 31, 2023. Our increase in income was primarily from an increase in interest income from increase in balance and rates received on money market accounts and short-term investments in the current period, $2.7 million for the six months ended August 31, 2024 compared to $1.7 million for the six months ended August 31, 2023.

Current wording

Other income (expense). Other income was $3.1 million for the nine months ended November 30, 2024 compared to $1.7 million for the nine months ended November 30, 2023. Our increase in income was primarily from an increase in interest income from increase in balance and rates received on money market accounts and short-term investments in the current period, $4.1 million for the nine months ended November 30, 2024 compared to $2.7 million for the nine months ended November 30, 2023.

Previous wording

Provision for income taxes. Our effective tax rate was 27.5% and 28.3% for the six months ended August 31, 2024 and 2023, respectively. The decrease in our overall tax rate this period as compared to last period is due to a decrease in our overall expected state tax rate due to changes in state apportionment.

Current wording

Provision for income taxes. Our effective tax rate was 27.5% and 28.3% for the nine months ended November 30, 2024 and 2023, respectively. The decrease in our overall tax rate this period as compared to last period is due to a decrease in our overall expected state tax rate due to changes in state apportionment.

Previous wording

Net earnings. Net earnings, due to the factors above, were $21.0 million for the six months ended August 31, 2024 as compared to $22.5 million for the comparable period in the prior year, a decrease of $1.6 million. Net earnings per diluted share for the six months ended August 31, 2024 was $0.80, compared to $0.87 for the same period in the prior year.

Current wording

Net earnings. Net earnings, due to the factors above, were $31.2 million for the nine months ended November 30, 2024 as compared to $32.5 million for the comparable period in the prior year, a decrease of $1.3 million. Net earnings per diluted share for the nine months ended November 30, 2024 was $1.19, compared to $1.25 for the same period in the prior year.

Previous wording

We rely on our cash flows generated from operations to meet all cash requirements of our business. The primary cash requirements of our business are payments to vendors in the normal course of business, capital expenditures, compensation and benefits for employees and the payment of dividends to our shareholders. We believe that our current cash balance of $100.0 million at August 31, 2024, short-term investments of $22.7 million and anticipated cash flows from operations are expected to be similar to prior periods which should be adequate to cover the next twelve months and beyond of our operating and capital requirements. Our capital requirements are expected to be within our historical levels of between $3.0 million and $6.0 million.

Current wording

We rely on our cash flows generated from operations to meet all cash requirements of our business. The primary cash requirements of our business are payments to vendors in the normal course of business, capital expenditures, compensation and benefits for employees and the payment of dividends to our shareholders. We believe that our current cash balance of $55.7 million and our short-term investments of $12.9 million at November 30, 2024, as well as our anticipated cash flows from operations, which are expected to be similar to prior periods, should be adequate to cover the next twelve months and beyond of our operating and capital requirements. Our capital requirements are expected to be between $3.0 million and $6.0 million over the next twelve months. These amounts are consistent with our historical levels.

Previous wording

Working Capital. Our working capital increased $10.9 million or 6.5%, from $167.6 million at February 29, 2024 to $178.5 million at August 31, 2024. Our current ratio, calculated by dividing our current assets by our current liabilities, increased from 6.0 to 1.0 at February 29, 2024 to 6.3 to 1.0 at August 31, 2024. Our increase in working capital primarily reflects the increase in cash and short-term investments, $11.7 million and inventory,$1.7 million, offset by the decrease in accounts receivable, $3.5 million.

Current wording

Working Capital. Due primarily to a special dividend of $65.0 million paid to Shareholders during the nine months ended November 30, 2024, our working capital decreased $47.5 million or -28.3%, from $167.6 million at February 29, 2024 to $120.1 million at November 30, 2024. Our current ratio, calculated by dividing our current assets by our current liabilities, decreased from 6.0 to 1.0 at February 29, 2024 to 4.7 to 1.0 at November 30, 2024. Our decrease in working capital primarily reflects the decrease in cash and short-term investments, $42.4 million, and net trade receivable, $7.0 million, offset by the decrease in accrued expenses, $2.0 million.

Previous wording

Cash flows from operating activities. Cash provided by operating activities was $35.0 million in the six months ended August 31, 2024 compared to $35.0 million in the comparative period ended August 31, 2023. A decrease in accounts receivable, net of accounts receivable from acquired business since the prior fiscal year end provided cash of $4.6 million in the current year six-month period, and $7.5 million in the comparable six-month period of the prior year. A decrease in inventories provided cash of $0.3 million in the six-month period ended August 31, 2024 and $2.6 million in the same period of 2023. A decrease in accounts payable and accrued expenses used cash of $0.1 million in the current year six-month period and a decrease in accounts payable and accrued expenses used cash of $6.5 million in the prior year comparable six-month period. The decrease in accounts receivable in the current period was primarily due to decreased sales. The increase in accounts payable and accrued expenses during the prior year period was primarily due to an increase in purchasing activities and inflationary pressures. We continue to monitor incoming orders and adjust raw material purchases accordingly.

Current wording

Cash flows from operating activities. Cash provided by operating activities was $53.1 million in the nine months ended November 30, 2024 compared to $52.5 million in the comparative period ended November 30, 2023. Accounts receivable, net of accounts receivable from acquired business since the prior fiscal year-end, provided cash of $8.1 million in the current year nine-month period, and $8.2 million in the comparable nine-month period of the prior year. The decrease in accounts receivable in the current period was primarily due to decreased sales volume and improved collections. A decrease in inventories provided cash of $2.5 million in the nine-month period ended November 30, 2024 and $6.8 million in the same period of 2023. Cash used in the current year nine-month period for accounts payable and accrued expenses were $2.4 million and $7.8 million in the prior year comparable nine-month period. The decrease in accounts payable and accrued expenses during the current period was primarily due to a decrease in purchasing activities and inventory management. We continue to monitor incoming orders and adjust raw material purchases accordingly.

Previous wording

Cash flows from investing activities. Cash used in investing activities was $1.8 million in the six months ended August 31, 2024 compared to $15.6 million in the six months ended August 31, 2023. Capital expenditures primarily of equipment was $3.6 million and $3.7 million for the six months ended August 31, 2024 and August 31, 2023, respectively. In the six months ended August 31, 2024, $5.7 million was used to acquire businesses compared to $11.9 million in same period last year. During the current period, we purchased approximately $10.1 million of U.S. government treasury bills, which was partially offset by $17.5 million in matured treasury bills and invested in money market funds. No treasury bills matured or were purchased during the six months ended August 31, 2023.

Current wording

Cash flows from investing activities. Cash provided by investing activities was $7.9 million in the nine months ended November 30, 2024 compared to cash used in investing activities of $43.2 million in the nine months ended November 30, 2023. Capital expenditures primarily of equipment was $4.3 million and $4.9 million for the nine months ended November 30, 2024 and November 30, 2023, respectively. In the nine months ended November 30, 2024, $5.5 million was used to acquire businesses compared to $19.9 million in same period last year. During the current period, we purchased approximately $10.1 million of U.S. government treasury bills, which was partially offset by $27.5 million in matured treasury bills and invested in money market funds. We purchased $18.4 million of U.S. government treasury bills during the nine months ended November 30, 2023.

Previous wording

Cash flows from financing activities. We used $1.8 million more cash in financing activities during the six months ended August 31, 2024 compared to the same period in the prior year. The increase in cash used during the six months ended August 31, 2024 resulted from $1.8 million common stock repurchased under our stock repurchase program in the six months ended August 31, 2024.

Current wording

Cash flows from financing activities. We used $67.5 million more cash in financing activities during the nine months ended November 30, 2024 compared to the same period in the prior year. The increase in cash used during the nine months ended November 30, 2024 resulted from a one-time special dividend of $2.50 per share or $65.0 million and a $1.8 million common stock repurchased under our stock repurchase program in the nine months ended November 30, 2024.

Previous wording

Pension Plan –The funded status of our Pension Plan is dependent on many factors, including returns on invested assets, the level of market interest rates and the level of funding. Assuming a stable funding status, we would expect that future required contributions would be between $1.0 million and $3.0 million per year. As our pension assets are invested in marketable securities, changes in actual investment returns or in discount rates could change funding status and requirements significantly. We made a contribution of $1.2 million to our Pension Plan during the period ended August, 31, 2024 and 2023. At August 31, 2024, we had a funded pension asset of $0.1 million.

Current wording

Pension Plan –The funded status of our Pension Plan is dependent on many factors, including returns on invested assets, the level of market interest rates and the level of funding. Assuming a stable funding status, we would expect that future required contributions would be between $1.0 million and $3.0 million per year. As our pension assets are invested in marketable securities, changes in actual investment returns or in discount rates could change funding status and requirements significantly. We made a contribution of $1.2 million to our Pension Plan during the nine months ended November 30, 2024. At November 30, 2024, we had a funded pension asset of $0.1 million.

Previous wording

Capital Expenditures–We continue to make capital expenditures for operational maintenance purposes, as may be required. Additionally, we will carefully review and make capital expenditures for additional equipment to the extent such additions make economic sense by improving our operations and not jeopardizing our strong liquidity position. We expect our capital requirements for our current fiscal year, exclusive of capital required for possible acquisitions, will be within our historical levels of between $3.0 million and $6.0 million. For the six months ended August 31, 2024, we spent approximately $3.6 million on capital expenditures that was funded out of our cash balance. We expect to generate sufficient cash flows from our operating activities to cover our operating and other normal capital requirements for the foreseeable future.

Current wording

Capital Expenditures–We continue to make capital expenditures for operational maintenance purposes, as may be required. Additionally, we will carefully review and make capital expenditures for additional equipment to the extent such additions make economic sense by improving our operations and not jeopardizing our strong liquidity position. We expect our capital requirements for our current fiscal year, exclusive of capital required for possible acquisitions, will be within our historical levels of between $3.0 million and $6.0 million. For the nine months ended November 30, 2024, we spent approximately $4.3 million on capital expenditures that was funded out of our cash balance. We expect to generate sufficient cash flows from our operating activities to cover our operating and other normal capital requirements for the foreseeable future.