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 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 | ||||||||
Contacts:
Marta Arciniega, 714-876-2490
