238 0 Kommentare EACO Corporation Reports Record 1st Quarter Net Sales and Record 1st Quarter Net Income

EACO Corporation (OTCQB:EACO) today reported the results for its quarter ended November 30, 2018.

Net sales, net income and earnings per share were as follows for the three months ended November 30, 2018 (dollars in thousands, except per share information):

Three Months Ended

November 30,

2018 2017

Change

(unaudited) Net sales $50,786 $42,171 20.4% Net income $1,925 $1,195 61.1% Basic and diluted earnings per common share $0.39 $0.24 62.5%

The Company had 336 sales employees at November 30, 2018, an increase of 8 from the prior year quarter. The Company’s sales force is divided into Sales Focus Teams (SFTs). The Company had 96 SFTs as of November 30, 2018 the same number from the prior year quarter. Management anticipates continued growth in both our headcount and SFTs in fiscal year 2019. The Company believes it continues to gain market share through its local presence business model, increasing net sales by 20% and bookings by 18% when compared to the prior year quarter.

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, market share, 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,
	2018		2018*
ASSETS
Current Assets:
Cash and cash equivalents	$	3,328	$	2,705
Restricted cash, current		162		933
Trade accounts receivable, net		26,411		26,277
Inventory, net		33,060		30,531
Marketable securities, trading		2,524		2,846
Prepaid expenses and other current assets		2,602		1,590
Total current assets		68,087		64,882
Non-current Assets:
Property, equipment and leasehold improvements, net		9,788		9,847
Other assets		1,469		1,570
Total assets	$	79,344	$	76,299
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	$	20,036	$	17,678
Accrued expenses and other current liabilities		5,783		7,452
Liability for short sales of trading securities		162		933
Current portion of long-term debt		147		146
Total current liabilities		26,128		26,209
Non-current Liabilities:
Long-term debt		9,266		8,204
Total liabilities		35,394		34,413
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		1,086		928
Retained earnings		30,436		28,530
Total shareholders’ equity		43,950		41,886
Total liabilities and shareholders’ equity	$	79,344	$	76,299

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2018 filed with the U.S. Securities and Exchange Commission on November 28, 2018.


EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except for share and per share information)
(Unaudited)

	Three Months Ended
	November 30,
		2018			2017
Revenues	$	50,786		$	42,171
Cost of revenues		36,677			29,992
Gross margin		14,109			12,179
Operating expenses:
Selling, general and administrative expenses		11,490			10,340
Income from operations		2,619			1,839

Other income:
Net gain on trading securities		228			203
Interest and other expense, net		(77	)		(101	)
Other income, net		151			102
Income before income taxes		2,770			1,941
Provision for income taxes		845			746
Net income		1,925			1,195
Cumulative preferred stock dividend		(19	)		(19	)
Net income attributable to common shareholders	$	1,906		$	1,176
Basic and diluted earnings per common share:	$	0.39		$	0.24
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,
		2018			2017
Operating activities:
Net income	$	1,925		$	1,195
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		247			251
Bad debt expense		10			4
Change in inventory reserve		21			31
Net gain on trading securities		(228	)		(203	)
(Increase) decrease in:
Trade accounts receivable		(144	)		(892	)
Inventory		(2,550	)		(4	)
Prepaid expenses and other assets		(911	)		(738	)
Increase (decrease) in:
Trade accounts payable		2,732			322
Accrued expenses and other current liabilities		(1,669	)		147
Net cash (used in) provided by operating activities		(556	)		113
Investing activities:
Purchase of property, equipment and leasehold improvements		(188	)		(849	)
Net sales (purchases) of marketable securities, trading		550			(347	)
Net change in securities sold short		(771	)		(113	)
Change in restricted cash		771			113
Net cash provided by (used in) investing activities		362			(1,196	)
Financing activities:
Borrowings on revolving credit facility		1,099			359
Preferred dividend		(19	)		(19	)
Change in bank overdraft		(385	)		364
Payments on long-term debt		(36	)		(35	)
Net cash provided by financing activities		659			669
Effect of foreign currency exchange rate changes on cash and cash equivalents		158			148
Net increase (decrease) in cash and cash equivalents		623			(266	)
Cash and cash equivalents - beginning of period		2,705			3,870
Cash and cash equivalents - end of period	$	3,328		$	3,604
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	77		$	105