EACO Corporation Reports Record Annual Net Sales and Record Quarter Net Sales & Net Income

Published

ANAHEIM, Calif.--(BUSINESS WIRE)-- EACO Corporation (OTC Pink:EACO) today reported the results for its year ended August 31, 2023.

Net sales, net income and earnings per share were as follows for the year ended August 31, 2023 (dollars in thousands, except per share information):

 

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.

The Company had 394 sales employees at August 31, 2023, an increase of 49 or 14% from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 107 SFT’s as of August 31, 2023, an increase of 6 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, the impact of products offered by our competitors from time to time, and the impact of the Covid-19 pandemic. 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)

 

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.

 

Michael Narikawa EACO Corporation (714) 876-2490

Source: EACO Corporation

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