EACO Corporation Reports Record 1st Quarter Net Sales

Business Wire
6 min read
0
In this article:

ANAHEIM, Calif., January 16, 2024--(BUSINESS WIRE)--EACO Corporation (OTC Pink:EACO) announced the results for its quarter ended November 30, 2023.

Net sales, net income and earnings per share were as follows for the quarter ended November 30, 2023 (dollars in thousands, except per share information):

Three Months Ended

November 30,

%

2023

2022

Change

(unaudited)

(unaudited)

Net sales

$80,255

$76,319

5.2%

Net income

$1,779

$4,711

(62.2%)

Basic and diluted earnings per common share

$0.36

$0.97

(62.3%)

The Company had 413 sales employees at November 30, 2023, an increase of 47 or 13% 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 November 30, 2023, an increase of 8 from 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)

November 30,

August 31,

2023

2023

ASSETS

Current Assets:

Cash and cash equivalents

$

6,499

$

8,558

Restricted cash

10

10

Trade accounts receivable, net

46,051

46,654

Inventory, net

60,256

56,270

Marketable securities, trading

4,227

27,228

Prepaid expenses and other current assets

4,148

3,843

Total current assets

121,191

142,563

Non-current Assets:

Property, equipment and leasehold improvements, net

35,519

8,041

Operating lease right-of-use assets

4,216

9,988

Other assets, net

1,760

1,652

Total assets

$

162,686

$

162,244

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Trade accounts payable

$

26,345

$

22,505

Accrued expenses and other current liabilities

14,118

16,375

Current portion of operating lease liabilities

2,130

3,950

Current portion of debt

3,201

120

Total current liabilities

45,794

42,950

Non-current Liabilities:

Long-term debt

4,317

4,348

Operating lease liabilities

2,225

6,225

Total liabilities

52,336

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

(93)

38

Retained earnings

98,015

96,255

Total shareholders’ equity

110,350

108,721

Total liabilities and shareholders’ equity

$

162,686

$

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

November 30,

2023

2022

Net sales

$

80,255

$

76,319

Cost of sales

56,683

54,656

Gross margin

23,572

21,663

Operating expenses:

Selling, general and administrative expenses

17,217

15,685

Impairment on termination of lease

3,906

––

Income from operations

2,449

5,978

Other (expense) income:

Net (loss) gain on trading securities

(44)

442

Interest and other expense, net

(9)

(48)

Other (expense) income, net

(53)

394

Income before income taxes

2,396

6,372

Provision for income taxes

617

1,661

Net income

1,779

4,711

Cumulative preferred stock dividend

(19)

(19)

Net income attributable to common shareholders

$

1,760

$

4,692

Basic and diluted earnings per common share:

$

0.36

$

0.97

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,

2023

2022

Operating activities:

Net income

$

1,779

$

4,711

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

317

359

Bad debt expense

47

2

Deferred tax provision

(67)

—

Net unrealized loss (gain) on trading securities

210

(487)

Impairment on termination of lease

3,906

––

Increase (decrease) in cash from changes in

Trade accounts receivable

556

4,300

Inventory

(3,986)

(4,247)

Prepaid expenses and other assets

(346)

(272)

Operating lease right-of-use assets

5,772

(256)

Trade accounts payable

190

(407)

Accrued expenses and other current liabilities

(2,257)

(768)

Right of use liabilities

(5,820)

272

Net cash provided by operating activities

301

3,207

Investing activities:

Additions to property, equipment, and leasehold improvements

(31,701)

(86)

Proceeds (purchase) from sale of marketable securities, trading

22,791

(6,243)

Net cash used in investing activities

(8,910)

(6,329)

Financing activities:

Borrowing on revolving credit facility

3,081

—

Payments on long-term debt

(31)

(29)

Preferred stock dividend

(19)

(19)

Bank overdraft

3,650

(109)

Net cash provided (used) by financing activities

6,681

(157)

Effect of foreign currency exchange rate changes on cash and cash equivalents

(131)

(86)

Net (decrease) in cash, cash equivalents, and restricted cash

(2,059)

(3,365)

Cash, cash equivalents, and restricted cash - beginning of period

8,568

17,396

Cash, cash equivalents, and restricted cash - end of period

$

6,509

$

14,031

Supplemental disclosures of cash flow information:

Cash paid for interest

$

296

$

51

Cash paid for income taxes

$

674

$

—

View source version on businesswire.com: https://www.businesswire.com/news/home/20240116473010/en/

Contacts

Michael Narikawa
EACO Corporation
(714) 876-2490

Advertisement

Recommended Stories

  • Homes are overvalued in most of the US – and the problem is worse in these 5 states

    A new report from Fitch Ratings showed that home prices are overvalued in 90% of U.S. metro areas – but the problem is most pronounced in five states.

  • Cathie Wood Pulls the Trigger on These 2 ‘Strong Buy’ Stocks

    Cathie Wood is famous for her singular investing style. Favoring high growth and disruptors, she often appears to be throwing caution to the wind and willing to tread where other Wall Street titans may fear to go. However, outré Wood’s strategy might seem to some, there’s one risk she’s not willing to take. Addressing the recent comeback of meme stocks, the Ark Invest CEO recently issued a warning to investors keen to get in on the action, sensibly warning that it will end badly for many piling

  • Tucked Away In Pennsylvania, This Town Is America's #1 Retirement Haven

    A recent survey from GoBankingRates.com has revealed the country’s number one best place to retire. Learn where this retirement haven is and why it scored 92 on its livability index. Choosing a place to retire is an important decision to make and according to a report from the Alliance for Lifetime Income, America is soon going to be hitting its record numbers of retirement also known as the ‘silver tsunami." The report revealed that a staggering 4.1 million Americans are set to turn 65 years ol

  • Trump Media Reports Big Loss, Scant Revenue; DJT Stock Rises

    Trump Media reported a sizeable first-quarter loss with revenue below $1 million once again. Donald Trump stock DJT edged higher late.

  • Warren Buffett Says, 'When It Rains Gold, Put Out The Bucket' And These High Yield Investments Are Making It Rain

    In his 2016 letter to Berkshire Hathaway shareholders, legendary investor Warren Buffett wrote, “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we ...

  • Forget Nvidia: Jim Cramer Says This Company Could Be About to Cash In on Artificial Intelligence (AI) Data Centers

    Data center services are witnessing outsized demand as the AI revolution unfolds.

  • Palo Alto Networks Tumbles After Sales Forecast Disappoints

    (Bloomberg) -- Palo Alto Networks Inc. slid in late trading after giving a downbeat forecast for the current period, renewing concerns about a slowdown in cybersecurity services. Most Read from BloombergIran State TV Says ‘No Sign of Life’ at Helicopter Crash SiteHims Debuts $199 Weight-Loss Shots at 85% Discount to WegovyJamie Dimon Says Succession at JPMorgan Is ‘Well on the Way’Speedier Wall Street Trades Are Putting Global Finance On EdgeOne of the Last Big Bears on Wall Street Turns Bullish

  • Red Lobster Chain Goes Bankrupt After Unlimited Shrimp Deal

    (Bloomberg) -- Seafood restaurant chain Red Lobster filed for bankruptcy, succumbing to onerous leases, high labor costs and a disastrous unlimited shrimp promotion. Most Read from BloombergIran State TV Says ‘No Sign of Life’ at Helicopter Crash SiteHims Debuts $199 Weight-Loss Shots at 85% Discount to WegovySpeedier Wall Street Trades Are Putting Global Finance On EdgeJamie Dimon Says Succession at JPMorgan Is ‘Well on the Way’One of the Last Big Bears on Wall Street Turns Bullish on US Stocks

  • 'Dumb Money' Loses $13.1 Billion In Latest GameStop Stock Mania

    It appears GameStop meme investors got suckered — again. Investors who jumped into the latest online frenzy over shares of the struggling video game retailer lost $13.1 billion in just three days from the mania's high, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. It's been a costly lesson for investors, some of which may have lost billions the last time on GameStop and other highly shorted stocks touted on social media.

  • Jim Cramer Destroys New Starbucks CEO In Heated Interview, Says He Was "Stunned" As Its Former CEO Admits a "Fall From Grace"

    Despite a strong start to the year for stock markets, investors in Starbucks (NASDAQ:SBUX) have been left bitterly disappointed with its shares down by approximately 20% at the time of this writing. After the earnings miss, Laxman Narasimhan, the new CEO of Starbucks, appeared on Jim Cramer's Mad Money to try and explain both the results and the company's path forward. Don't Miss: Startup behind ‘the #1 free contractor app' grows 162% YoY, opens its doors for investors at a $100 minimum. Invest