EX-99.1 2 tm2229004d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Michael Narikawa

EACO Corporation

(714) 876-2490 October 26, 2022

 

EACO CORPORATION REPORTS RECORD ANNUAL NET SALES & NET INCOME AND RECORD QUARTER NET SALES & NET INCOME

 

ANAHEIM, CALIFORNIA – 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 byoperating 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.