diff --git a/src/templates/__tests__/templateformatter.test.js b/src/templates/__tests__/templateformatter.test.js
index 5a8b655..8c4c745 100644
--- a/src/templates/__tests__/templateformatter.test.js
+++ b/src/templates/__tests__/templateformatter.test.js
@@ -59,4 +59,25 @@ describe('formatTemplateContent', () => {
     expect(result.content).not.toMatch(/\(\s+<%/);
     expect(result.content).not.toMatch(/%>\s+\)/);
   });
+
+  it('should not add a space next to a colon before EJS output', () => {
+    const input =
+      '<Barcode format="code128" height="33px" barcodeWidth="3">INV: <%= _reference %>\n      </Barcode>';
+    const result = formatTemplateContent(input);
+
+    expect(result.content).toBe(
+      '<Barcode format="code128" height="33px" barcodeWidth="3">INV:<%= _reference %></Barcode>'
+    );
+  });
+
+  it('should keep barcode content and the closing tag on one line', () => {
+    const input =
+      '<Barcode format="code128" height="33px" barcodeWidth="3">INV:<%= _reference %></Barcode>';
+    const result = formatTemplateContent(input);
+
+    expect(result.content).toBe(
+      '<Barcode format="code128" height="33px" barcodeWidth="3">INV:<%= _reference %></Barcode>'
+    );
+    expect(result.content).not.toMatch(/%>\s*\n\s*<\/Barcode>/);
+  });
 });
diff --git a/src/templates/templateformatter.js b/src/templates/templateformatter.js
index 6182ff9..055492e 100644
--- a/src/templates/templateformatter.js
+++ b/src/templates/templateformatter.js
@@ -4,7 +4,9 @@ const { html: beautifyHtml, js: beautifyJs } = beautify;
 
 const EJS_BLOCK_REGEX = /<%[\s\S]*?%>/g;
 const EJS_TAG_REGEX = /^<%([=#-]?)([\s\S]*?)%>/;
-const EJS_PLACEHOLDER_REGEX = /<!--EJS_PH_(\d+)-->/g;
+const EJS_COMMENT_PLACEHOLDER_REGEX = /<!--EJS_PH_(\d+)-->/g;
+const EJS_INLINE_PLACEHOLDER_REGEX = /___EJS_PH_(\d+)___/g;
+const TEXT_ONLY_TAG_REGEX = /<([A-Za-z][\w:-]*)(\s[^>]*)?>([^<]*)<\/\1>/g;
 
 const HTML_BEAUTIFY_OPTIONS = {
   indent_size: 2,
@@ -47,28 +49,53 @@ function formatEjsTag(tag) {
   }
 }
 
+function isControlEjs(tag) {
+  const match = tag.match(EJS_TAG_REGEX);
+  if (!match) {
+    return false;
+  }
+
+  const [, modifier] = match;
+  return !modifier;
+}
+
 function maskEjsBlocks(content) {
   const ejsBlocks = [];
 
   const masked = content.replace(EJS_BLOCK_REGEX, (match) => {
     const index = ejsBlocks.length;
     ejsBlocks.push(match);
-    return `\n<!--EJS_PH_${index}-->\n`;
+    if (isControlEjs(match)) {
+      return `\n<!--EJS_PH_${index}-->\n`;
+    }
+    return `___EJS_PH_${index}___`;
   });
 
   return { masked, ejsBlocks };
 }
 
 function restoreEjsBlocks(content, ejsBlocks) {
-  return content.replace(EJS_PLACEHOLDER_REGEX, (_, index) =>
-    formatEjsTag(ejsBlocks[Number(index)])
-  );
+  const restore = (_, index) => formatEjsTag(ejsBlocks[Number(index)]);
+  return content
+    .replace(EJS_COMMENT_PLACEHOLDER_REGEX, restore)
+    .replace(EJS_INLINE_PLACEHOLDER_REGEX, restore);
+}
+
+function collapseTextOnlyTags(content) {
+  return content.replace(TEXT_ONLY_TAG_REGEX, (_, tagName, attrs, inner) => {
+    const collapsedInner = inner.replace(/^\s+|\s+$/g, '');
+    return `<${tagName}${attrs || ''}>${collapsedInner}</${tagName}>`;
+  });
 }
 
 function tightenParenthesesAroundEjs(content) {
   return content.replace(/\(\s+(<%)/g, '($1').replace(/(%>)\s+\)/g, '$1)');
 }
 
+function tightenColonsAroundEjs(content) {
+  return content.replace(/:\s+(<%)/g, ':$1');
+}
+
 export function formatTemplateContent(content) {
   if (content == null || typeof content !== 'string') {
     return { error: 'Content is required and must be a string.', code: 400 };
@@ -81,8 +108,10 @@ export function formatTemplateContent(content) {
   try {
     const { masked, ejsBlocks } = maskEjsBlocks(content);
     let formatted = beautifyHtml(masked, HTML_BEAUTIFY_OPTIONS);
+    formatted = collapseTextOnlyTags(formatted);
     formatted = restoreEjsBlocks(formatted, ejsBlocks);
     formatted = tightenParenthesesAroundEjs(formatted);
+    formatted = tightenColonsAroundEjs(formatted);
     return { content: formatted.trimEnd() };
   } catch (error) {
     return { error: error.message || 'Failed to format template content.', code: 400 };