This article appeared in the Ft. Worth Star Telegram today and fortifies exactly why I'm a long term investor in Ennis Business Forms.http://www.dfw.com/mld/dfw/business/9472236.htm?1c
Jim, the site requires registration. Would you please offer a summary?
Sorry about that. I was not required to register when I first went to this site earlier this am. Then when I went back to get this requested info, I had to sign up! Strange!Anyway, here's the article:Getting big by staying smallSimple approach works for business-forms firm based in MidlothianBy J.G. DomkeSpecial to the Star-TelegramIt looked bad four years ago.Consultants and financial advisers said that Ennis Inc. was outdated and not keeping up with the times. Although the company had been in business since 1909 and was growing, its stock took a nose dive.But the advisers were wrong, says Chief Executive Keith Walters, at the company's new corporate office in Midlothian. Ennis is healthy and growing, and reported $256 million in sales when the fiscal year ended in April.The company keeps growing. In June, it bought competitor Crabar/GBF, and it will expand its product line by merging with AlStyle Apparel, a deal that was announced in July but won't be official until September.Walters says Ennis is committed to improve its service to customers and expects sales of more than half a billion dollars in 2005.Consultants are touting Ennis as an example for others.The business started in Ennis, a city in Ellis County, when the local newspaper burned down and only the printing press was left standing. Taking advantage of a bad situation, owners put the press to use making labels and tags for cotton bales and sales receipts. The company grew from there.The owners found opportunities printing multicopy business forms that included companies' addresses atop sales receipts, order forms, shipping labels, invoices and similar forms.It didn't matter to the company's owners that they couldn't print in high quantities. They wanted to keep it simple and were content with smaller orders for 10,000 to 100,000 forms, rather than millions.Today, Ennis is the country's largest supplier of business forms.Although computers are eliminating the need for this paper trail, restaurants still need paper to give the customer a receipt, and businesses still want hard copies of orders and shipping labels.Many printing firms that once profited from huge orders are losing money as customers submit small, last-minute orders that won't tie up money. Ennis has produced that type of order for years.The company is still using a portion of a press that was bought in the '50s."We don't put out products you don't need," says Walters, who simply wants to meet the needs of 60,000 distributors he serves across the country. They will take orders as low as $300 or those from large corporations. Ennis meets all printing needs for RadioShack and Blockbuster.The company customizes orders for its customers.A bar code is printed on Outback's restaurant receipts to enable them to be scanned, and inventory and sales can be tracked at a specific location.As computers have reduced the need for printed forms, distributors have added new products. Ennis sought to do this by buying other companies.Customers requested promotional items with company names printed on notepads, coffee mugs, mouse pads and other promotional items. Ennis has become Bic pen's largest customer.Although sales of promotional items slowed during the recession, demand has grown for financial products with chemically reactive paper, or "thermo chromatic" ink, which makes cashier's checks, certificates of deposit or bank drafts difficult to forge. Ennis now prints all money orders for Western Union.Ennis has 37 manufacturing facilities in 12 states, mostly in small towns. The largest plant is in Columbus, Kan., with 2,000 employees; the smallest has 34.Walters, who grew up in an Ohio town of 300 residents, sees no advantage in consolidating operations or laying off employees solely to reduce expenses.He keeps things simple: He wants his customers to believe that they are buying from the same local business.The company's location in small towns often makes it the town's largest employer. Employees are usually willing to work hard to produce a quality product and ship on time, Walters said.Staying local helps Ennis in other ways. When a customer objected to rising shipping costs amid rising fuel prices, Walters filled the orders from five locations that were closer to the customer, reducing shipping charges.The company has been getting attention recently: On the Motley Fool's Web site, Matt Richey, a portfolio manager at Centaur Capital Partners in Dallas, says, "Ennis has the classic virtues that long-term oriented investors like to see.""We are a national company that runs as if it is a regional business," Walters says. He doesn't want what he calls "a high-profile footprint."We don't have a need for it," he says. "It plays away from our goal of operating like a small business."
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