Market Overview

EACO Corporation Reports Record Annual Net Sales

Share:

EACO Corporation (OTCQB:EACO) today reported the results for its year ended August 31, 2020.

Net sales, net income and earnings per share were as follows for the year ended August 31, 2020 (dollars in thousands, except per share information):

 

Three Months Ended

August 31,

 

%

 

2020

 

2019

 

Change

(unaudited)

 

(unaudited)

 

 

 

 

Net sales

$

57,454

$

60,056

(4.3

%)

 

 

 

 

Net income

$

1,523

$

2,602

(41.5

)%

 

 

 

 

Basic and diluted earnings per common share

$

0.31

$

0.53

(41.8

)%

 

Year Ended August 31,

 

%

 

2020

 

2019*

 

Change

(unaudited)

 

 

 

 

 

 

Net sales

$

225,245

$

221,241

1.8

%

 

 

 

 

Net income

$

7,793

$

9,432

(17.4

)%

 

 

 

 

Basic and diluted earnings per common share

$

1.59

$

1.92

(17.5

)%

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2019 filed with the U.S. Securities and Exchange Commission on November 27, 2019.

The Company had 373 sales employees at August 31, 2020, an increase of 26 or 7% from the prior year quarter. The Company's sales force is divided into sales focus teams (SFT's). The Company had 100 SFT's as of August 31, 2020 an increase of 2 from the prior year quarter. Management anticipates continued growth in both our headcount and SFT's in fiscal year 2021. 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, the impact of the Covid-19 pandemic, 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,

2020

2019*

ASSETS

 

 

 

Current Assets:

Cash and cash equivalents

$

6,079

 

$

4,692

Restricted cash

 

2,916

 

 

655

Trade accounts receivable, net

 

29,667

 

 

31,655

Inventory, net

 

39,545

 

 

37,259

Marketable securities, trading

 

1,368

 

 

1,873

Prepaid expenses and other current assets

 

5,094

 

 

4,234

Total current assets

 

84,669

 

 

80,368

Property, equipment and leasehold improvements:

 

 

 

Held for use, net

 

8,848

 

 

3,717

Held for sale, net

 

 

 

6,855

Total property, equipment and leasehold improvements, net

 

8,848

 

 

10,572

Other assets:

 

 

 

Operating lease right-of-use assets

 

11,512

 

 

Other assets, net

 

1,424

 

 

1,938

Total assets

$

106,453

 

$

92,878

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current Liabilities:

 

 

 

Trade accounts payable

$

16,535

 

$

21,138

Accrued expenses and other current liabilities

 

6,632

 

 

8,297

Liability for short sales of trading securities

 

2,916

 

 

655

Current portion of operating lease liabilities

 

2,493

 

 

Current portion of long-term debt

 

 

 

5,484

Total current liabilities

 

28,576

 

 

35,574

Non-current Liabilities:

 

 

 

Long-term debt

 

9,907

 

 

6,114

Operating lease liabilities

 

9,151

 

 

Total liabilities

 

47,634

 

 

41,688

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

 

788

 

 

876

Retained earnings

 

45,603

 

 

37,886

Total shareholders' equity

 

58,819

 

 

51,190

Total liabilities and shareholders' equity

$

106,453

 

$

92,878

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2019 filed with the U.S. Securities and Exchange Commission on November 27, 2019.

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except for share and per share information)

(unaudited)

 

Three Months Ended

August 31,

 

Year Ended

August 31,

 

2020

 

2019*

 

2020

 

2019*

Revenues

$

57,454

 

 

$

60,056

 

 

$

225,245

 

 

$

221,241

 

Cost of revenues

 

42,626

 

 

 

43,569

 

 

 

163,868

 

 

 

160,008

 

Gross margin

 

14,828

 

 

 

16,487

 

 

 

61,377

 

 

 

61,233

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

12,929

 

 

 

12,650

 

 

 

50,936

 

 

 

48,213

 

Income from operations

 

1,899

 

 

 

3,837

 

 

 

10,441

 

 

 

13,020

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

Net (loss) gain on trading securities

 

137

 

 

 

(88

)

 

 

912

 

 

 

427

 

Loss on Sale of Property

 

-

 

 

 

-

 

 

 

(130

)

 

 

-

 

Interest and other expense

 

(32

)

 

 

(145

)

 

 

(256

)

 

 

(475

)

Other income (expense), net

 

105

 

 

 

(233

)

 

 

526

 

 

 

(48

)

Income before income taxes

 

2,004

 

 

 

3,604

 

 

 

10,967

 

 

 

12,972

 

Provision for income taxes

 

481

 

 

 

1,002

 

 

 

3,174

 

 

 

3,540

 

Net income

 

1,523

 

 

 

2,602

 

 

 

7,793

 

 

 

9,432

 

Cumulative preferred stock dividend

 

(19

)

 

 

(19

)

 

 

(76

)

 

 

(76

)

Net income attributable to common shareholders

$

1,504

 

 

$

2,583

 

 

$

7,717

 

 

$

9,356

 

 

 

 

 

 

 

 

Basic and diluted earnings per common share:

$

0.31

 

 

$

0.53

 

 

$

1.59

 

 

$

1.92

 

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, 2019 filed with the U.S. Securities and Exchange Commission on November 27, 2019.

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Year Ended

August 31,

2020

2019*

Operating activities:

 

 

 

Net income

$

7,793

 

 

$

9,432

 

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

 

 

 

Depreciation and amortization

 

1,224

 

 

 

1,047

 

Bad debt expense

 

72

 

 

 

340

 

Loss on sale of real property

 

130

 

 

 

 

Net gain on trading securities

 

(912

)

 

 

(427

)

(Increase) decrease in:

 

 

 

Trade accounts receivable

 

1,916

 

 

 

(5,718

)

Inventory

 

(2,286

)

 

 

(6,728

)

Prepaid expenses and other assets

 

(346

)

 

 

(3,012

)

Operating lease right-of-use assets

 

(11,512

)

 

 

 

Increase (decrease) in:

 

 

 

Trade accounts payable

 

(3,275

)

 

 

3,313

 

Accrued expenses and other current liabilities

 

(1,665

)

 

 

845

 

Operating lease liabilities

 

11,644

 

 

 

 

Net cash provided by (used in) operating activities

 

2,783

 

 

 

(908

)

Investing activities:

 

 

 

Purchase of property, equipment, and leasehold improvements

 

(6,705

)

 

 

(1,772

)

Proceeds from sale of real property

 

7,075

 

 

 

 

Sale of marketable securities, trading

 

1,417

 

 

 

1,400

 

Net change in liabilities for short sales of trading securities

 

2,261

 

 

 

(278

)

Net cash provided by (used in) investing activities

 

4,048

 

 

 

(650

)

Financing activities:

 

 

 

(Payments) borrowings on revolving credit facility, net

 

(1,014

)

 

 

3,153

 

Borrowings on Construction Loan

 

4,448

 

 

 

342

 

Repayments on long-term debt

 

(5,125

)

 

 

(247

)

Preferred stock dividend

 

(76

)

 

 

(76

)

Bank overdraft

 

(1,328

)

 

 

147

 

Net cash (used in) provided by financing activities

 

(3,095

)

 

 

3,319

 

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

 

(88

)

 

 

(52

)

Net increase in cash, cash equivalents, and restricted cash

 

3,648

 

 

 

1,709

 

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

 

5,347

 

 

 

3,638

 

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

$

8,995

 

 

$

5,347

 

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for interest

$

291

 

 

$

475

 

Cash paid for income taxes

$

3,405

 

 

$

3,107

 

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2019 filed with the U.S. Securities and Exchange Commission on November 27, 2019

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com