EACO Corporation (OTC Pink:EACO) announced the results for its quarter ended November 30, 2023.
Net sales, net income and earnings per share were as follows for the quarter ended November 30, 2023 (dollars in thousands, except per share information):
|
Three Months Ended November 30, |
% |
|
|
2023 |
2022 |
Change |
|
(unaudited) |
(unaudited) |
|
|
|
|
|
Net sales |
$80,255 |
$76,319 |
5.2% |
|
|
|
|
Net income |
$1,779 |
$4,711 |
(62.2%) |
|
|
|
|
Basic and diluted earnings per common share |
$0.36 |
$0.97 |
(62.3%) |
The Company had 413 sales employees at November 30, 2023, an increase of 47 or 13% from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 109 SFT’s as of November 30, 2023, an increase of 8 from the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2024. The Company believes it continues to gain market share through its local presence business model.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Any statements set forth in this news release that are not entirely historical and factual in nature, including without limitation, statements related to our headcount expansion and future growth are forward-looking statements. These forward-looking statements are based on our current expectations and are inherently subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. The potential risks and uncertainties include, but are not limited to, our ability to hire and retain additional qualified employees, our ability to open additional sales offices, and to gain market acceptance for our products, the pricing and availability of our products, the success of our sales and marketing programs, and the impact of products offered by our competitors from time to time. In addition to these factors and any other factors mentioned elsewhere in this news release, the reader should refer as well to the factors, uncertainties or risks identified in EACO’s most recent Form 10-K and all subsequent Form 10-Q reports filed by us with the SEC. The forward-looking statements included in this release speak only as of the date hereof, and EACO does not undertake any obligation to update these forward-looking statements to reflect subsequent events or circumstances.
EACO Corporation and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share information) (unaudited) |
||||||||||||
|
|
November 30, |
|
August 31, |
||||||||
|
|
2023 |
|
2023 |
||||||||
ASSETS |
|
|
|
|
|
|
||||||
Current Assets: |
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
6,499 |
|
$ |
8,558 |
||||||
Restricted cash |
|
|
10 |
|
|
10 |
||||||
Trade accounts receivable, net |
|
|
46,051 |
|
|
46,654 |
||||||
Inventory, net |
|
|
60,256 |
|
|
56,270 |
||||||
Marketable securities, trading |
|
|
4,227 |
|
|
27,228 |
||||||
Prepaid expenses and other current assets |
|
|
4,148 |
|
|
3,843 |
||||||
Total current assets |
|
|
121,191 |
|
|
142,563 |
||||||
Non-current Assets: |
|
|
|
|
|
|
||||||
Property, equipment and leasehold improvements, net |
|
|
35,519 |
|
|
8,041 |
||||||
Operating lease right-of-use assets |
|
|
4,216 |
|
|
9,988 |
||||||
Other assets, net |
|
|
1,760 |
|
|
1,652 |
||||||
Total assets |
|
$ |
162,686 |
|
$ |
162,244 |
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||||||
Current Liabilities: |
|
|
|
|
|
|
||||||
Trade accounts payable |
|
$ |
26,345 |
|
$ |
22,505 |
||||||
Accrued expenses and other current liabilities |
|
|
14,118 |
|
|
16,375 |
||||||
Current portion of operating lease liabilities |
|
|
2,130 |
|
|
3,950 |
||||||
Current portion of debt |
|
|
3,201 |
|
|
120 |
||||||
Total current liabilities |
|
|
45,794 |
|
|
42,950 |
||||||
Non-current Liabilities: |
|
|
|
|
|
|
||||||
Long-term debt |
|
|
4,317 |
|
|
4,348 |
||||||
Operating lease liabilities |
|
|
2,225 |
|
|
6,225 |
||||||
Total liabilities |
|
|
52,336 |
|
|
53,523 |
||||||
Commitments and Contingencies |
|
|
|
|
|
|
||||||
Shareholders’ Equity: |
|
|
|
|
|
|
||||||
Convertible preferred stock, $0.01 par value per share; 10,000,000 shares authorized; 36,000 shares outstanding (liquidation value $900) |
|
|
1 |
|
|
1 |
||||||
Common stock, $0.01 par value per share; 8,000,000 shares authorized; 4,861,590 shares outstanding |
|
|
49 |
|
|
49 |
||||||
Additional paid-in capital |
|
|
12,378 |
|
|
12,378 |
||||||
Accumulated other comprehensive income |
|
|
(93) |
|
|
38 |
||||||
Retained earnings |
|
|
98,015 |
|
|
96,255 |
||||||
Total shareholders’ equity |
|
|
110,350 |
|
|
108,721 |
||||||
Total liabilities and shareholders’ equity |
|
$ |
162,686 |
|
$ |
162,244 |
||||||
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2023 filed with the U.S. Securities and Exchange Commission on November 22, 2023.
EACO Corporation and Subsidiaries Condensed Consolidated Statements of Income (in thousands, except for share and per share information) (unaudited) |
||||||
|
|
Three Months Ended |
||||
|
|
November 30, |
||||
|
|
2023 |
|
2022 |
||
Net sales |
|
$ |
80,255 |
|
$ |
76,319 |
Cost of sales |
|
|
56,683 |
|
|
54,656 |
Gross margin |
|
|
23,572 |
|
|
21,663 |
Operating expenses: |
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
17,217 |
|
|
15,685 |
Impairment on termination of lease |
|
|
3,906 |
|
|
–– |
Income from operations |
|
|
2,449 |
|
|
5,978 |
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
Net (loss) gain on trading securities |
|
|
(44) |
|
|
442 |
Interest and other expense, net |
|
|
(9) |
|
|
(48) |
Other (expense) income, net |
|
|
(53) |
|
|
394 |
Income before income taxes |
|
|
2,396 |
|
|
6,372 |
Provision for income taxes |
|
|
617 |
|
|
1,661 |
Net income |
|
|
1,779 |
|
|
4,711 |
Cumulative preferred stock dividend |
|
|
(19) |
|
|
(19) |
Net income attributable to common shareholders |
|
$ |
1,760 |
|
$ |
4,692 |
Basic and diluted earnings per common share: |
|
$ |
0.36 |
|
$ |
0.97 |
Basic and diluted weighted average common shares outstanding |
|
|
4,861,590 |
|
|
4,861,590 |
EACO Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
|||||||
|
|
Three Months Ended |
|||||
|
|
November 30, |
|||||
|
|
2023 |
|
2022 |
|||
Operating activities: |
|
|
|
|
|
|
|
Net income |
|
$ |
1,779 |
|
$ |
4,711 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
317 |
|
|
359 |
|
Bad debt expense |
|
|
47 |
|
|
2 |
|
Deferred tax provision |
|
|
(67) |
|
|
— |
|
Net unrealized loss (gain) on trading securities |
|
|
210 |
|
|
(487) |
|
Impairment on termination of lease |
|
|
3,906 |
|
|
–– |
|
Increase (decrease) in cash from changes in |
|
|
|
|
|
|
|
Trade accounts receivable |
|
|
556 |
|
|
4,300 |
|
Inventory |
|
|
(3,986) |
|
|
(4,247) |
|
Prepaid expenses and other assets |
|
|
(346) |
|
|
(272) |
|
Operating lease right-of-use assets |
|
|
5,772 |
|
|
(256) |
|
Trade accounts payable |
|
|
190 |
|
|
(407) |
|
Accrued expenses and other current liabilities |
|
|
(2,257) |
|
|
(768) |
|
Right of use liabilities |
|
|
(5,820) |
|
|
272 |
|
Net cash provided by operating activities |
|
|
301 |
|
|
3,207 |
|
Investing activities: |
|
|
|
|
|
|
|
Additions to property, equipment, and leasehold improvements |
|
|
(31,701) |
|
|
(86) |
|
Proceeds (purchase) from sale of marketable securities, trading |
|
|
22,791 |
|
|
(6,243) |
|
Net cash used in investing activities |
|
|
(8,910) |
|
|
(6,329) |
|
Financing activities: |
|
|
|
|
|
|
|
Borrowing on revolving credit facility |
|
|
3,081 |
|
|
— |
|
Payments on long-term debt |
|
|
(31) |
|
|
(29) |
|
Preferred stock dividend |
|
|
(19) |
|
|
(19) |
|
Bank overdraft |
|
|
3,650 |
|
|
(109) |
|
Net cash provided (used) by financing activities |
|
|
6,681 |
|
|
(157) |
|
Effect of foreign currency exchange rate changes on cash and cash equivalents |
|
|
(131) |
|
|
(86) |
|
Net (decrease) in cash, cash equivalents, and restricted cash |
|
|
(2,059) |
|
|
(3,365) |
|
Cash, cash equivalents, and restricted cash - beginning of period |
|
|
8,568 |
|
|
17,396 |
|
Cash, cash equivalents, and restricted cash - end of period |
|
$ |
6,509 |
|
$ |
14,031 |
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
296 |
|
$ |
51 |
|
Cash paid for income taxes |
|
$ |
674 |
|
$ |
— |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240116473010/en/
Contacts
Michael Narikawa
EACO Corporation
(714) 876-2490
