EACO Corporation Reports Record First Quarter Net Sales
ANAHEIM. Calif., January 4, 2023–(BUSINESS WIRE)–EACO Corporation (OTC Pink:EACO) announced the results for its quarter ended November 30, 2022.
For the quarter ending November 30, 2022, net sales, net income, and earnings per share were as following (dollars in thousand, except for per share information).
|
Three Months Ended November |
% |
|||||
|
2022 |
2021 |
Change |
||||
|
(unaudited) |
(unaudited) |
|||||
|
Net sales |
$76,319 |
$63,822 |
19.6% |
|||
|
Net income |
$4,711 |
$6,786* |
(30.6%) |
|||
|
Earnings per common share, basic and diluted |
$0.97 |
$1.39 |
(30.2%) |
|||
*Includes an income benefit of $3.4 million As a result of the Employee Retention Credit qualified federal tax credit
At November 30, 2022 the Company had 366 employees in sales, an increase 38 or 12% over the previous quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 101 SFT’s as of November 30, 2022, the same as the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2023. The Company believes that it continues to win market share by its local presence business model.
Safe Harbor Statement under Private Securities Litigation Reform Act of 95:
Forward-looking statements include statements that are not historical or factual and statements about our future growth and headcount expansion. These forward-looking statements reflect our current expectations. Actual results could differ materially from the statements. There are potential risks and uncertainties, including our ability to retain and hire qualified employees, our ability open additional sales offices and gain market acceptance for products, the pricing and availability, success of our marketing and sales programs, as well as the impact of competing products. 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. These forward-looking statement are only valid as of this date. EACO has no obligation to make any changes to these forward looking statements to reflect new events or circumstances.
|
EACO Corporation and Subsidiaries Condensed Consolidated Balance Sheets (in the thousands, except that of share information (unaudited) |
|||||||
|
November 30, |
August 31, |
||||||
|
2022 |
2022* |
||||||
|
ASSETS |
|||||||
|
Current Assets |
|||||||
|
Cash and cash equivalents |
$ |
14,021 |
$ |
17,386 |
|||
|
Restricted cash |
10 |
10 |
|||||
|
Trade accounts receivable, net |
40,335 |
44,637 |
|||||
|
Inventory, net |
53,055 |
48,808 |
|||||
|
Tradeable securities |
10,655 |
3,925 |
|||||
|
Prepaid expenses and other assets |
5,198 |
5,008 |
|||||
|
Total assets |
123,274 |
119,774 |
|||||
|
Non-current Assets: |
|||||||
|
Equipment, property, and leasehold improvements net |
8,206 |
8,479 |
|||||
|
Lease rights-of-use assets |
10,645 |
10,389 |
|||||
|
Other assets, net |
1,121 |
1,039 |
|||||
|
Total assets |
$ |
143,246 |
$ |
139,681 |
|||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||||||
|
Current Liabilities |
|||||||
|
Trade accounts payable |
$ |
21,246 |
$ |
21,762 |
|||
|
Current liabilities and accrued expenses |
14,252 |
15,020 |
|||||
|
Current portion of operating leasing liabilities |
3,554 |
3,375 |
|||||
|
Current portion of long-term credit |
120 |
119 |
|||||
|
Total current liabilities |
39,172 |
40,276 |
|||||
|
Non-current Liabilities: |
|||||||
|
Long-term debt |
4,435 |
4,465 |
|||||
|
Operating lease liabilities |
7,285 |
7,192 |
|||||
|
Total liabilities |
50,892 |
51,933 |
|||||
|
Commitments & 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 |
|||||
|
Other comprehensive income accumulated |
88 |
174 |
|||||
|
Retained earnings |
79,838 |
75,146 |
|||||
|
Total shareholders’ equity |
92,354 |
87,748 |
|||||
|
Total liabilities and shareholders’ equity |
$ |
143,246 |
$ |
139,681 |
|||
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2022 filed with the U.S. Securities and Exchange Commission on November 4, 2022.
|
EACO Corporation and Subsidiaries Condensed Consolidated Statements Of Income (In thousands, except for information about share and per share) (unaudited) |
||||||
|
Three Months End |
||||||
|
2022 |
2021 |
|||||
|
Net sales |
$ |
76,319 |
$ |
63,822 |
||
|
Sales costs |
54,656 |
45,644 |
||||
|
Gross margin |
21,663 |
18,178 |
||||
|
Operating expenses |
||||||
|
Selling, general and administration expenses |
15,685 |
8,895 |
||||
|
Operating income |
5,978 |
9,283 |
||||
|
Other income (expenses): |
||||||
|
Trading securities can result in net gain or loss |
442 |
(56 |
) |
|||
|
Interest and other expenses net |
(48 |
) |
(52 |
) |
||
|
Other income (expenses), net |
394 |
(108 |
) |
|||
|
Income before income taxes |
6,372 |
9,175 |
||||
|
Provision for income taxes |
1,661 |
2,389 |
||||
|
Net income |
4,711 |
6,786 |
||||
|
Cumulative preferred stock dividend |
(19 |
) |
(19 |
) |
||
|
Common shareholders share the net income |
$ |
4,692 |
$ |
6,767 |
||
|
Earnings per common share, basic and diluted: |
$ |
0.97 |
$ |
1.39 |
||
|
Basic and diluted weighted mean common |
4,861,590 |
4,861,590 |
||||
|
EACO Corporation and Subsidiaries Condensed Consolidated Statements on Cash Flows (in thousands) (unaudited) |
|||||||
|
Three Months End |
|||||||
|
2022 |
2021 |
||||||
|
Operational activities |
|||||||
|
Net income |
$ |
4,711 |
$ |
6,786 |
|||
|
Adjustments to reconcile net Income to Net Cash Provided by (used for) Operating Activities: |
|||||||
|
Amortization and depreciation |
359 |
382 |
|||||
|
Bad debt expense |
2 |
9 |
|||||
|
Trading securities: Net unrealized loss |
(487 |
) |
56 |
||||
|
Cash changes can cause an increase or decrease in cash. |
|||||||
|
Trade accounts receivable |
4,300 |
(248 |
) |
||||
|
Inventory |
(4,247 |
) |
(2,094 |
) |
|||
|
Prepaid expenses, and other assets |
(272 |
) |
(4,350 |
) |
|||
|
Operating lease right of use assets |
(256 |
) |
(220 |
) |
|||
|
Trade accounts payable |
(407 |
) |
1,642 |
||||
|
Current liabilities and accrued expenses |
(768 |
) |
744 |
||||
|
Operating lease liabilities |
272 |
240 |
|||||
|
Operating activities generate net cash |
3,207 |
2,947 |
|||||
|
Investing activities |
|||||||
|
Additions to equipment, property, or leasehold improvements |
(86 |
) |
(286 |
) |
|||
|
(Purchase), Sale of Marketable Securities, Trading |
(6,243 |
) |
1 |
||||
|
Net cash used in investing activities |
(6,329 |
) |
(285 |
) |
|||
|
Financing activities |
|||||||
|
Payments on long-term loans |
(29 |
) |
(27 |
) |
|||
|
Dividend from preferred stock |
(19 |
) |
(19 |
) |
|||
|
Bank overdraft |
(109 |
) |
(1,008 |
) |
|||
|
Use net cash for financing |
(157 |
) |
(1,054 |
) |
|||
|
Changes in foreign currency exchange rates have an impact on cash and cash equivalents |
(86 |
) |
(480 |
) |
|||
|
Increase net (decrease in cash), cash equivalents and restricted cash |
(3,365 |
) |
1,128 |
||||
|
Cash equivalents and restricted cash – start of period |
17,396 |
4,465 |
|||||
|
End of period cash, cash equivalents, restricted cash |
$ |
14,031 |
$ |
5,593 |
|||
|
Cash flow information supplemental disclosures: |
|||||||
|
Interest paid in cash |
$ |
51 |
$ |
52 |
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Contacts
Michael Narikawa
EACO Corporation
(714) 876-2490