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EACO Corporation Reports Record Quarter Net Sales and Record Quarter Net Income
ANAHEIM, Calif.--(BUSINESS WIRE)--EACO Corporation (OTCMKTS:EACO) today reported the results for its quarter ended May 31, 2025.
EACO Corporation reports Record Quarter net sales and Record Quarter income.
Share
Net sales, net income and earnings per share were as follows for the three months ended May 31, 2025 and 2024 (dollars in thousands, except per share information):
The Company had 435 sales employees at May 31, 2025, an increase of 36 employees or 9%, from the prior year quarter. The Company's sales force is divided into sales focus teams (SFT's). The Company had 114 SFT's as of May 31, 2025, four more than the prior year quarter. Management anticipates continued growth in both our headcount and SFT's in fiscal year 2025. 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:
This press release contains certain forward-looking statements within the meaning of the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1955, as amended. These forward-looking statements include, without limitation, statements related to our headcount expansion, growth in market share, and other statement that is not historical information. 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 as well as increases to international tariffs. 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
(unaudited)
May 31,
2025
2024*
ASSETS
Current Assets:
Cash and cash equivalents
$
3,613
$
843
Restricted cash
10
10
Trade accounts receivable, net
59,875
53,272
Inventory, net
82,780
69,602
Marketable securities, trading
22,063
14,748
Prepaid expenses and other current assets
3,491
3,526
Total current assets
171,832
142,001
Non-current Assets:
Property, equipment and leasehold improvements, net
34,368
35,061
Operating lease right-of-use assets
6,739
7,513
Other assets, net
3,989
3,963
Total assets
$
216,928
$
188,538
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable
$
37,067
$
28,054
Accrued expenses and other current liabilities
21,494
24,910
Current portion of long-term debt
131
129
Current portion of operating lease liabilities
2,674
2,708
Total current liabilities
61,366
55,801
Non-current Liabilities:
Line of Credit
491
–
Long-term debt
4,116
4,214
Operating lease liabilities
4,222
4,892
Total liabilities
70,195
64,907
Commitments and Contingencies Note 9
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
66
73
Retained earnings
134,239
111,130
Total shareholders' equity
146,733
123,631
Total liabilities and shareholders' equity
$
216,928
$
188,538
* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2024 filed with the U.S. Securities and Exchange Commission on November 29, 2024.
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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,
2025
2024
2025
2024
Net sales
$
111,410
$
96,121
$
305,462
$
259,711
Cost of sales
77,337
68,193
214,100
183,184
Gross margin
34,073
27,928
91,362
76,527
Operating expenses:
Selling, general and administrative expenses
21,627
26,314
60,979
61,129
Impairment on termination of lease
-
–
-
3,906
Income from operations
12,446
1,614
30,383
11,492
Other income (expense):
Net gain (loss) on trading securities
277
(24)
761
(45)
Interest and other (expense)
(46)
(44)
(143)
(128)
Other income (expense), net
231
(68)
618
(173)
Income before income taxes
12,677
1,546
31,001
11,319
Provision for income taxes
3,162
362
7,835
2,858
Net income
9,515
1,184
23,166
8,461
Cumulative preferred stock dividend
(19)
(19)
(57)
(57)
Net income attributable to common shareholders
$
9,496
$
1,165
$
23,109
$
8,404
Basic earnings per share:
$
1.95
$
0.24
$
4.75
$
1.73
Diluted earnings per share:
$
1.94
$
0.24
$
4.73
$
1.73
Basic weighted average common shares outstanding
4,861,590
4,861,590
4,861,590
4,861,590
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EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
May 31,
2025
2024
Operating activities:
Net income
$
23,166
$
8,461
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization
1,268
1,247
Bad debt expense
203
359
Deferred tax provision
(18)
51
Net unrealized (gain) loss on trading securities
(205)
357
Impairment on termination of lease
–
3,906
Increase (decrease) in cash flow from change in:
Trade accounts receivable
(6,806)
(7,764)
Inventory
(13,178)
(11,139)
Prepaid expenses and other assets
27
98
Operating lease right-of-use assets
774
5,490
Trade accounts payable
6,268
8,043
Accrued expenses and other current liabilities
(3,416)
785
Operating lease liabilities
(704)
(5,501)
Net cash provided by operating activities
7,379
4,393
Investing activities:
Purchase of property, equipment, and leasehold improvements
(575)
(32,527)
Net (purchases) sales of marketable securities, trading
(7,110)
17,466
Net cash used in investing activities
(7,685)
(15,061)
Financing activities:
Borrowings on revolving credit facility
491
–
Repayments on long-term debt
(96)
(94)
Preferred stock dividend
(57)
(57)
Bank overdraft
2,745
3,066
Net cash provided by financing activities
3,083
2,915
Effect of foreign currency exchange rate changes on cash and cash equivalents
(7)
(68)
Net increase (decrease) in cash, cash equivalents, and restricted cash
2,770
(7,821)
Cash, cash equivalents, and restricted cash - beginning of period
853
8,568
Cash, cash equivalents, and restricted cash - end of period
$
3,623
$
747
Supplemental disclosures of cash flow information:
Cash paid for interest
$
143
$
145
Cash paid for income taxes
$
9,213
$
8,276
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