EACO Corporation (OTC Pink: EACO) today reported the results for its quarter ended February 28, 2025.
Net sales, net income and earnings per share were as follows for the three months ended February 28, 2025 and February 29, 2024 (dollars in thousands, except per share information):
Three Months Ended |
|||||
February 28, 2025 |
February 29, 2024 |
% Change |
|||
(unaudited) |
(unaudited) |
||||
Net sales |
$100,132 |
$83,335 |
20.2% |
||
Net income |
$6,763 |
$5,498 |
23.0% |
||
Basic earnings per common share |
$1.39 |
$1.13 |
23.0% |
||
The Company had 445 sales employees at February 28, 2025, an increase of 31 employees or 7%, from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 114 SFT’s as of February 28, 2025, four more than the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2025. 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:
This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1955, as amended. These forward-looking statements include, without limitation, statements related to our headcount expansion, growth in market share, and other statement that is not historical information. 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 as well as increases to international tariffs. 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, |
||||
2025 |
2024* |
||||
ASSETS |
|||||
Current Assets: |
|||||
Cash and cash equivalents |
$ |
499 |
$ |
843 |
|
Restricted cash |
10 |
10 |
|||
Trade accounts receivable, net |
54,743 |
53,272 |
|||
Inventory, net |
79,377 |
69,602 |
|||
Marketable securities, trading |
15,081 |
14,748 |
|||
Prepaid expenses and other current assets |
4,325 |
3,526 |
|||
Total current assets |
154,035 |
142,001 |
|||
Non-current Assets: |
|||||
Property, equipment and leasehold improvements, net |
34,529 |
35,061 |
|||
Operating lease right-of-use assets |
7,223 |
7,513 |
|||
Other assets, net |
3,970 |
3,963 |
|||
Total assets |
$ |
199,757 |
$ |
188,538 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||||
Current Liabilities: |
|||||
Trade accounts payable |
$ |
35,453 |
$ |
28,054 |
|
Accrued expenses and other current liabilities |
15,545 |
24,910 |
|||
Current portion of long-term debt |
131 |
129 |
|||
Current portion of operating lease liabilities |
2,679 |
2,708 |
|||
Total current liabilities |
53,808 |
55,801 |
|||
Non-current Liabilities: |
|||||
Long-term debt |
4,149 |
4,214 |
|||
Operating lease liabilities |
4,695 |
4,892 |
|||
Total liabilities |
62,652 |
64,907 |
|||
Commitments and Contingencies Note 9 |
|||||
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 |
(66 |
) |
73 |
||
Retained earnings |
124,743 |
111,130 |
|||
Total shareholders’ equity |
137,105 |
123,631 |
|||
Total liabilities and shareholders’ equity |
$ |
199,757 |
$ |
188,538 |
|
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2024 filed with the U.S. Securities and Exchange Commission on November 29, 2024. |
|||||
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, 2025 |
February 29, 2024 |
February 28, 2025 |
February 29, 2024 |
|||||||||||
Net sales |
$ |
100,132 |
$ |
83,335 |
$ |
194,052 |
$ |
163,590 |
||||||
Cost of sales |
70,624 |
58,308 |
136,763 |
114,991 |
||||||||||
Gross margin |
29,508 |
25,027 |
57,289 |
48,599 |
||||||||||
Operating expenses: |
||||||||||||||
Selling, general and administrative expenses |
20,414 |
17,598 |
39,352 |
34,815 |
||||||||||
Impairment on termination of lease |
– |
– |
– |
3,906 |
||||||||||
Income from operations |
9,094 |
7,429 |
17,937 |
9,878 |
||||||||||
Other income (expense): |
||||||||||||||
Net gain (loss) on trading securities |
30 |
23 |
484 |
(21 |
) |
|||||||||
Interest and other (expense) |
(49 |
) |
(75 |
) |
(97 |
) |
(84 |
) |
||||||
Other (expense) income, net |
(19 |
) |
(52 |
) |
387 |
(105 |
) |
|||||||
Income before income taxes |
9,075 |
7,377 |
18,324 |
9,773 |
||||||||||
Provision for income taxes |
2,312 |
1,879 |
4,673 |
2,496 |
||||||||||
Net income |
6,763 |
5,498 |
13,651 |
7,277 |
||||||||||
Cumulative preferred stock dividend |
(19 |
) |
(19 |
) |
(38 |
) |
(38 |
) |
||||||
Net income attributable to common shareholders |
$ |
6,744 |
$ |
5,479 |
$ |
13,613 |
$ |
7,239 |
||||||
Basic earnings per share: |
$ |
1.39 |
$ |
1.13 |
$ |
2.80 |
$ |
1.49 |
||||||
Basic weighted average common
|
4,861,590 |
4,861,590 |
4,861,590 |
4,861,590 |
||||||||||
Diluted earnings per share: |
$ |
1.38 |
$ |
1.12 |
$ |
2.79 |
$ |
1.48 |
||||||
Diluted weighted average common
|
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, 2025 |
February 29, 2024 |
||||||
Operating activities: |
|||||||
Net income |
$ |
13,651 |
$ |
7,277 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
858 |
806 |
|||||
Bad debt expense |
144 |
135 |
|||||
Deferred tax provision |
(28 |
) |
40 |
||||
Net unrealized (gain) loss on trading securities |
(100 |
) |
267 |
||||
Impairment on termination of lease |
– |
3,906 |
|||||
Increase (decrease) in cash flow from change in: |
|||||||
Trade accounts receivable |
(1,615 |
) |
(468 |
) |
|||
Inventory |
(9,775 |
) |
(7,483 |
) |
|||
Prepaid expenses and other assets |
(778 |
) |
751 |
||||
Operating lease right-of-use assets |
290 |
5,296 |
|||||
Trade accounts payable |
5,881 |
3,404 |
|||||
Accrued expenses and other current liabilities |
(9,365 |
) |
(8,166 |
) |
|||
Operating lease liabilities |
(226 |
) |
(5,305 |
) |
|||
Net cash (used in) provided by operating activities |
(1,063 |
) |
460 |
||||
Investing activities: |
|||||||
Purchase of property, equipment, and leasehold improvements |
(326 |
) |
(32,208 |
) |
|||
Net (purchases) sales of marketable securities, trading |
(233 |
) |
25,283 |
||||
Net cash used in investing activities |
(559 |
) |
(6,925 |
) |
|||
Financing activities: |
|||||||
Repayments on long-term debt |
(63 |
) |
(62 |
) |
|||
Preferred stock dividend |
(38 |
) |
(38 |
) |
|||
Bank overdraft |
1,518 |
2,077 |
|||||
Net cash provided by financing activities |
1,417 |
1,977 |
|||||
Effect of foreign currency exchange rate changes on cash and cash equivalents |
(139 |
) |
(86 |
) |
|||
Net decrease in cash, cash equivalents, and restricted cash |
(344 |
) |
(4,574 |
) |
|||
Cash, cash equivalents, and restricted cash - beginning of period |
853 |
8,568 |
|||||
Cash, cash equivalents, and restricted cash - end of period |
$ |
509 |
$ |
3,994 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Cash paid for interest |
$ |
97 |
$ |
145 |
|||
Cash paid for income taxes |
$ |
9,213 |
$ |
8,276 |
|||
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