ANAHEIM, Calif., November 21, 2024--(BUSINESS WIRE)--EACO Corporation (OTC Pink:EACO) today reported financial results for its fiscal year ended August 31, 2024.
Net sales, net income and earnings per share were as follows for the fiscal year ended August 31, 2024 (dollars in thousands, except per share information):
Three Months Ended August 31,
%
2024
2023
Change
(unaudited)
(unaudited)
Net sales
$96,520
$85,904
12.4%
Net income
$6,546
$6,055
8.1%
Basic and diluted earnings per common share
$1.34
$1.24
8.1%
Year Ended August 31,
%
2024
2023*
Change
(unaudited)
Net sales
$356,231
$319,397
11.5%
Net income
$15,007
$21,185
(29.2%)
Basic and diluted earnings per common share
$3.07
$4.34
(29.3%)
* 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.
The Company had 427 sales employees at August 31, 2024, an increase of 33 or 8% from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 111 SFT’s as of August 31, 2024, an increase of 4 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.
The net income for the fiscal year ended 2024 included extraordinary items of $7.6 million in accrual expense related to an employee class action settlement agreement and an impairment loss of $3.9 million related to the termination of a lease.
This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1955, as amended. These forward-looking statements include, without limitation, statements related to our headcount expansion, growth in market share, and other statement that is not historical information. 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)
August 31,
August 31,
2024
2023*
ASSETS
Current Assets:
Cash and cash equivalents
$
843
$
8,558
Restricted cash
10
10
Trade accounts receivable, net
53,272
46,654
Inventory, net
69,602
56,270
Marketable securities, trading
14,748
27,228
Prepaid expenses and other current assets
3,526
3,843
Total current assets
142,001
142,563
Non-current Assets:
Property, equipment and leasehold improvements, net
35,139
8,041
Operating lease right-of-use assets
7,513
9,988
Other assets, net
3,963
1,652
Total assets
$
188,616
$
162,244
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable
$
28,054
$
22,505
Accrued expenses and other current liabilities
24,933
16,375
Current portion of operating lease liabilities
2,708
3,950
Current portion of long-term debt
129
120
Total current liabilities
55,824
42,950
Non-current Liabilities:
Long-term debt
4,214
4,348
Operating lease liabilities
4,892
6,225
Total liabilities
64,930
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
72
38
Retained earnings
111,186
96,255
Total shareholders’ equity
123,686
108,721
Total liabilities and shareholders’ equity
$
188,616
$
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 August 31,
Year Ended August 31,
2024
2023
2024
2023*
Revenues
$
96,520
$
85,904
$
356,231
$
319,397
Cost of revenues
66,835
60,656
250,019
226,981
Gross margin
29,685
25,248
106,212
92,416
Operating expenses:
Selling, general and administrative expenses
19,763
17,368
80,892
64,936
Impairment on termination of lease
–
–
3,906
–
Income from operations
9,922
7,880
21,414
27,480
Other (expense) income:
Net gain on trading securities
173
500
128
1,284
Interest and other expense
(49
)
(21
)
(177
)
(59
)
Other income (expense), net
124
479
(49
)
1,225
Income before income taxes
10,046
8,359
21,365
28,705
Provision for income taxes
3,500
2,304
6,358
7,520
Net income
6,546
6,055
15,007
21,185
Cumulative preferred stock dividend
(19
)
(19
)
(76
)
(76
)
Net income attributable to common shareholders
$
6,527
$
6,036
$
14,931
$
21,109
Basic and diluted earnings per common share:
$
1.34
$
1.24
$
3.07
$
4.34
Basic and diluted weighted average common shares outstanding
4,861,590
4,861,590
4,861,590
4,861,590
* 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 Cash Flows
(in thousands)
(unaudited)
Year Ended August 31,
2024
2023*
Operating activities:
Net income
$
15,007
$
21,185
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
1,685
1,398
Bad debt expense
454
614
Unrealized loss (gain) on trading securities
324
(448
)
Deferred tax provision
(2,380
)
(277
)
Impairment on termination of lease
3,906
–
Increase (decrease) in cash flow from change in:
Trade accounts receivable
(7,072
)
(2,631
)
Inventory
(13,332
)
(7,462
)
Prepaid expenses and other assets
386
829
Operating lease right-of-use assets
2,475
401
Trade accounts payable
6,668
(1,150
)
Accrued expenses and other current liabilities
8,610
1,355
Operating lease liabilities
(2,575
)
(392
)
Net cash provided by operating activities
14,156
13,422
Investing activities:
Additions to property, equipment, and leasehold improvements
(32,689
)
(960
)
Sale (purchase) of marketable securities, trading
12,156
(22,855
)
Net cash used in investing activities
(20,533
)
(23,815
)
Financing activities:
Repayments on long-term debt
(125
)
(116
)
Preferred stock dividend
(76
)
(76
)
Bank overdraft
(1,171
)
1,893
Net cash (used in) provided by financing activities
(1,372
)
1,701
Effect of foreign currency exchange rate changes on cash and cash equivalents
34
(136
)
Net (decrease) in cash, cash equivalents, and restricted cash
(7,715
)
(8,828
)
Cash, cash equivalents, and restricted cash - beginning of period
8,568
17,396
Cash, cash equivalents, and restricted cash - end of period
$
853
$
8,568
Supplemental disclosures of cash flow information:
Cash paid for interest
$
243
$
202
Cash paid for income taxes
$
8,505
$
7,473
* 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.
