ANAHEIM, Calif., January 08, 2025--(BUSINESS WIRE)--EACO Corporation (OTC Pink:EACO) announced the results for its quarter ended November 30, 2024.
Net sales, net income and earnings per share were as follows for the quarter ended November 30, 2024 (dollars in thousands, except per share information):
Three Months Ended November 30,
%
2024
2023
Change
(unaudited)
(unaudited)
Net sales
$
93,920
$
80,255
17.0
%
Net income
$
6,888
$
1,779
287.2
%*
Basic and diluted earnings per common share
$
1.41
$
0.36
291.7
%
* The increase in net income for the three months ended November 30, 2024 reflects a $3.9 million impairment expense recorded during the three months ended November 30, 2023 and a 17% increase in net sales during the three months ended November 30, 2024.
The Company had 426 sales employees at November 30, 2024, an increase of 13 or 3% from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 112 SFT’s as of November 30, 2024, an increase of 3 from the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2025. 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,
2024
2024
ASSETS
Current Assets:
Cash and cash equivalents
$
591
$
843
Restricted cash
10
10
Trade accounts receivable, net
51,736
53,272
Inventory, net
75,683
69,602
Marketable securities, trading
20,521
14,748
Prepaid expenses and other current assets
4,489
3,526
Total current assets
153,030
142,001
Non-current Assets:
Property, equipment and leasehold improvements, net
34,759
35,061
Operating lease right-of-use assets
6,930
7,513
Other assets, net
4,043
3,963
Total assets
$
198,762
$
188,538
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable
$
34,893
$
28,054
Accrued expenses and other current liabilities
21,070
24,910
Current portion of long-term debt
131
129
Current portion of operating lease liabilities
2,596
2,708
Total current liabilities
59,690
55,801
Non-current Liabilities:
Long-term debt
4,181
4,214
Operating lease liabilities
4,426
4,892
Total liabilities
68,297
64,907
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
38
73
Retained earnings
117,999
111,130
Total shareholders’ equity
130,465
123,631
Total liabilities and shareholders’ equity
$
198,762
$
188,538
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2024 filed with the U.S. Securities and Exchange Commission on November 29, 2024.
EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except for share and per share information)
(unaudited)
Three Months Ended
November 30,
2024
2023
Net sales
$
93,920
$
80,255
Cost of sales
66,139
56,683
Gross margin
27,781
23,572
Operating expenses:
Selling, general and administrative expenses
18,938
17,217
Impairment on termination of lease
–
3,906
Income from operations
8,843
2,449
Other (expense) income:
Net gain (loss) on trading securities
454
(44
)
Interest and other expense, net
(48
)
(9
)
Other income (expense), net
406
(53
)
Income before income taxes
9,249
2,396
Provision for income taxes
2,361
617
Net income
6,888
1,779
Cumulative preferred stock dividend
(19
)
(19
)
Net income attributable to common shareholders
$
6,869
$
1,760
Basic and diluted earnings per common share:
$
1.41
$
0.36
Basic average common shares outstanding
4,861,590
4,861,590
Diluted weighted average common shares outstanding
4,901,590
4,901,590
EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
November 30,
2024
2023
Operating activities:
Net income
$
6,888
$
1,779
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
433
317
Bad debt expense
66
47
Deferred tax provision
(48
)
(67
)
Net unrealized (gain) loss on trading securities
(213
)
210
Impairment on termination of lease
–
3,906
Increase (decrease) in cash from changes in
Trade accounts receivable
1,470
556
Inventory
(6,081
)
(3,986
)
Prepaid expenses and other assets
(995
)
(346
)
Operating lease right-of-use assets
583
5,772
Trade accounts payable
3,328
190
Accrued expenses and other current liabilities
(2,840
)
(2,257
)
Right of use liabilities
(578
)
(5,820
)
Net cash provided by operating activities
2,012
301
Investing activities:
Additions to property, equipment, and leasehold improvements
(131
)
(31,701
)
(Purchase) proceeds from sale of marketable securities, trading
(5,560
)
22,791
Net cash used in investing activities
(5,691
)
(8,910
)
Financing activities:
Borrowing on revolving credit facility
–
3,081
Payments on long-term debt
(31
)
(31
)
Preferred stock dividend
(19
)
(19
)
Bank overdraft
3,511
3,650
Net cash provided by financing activities
3,461
6,681
Effect of foreign currency exchange rate changes on cash and cash equivalents
(35
)
(131
)
Net (decrease) in cash, cash equivalents, and restricted cash
(252
)
(2,059
)
Cash, cash equivalents, and restricted cash - beginning of period
853
8,568
Cash, cash equivalents, and restricted cash - end of period
$
601
$
6,509
Supplemental disclosures of cash flow information:
