EACO Corporation Reports Record Quarterly and Annual Net Sales - EACO (OTC:EACO)

EACO Corporation EACO today reported the results for its year ended August 31, 2017.

Net sales, net income and earnings per share were as follows for the three months and year ended August 31, 2017 (dollars in thousands, except per share information):


	Three Months Ended August 31,				%
	2017		2016		Change
	(unaudited)		(unaudited)

Net sales	$	42,181	$	39,787	6.0	%

Net income	$	1,364	$	1,245	9.6	%

Basic and diluted earnings per common share	$	0.28	$	0.25	12.0	%


	Year Ended August 31,				%
	2017		2016*		Change
	(unaudited)

Net sales	$	156,954	$	148,544	5.7	%

Net income	$	4,051	$	4,095	(1.1	)%

Basic and diluted earnings per common share	$	0.83	$	0.83	0	%

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2016 filed with the U.S. Securities and Exchange Commission on November 23, 2016.

The Company had 316 sales employees at August 31, 2017, an increase of 2 from the prior year. The Company's sales force is divided into Sales focus teams (SFT's). The company had 94 SFT's as of August 31, 2017, the same number from the prior year. Management anticipates continued growth in both our headcount and SFT's in fiscal year 2018. The Company believes it continues to gain market share through its local presence business model, increasing net sales by 6.0% and bookings by 5% when comparing to the prior year.

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, and the impact of products offered by our competitors from time to time. 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,
	2017		2016*
ASSETS
Current Assets:
Cash and cash equivalents	$	3,870	$	4,878
Restricted cash, current		707		1,425
Trade accounts receivable, net		21,339		18,797
Inventory, net		26,791		21,532
Marketable securities, trading		1,596		540
Prepaid expenses and other current assets		1,354		1,135
Total current assets		55,657		48,307
Non-current Assets:
Property, equipment and leasehold improvements, net		9,256		1,395
Other assets		867		890
Total assets	$	65,780	$	50,592
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable	$	13,364	$	12,727
Accrued expenses and other current liabilities		4,545		5,600
Liability for short sales of trading securities		707		1,425
Current portion of long-term debt		139		-
Total current liabilities		18,755		19,752
Non-current Liabilities:
Long-term debt		12,193		-
Total liabilities		30,948		19,752
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		747		730
Retained earnings		21,657		17,682
Total shareholders' equity		34,832		30,840
Total liabilities and shareholders' equity	$	65,780	$	50,592

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2016 filed with the U.S. Securities and Exchange Commission on November 23, 2016.


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

	Three Months Ended						Year Ended
	August 31,						August 31,
	2017			2016			2017			2016*
Revenues	$	42,181		$	39,787		$	156,954		$	148,544
Cost of revenues		30,061			28,055			112,184			104,981
Gross margin		12,120			11,732			44,770			43,563
Operating expenses:
Selling, general and administrative expenses		10,098			9,600			38,455			37,122
Income from operations		2,022			2,132			6,315			6,441

Other (expense) income:
Net gain on trading securities		24			(91	)		208			104
Interest and other (expense)		(100	)		(3	)		(181	)		(17	)
Total other (expense) income		(76	)		(94	)		27			87
Income before income taxes		1,946			2,038			6,342			6,528
Provision for income taxes		582			793			2,291			2,433
Net income		1,364			1,245			4,051			4,095
Cumulative preferred stock dividend		(19	)		(19	)		(76	)		(76	)
Net income attributable to common shareholders	$	1,345		$	1,226		$	3,975		$	4,019

Basic and diluted earnings per share:	$	0.28		$	0.25		$	0.83		$	0.83
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, 2016 filed with the U.S. Securities and Exchange Commission on November 23, 2016.


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

	Year Ended
	August 31,
	2017			2016*
Operating activities:
Net income	$	4,051		$	4,095
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		785			577
Bad debt expense		96			73
Change in inventory reserve		87			202
Net gain on investments		(208	)		(104	)
(Increase) decrease in:
Trade accounts receivable		(2,638	)		(3,385	)
Inventory		(5,346	)		(5,001	)
Prepaid expenses and other assets		(247	)		(365	)
Increase (decrease) in:
Trade accounts payable		(30	)		1,641
Accrued expenses and other current liabilities		(1,027	)		1,167
Net cash used in operating activities		(4,477	)		(1,100	)
Investing activities:
Purchase of property and equipment		(8,646	)		(403	)
Purchase of marketable securities, trading		(848	)		(436	)
Net change in securities sold short		(718	)		(356	)
Change in restricted cash		737			375
Net cash used in investing activities		(9,475	)		(820	)
Financing activities:
Borrowings on revolving credit facility		6,967			(33	)
Repayments on long-term debt		(35	)		-
Preferred dividend		(76	)		(76	)
Bank overdraft		671			1,768
Borrowings on long-term debt		5,400			-
Net cash provided by financing activities		12,927			1,659
Effect of foreign currency exchange rate changes on cash and cash equivalents		17			(130	)
Net decrease in cash and cash equivalents		(1,008	)		(391	)
Cash and cash equivalents - beginning of period		4,878			5,269
Cash and cash equivalents - end of period	$	3,870		$	4,878
Supplemental disclosures of cash flow information:
Cash paid for interest	$	182		$	9
Cash paid for income taxes	$	2,833		$	2,199

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2016 filed with the U.S. Securities and Exchange Commission on November 23, 2016.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171031006323/en/

Market News and Data brought to you by Benzinga APIs