AP NEWS
ADVERTISEMENT
Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

EACO Corporation Reports 2nd Quarter Net Sales and Net Income

March 30, 2021 GMT

ANAHEIM, Calif.--(BUSINESS WIRE)--Mar 30, 2021--

EACO Corporation (OTCMKTS:EACO) today reported the results for its quarter ended February 28, 2021.

Net sales, net income and earnings per share were as follows for the three months ended February 28, 2021 (dollars in thousands, except per share information):

 

Three Months Ended

 

February 28,

February 29,

%

 

2021

2020

Change

 

(unaudited)

(unaudited)

Net sales

$

55,751

$

56,828

(1.9)%

 

 

 

 

 

 

 

 

Net income

$

1,394

$

2,598

(46.3)%

 

 

 

 

 

 

 

 

Basic and diluted earnings per common share

$

0.28

$

0.53

(47.2)%

The Company had 361 sales employees at February 28, 2021, an increase of 10 or 3%, 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 February 28, 2021, two more than 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.

ADVERTISEMENT

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, 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)

 

February 28,

 

August 31,

2021

2020*

ASSETS

 

 

 

 

Current Assets:

Cash and cash equivalents

$

2,817

$

6,079

Restricted cash

1,304

2,916

Trade accounts receivable, net

 

28,746

 

29,667

Inventory, net

40,180

39,545

Marketable securities, trading

 

4,155

 

1,368

Prepaid expenses and other current assets

3,818

5,094

Total current assets

 

82,695

 

84,669

Non-current Assets:

 

 

 

 

Property, equipment and leasehold improvements, net

8,387

8,848

Other assets:

 

 

 

 

Operating lease right-of-use assets

 

11,963

 

12,810

Other assets, net

 

1,402

 

1,424

Total assets

$

102,772

$

107,751

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

Current Liabilities:

Trade accounts payable

$

19,622

$

16,535

Accrued expenses and other current liabilities

4,053

6,632

Liability for short sales of trading securities

1,294

2,916

Current portion of operating lease liabilities

 

2,609

 

2,653

Current portion of long-term debt

 

116

 

5,100

Total current liabilities

 

27,694

 

33,836

Non-current Liabilities:

Long-term debt

4,638

4,807

Operating lease liabilities

 

9,405

 

10,289

Total liabilities

 

41,737

 

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

797

788

Retained earnings

 

47,810

 

45,603

Total shareholders’ equity

61,065

58,819

Total liabilities and shareholders’ equity

$

102,772

$

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

Six Months Ended

 

February 28,

 

February 29,

February 28,

 

February 29,

 

 

2021

 

 

2020

 

2021

 

 

2020

 

Net sales

$

55,751

 

$

56,828

 

$

109,154

 

$

112,868

 

Cost of sales

 

40,727

 

 

41,029

 

79,678

 

 

81,173

 

Gross margin

 

15,024

 

 

15,799

 

 

29,476

 

 

31,695

 

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative expenses

12,540

 

 

12,673

 

25,221

 

 

25,275

 

Income from operations

 

2,484

 

 

3,179

 

 

4,255

 

 

6,420

 

 

Other income (expense):

Net (loss) gain on trading securities

 

(506

)

 

471

 

 

(1,059

)

 

391

 

Loss on sale of property

 

 

 

 

 

 

 

(102

)

Interest and other (expense)

(60

)

 

(65

)

(129

)

 

(184

)

Other (expense) income, net

 

(566

)

 

406

 

 

(1,188

)

 

105

 

Income before income taxes

1,918

 

3,532

 

3,067

 

6,525

 

Provision for income taxes

 

524

 

 

934

 

 

822

 

 

2,010

 

Net income

1,394

 

2,598

 

2,245

 

4,515

 

Cumulative preferred stock dividend

 

(19

)

 

(19

)

 

(38

)

 

(38

)

Net income attributable to common shareholders

$

1,375

 

$

2,579

 

$

2,207

 

$

4,477

 

Basic and diluted earnings per share:

$

0.28

 

$

0.53

 

$

0.45

 

$

0.92

 

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)

 

Six Months Ended

February 28,

2021

February 29,

2020

Operating activities:

 

 

Net income

$

2,245

 

$

4,515

 

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

 

 

Depreciation and amortization

751

 

506

 

Bad debt expense

55

 

 

 

14

 

Loss on sale of real property

 

 

 

 

102

 

Net (loss) gain on trading securities

1,059

 

(391

)

(Increase) decrease in:

 

 

Trade accounts receivable

866

 

931

 

Inventory

(635

)

 

 

(2,852

)

Prepaid expenses and other assets

1,279

 

(958

)

Operating lease right-of-use assets

 

856

 

 

 

 

Increase (decrease) in:

 

 

Trade accounts payable

561

 

(2,243

)

Accrued expenses and other current liabilities

 

(2,579

)

 

 

(3,245

)

Operating lease liabilities

(928

)

 

 

 

Net cash provided by (used in) operating activities

3,530

 

 

 

(3,621

)

Investing activities:

Purchase of property, equipment, and leasehold improvements

(290

)

 

 

(4,591

)

Proceeds from sale of real property

 

 

 

 

7,075

 

Net (purchases) sales of marketable securities, trading

(3,846

)

1,370

 

Net change in liabilities for short sales of trading securities

(1,622

)

 

 

1,731

 

Net cash (used in) provided by investing activities

(5,758

)

 

 

5,585

 

Financing activities:

(Repayment) borrowings on revolving credit facility, net

(5,100

)

 

 

3,192

 

Borrowings on construction loan

 

 

 

 

3,342

 

Repayments on long-term debt

 

(53

)

 

 

(5,125

)

Preferred stock dividend

(38

)

(38

)

Net change in bank overdraft

2,526

 

 

 

(147

)

Net cash (used in) provided by financing activities

(2,665

)

 

 

1,224

 

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

9

 

 

(249

)

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

(4,884

)

 

 

2,939

 

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

8,995

 

 

5,347

 

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

$

4,111

 

 

$

8,286

 

Supplemental disclosures of cash flow information:

Cash paid for interest

$

121

 

 

$

17

 

Cash paid for income taxes

$

2,509

 

$

3,395

 

 

ADVERTISEMENT

View source version on businesswire.com:https://www.businesswire.com/news/home/20210330005977/en/

CONTACT: Marta Arciniega

EACO Corporation

(714) 876-2490

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: SEMICONDUCTOR HARDWARE MANUFACTURING TECHNOLOGY ENGINEERING

SOURCE: EACO Corporation

Copyright Business Wire 2021.

PUB: 03/30/2021 04:01 PM/DISC: 03/30/2021 04:01 PM

http://www.businesswire.com/news/home/20210330005977/en