EACO - EACO Corporation Reports Record Annual Net Sales and Record 4th Quarter Net Sales

June, 30 2022 08:59 AM Eaco Corp

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

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



Three Months Ended August 31,

%


2021

2020

Change


(unaudited)

(unaudited)









Net sales

$66,132

$57,454

15.1%







Net income

$3,062

$1,523

101.1%







Basic and diluted earnings per common share

$0.63

$0.31

103.2%



Year Ended August 31,

%


2021

2020*

Change


(unaudited)











Net sales

$237,962

$225,245

5.6%







Net income

$8,387

$7,793

6.6%







Basic and diluted earnings per common share

$1.71

$1.59

7.5%

* 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.

The Company had 342 sales employees at August 31, 2021, a decrease of 31 or 8.3% 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 August 31, 2021, an increase of 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:

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,

August 31,


2021

2020*
ASSETS




Current Assets:




Cash and cash equivalents

$
4,455

$
6,079
Restricted cash


10


2,916
Trade accounts receivable, net


33,929


29,667
Inventory, net


40,448


39,545
Marketable securities, trading


3,741


1,368
Prepaid expenses and other current assets


6,780


5,094
Total current assets


89,363


84,669
Property, equipment and leasehold improvements, net


8,269


8,848
Operating lease right-of-use assets


11,084


12,810
Other assets, net


1,669


1,424
Total assets

$
110,385

$
107,751
LIABILITIES AND SHAREHOLDERS’ EQUITY




Current Liabilities:




Trade accounts payable

$
16,413

$
16,535
Accrued expenses and other current liabilities


10,964


6,632
Liability for short sales of trading securities


–


2,916
Current portion of operating lease liabilities


3,096


2,653
Current portion of long-term debt


113


5,100
Total current liabilities


30,586


33,836
Non-current Liabilities:




Long-term debt


4,585


4,807
Operating lease liabilities


8,092


10,289
Total liabilities


43,263


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


780


788
Retained earnings


53,914


45,603
Total shareholders’ equity


67,122


58,819
Total liabilities and shareholders’ equity

$
110,385

$
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 August 31,

Year Ended August 31,


2021

2020*

2021

2020*
Revenues

$
66,132


$
57,454


$
237,962


$
225,245

Cost of revenues


51,673



42,626



177,177



163,868

Gross margin


14,459



14,828



60,785



61,377

Operating expenses:








Selling, general and administrative expenses


10,051



12,929



48,072



50,936

Income from operations


4,408



1,899



12,713



10,441

Other (expense) income:








Net (loss) gain on trading securities


56



137



(807
)


912

Loss on Sale of Property


-



-



-



(130
)
Interest and other expense


(52
)


(32
)


(226
)


(256
)
Other income (expense), net


4



105



(1,033
)


526

Income before income taxes


4,412



2,004



11,680



10,967

Provision for income taxes


1,350



481



3,293



3,174

Net income


3,062



1,523



8,387



7,793

Cumulative preferred stock dividend


(19
)


(19
)


(76
)


(76
)
Net income attributable to common shareholders

$
3,043


$
1,504


$
8,311


$
7,717










Basic and diluted earnings per common share:

$
0.63


$
0.31


$
1.71


$
1.59

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, 2020 filed with the U.S. Securities and Exchange Commission on November 30, 2020.

EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)





Year Ended August 31,


2021

2020*
Operating activities:




Net income

$
8,387


$
7,793

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




Depreciation and amortization


1,525



1,224

Bad debt expense


89



72

Loss on sale of real property


–



130

Net gain on trading securities


807



(912
)
(Increase) decrease in:




Trade accounts receivable


(4,351
)


1,916

Inventory


(903
)


(2,286
)
Prepaid expenses and other assets


(1,950
)


(346
)
Operating lease right-of-use assets


1,735



(11,512
)
Trade accounts payable


901



(3,275
)
Accrued expenses and other current liabilities


4,332



(1,665
)
Operating lease liabilities


(1,754
)


11,644

Net cash provided by (used in) operating activities


8,818



2,783

Investing activities:




Purchase of property, equipment, and leasehold improvements


(946
)


(6,705
)
Proceeds from sale of real property


–



7,075

Sale of marketable securities, trading


(3,180
)


1,417

Net change in liabilities for short sales of trading securities


(2,916
)


2,261

Net cash provided by (used in) investing activities


(7,042
)


4,048

Financing activities:




(Payments) borrowings on revolving credit facility, net


(5,100
)


(1,014
)
Borrowings on Construction Loan


–



4,448

Repayments on long-term debt


(109
)


(5,125
)
Preferred stock dividend


(76
)


(76
)
Bank overdraft


(1,023
)


(1,328
)
Net cash (used in) provided by financing activities


(6,308
)


(3,095
)
Effect of foreign currency exchange rate changes on cash and cash equivalents


(8
)


(88
)
Net increase in cash, cash equivalents, and restricted cash


(4,540
)


3,648

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


8,995



5,347

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

$
4,455


$
8,995

Supplemental disclosures of cash flow information:




Cash paid for interest

$
227


$
291

Cash paid for income taxes

$
2,780


$
3,405

* 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

View source version on businesswire.com: https://www.businesswire.com/news/home/20220630005280/en/

Michael Narikawa
EACO Corporation
(714) 876-2490

Company Name:	Eaco Corp
Stock Symbol:	EACO
Market:	OTC
Website:	eacocorp.com

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