Annual Report for Fiscal Year Ending February 28, 2026 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis provides material historical and prospective disclosures intended to enable investors and other users to assess our financial condition and results of operations. Statements that are not historical are forward-looking and involve risk and uncertainties, including those discussed under the caption "Risk Factors" in Item 1A of this Annual Report on Form 10-K and elsewhere in this Report. You should read this discussion and analysis in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Report. The words "anticipate," "preliminary," "expect," "believe," "intend" and similar expressions identify forward-looking statements. We believe these forward-looking statements are based upon reasonable assumptions. All such statements involve risks and uncertainties, and as a result, actual results could differ materially from those projected, anticipated, or implied by these statements.

In view of such uncertainties, investors should not place undue reliance on our forward-looking statements since such statements may prove to be inaccurate and speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This Management's Discussion and Analysis covers the continuing operations of the Company, which are comprised of the production and sale of business forms and other business products. This Management's Discussion and Analysis includes the following sections:

References to 2026, 2025 and 2024 refer to the fiscal years ended February 28, 2026, February 28, 2025 and February 29, 2024, respectively.

Overview

The Company - Our management believes we are the largest provider of business forms, pressure-seal forms, labels, tags, envelopes, and presentation folders to independent distributors in the United States.

Our Business Challenges - Our industry continues to experience consolidation of traditional supply channels, ongoing product obsolescence, paper supplier capacity adjustments, and periodic pricing volatility and potential supply allocations resulting from demand and supply imbalance. Technology advances have enabled electronic document distribution, web-based hosting, digital printing and print-on-demand as viable and cost-effective alternatives to traditional custom-printed documents and customer communications. Improved equipment has become more accessible to both existing and new competitors. As a result, we face highly competitive conditions in an already mature, price-competitive print industry.

In addition to the risk factors discussed under the caption "Risk Factors" in Item 1A of this Annual Report, some of the key challenges of our business include the following:

Transformation of our portfolio of products - While traditional business documents remain essential to conducting business, many are being replaced through the use of lower-cost paper grades or imported products, or are being devalued by advances in digital technologies, resulting in continued declines in demand for a portion of our product line. Transforming our product offerings in order to provide innovative, value-added solutions on a proactive basis requires ongoing investments in new and existing technologies, as well as the development of key strategic business relationships, including print-on-demand services and product offerings that support customers transitioning to digital business environments. We continue to evaluate new market opportunities and niches, including through acquisitions, and to expand our offerings in areas such as envelopes, tags, folders, healthcare wristbands, specialty packaging, direct mail, pressure seal products, secure document, in-mold labels, and long-run integrated high color web print, which provide opportunities for growth and further differentiate us from our competition. Our ability to make such investments or pursue acquisitions is dependent on our liquidity, capital resources, and operating results.

Production capacity and price competition within our industry - Industry supply of paper products continues to fluctuate as changing market conditions influence producers to idle or permanently close individual machines or mills, or convert capacity to alternative product lines, including packaging, to offset declines in demand for certain paper grades. Recent industry activity has included temporary idling of machines, permanent closures and limited increases in specialty paper capacity, reflecting ongoing adjustments in response to shifts in demand. During the current fiscal year, the only domestic producer of carbonless paper permanently closed its mill which has contributed to ongoing supply constraints for this product. As previously reported, we increased inventory levels to provide buffer stock while transitioning to alternative sources of carbonless paper.

These dynamics may result in continued supply constraints and input cost volatility for certain paper grades. Margins remain under pressure due to volume variability in certain markets, elevated input costs and ongoing pricing competition. To mitigate these impacts, we continue to manage product costs through forecasting, production and costing models, strengthening supplier relationships; negotiating procurement terms; and improving operational efficiency, while evaluating opportunities to better leverage our fixed cost structure.

Continued consolidation of our customers - Our customers are primarily distributors, many of which are consolidating or are being acquired by competitors. While we have historically maintained a significant share of business with these customers, continued consolidation may affect our sales volume, pricing, and margins.

Critical Accounting Estimates

In preparing our Consolidated Financial Statements, we are required to make estimates and assumptions that affect the disclosures and reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and judgments on an ongoing basis, including those related to allowance for credit losses, inventory valuations, property, plant and equipment, intangible assets, pension plan obligations, accrued liabilities and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We believe the following accounting estimates are the most critical due to the application of significant subjective assumptions and judgments in the preparation of such estimates, which are included in our Consolidated Financial Statements.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation. Refer to Note 14, Income taxes.

Pension Plan - We maintain the Pension Plan for certain eligible employees. Included in our financial results are Pension Plan costs that are measured using actuarial valuations and require the use of a number of significant assumptions. Changes in these assumptions can result in different expense and liability amounts and future actual pension cost experience and funding requirements may differ materially from current estimates.

As our Pension Plan assets are invested in marketable securities, fluctuations in market values could potentially impact our Pension Plan funding status and associated liability recorded. The expected rate of return on assets was 5.50% at February 28, 2026 and February 28, 2025.

Similar to fluctuations in market values, a drop in the discount rate could potentially negatively impact our Pension Plan's funded status, recorded pension liability and future contribution levels with the opposite impact occurring for an increase in the discount rate. During fiscal years 2026 and 2025, the discount rate used to determine the net pension obligations for purposes of our Consolidated Financial Statements was 5.15%. The discount rate is reviewed by management annually and is adjusted to reflect movements in the average Mercer and FTSE (formerly Citigroup) pension yield curves for mature pension plans with duration of about 10 years. The Company estimated the duration of its pension benefit obligation ("PBO") to be approximately 12-15 years. Each 10-basis point change in the discount rate impacts our computed pension liability by about $0.5 million.

Also, continued changes in the mortality assumptions could potentially impact our Pension Plan's funded status. For the February 28, 2026 measurement, no change was made to the mortality assumption. The mortality assumption is used to estimate the future lifetime of plan participants. Any actual impact on the Pension Plan from the higher than expected mortality has already been recognized in the underlying participant data used to measure the pension liability. The impact on future longevity is still being studied, and there is a general expectation that the current population is a healthier cohort such that mortality rates may return to pre-pandemic levels. This assumption will continue to be monitored.

Impairment Assessments on Goodwill and Other Intangible Assets - Amounts allocated to intangibles and goodwill are determined based on valuation analyses for our acquisitions. Amortizable intangibles are amortized over their expected useful lives. We evaluate these amounts periodically (at least once a year) to determine whether a triggering event has occurred during the year that would indicate potential impairment.

We assess goodwill for impairment annually as of December 1, or more frequently if impairment indicators are present. The Company uses qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that the fair value of its single 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 reporting unit's business, overall financial performance of the business, and performance of the common share price of the Company. If qualitative factors are not deemed sufficient to conclude that it is more likely than not that the fair value of the reporting unit exceeds its carrying value, then a one-step quantitative approach is applied in making an evaluation. 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, an appropriate 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 quantitative evaluation results in the fair value of the reporting unit being lower than the carrying value, an impairment charge is recorded. A goodwill impairment charge was not required for the fiscal years 2026, 2025 or 2024.

Allowance for Credit Losses and Accounts Receivable - Net sales consist of gross sales invoiced to customers, less certain related charges, including discounts, returns and other allowances. Our allowance for credit losses is based on an analysis that estimates the amount of our total customers receivable balance that is not collectible. This analysis includes assessing a default probability to customers' receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends. While we believe we have exercised prudent judgment and applied reasonable assumptions, there can be no assurance that in the future, changes in economic conditions or other factors would not cause changes in the financial health of our customers. If the financial health of our customers deteriorates, the timing

and level of payments received could be impacted and therefore, could result in a change to our estimated losses. Returns, discounts and other allowances have historically been insignificant.

Allowance for Excess and Obsolete Inventories - With the exception of approximately 5.6% and 7.1% of inventories valued using the lower of last-in, first-out ("LIFO") cost flow assumption for fiscal years 2026 and 2025, respectively, our inventories are valued at the lower of cost or net realizable value as is required under U.S. GAAP when we follow the first-in-first-out cost flow assumption ("FIFO"). We regularly review inventory values on hand, using specific aging categories, and write down inventory deemed obsolete and/or slow-moving based on historical usage and estimated future usage to its estimated net realizable value. As actual future demand or market conditions may vary from those projected by management, adjustments to inventory valuations may be required. The allowance for excess and obsolete inventory at fiscal years ended 2026 and 2025 were $1.9 million and $1.8 million, respectively. The aged inventory allowance is recorded primarily to account for the decrease in market value of general stock inventory that is not manufactured to specific customer order. Inventory write offs were less than $0.1 million in fiscal year ended 2026 and $0.1 million in each of the fiscal years ended 2025 and 2024.

Results of Operations

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 Consolidated Financial Statements and notes thereto. Unless otherwise indicated, this financial overview is for the continuing operations of the Company, which are comprised of the production and sales of business forms and other business products. The operating results of the Company for fiscal year 2026 and the comparative fiscal years 2025 and 2024 are included in the tables below.

Consolidated Summary

Net Sales. Our net sales were $392.4 million for fiscal year 2026, compared to $394.6 million for fiscal year 2025, a decrease of $2.2 million, or 0.6%. The decrease was primarily driven by lower organic volumes of approximately $25.0 million, reflecting continued softness in portions of the print market and ongoing pricing competition. The decline was largely offset by approximately $22.8 million increase in revenues generated from our recent acquisitions. Industry demand continues to be influenced by the long-term shift toward digital alternatives, although print remains an essential component in many of our customers' operations. We continue to focus on, and maintain our pricing discipline, while optimizing our product mix to mitigate volume-related pressures.

Our net sales were $394.6 million for fiscal year 2025 compared to $420.1 million for fiscal year 2024, a decrease of $25.5 million or 6.1%, primarily due to a $38.7 million decrease in volume demand, partially offset by an approximately $13.2 million increase in revenues generated from our recent acquisitions during fiscal year 2024 and 2025.

Cost of Goods Sold. Manufacturing costs decreased $5.3 million, or 1.9% from $277.3 million for fiscal year 2025 to $272.0 million for fiscal year 2026, primarily reflecting lower sales volumes, partially offset by higher input costs in certain categories. Our gross profit was $120.4 million or 30.7% of sales for fiscal year 2026, compared to $117.3 million or 29.7% of sales for fiscal year 2025. The improvement in gross margin was driven by pricing discipline, product mix, and ongoing cost management initiatives, including procurement strategies and manufacturing efficiencies.

Manufacturing costs decreased $17.5 million, or 5.9%, from $294.8 million for fiscal year 2024 to $277.3 million for fiscal year 2025 primarily as a result of decreased sales volume. Our gross profit was $117.3 million or 29.7% of sales for fiscal year 2025, compared to $125.3 million or 29.8% for fiscal year 2024.

Selling, general, and administrative expenses. For fiscal year 2026, our selling, general and administrative ("SG&A") expenses were $67.7 million compared to $65.4 million for fiscal year 2025, an increase of $2.3 million, or 3.5%. The increase was primarily driven by higher incentive compensation reflecting improved net earnings, increased medical costs, and higher amortization expense, partially offset by lower consolidation-related expenses. As a percentage of sales, SG&A increased from 16.6% in fiscal year 2025 to 17.3% in fiscal year 2026, reflecting the impact of lower organic volumes and higher operating costs.

Our SG&A expenses decreased approximately $3.4 million or 5.0%, from $68.8 million for fiscal year 2024 to $65.4 million for fiscal year 2025 primarily as a result of reduction in executive incentive compensation expense and operational efficiencies. As a percentage of sales, SG&A expenses increased slightly from 16.4% to 16.6% in fiscal year 2025.

(Gain) loss from disposal of assets. Our gain from disposal of assets was less than $0.1 million in 2026. The $0.1 million gain from disposal of assets for fiscal 2025 is primarily from the sale of unused manufacturing equipment. The $0.1 million loss from disposal of assets for fiscal 2024 is primarily from the sale of unused manufacturing equipment.

Income from operations. Primarily due to factors described above, our income from operations for fiscal year 2026 increased $0.7 million to $52.7 million or 13.4% of net sales from $52.0 million or 13.2% of net sales for fiscal year 2025. Income from operations for fiscal year 2025 decreased $4.5 million to $52.0 million or 13.2% of net sales from $56.5 million or 13.4% of net sales for fiscal year 2024.

Other income (expense). Other income was $5.9 million in 2026 compared to $3.5 million in 2025. The increase was primarily attributable to the recognition of $5.3 million related to proceeds received in connection with a legal matter against Wright Printing Company, its owners Mark Wright, and CEO Mardra Sikora, which includes $0.4 million of interest income.

Interest income decreased to $1.9 million in fiscal year 2026 from $4.9 million in 2025 and $4.0 million in 2024 primarily due to lower average cash balances following the special dividend paid in the fourth quarter of fiscal year 2025, an increase in inventory levels, and acquisition of NEC in fiscal year 2026. Other expense for fiscal year 2026 was $1.3 million compared to $1.4 million for fiscal year 2025 and $1.3 million for fiscal year 2024.

Provision for income taxes. Our effective tax rates for fiscal years 2026, 2025 and 2024 were 27.3%, 27.5%, and 28.0%, respectively.

Net earnings. Net earnings were $42.6 million, or $1.66 per diluted share for fiscal year 2026 compared to $40.2 million or $1.54 per diluted share for fiscal year 2025. The increase was primarily driven by improved gross margins and higher other income, including proceeds from the settlement of a legal matter, partially offset by lower revenues.

Net earnings were $40.2 million, or $1.54 per diluted share for fiscal year 2025 as compared to $42.6 million or $1.64 per diluted share for fiscal year 2024. Net earnings were impacted by decreased revenues in fiscal year 2025.

Liquidity and Capital Resources

We fund our operations primarily through cash generated from operating activities. Our principal cash requirements include payments to vendors in the ordinary course of business, capital expenditures, compensation and benefits, and dividends to shareholders. As of February 28, 2026, we had a cash and cash equivalents balance of $34.6 million. We expect operating cash flows to be consistent with prior years, and we anticipate reduced purchasing needs over the next few quarters due to our recent strategic stockpiling of carbonless paper inventory. Based on these factors, we believe our cash on hand, together with anticipated cash flows from operations, will be sufficient to meet our operating and capital requirements for the next twelve months. Our capital expenditures to maintain our manufacturing facilities are expected to range between $4.0 million and $7.0 million over the next twelve months, consistent with

historical spending levels. For the year ended February 2026, we spent approximately $3.7 million on capital expenditures and purchased a leased building for $8.0 million.

Working Capital. Our working capital decreased $23.0 million or 19.3% from $119.4 million at February 28, 2025 to $96.4 million at February 28, 2026 primarily due to cash used for the acquisition of NEC, ESS and CFC totaling $38.9 million, stock repurchases of $14.5 million, dividends paid of $26.1 million, capital expenditures of $11.7 million and inventory purchases of $15.9 million, partially offset by cash collections on receivables. Our current ratio, calculated by dividing our current assets by our current liabilities, decreased from 4.6 to 1.0 for fiscal year 2025 to 3.7 to 1.0 for fiscal year 2026.

Our working capital decreased by approximately $48.2 million, or 28.8%, from $167.6 million at fiscal year 2024 to $119.4 million at fiscal year 2025. Our current ratio, calculated by dividing our current assets by our current liabilities, decreased from 6.0 to 1.0 for fiscal year 2024 to 4.6 to 1.0 for fiscal year 2025. Our decrease in working capital primarily reflects the decrease in cash due to a special dividend of $65.0 million paid to shareholders during the fiscal year 2025, offset by cash collections on receivables.

Cash Flow Components

Cash flows from operating activities. Cash provided by operating activities was $52.7 million for fiscal year 2026 (a decrease of $13.2 million compared to fiscal year 2025), $65.9 million for fiscal year 2025 (a decrease of $3.2 million compared to fiscal year 2024) and $69.1 million for fiscal year 2024.

Our decreased operational cash flows in fiscal year 2026 compared to fiscal year 2025 was primarily the result of

a $15.9 million increase in inventories, offset by a $2.4 million increase in earnings.

Our decreased operational cash flows in fiscal year 2025 compared to fiscal year 2024 was primarily the result of

a $6.1 million decrease from inventories, $0.7 million increase from our accounts receivable, offset by a $2.4 million decrease in earnings and $7.7 million decrease in payables and accrued expenses.

Cash flows from investing activities. Cash used in investing activities was $44.8 million in fiscal year 2026 compared to cash provided by investing activities of $13.2 million in fiscal year 2025, representing a $58.0 million decrease. During fiscal year 2026, we invested $8.0 million to purchase a facility we previously leased and paid $38.9 million for the acquisitions of NEC, ESS and CFC. During fiscal year 2025, we made acquisitions totaling $6.2 million and had net maturities of U.S. Treasury bills of $24.9 million. During fiscal year 2024, $19.6 million was used to acquire businesses and $29.9 million was used for net purchases of U.S. Treasury bills.

Cash flows from financing activities. Cash used in financing activities decreased by $53.3 million in fiscal year 2026 compared to fiscal year 2025. The decrease was primarily due to a one-time special dividend of $2.50 per share or $65.0 million, paid during fiscal year 2025. During fiscal years 2026, 2025 and 2024 we repurchased $14.5 million, $1.8 million and $0.6 million, respectively, of our common stock under our stock repurchase program.

Stock Repurchase - The Board has authorized the repurchase of the Company's outstanding common stock under a program with an aggregate authorization of up to $60.0 million. Repurchases may be made from time to time in the open market or through privately negotiated transactions, depending on market conditions, share price, trading volume

and other factors. The program may be suspended or discontinued at any time without prior notice, subject to compliance with applicable insider trading rules and securities laws and regulations.

Since the program's inception in October 2008, we have repurchased 3,127,900 common shares at an average price of $16.87 per share. During our fiscal year 2026, we repurchased 793,556 shares at an average price of $18.04 per share. As of February 28, 2026, $7.2 million remained available under the program. We may repurchase shares from time to time under the program, subject to Board authorization, market conditions and other factors.

Credit Facility - As of February 28, 2026, we had $0.2 million outstanding under a standby letter of credit arrangement secured by a cash collateral bank account. It is anticipated that our cash, short-term investments and funds from operating cash flows will be sufficient to fund anticipated future expenditures for at least the next twelve months from the date of this filing.

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. The assumptions used to calculate the pension funding deficit are different from the assumption used to determine the net pension obligations for purposes of our Consolidated Financial Statements. The funding of our Pension Plan is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, and the Internal Revenue Code and is also subject to the Moving Ahead for Progress in the 21st Century Act, the Highway and Transportation Funding Act of 2014, the Bipartisan Budget Act of 2015, and the American Rescue Plan Act of 2021. Under these regulations, the liabilities are discounted using 24-month average corporate bond rates within a specified corridor around the 25-year average. For the remainder of 2026, the effective discount rate is expected to be between 5.30% and 5.40%. We were not required to make, and did not make a contribution to our Pension Plan in fiscal year 2026; however, we contributed $1.2 million in each of fiscal years 2025 and 2024. Given our funded status as of February 28, 2026, and absent any significant negative event, we anticipate that our future contributions will be between $1.0 million and $1.2 million per year, depending on our Pension Plan's funding.

Inventories - We believe our inventory levels are sufficient to satisfy customer demand, and we expect to maintain adequate access to raw materials to support future business requirements. Recent consolidation within the paper industry and the closure of the sole U.S. mill producing rolls of carbonless paper are expected to create volatility in paper pricing and supply availability. In anticipation of this disruption, we made a strategic decision to increase inventory levels to mitigate the risk of shortages and ensure continuity of supply. We maintain long-term supply agreements with key paper vendors that establish pricing parameters but do not impose minimum purchase obligations. Certain rebate programs, however, are contingent on achieving minimum purchase volumes and management currently expects to meet those requirements. During the current fiscal year, our primary domestic supplier of carbonless papers permanently closed one of its mills, and we are in the process of identifying and transitioning to alternative suppliers on a go-forward basis.

Capital Expenditures - We continue to make capital expenditures for operational maintenance purposes, as required. Additionally, we will carefully evaluate capital expenditures for additional equipment to the extent such investments improve our operations and do not jeopardize our strong liquidity position. We expect our capital requirements for fiscal year 2027, exclusive of capital required for possible acquisitions, to be within our historical range of between $4.0 million and $7.0 million.

For the year ended February 2026, we spent approximately $3.7 million on capital expenditures and purchased a leased building for $8.0 million. We expect to generate sufficient cash flows from our operating activities to cover our operating and other normal capital requirements for the foreseeable future.

Contractual Obligations - There have been no significant changes in our contractual obligations since February 28, 2026 that have, or that are reasonably likely to have, a material impact on our results of operations or financial condition. The following table represents our contractual commitments as of February 28, 2026 (in thousands).