Educational Development Corporation · NASDAQ:EDUC
Educational Development — Investor Presentation (November 2022)
21 slides from Educational Development's investor presentation, Nov 11, 2022
Slide 1: Educational Development Corporation
Educational Development Corporation Usborne & Kane Miller Books
Slide 2: Cautionary Statement for the Purpose of the Safe Harbor Provision
Cautionary Statement for the Purpose of the “Safe Harbor” Provision of the Private Securities Litigation Reform Act of 1995. The information discussed in this Press Release includes “forward-looking statements and financial estimates.” These forward-looking statements are identified by their use of
Slide 3: Investment Summary
INVESTMENT SUMMARY EDC’s vision is to impact children’s literacy and learning through best-in-class products. Ticker EDUC Stock Price 11/10/22 $2.53 Market Cap (Q2 FY23) $27.5 million TTM – EPS (Q2 FY23) $0.28 Kane Miller SmartLab Learning Usborne Annual Dividends Per Share $0.20 Publishing Toys Wra
Slide 4: Notable Awards (Usborne Publishing)
Usborne Publishing was founded in 1973 by Peter Usborne. Currently employs over 260 individuals developing content, artwork, design, and illustrations. An enormous amount of time and money are spent producing every book. Many other ingredients are used to make Usborne books appealing to children; hu
Slide 5: Notable Awards (Kane Miller)
For over 35 years, Kane Miller has published children’s books from around the world. These books bring the children of the world closer to each other, sharing stories and ideas, while exploring cultural differences and similarities. These picture books and fiction books allow the reader to comfortab
Slide 6: Recent Acquisitions: Learning Wrap-Ups
Founded in 1983 - Learning Wrap-Ups Recent Acquisitions publishes a variety of self-correcting learning manipulatives for math, vocabulary and science. Acquired by EDC in Q4 FY22 after selling these high-quality products for over 25 years. Learning Wrap-Ups and Learning Palette products are sold dom
Slide 7: SmartLab Toys STEAM products
SmartLab Toys has 5 primary product lines and is known for creating top quality STEAM products for the past 18 years. Average annual net sales of approximately $6.5 million. Acquired by EDC in Q3 FY23 with the shared mission of expanding children’s literacy and offering education products that inspi
Slide 8: 15 Year Net Revenues History
15 YEAR NET REVENUES HISTORY TTM & NORMALIZED 3 YEAR AVERAGE $250,000,000 $200,000,000 $150.1 M $150,000,000 $100,000,000 $111.0 M $50,000,000 $- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q2 TTM Net Revenues Normalized 3 Year Average
Slide 9: Revenue Breakout by Division
REVENUE BREAKOUT BY DIVISION PUBLISHING (RETAIL) AND UBAM 5 YEAR NET REVENUES BY SEGMENT $250,000,000.00 $204.64 $200,000,000.00 $142.23 $150,000,000.00 $111.98 $118.81 $113.01 $100,000,000.00 $50,000,000.00 $- 2018 2019 2020 2021 2022 Publishing Division UBAM Division
Slide 10: Consultant Sales Division Active Consultant Count
CONSULTANT SALES DIVISION ACTIVE CONSULTANT COUNT 60,000 2021 GROWTH DRIVERS: -Increased demand for non-traditional employment opportunities -New Technology Improvements -Restructure of Consultant Success Program 50,000 COVID-19 40,000 Purchase & relocate to larger distribution facility 30,000 Fisca
Slide 11: Consultant Sales Channel Improvements
CONSULTANT SALES CHANNEL IMPROVEMENTS Leadership & Training Company developed online training site for new consultants (reduce churn) including: o 1st Time Consultant Training o How to Promote to Team Leader Training o “Now I’m a Team Leader – What’s Next??” Training Continued System Improvements th
Slide 12: Sales Channel Challenges
SALES CHANNEL CHALLENGES FISCAL 2023 CHALLENGES High inflation in the U.S. market has reduced disposable income of families with young children, which is our target customer base. Usborne new distribution agreement created “consultant distraction” which began in summer of 2022. Increased inbound and
Slide 13: Sales Channel
SALES CHANNEL Library Gift Shop EDC Booth Homes (89%) Book Order Bookstore Toy Store School After receiving a customer order, books are shipped to customers across the United States from our distribution warehouse in Tulsa, OK. While orders are shipped to a variety of destinations, the majority (89%
Slide 14: Operations Summary
OPERATIONS SUMMARY Increased Freight Shipment Charges to Restore Profitability and Drive Customer Purchasing Decisions to Higher Order Sizes Orders up to $59.99 = $9.95 for Shipping Orders $60.00 to $99.99 = $8.95 for Shipping Orders $100.00 or more = $6.95 for Shipping Continual Improvements in War
Slide 15: EDC – Cashflow Drivers
EDC – CASHFLOW DRIVERS Inventory normalization is expected to generate approximately $15.0M of free cash flow in 2023 and additional in 2024. Cash generated will be used to pay down working capital debt, restore historical quarterly dividend payments and reinstate stock buyback program Limited Capit
Slide 16: Investment Performance: TTM EBITDA
INVESTMENT PERFORMANCE TTM EBITDA THROUGH Q2 FY23 $24,000,000 $22,000,000 $21.5M $20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $7.0M $6,000,000 $4,000,000 $2,000,000 $- Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Nov
Slide 17: Investment Performance: TTM Fully Diluted EPS
INVESTMENT PERFORMANCE TTM Fully Diluted EPS $1.80 $1.68 $1.60 $1.50 $1.39 $1.40 $1.31 $1.20 $1.20 $1.13 $0.98 $1.00 $0.84 $0.81 $0.80 $0.76 $0.75 $0.74 $0.71 $0.70 $0.68 $0.68 $0.62 $0.64 $0.60 $0.60 $0.51 $0.40 $0.28 $0.20 $- Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Fe
Slide 18: Stability of Management and Business
STABILITY OF MANAGEMENT AND BUSINESS Company leadership Craig White has held the role of President and CEO since the summer of 2021 and has been with the Company for over 25 years Revenues growth from $5M to $140M+ reported in FY 2022 Longstanding relationship with Usborne dating back to 1988 We acq
Slide 19: Seasoned Management Team and Board of Directors
SEASONED MANAGEMENT TEAM AND BOARD OF DIRECTORS Craig White Heather Cobb Dan O’Keefe President and Chief Sales and Chief Financial Chief Executive Marketing Officer Officer Officer 27 Years with EDC 11 Years with EDC 5 Years with EDC 25+ Years Experience 20+ Years Experience 30+ Years Experience
Slide 20: Fiscal 2023 Highlights / Fiscal 2024 Expectations
FISCAL 2023 HIGHLIGHTS • Stabilization of active consultant levels • Reduced Inventory from $74.0M at BOY to $68.0M at Q2 • New banking relationship to strengthen our balance sheet, improve our financial results, and further support our future growth • Continue to expect further inventory reductions
Slide 21: The future of our world
The future of our world depends on the education of our children. We deliver educational excellence one book at a time. We provide economic opportunity while fostering strong family values. We touch the lives of children for a lifetime.
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