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Press release content from Business Wire. The AP news staff was not involved in its creation.

EACO Corporation Reports Record Quarter Net Sales and Record Quarter Net Income

June 29, 2021 GMT

ANAHEIM, Calif.--(BUSINESS WIRE)--Jun 29, 2021--

EACO Corporation (OTCMKTS:EACO) today reported the results for its quarter ended May 31, 2021.

Net sales, net income and earnings per share were as follows for the three months ended May 31, 2021 (dollars in thousands, except per share information):

 

Three Months Ended
May 31,

%

 

2021

2020

Change

 

(unaudited)

(unaudited)

 

 

 

 

Net sales

$62,676

$54,923

14.1%

 

 

 

 

Net income

$3,080

$1,755

75.5%

 

 

 

 

Basic and diluted earnings per common share

$0.63

$0.36

75.0%

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The Company had 349 sales employees at May 31, 2021, a decrease of 8 or 2.2% from the prior year quarter. The Company’s sales force is divided into Sales focus teams (SFT’s). The Company had 103 SFT’s as of May 31, 2021, an increase of 5 or 5% 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:

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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, the impact of products offered by our competitors from time to time, and the impact of the Covid-19 pandemic. 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)

 

May 31,

 

August 31,

2021

2020*

ASSETS

 

 

 

 

Current Assets:

Cash and cash equivalents

$

2,425

$

6,079

Restricted cash

10

2,916

Trade accounts receivable, net

 

32,844

 

29,667

Inventory, net

40,406

39,545

Marketable securities, trading

 

4,924

 

1,368

Prepaid expenses and other current assets

3,546

5,094

Total current assets

 

84,155

 

84,669

Non-current Assets:

 

 

 

 

Property, equipment and leasehold improvements, net

8,469

8,848

Other assets:

 

 

 

 

Operating lease right-of-use assets

 

11,410

 

12,810

Other assets, net

 

1,404

 

1,424

Total assets

$

105,438

$

107,751

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

Current Liabilities:

Trade accounts payable

$

19,574

$

16,535

Accrued expenses and other current liabilities

5,341

6,632

Liability for short sales of trading securities

2,916

Current portion of operating lease liabilities

 

2,501

 

2,653

Current portion of long-term debt

 

116

 

5,100

Total current liabilities

 

27,532

 

33,836

Non-current Liabilities:

Long-term debt

4,609

4,807

Operating lease liabilities

 

8,987

 

10,289

Total liabilities

 

41,128

 

48,932

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

1,011

788

Retained earnings

 

50,871

 

45,603

Total shareholders’ equity

64,310

58,819

Total liabilities and shareholders’ equity

$

105,438

$

107,751

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2020 filed with the U.S. Securities and Exchange Commission on November 30, 2020.

 

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Income

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

(unaudited)

 

 

 

Three Months Ended
May 31,

 

 

Nine Months Ended
May 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net sales

$

62,676

 

$

54,923

 

$

171,830

 

$

167,791

 

Cost of sales

 

45,826

 

 

40,069

 

125,504

 

 

121,242

 

Gross margin

 

16,850

 

 

14,854

 

 

46,326

 

 

46,549

 

Operating expenses:

 

 

Selling, general and administrative expenses

12,800

 

 

12,732

 

38,021

 

 

38,007

 

Income from operations

 

4,050

 

 

2,122

 

 

8,305

 

 

8,452

 

 

Other income (expense):

Net gain on trading securities

 

196

 

 

384

 

 

(863

)

 

775

 

Loss on sale of property

 

 

 

(28

)

 

 

 

(130

)

Interest and other (expense)

(45

)

 

(40

)

(174

)

 

(224

)

Other income, net

 

151

 

 

316

 

 

(1,037

)

 

421

 

Income before income taxes

4,201

 

2,438

 

7,268

 

8,963

 

Provision for income taxes

 

1,121

 

 

683

 

 

1,943

 

 

2,693

 

Net income

3,080

 

1,755

 

5,325

 

6,270

 

Cumulative preferred stock dividend

 

(19

)

 

(19

)

 

(57

)

 

(57

)

Net income attributable to common shareholders

$

3,061

 

$

1,736

 

$

5,268

 

$

6,213

 

Basic and diluted earnings per share:

$

0.63

 

$

0.36

 

$

1.08

 

$

1.28

 

Basic and diluted weighted average common shares outstanding

4,861,590

 

4,861,590

 

4,861,590

 

4,861,590

 

   

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

   
 

Nine Months Ended
May 31,

 

2021

2020

Operating activities:

 

 

 

Net income

 

$

5,325

 

$

6,270

 

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

 

 

 

Depreciation and amortization

 

1,136

 

860

 

Bad debt expense

 

62

 

 

 

33

 

Loss on sale of real property

 

 

 

 

 

130

 

Net loss (gain) on trading securities

 

863

 

(775

)

(Increase) decrease in:

 

 

 

Trade accounts receivable

 

(3,239

)

2,971

 

Inventory

 

(861

)

 

 

(4,538

)

Prepaid expenses and other assets

 

1,568

 

51

 

Operating lease right-of-use assets

 

 

1,400

 

 

 

(12,428

)

Increase (decrease) in:

 

 

 

Trade accounts payable

 

2,895

 

(3,781

)

Accrued expenses and other current liabilities

 

 

(1,291

)

 

 

(2,309

)

Operating lease liabilities

 

(1,454

)

 

 

12,562

 

Net cash provided by (used in) operating activities

 

6,404

 

 

 

(954

)

Investing activities:

 

Purchase of property, equipment, and leasehold improvements

 

(757

)

 

 

(6,032

)

Proceeds from sale of real property

 

 

 

 

 

7,075

 

Net (purchases) sales of marketable securities, trading

 

(4,419

)

2,648

 

Net change in liabilities for short sales of trading securities

 

(2,916

)

 

 

(586

)

Net cash (used in) provided by investing activities

 

(8,092

)

 

 

3,105

 

Financing activities:

 

(Repayment) borrowings on revolving credit facility, net

 

(5,100

)

 

 

1,042

 

Borrowings on construction loan

 

 

 

 

 

4,545

 

Repayments on long-term debt

 

 

(82

)

 

 

(5,125

)

Preferred stock dividend

 

(57

)

(57

)

Net change in bank overdraft

 

144

 

 

 

(433

)

Net cash (used in) provided by financing activities

 

(5,095

)

 

 

(28

)

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

 

223

 

 

(219

)

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

 

(6,560

)

 

 

1,904

 

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

 

8,995

 

 

5,347

 

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

 

$

2,435

 

 

$

7,251

 

Supplemental disclosures of cash flow information:

 

Cash paid for interest

 

$

172

 

 

$

246

 

Cash paid for income taxes

 

$

2,509

 

$

3,405

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20210629006013/en/

CONTACT: Marta Arciniega

EACO Corporation

(714) 876-2490

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: SEMICONDUCTOR HARDWARE MANUFACTURING TECHNOLOGY ENGINEERING

SOURCE: EACO Corporation

Copyright Business Wire 2021.

PUB: 06/29/2021 04:01 PM/DISC: 06/29/2021 04:02 PM

http://www.businesswire.com/news/home/20210629006013/en