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EACO Corporation Reports Record Quarterly Net Sales
[October 22, 2014]

EACO Corporation Reports Record Quarterly Net Sales


ANAHEIM, Calif. --(Business Wire)--

EACO Corporation (OTCQB:EACO) today reported the results for its quarter ended August 31, 2014.

Net sales, net income and earnings per share were as follows for the twelve and three months ended August 31, 2014 (dollars in thousands, except per share information):





 
      Twelve Months Ended August 31,       %
2014       2013 Change
(unaudited)
 
Net sales $ 134,747 $ 120,432 11.9 %
 
Net income $ 5,611 $ 2,552 119.9 %
 
Basic and diluted earnings per common share $ 1.14 $ 0.51 123.5 %
 
 
Three Months Ended August 31, %
2014 2013 Change
(unaudited)
 
Net sales $ 36,537 $ 31,284 16.8 %
 
Net income $ 2,141 $ 294 628.2 %
 
Basic and diluted earnings per common share $ 0.44 $ 0.06 633.3 %
 

The Company's productivity gain from operations contributed to the Company's 12% net sales growth at the fiscal year ended August 31, 2014, while the sales team increased to 329 compared to 328 employees as of August 31, 2014 and August 31, 2013 respectively. The sales force is divided into Sales Focus Teams (SFT's.) The Company had 94 SFT's as of August 31, 2014, an increase of 1 from 93 SFT's on August 31, 2013 with an average size being 3.2 employees per SFT. The Company continued to gain market share through its local presence business model. Net income for the three months ended August 31, 2014 includes non-operating items relating to the sale of the Sylmar properties and gain on workers compensation settlement. Additionally, the net income for the fiscal year ended August 31, 2014 includes the sale of the Orange (News - Alert) Park property.

 

EACO Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share information)

(unaudited)

 
      August 31,       August 31,
2014 2013*
ASSETS
Current Assets:
Cash and cash equivalents $ 3,480 $ 1,507
Restricted cash, current portion 642 --
Trade accounts receivable, net 17,795 14,438
Inventory, net 14,863 14,272
Marketable securities, trading 73 1,395
Assets held for sale -- 7,988
Prepaid expenses and other current assets   1104   619
Total current assets 37,957 40,219
 
Non-current Assets:
Restricted cash, non-current 322 548
Equipment and leasehold improvements, net 1,603 1,396
Other assets   1,001   2,317
Total assets $ 40,883 $ 44,480
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 11,192 $ 9,315
Accrued expenses and other current liabilities 3,507 2,880
Liabilities of discontinued operations - short-term 49 146
Liability for short sales of trading securities 642 --
Liabilities of assets held for sale   --   5,397
Total current liabilities 15,390 17,738
 
Non-current Liabilities:
Liabilities of discontinued operations - long-term 274 2,410
Deposit liability -- 87
Long-term debt   1,728   6,534
Total liabilities 17,392 26,769
 
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 1,065 820
Retained earnings   9,998   4,463
Total shareholders' equity   23,491   17,711
Total liabilities and shareholders' equity $ 40,883 $ 44,480
 

* Derived from the Company's audited financial statements included in its Form 10-K for the year ended August 31, 2013 filed with the U.S. Securities and Exchange Commission on November 29, 2013.

 
 

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Income

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

(unaudited)

 
     

Three Months Ended

     

Year Ended

August 31,

August 31,

2014

     

2013

2014

     

2013*

           
Revenues $ 36,537 $ 31,284 $ 134,747 $ 120,432
Cost of revenues   27,155     22,562     97,710     86,600  
Gross margin   9,382     8,722     37,037     33,832  
Operating expenses:
Selling, general and administrative expenses   8,351     7,814     32,178     30,132  
Income from operations 1,031 908 4,859 3,700
 
Other income (expense):
Net gain (loss) on trading securities 30 49 (19 ) 15
Gain on sale of property 960 -- 1,495 730
Interest and other expense, net   (11 )   (93 )   (307 )   (584 )
Total other income (expense)   979     (44 )   1,169     161  
Income from continuing operations before income taxes 2,010 864 6,028 3,861
Provision for income taxes   461     570     1,009     1,309  
Net income from continuing operations 1,549 294 5,019 2,552
Discontinued Operations:
Gain on settlement of liabilities of discontinued operations, net of tax $394   592     --     592     --  
Net Income 2,141 294 5,611 2,552
Cumulative preferred stock dividend   (19 )   (19 )   (76 )   (76 )

Net income attributable to common shareholders

$ 2,122   $ 275   $ 5,535   $ 2,476  
 
Basic and diluted earnings per share
Net Income from continuing operations $ 0.32 $ 0.06 $ 1.02 $ 0.51
Net Income from discontinued operations   0.12     --     0.12     --  
Net income attributable to common shareholders   0.44     0.06     1.14     0.51  
 

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, 2013 filed with the U.S. Securities and Exchange Commission on November 29, 2013.

 
 

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
      Year Ended
August 31,
2014       2013
Operating activities:
Net income $ 5,611 $ 2,552
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 539 616
Bad debt expense 12 137
Inventory reserve 100 (48 )
Gain on sale of property (1,495 ) (730 )
Gain on settlement of liabilities on discontinued operations (986 ) -
Net loss (gain) on investments 19 (15 )
(Increase) decrease in:
Trade accounts receivable (3,369 ) (602 )
Inventory (691 ) (2,035 )
Prepaid expenses and other assets 831 574
Increase (decrease) in:
Trade accounts payable 1,332 50
Accrued expenses and other current liabilities 610 398
Deposit liability (87 ) (60 )
Liabilities of discontinued operations   (1,247 )   (157 )
Net cash provided by operating activities   1,179     680  
 
Investing activities:
Purchase of property and equipment (746 ) (756 )
Sale of marketable securities, trading 1,303 0
Proceeds from securities sold short 642 (1,183 )
Proceeds from sale of property 9,483 2,830
Change in restricted cash   (416 )   0  
Net cash provided by investing activities   10,266     891  
 
Financing activities:
Payments on revolving credit facility (4,795 ) (971 )
Preferred dividend (57 ) (76 )
Bank overdraft 545 (254 )
Payments on long-term debt - real estate held for sale (5,397 ) -
Payments on long-term debt   (11 )   (1,673 )
Net cash (used in) financing activities   (9,715 )   (2,974 )
Effect of foreign currency exchange rate changes on cash and cash equivalents   243     342  
Net increase (decrease) in cash and cash equivalents 1,973 (1,061 )
 
Cash and cash equivalents - beginning of period   1,507     2,568  
Cash and cash equivalents - end of period $ 3,480   $ 1,507  
 
Supplemental disclosures of cash flow information:
Cash paid for interest $ 296   $ 815  
 
Cash paid for taxes $ 666   $ 276  


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