New Zealand markets close in 34 minutes
  • NZX 50

    11,050.12
    +90.67 (+0.83%)
     
  • NZD/USD

    0.5701
    -0.0024 (-0.43%)
     
  • NZD/EUR

    0.5796
    -0.0023 (-0.39%)
     
  • ALL ORDS

    6,830.40
    +174.00 (+2.61%)
     
  • ASX 200

    6,626.50
    +169.60 (+2.63%)
     
  • OIL

    83.67
    +0.04 (+0.05%)
     
  • GOLD

    1,705.10
    +3.10 (+0.18%)
     
  • NASDAQ

    11,229.73
    +258.50 (+2.36%)
     
  • FTSE

    6,908.76
    +14.95 (+0.22%)
     
  • Dow Jones

    29,490.89
    +765.38 (+2.66%)
     
  • DAX

    12,209.48
    +95.12 (+0.79%)
     
  • Hang Seng

    17,079.51
    -143.32 (-0.83%)
     
  • NIKKEI 225

    26,840.75
    +624.96 (+2.38%)
     
  • NZD/JPY

    82.5270
    -0.1860 (-0.22%)
     

EACO Corporation Reports Record Quarterly Net Sales and Record 2nd Quarter Net Income

·6-min read

ANAHEIM, Calif., August 18, 2022--(BUSINESS WIRE)--EACO Corporation (OTCMKTS:EACO) today reported the results for its quarter ended February 28, 2022.

Net sales, net income and earnings per share were as follows for the three months ended February 28, 2022 (dollars in thousands, except per share information):

Three Months Ended
February 28,

2022

2021

% Change

(unaudited)

(unaudited)

Net sales

$66,587

$55,751

19.4%

Net income

$3,407

$1,394

144.4%

Basic and diluted earnings per common share

$0.70

$0.28

150.0%

The Company had 338 sales employees at February 28, 2022, a decrease of 5 employees or 1.5%, from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 102 SFT’s as of February 28, 2022, two more than the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2022. 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)

February 28,

August 31,

2022

2021*

ASSETS

Current Assets:

Cash and cash equivalents

$

5,622

$

4,455

Restricted cash

10

10

Trade accounts receivable, net

36,861

33,939

Inventory, net

44,724

40,448

Marketable securities, trading

4,598

3,741

Prepaid expenses and other current assets

8,416

6,780

Total current assets

100,231

89,363

Non-current Assets:

Property, equipment and leasehold improvements, net

8,162

8,269

Operating lease right-of-use assets

11,030

11,084

Other assets, net

1,407

1,669

Total assets

$

120,830

$

110,385

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Trade accounts payable

$

19,756

$

16,413

Accrued expenses and other current liabilities

8,440

10,964

Current portion of operating lease liabilities

3,385

3,096

Current portion of long-term debt

119

113

Total current liabilities

31,700

30,586

Non-current Liabilities:

Long-term debt

4,425

4,585

Operating lease liabilities

7,784

8,092

Total liabilities

41,737

43,263

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

325

780

Retained earnings

64,069

53,914

Total shareholders’ equity

76,822

67,122

Total liabilities and shareholders’ equity

$

120,830

$

110,385

*

Derived from the Company’s audited financial statements included in its Form 10-K for the year
ended August 31, 2021 filed with the U.S. Securities and Exchange Commission on July 6, 2022.

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

Three Months Ended

Six Months Ended

February 28,

February 28,

2022

2021

2022

2021

Net sales

$

66,587

$

55,751

$

130,409

$

109,154

Cost of sales

48,462

40,727

94,106

79,678

Gross margin

18,125

15,024

36,303

29,476

Operating expenses:

Selling, general and administrative expenses

13,439

12,540

22,334

25,221

Income from operations

4,686

2,484

13,969

4,255

Other income (expense):

Net (loss) gain on trading securities

(22

)

(506

)

(78

)

(1,059

)

Interest and other (expense)

(53

)

(60

)

(105

)

(129

)

Other (expense) income, net

(75

)

(566

)

(183

)

(1,188

)

Income before income taxes

4,611

1,918

13,786

3,067

Provision for income taxes

1,204

524

3,593

822

Net income

3,407

1,394

10,193

2,245

Cumulative preferred stock dividend

(19

)

(19

)

(38

)

(38

)

Net income attributable to common shareholders

$

3,388

$

1,375

$

10,155

$

2,207

Basic and diluted earnings per share:

$

0.70

$

0.28

$

2.09

$

0.45

Basic weighted average common
shares outstanding

4,861,590

4,861,590

4,861,590

4,861,590

Diluted weighted average common
shares outstanding

4,901,590

4,901,590

4,901,590

4,901,590

EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Six Months Ended
February 28,

2022

2021

Operating activities:

Net income

$

10,193

$

2,245

Adjustments to reconcile net income to net cash provided by
(used in) operating activities:

Depreciation and amortization

751

751

Bad debt expense

26

55

Loss on sale of real property

Net unrealized loss on trading securities

78

1,059

Increase (decrease) in cash from changes in:

Trade accounts receivable

(2,958

)

866

Inventory

(4,276

)

(635

)

Prepaid expenses and other assets

(1,374

)

1,298

Operating lease right-of-use assets

54

847

Trade accounts payable

4,404

561

Accrued expenses and other current liabilities

(2,524

)

(2,579

)

Operating lease liabilities

(19

)

(928

)

Net cash provided by operating activities

4,355

3,540

Investing activities:

Purchase of property, equipment, and leasehold improvements

(644

)

(290

)

Net (purchases) sales of marketable securities, trading

(935

)

(3,846

)

Net change in liabilities for short sales of trading securities

––

(1,622

)

Net cash (used in) investing activities

(1,579

)

(5,758

)

Financing activities:

Payments on revolving credit facility, net

––

(5,100

)

Repayments on long-term debt

(55

)

(53

)

Preferred stock dividend

(38

)

(38

)

Net change in bank overdraft

(1,061

)

2,526

Net cash (used in) financing activities

(1,154

)

(2,665

)

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

(455

)

9

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

1,167

(4,874

)

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

4,465

8,995

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

$

5,632

$

4,121

Supplemental disclosures of cash flow information:

Cash paid for interest

$

105

$

121

Cash paid for income taxes

$

3,979

$

2,509

View source version on businesswire.com: https://www.businesswire.com/news/home/20220818005696/en/

Contacts

Michael Narikawa
EACO Corporation
(714) 876-2490