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

Rhea-AI Summary

EACO Corporation (OTC Pink:EACO) announced substantial growth in its financial performance for the year ended August 31, 2022. The company reported net sales of $292,562,000, a 22.9% increase from the previous year, alongside a significant rise in net income to $21,308,000, marking a 154.1% growth. Earnings per share also surged by 155.6% to $4.37. Despite a modest increase in sales staff to 345, EACO anticipates further growth in fiscal year 2023, aiming to enhance its market presence.

Positive

• Net sales increased by 22.9% to $292,562,000.
• Net income rose by 154.1% to $21,308,000.
• Earnings per share increased by 155.6% to $4.37.
• Continued growth in sales workforce observed.

Negative

• None.

ANAHEIM, Calif.--(BUSINESS WIRE)-- EACO Corporation (OTC Pink:EACO) today reported the results for its year ended August 31, 2022.

Net sales, net income and earnings per share were as follows for the year ended August 31, 2022 (dollars in thousands, except per share information):

	Three Months Ended August 31,			%
	2022	2021		Change
	(unaudited)	(unaudited)
Net sales	$84,356	$66,132		27.6%
Net income	$5,785	$3,062		88.9%
Basic and diluted earnings per common share	$1.19	$0.63		88.9%

	Year Ended August 31,			%
	2022	2021*		Change
	(unaudited)
Net sales	$292,562	$237,962		22.9%
Net income	$21,308	$8,387		154.1%
Basic and diluted earnings per common share	$4.37	$1.71		155.6%

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2021 filed with the U.S. Securities and Exchange Commission on July 6, 2022.

The Company had 345 sales employees at August 31, 2022, an increase of 5 or 1% from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 101 SFT’s as of August 31, 2022, an increase of 1 from the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2023. 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,
		2022			2021*
ASSETS
Current Assets:
Cash and cash equivalents	$	17,386		$	4,455
Restricted cash		10			10
Trade accounts receivable, net		44,637			33,929
Inventory, net		48,808			40,448
Marketable securities, trading		3,925			3,741
Prepaid expenses and other current assets		5,008			6,780
Total current assets		119,774			89,363
Non-current Assets:
Property, equipment and leasehold improvements, net		8,479			8,269
Operating lease right-of-use assets		10,389			11,084
Other assets, net		1,039			1,669
Total assets	$	139,681		$	110,385
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	$	21,762		$	16,413
Accrued expenses and other current liabilities		15,020			10,964
Current portion of operating lease liabilities		3,375			3,096
Current portion of long-term debt		119			113
Total current liabilities		40,276			30,586
Non-current Liabilities:
Long-term debt		4,465			4,585
Operating lease liabilities		7,192			8,092
Total liabilities		51,933			43,263
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		174			780
Retained earnings		75,146			53,914
Total shareholders’ equity		87,748			67,122
Total liabilities and shareholders’ equity	$	139,681		$	110,385

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2021 filed with the U.S. Securities and Exchange Commission on July 6, 2022.

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,
		2022			2021			2022			2021*
Revenues	$	84,356		$	66,132		$	292,562		$	237,962
Cost of revenues		58,747			51,673			209,060			177,177
Gross margin		25,609			14,459			83,502			60,785
Operating expenses:
Selling, general and administrative expenses		17,089			10,051			53,970			48,072
Income from operations		8,520			4,408			29,532			12,713
Other (expense) income:
Net (loss) gain on trading securities		(348	)		56			(213	)		(807	)
Interest and other expense		(48	)		(52	)		(201	)		(226	)
Other income (expense), net		(396	)		4			(414	)		(1,033	)
Income before income taxes		8,124			4,412			29,118			11,680
Provision for income taxes		2,339			1,350			7,810			3,293
Net income		5,785			3,062			21,308			8,387
Cumulative preferred stock dividend		(19	)		(19	)		(76	)		(76	)
Net income attributable to common shareholders	$	5,766		$	3,043		$	21,232		$	8,311
Basic and diluted earnings per common share:	$	1.19		$	0.63		$	4.37		$	1.71
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, 2021 filed with the U.S. Securities and Exchange Commission on July 6, 2022.

EACO Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
	Year Ended August 31,
	2022				2021*
Operating activities:
Net income	$	21,308			$	8,387
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,491				1,525
Bad debt expense		38				89
Loss on sale of property		–				–
Net loss on trading securities		213				807
(Increase) decrease in:
Trade accounts receivable		(10,746	)			(4,351	)
Inventory		(8,360	)			(903	)
Prepaid expenses and other assets		2,402				(1,950	)
Operating lease right-of-use assets		695				1,735
Trade accounts payable		6,390				901
Accrued expenses and other current liabilities		4,056				4,332
Operating lease liabilities		(621	)			(1,754	)
Net cash provided by operating activities		16,866				8,818
Investing activities:
Additions to property, equipment, and leasehold improvements		(1,701	)			(946	)
Sale of marketable securities, trading		(397	)			(3,180	)
Net change in liabilities for short sales of trading securities		–				(2,916	)
Net cash (used in) investing activities		(2,098	)			(7,042	)
Financing activities:
Payments on revolving credit facility, net		–				(5,100	)
Repayments on long-term debt		(114	)			(109	)
Preferred stock dividend		(76	)			(76	)
Bank overdraft		(1,041	)			(1,023	)
Net cash (used in) financing activities		(1,231	)			(6,308	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(606	)			(8	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		12,931				(4,540	)
Cash, cash equivalents, and restricted cash - beginning of period		4,465				8,995
Cash, cash equivalents, and restricted cash - end of period	$	17,396			$	4,455
Supplemental disclosures of cash flow information:
Cash paid for interest	$	205			$	227
Cash paid for income taxes	$	3,222			$	2,780

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2021 filed with the U.S. Securities and Exchange Commission on July 6, 2022.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005940/en/

Michael Narikawa

EACO Corporation

(714) 876-2490

Source: EACO Corporation

FAQ

What are EACO Corporation's net sales for the year ended August 31, 2022?

EACO Corporation reported net sales of $292,562,000 for the year ended August 31, 2022.

How much did EACO Corporation's net income increase for the year ended August 31, 2022?

EACO Corporation's net income increased by 154.1% to $21,308,000 for the year ended August 31, 2022.

What was EACO Corporation's earnings per share for the year ended August 31, 2022?

EACO Corporation reported basic and diluted earnings per share of $4.37 for the year ended August 31, 2022.

How many sales employees did EACO Corporation have as of August 31, 2022?

EACO Corporation had 345 sales employees as of August 31, 2022.

What growth does EACO Corporation anticipate in fiscal year 2023?

EACO Corporation anticipates continued growth in both headcount and sales focus teams in fiscal year 2023.