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Eaco Corporation Reports Record Annual Net Sales, Annual Net Income, Quarterly Net Sales and 4th Quarter Net Income

October 23, 2019

ANAHEIM, Calif.--(BUSINESS WIRE)--Oct 23, 2019--

EACO Corporation (OTCQB:EACO) today reported the results for its year ended August 31, 2019.

Net sales, net income and earnings per share were as follows for the three months and year ended August 31, 2019 (dollars in thousands, except per share information):

 

Three Months Ended August 31,

 

%

 

2019

 

2018

 

Change

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

Net sales

$60,056

 

$54,349

 

10.5%

 

 

 

 

 

 

Net income

$2,602

 

$2,181

 

19.3%

 

 

 

 

 

 

Basic and diluted earnings per common share

$0.53

 

$0.44

 

20.5%

 

 

 

 

 

 

Year Ended August 31,

 

%

 

2019

 

2018*

 

Change

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

Net sales

$221,241

 

$193,284

 

14.5%

 

 

 

 

 

 

Net income

$9,432

 

$6,949

 

35.7%

 

 

 

 

 

 

Basic and diluted earnings per common share

$1.92

 

$1.41

 

36.2%

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2018 filed with the U.S. Securities and Exchange Commission on November 28, 2018.

The Company had 347 sales employees at August 31, 2019, an increase of 11 or 3%, from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 98 SFT’s as of August 31, 2019 an increase of 2 from the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2020. The Company believes it continues to gain market share through its local presence business model, increasing quarterly net sales and net income by 10.5% and 19.3% respectively when compared to the prior year quarter.

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,

2019

 

2018*

ASSETS

 

 

 

 

 

Current Assets:

 

Cash and cash equivalents

$

4,692

 

$

2,705

Restricted cash

655

 

933

Trade accounts receivable, net

 

30,799

 

 

26,277

Inventory, net

37,259

 

30,531

Marketable securities, trading

 

1,873

 

 

2,846

Prepaid expenses and other current assets

4,234

 

1,590

Total current assets

 

79,512

 

 

64,882

Non-current Assets:

 

Property, equipment and leasehold improvements, net

10,572

 

9,847

Other assets

 

1,938

 

 

1,570

Total assets

$

92,022

 

$

76,299

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current Liabilities:

 

Trade accounts payable

$

21,138

 

$

17,678

Accrued expenses and other current liabilities

7,441

 

7,452

Liability for short sales of trading securities

655

 

933

Current portion of long-term debt

 

5,484

 

 

146

Total current liabilities

 

34,718

 

 

26,209

Non-current Liabilities:

 

Long-term debt

6,114

 

8,204

Total liabilities

 

40,832

 

 

34,413

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

876

 

928

Retained earnings

 

37,886

 

 

28,530

Total shareholders’ equity

51,190

 

41,886

Total liabilities and shareholders’ equity

$

92,022

 

$

76,299

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2018 filed with the U.S. Securities and Exchange Commission on November 28, 2018.

 

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,

 

 

 

2019

 

 

 

2018

 

 

2019

 

 

 

2018

 

Revenues

 

$

60,056

 

 

$

54,349

 

 

$

221,241

 

 

$

193,284

 

Cost of revenues

 

 

43,569

 

 

39,024

 

 

160,008

 

 

138,255

 

Gross margin

 

 

16,487

 

 

15,325

 

 

61,233

 

 

55,029

 

Operating expenses:

    

Selling, general and administrative expenses

 

12,650

 

 

12,245

 

 

48,213

 

 

44,705

 

Income from operations

 

 

3,837

 

 

3,080

 

 

13,020

 

 

10,324

 

   

 

 

 

Other (expense) income:

    

Net (loss) gain on trading securities

 

 

(88

)

 

86

 

 

427

 

 

273

 

Interest and other expense

 

(145

)

 

(124

)

 

(475

)

 

(477

)

Other expense, net

 

 

(233

)

 

(38

)

 

(48

)

 

(204

)

Income before income taxes

 

3,604

 

 

3,042

 

 

12,972

 

 

10,120

 

Provision for income taxes

 

 

1,002

 

 

861

 

 

3,540

 

 

3,171

 

Net income

 

 

2,602

 

 

2,181

 

 

9,432

 

 

6,949

 

Cumulative preferred stock dividend

 

(19

)

 

(19

)

 

(76

)

 

(76

)

Net income attributable to common shareholders

 

$

2,583

 

 

$

2,162

 

 

$

9,356

 

 

$

6,873

 

     

Basic and diluted earnings per common share:

 

$

0.53

 

 

$

0.44

 

 

$

1.92

 

 

$

1.41

 

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, 2018 filed with the U.S. Securities and Exchange Commission on November 28, 2018.

 

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

  
 

Year Ended

August 31,

 

2019

 

 

2018*

Operating activities:

 

 

 

 

Net income

 

$

9,432

 

 

$

6,949

 

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

 

 

 

 

Depreciation and amortization

 

1,047

 

 

1,009

 

Bad debt expense

 

340

 

 

 

 

106

 

Change in inventory reserve

 

151

 

 

(156

)

Net gain on trading securities

 

(427

)

 

(273

)

(Increase) decrease in:

 

 

 

 

Trade accounts receivable

 

(4,862

)

 

(5,044

)

Inventory

 

(6,879

)

 

 

 

(3,888

)

Prepaid expenses and other assets

 

(3,012

)

 

(655

)

Increase (decrease) in:

 

 

 

 

Trade accounts payable

 

3,313

 

 

4,009

 

Accrued expenses and other current liabilities

 

(11

)

 

 

 

2,914

 

Net cash (used in) provided by operating activities

 

(908

)

 

 

 

4,971

 

Investing activities:

  

Purchase of property, equipment, and leasehold improvements

 

(1,772

)

 

 

 

(1,600

)

Sale (purchase) of marketable securities, trading

 

1,400

 

 

(977

)

Net change in liabilities for short sales of trading securities

 

(278

)

 

 

 

226

 

Net cash used in investing activities

 

(650

)

 

 

 

(2,351

)

Financing activities:

  

Borrowings (payments) on revolving credit facility, net

 

3,495

 

 

 

 

(3,853

)

Repayments on long-term debt

 

 

(247

)

 

 

 

(128

)

Preferred stock dividend

 

(76

)

 

(76

)

Bank overdraft

 

147

 

 

 

 

317

 

Net cash provided by (used in) financing activities

 

3,319

 

 

 

 

(3,740

)

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

 

(52

)

 

 

181

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

1,709

 

 

 

 

(939

)

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

 

3,638

 

 

 

4,577

 

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

 

$

5,347

 

 

 

$

3,638

 

Supplemental disclosures of cash flow information:

  

Cash paid for interest

 

$

475

 

 

 

$

466

 

Cash paid for income taxes

 

$

3,107

 

 

$

2,055

 

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2018 filed with the U.S. Securities and Exchange Commission on November 28, 2018.

View source version on businesswire.com:https://www.businesswire.com/news/home/20191023005750/en/

CONTACT: Marta Arciniega

EACO Corporation

(714) 876-2490

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: TECHNOLOGY OTHER MANUFACTURING OTHER TECHNOLOGY MANUFACTURING

SOURCE: EACO Corporation

Copyright Business Wire 2019.

PUB: 10/23/2019 04:01 PM/DISC: 10/23/2019 04:01 PM

http://www.businesswire.com/news/home/20191023005750/en