101 0 Kommentare EACO Corporation Reports Record 2nd Quarter Net Sales and Record 2nd Quarter Net Income

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)

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