EACO Corporation Reports Record 4th Quarter & Annual Net Sales

ANAHEIM, Calif.--(BUSINESS WIRE)--

EACO Corporation EACO today reported record results for the quarter and year ended August 31, 2016.

Net sales, net income and earnings per share were as follows for the three months and twelve months ended August 31, 2016 (dollars in thousands, except per share information):

		Three Months Ended August 31,						%
		2016			2015			Change
		(unaudited)			(unaudited)
Net sales		$	39,787		$	35,652		11.6	%
Net income		$	1,245		$	1,052		18.3	%
Basic and diluted earnings per common share		$	0.25		$	0.21		19.0	%
		Twelve Months Ended August 31,						%
		2016			2015*			Change
		(unaudited)
Net sales		$	148,544		$	140,213		5.9	%
Net income		$	4,095		$	3,741		10.5	%
Basic and diluted earnings per common share		$	0.84		$	0.75		12.0	%

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2015 filed with the U.S. Securities and Exchange Commission on November 25, 2015.

The company had 314 sales employees at August 31, 2016, an increase of one from the 313 as of August 31, 2015. The company's sales force is divided into Sales focus teams (SFT's). The company had 94 SFT's as of August 31, 2016, a decrease from 96 SFT's the company had on August 31, 2015. Management anticipates growth in both our headcount and SFT's in fiscal year 2017. The company continues to gain market share through its local presence business model and believes that the overall market for its products are expanding.

EACO Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share information)
		August 31,			August 31,
		2016			2015*
ASSETS
Current Assets:
Cash and cash equivalents	$	4,878		$	5,269
Restricted cash, current		1,425			1,781
Trade accounts receivable, net		18,797			15,485
Inventory, net		21,532			16,733
Marketable securities, trading		540			-
Prepaid expenses and other current assets		1,135			591
Total current assets		48,307			39,859
Non-current Assets:
Equipment and leasehold improvements, net		1,395			1,569
Other assets		890			1,088
Total assets	$	50,592		$	42,516
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable	$	12,727		$	9,318
Accrued expenses and other current liabilities		5,600			4,433
Liability for short sales of trading securities		1,425			1,781
Total current liabilities		19,752			15,497
Non-current Liabilities:
Long-term debt		-			33
Total liabilities		19,752			15,565
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		730			860
Retained earnings		17,682			13,663
Total shareholders' equity		30,840			26,951
Total liabilities and shareholders' equity	$	50,592		$	42,516

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2015 filed with the U.S. Securities and Exchange Commission on November 25, 2015.

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,
			2016				2015				2016				2015*
Revenues		$	39,787			$	35,652			$	148,544			$	140,213
Cost of revenues			28,055				25,409				104,981				99,105
Gross margin			11,732				10,243				43,563				41,108
Operating expenses:
Selling, general and administrative expenses			9,600				9,083				37,122				35,394
Income from operations			2,132				1,160				6,441				5,714
Other (expense) income:
Net (loss) gain on trading securities			(91	)			188				104				225
Interest and other (expense)			(3	)			59				(17	)			56
Total other (expense) income			(94	)			247				87				281
Income before income taxes			2,038				1,407				6,528				5,995
Provision for income taxes			793				355				2,433				2,254
Net income			1,245				1,052				4,095				3,741
Cumulative preferred stock dividend			(19	)			(19	)			(76	)			(76	)
Net income attributable to common shareholders		$	1,226			$	1,033			$	4,019			$	3,665
Basic and diluted earnings per share:		$	0.25			$	0.21			$	0.84			$	0.75
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, 2015 filed with the U.S. Securities and Exchange Commission on November 25, 2015.

EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Year Ended
		August 31,
		2016				2015*
Operating activities:
Net income		$	4,095			$	3,741
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			577				553
Bad debt expense			73				91
Change in inventory reserve			202				81
Net (gain) on investments			(104	)			(225	)
(Increase) decrease in:
Trade accounts receivable			(3,385	)			2,219
Inventory			(5,001	)			(1,951	)
Prepaid expenses and other assets			(365	)			509
Increase (decrease) in:
Trade accounts payable			1,641				(47	)
Accrued expenses and other current liabilities			1,167				603
Net cash provided by operating activities			(1,100	)			5,574
Investing activities:
Purchase of property and equipment			(403	)			(519	)
(Purchase) Sale of marketable securities, trading			(436	)			298
Net Change in securities sold short			(356	)			1,139
Change in restricted cash			375				(900	)
Net cash provided by investing activities			(820	)			18
Financing activities:
Payments on revolving credit facility			(33	)			(1,684	)
Payment of preferred stock dividend			(76	)			(76	)
Bank overdraft			1,768				(1,827	)
Payments on long-term debt			-				(11	)
Net cash (used in) financing activities			1,659				(3,598	)
Effect of foreign currency exchange rate changes on cash and cash equivalents			(130	)			(205	)
Net (decrease) increase in cash and cash equivalents			(391	)			1,789
Cash and cash equivalents - beginning of period			5,269				3,480
Cash and cash equivalents - end of period		$	4,878			$	5,269
Supplemental disclosures of cash flow information:
Cash paid for taxes		$	2,227			$	1,342

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2015 filed with the U.S. Securities and Exchange Commission on November 25, 2015.

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