Three Months Ended August 31,

%

2023

2022

Change

(unaudited)

(unaudited)

Net sales

$85,904

$84,356

1.8%

Net income

$6,055

$5,785

4.7%

Basic and diluted earnings per common share

$1.24

$1.19

4.2%

Year Ended August 31,

%

2023

2022*

Change

(unaudited)

Net sales

$319,397

$292,562

9.2%

Net income

$21,185

$21,308

(0.6%)

Basic and diluted earnings per common share

$4.34

$4.37

(0.7%)

* 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 Balance Sheets

(in thousands, except share information)

(unaudited)

August 31,

August 31,

2023

2022*

ASSETS

Current Assets:

Cash and cash equivalents

$

8,558

$

17,386

Restricted cash

10

10

Trade accounts receivable, net

46,654

44,637

Inventory, net

56,270

48,808

Marketable securities, trading

27,228

3,925

Prepaid expenses and other current assets

3,843

5,008

Total current assets

142,563

119,774

Non-current Assets:

Property, equipment and leasehold improvements, net

8,041

8,479

Operating lease right-of-use assets

9,988

10,389

Other assets, net

1,652

1,039

Total assets

$

162,244

$

139,681

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Trade accounts payable

$

22,505

$

21,762

Accrued expenses and other current liabilities

16,375

15,020

Current portion of operating lease liabilities

3,950

3,375

Current portion of long-term debt

120

119

Total current liabilities

42,950

40,276

Non-current Liabilities:

Long-term debt

4,348

4,465

Operating lease liabilities

6,225

7,192

Total liabilities

53,523

51,933

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

38

174

Retained earnings

96,255

75,146

Total shareholders’ equity

108,721

87,748

Total liabilities and shareholders’ equity

$

162,244

$

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 share and per share information)

(unaudited)

Three Months Ended

August 31,

Year Ended

August 31,

2023

2022

2023

2022*

Revenues

$

85,904

$

84,356

$

319,397

$

292,562

Cost of revenues

60,656

58,747

226,981

209,060

Gross margin

25,248

25,609

92,416

83,502

Operating expenses:

Selling, general and administrative expenses

17,368

17,089

64,936

53,970

Income from operations

7,880

8,520

27,480

29,532

Other (expense) income:

Net (loss) gain on trading securities

500

(348

)

1,284

(213

)

Interest and other expense

(21

)

(48

)

(59

)

(201

)

Other income (expense), net

479

(396

)

1,225

(414

)

Income before income taxes

8,359

8,124

28,705

29,118

Provision for income taxes

2,304

2,339

7,520

7,810

Net income

6,055

5,785

21,185

21,308

Cumulative preferred stock dividend

(19

)

(19

)

(76

)

(76

)

Net income attributable to common shareholders

$

6,036

$

5,766

$

21,109

$

21,232

Basic and diluted earnings per common share:

$

1.24

$

1.19

$

4.34

$

4.37

Basic and diluted weighted average common shares outstanding

4,861,590

4,861,590

4,861,590

4,861,590

* 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 Cash Flows

(in thousands)

(unaudited)

Year Ended August 31,

2023

2022*

Operating activities:

Net income

$

21,185

$

21,308

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

Depreciation and amortization

1,398

1,491

Bad debt expense

614

38

Unrealized (gain) loss on trading securities

(448

)

351

Deferred tax provision

(581

)

333

Increase (decrease) in cash flow from change in:

Trade accounts receivable

(2,631

)

(10,746

)

Inventory

(7,462

)

(8,360

)

Prepaid expenses and other assets

1,133

2,069

Operating lease right-of-use assets

401

695

Trade accounts payable

(1,150

)

6,390

Accrued expenses and other current liabilities

1,355

4,056

Operating lease liabilities

(392

)

(621

)

Net cash provided by operating activities

13,422

17,004

Investing activities:

Additions to property, equipment, and leasehold improvements

(960

)

(1,701

)

(Purchase) of marketable securities, trading

(22,855

)

(535

)

Net cash used in by investing activities

(23,815

)

(2,236

)

Financing activities:

Repayments on long-term debt

(116

)

(114

)

Preferred stock dividend

(76

)

(76

)

Bank overdraft

1,893

(1,041

)

Net cash used in by financing activities

1,701

(1,231

)

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

(136

)

(606

)

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

(8,828

)

12,931

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

17,396

4,465

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

$

8,568

$

17,396

Supplemental disclosures of cash flow information:

Cash paid for interest

$

202

$

205

Cash paid for income taxes

$

7,473

$

3,222

* 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.