EACO Corporation (OTCMKTS:EACO) today reported the results for
its quarter ended February 29, 2024.
Net sales, net income and earnings per share were as follows for
the three months ended February 29, 2024 (dollars in thousands,
except per share information):
Three Months Ended
February 29,
2024
February 28,
2023
% Change
(unaudited)
(unaudited)
Net sales
$83,335
$76,925
8.3%
Net income
$5,498
$5,100
7.8%
Basic earnings per common share
$1.13
$1.05
7.6%
The Company had 413 sales employees at February 29, 2024, an
increase of 43 employees or 11.6%, 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 February 29, 2024, five more than
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)
February 29,
August 31,
2024
2023
ASSETS
Current Assets:
Cash and cash equivalents
$
3,984
$
8,558
Restricted cash
10
10
Trade accounts receivable, net
46,987
46,654
Inventory, net
63,753
56,270
Marketable securities, trading
1,678
27,228
Prepaid expenses and other current
assets
3,170
3,843
Total current assets
119,582
142,563
Non-current Assets:
Property, equipment and leasehold
improvements, net
35,537
8,041
Operating lease right-of-use assets
4,692
9,988
Other assets, net
1,534
1,652
Total assets
$
161,345
$
162,244
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable
$
27,986
$
22,505
Accrued expenses and other current
liabilities
8,209
16,375
Current portion of operating lease
liabilities
2,245
3,950
Current portion of debt
120
120
Total current liabilities
38,560
42,950
Non-current Liabilities:
Long-term debt
4,286
4,348
Operating lease liabilities
2,625
6,225
Total liabilities
45,471
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
(48
)
38
Retained earnings
103,494
96,255
Total shareholders’ equity
115,874
108,721
Total liabilities and shareholders’
equity
$
161,345
$
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
Six Months Ended
February 29,
2024
February 28,
2023
February 29,
2024
February 28,
2023
Net sales
$
83,335
$
76,925
$
163,590
$
153,244
Cost of sales
58,308
54,661
114,991
109,317
Gross margin
25,027
22,264
48,599
43,927
Operating expenses:
Selling, general and administrative
expenses
17,598
15,606
34,815
31,291
Impairment on termination of lease
–
–
3,906
–
Income from operations
7,429
6,658
9,878
12,636
Other income (expense):
Net (loss) gain on trading securities
23
179
(21
)
621
Interest and other (expense)
(75
)
46
(84
)
(2
)
Other (expense) income, net
(52
)
225
(105
)
619
Income before income taxes
7,377
6,883
9,773
13,255
Provision for income taxes
1,879
1,783
2,496
3,444
Net income
5,498
5,100
7,277
9,811
Cumulative preferred stock dividend
(19
)
(19
)
(38
)
(38
)
Net income attributable to common
shareholders
$
5,479
$
5,081
$
7,239
$
9,773
Basic earnings per share:
$
1.13
$
1.05
$
1.49
$
2.01
Diluted earnings per share:
$
1.12
$
1.04
$
1.48
$
2.00
Basic weighted average common shares
outstanding
4,861,590
4,861,590
4,861,590
4,861,590
Diluted weighted average common shares
outstanding
4,901,590
4,901,590
4,901,590
4,901,590
EACO Corporation and
Subsidiaries
Condensed Consolidated Statements
of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
February 29,
2024
February 28,
2023
Operating activities:
Net income
$
7,277
$
9,811
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
806
708
Bad debt expense
135
182
Deferred tax provision
40
–
Net unrealized loss (gain) on trading
securities
267
(621
)
Impairment on termination of lease
3,906
–
Changes in current assets and
liabilities:
Trade accounts receivable
(468
)
2,901
Inventory
(7,483
)
(4,658
)
Prepaid expenses and other assets
751
1,356
Operating lease right-of-use assets
5,296
(271
)
Trade accounts payable
3,404
1,087
Accrued expenses and other current
liabilities
(8,166
)
(4,842
)
Operating lease liabilities
(5,305
)
285
Net cash provided by operating
activities
460
5,938
Investing activities:
Purchase of property, equipment, and
leasehold improvements
(32,208
)
(391
)
Net sales (purchases) of marketable
securities, trading
25,283
(17,319
)
Net cash used in investing activities
(6,925
)
(17,710
)
Financing activities:
Repayments on long-term debt
(62
)
(58
)
Preferred stock dividend
(38
)
(38
)
Net change in bank overdraft
2,077
(109
)
Net cash provided by (used in) financing
activities
1,977
(205
)
Effect of foreign currency exchange rate
changes on cash and cash equivalents
(86
)
(85
)
Net decrease in cash, cash equivalents,
and restricted cash
(4,574
)
(12,062
)
Cash, cash equivalents, and restricted
cash - beginning of period
8,568
17,396
Cash, cash equivalents, and restricted
cash - end of period
$
3,994
$
5,334
Supplemental disclosures of cash flow
information:
Cash paid for interest
$
145
$
102
Cash paid for income taxes
$
8,276
$
7,544
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version on businesswire.com: https://www.businesswire.com/news/home/20240328153225/en/
Michael Narikawa EACO Corporation (714) 876-2490