ANAHEIM, Calif.--(BUSINESS WIRE)--EACO Corporation (OTCQB:EACO) today reported the results for its quarter ended February 28, 2014.
Net sales, net income and earnings per share were as follows for the three months ended February 28, 2014 (dollars in thousands, except per share information):
| Six Months Ended February 28, | % | ||||
| 2014 | 2013 | Change | |||
| (unaudited) | |||||
| Net sales | $61,957 | $57,780 | 7.2% | ||
| Net income | $1,173 | $1,024 | 14.6% | ||
| Basic and diluted earnings per common share | $0.23 | $0.20 | 15% | ||
| Three Months Ended February 28, | % | ||||
| 2014 | 2013 | Change | |||
| (unaudited) | |||||
| Net sales | $30,922 | $28,520 | 8% | ||
| Net income | $109 | $641 | -83.0% | ||
| Basic and diluted earnings per common share | $0.02 | $0.13 | -84.6% | ||
As of February 28, 2014, the Company’s sales team numbered 323 employees, an increase of 5% from the 308 employees on February 28, 2013. The Company’s sales force is divided into Sales Focus Teams (SFT’s.) The Company had 96 SFT’s as of February 28, 2014, an increase of 14% from 84 SFT’s on February 28, 2013.
We estimate that the annual North American market for our products is approximately $6.7 billion. The Company’s current estimated market Share is 1.8% as compared to 1.7% in the prior year.
| EACO Corporation and Subsidiaries | ||||||
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Condensed Consolidated Balance Sheets |
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(in thousands, except share information) |
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| February 28, | August 31, | |||||
| 2014 | 2013 | |||||
| ASSETS | (unaudited) | |||||
| Current Assets: | ||||||
| Cash and cash equivalents | $ | 2,669 | $ | 1,507 | ||
| Restricted cash, current | 1,576 | -- | ||||
| Trade accounts receivable, net | 15,524 | 14,438 | ||||
| Inventory, net | 14,122 | 14,272 | ||||
| Marketable securities, trading | 417 | 1,395 | ||||
| Real estate properties held for sale | 7,494 | 7,988 | ||||
| Prepaid expenses and other current assets | 655 | 619 | ||||
| Total current assets | 42,457 | 40,219 | ||||
| Non-current Assets: | ||||||
| Restricted cash, non-current | 548 | 548 | ||||
| Equipment and leasehold improvements, net | 1,394 | 1,396 | ||||
| Deferred tax asset | 1,755 | 1,712 | ||||
| Other assets | 430 | 605 | ||||
| Total assets | $ | 46,584 | $ | 44,480 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current Liabilities: | ||||||
| Trade accounts payable | $ | 9,193 | $ | 9,315 | ||
| Accrued expenses and other current liabilities | 2,682 | 2,880 | ||||
| Securities sold short, at fair value | 1,576 | -- | ||||
| Liabilities of discontinued operations – short-term | 153 | 146 | ||||
| Liabilities of assets held for sale | 4,917 | 5,397 | ||||
| Total current liabilities | 18,521 | 17,738 | ||||
| Non-current Liabilities: | ||||||
| Liabilities of discontinued operations – long-term | 2,301 | 2,410 | ||||
| Deposit liability | 63 | 87 | ||||
| Long-term debt | 6,714 | 6,534 | ||||
| Total liabilities | 27,599 | 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 | 959 | 820 | ||||
| Retained earnings | 5,598 | 4,463 | ||||
| Total shareholders’ equity | 18,985 | 17,711 | ||||
| Total liabilities and shareholders’ equity | $ | 46,584 | $ | 44,480 | ||
Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2012 filed with the U.S. Securities and Exchange Commission on November 29, 2013.
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EACO Corporation and Subsidiaries |
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Condensed Consolidated Statements of Income |
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(in thousands, except for share and per share information) |
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(Unaudited) |
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| Three Months Ended | Six Months Ended | ||||||||
| February 28, | February 28, | ||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||
| Revenues | 30,922 | 28,520 | 61,957 | 57,780 | |||||
| Cost of revenues | 22,412 | 20,474 | 44,541 | 41,633 | |||||
| Gross margin | 8,510 | 8,046 | 17,416 | 16,147 | |||||
| Selling, general and administrative expenses | 8,027 | 7,350 | 15,806 | 14,610 | |||||
| Income from operations | 483 | 696 | 1,610 | 1,537 | |||||
| Non-operating (expense) income: | |||||||||
| Net loss on trading securities | (148) | (97) | (57) | (119) | |||||
| Gain on sale of property | - | 540 | 535 | 540 | |||||
| Interest expense, net | (112) | (166) | (211) | (333) | |||||
| Total non-operating (expense) income | (260) | 277 | 267 | 88 | |||||
| Net income before income taxes | 223 | 973 | 1,877 | 1,625 | |||||
| Provision for income taxes | 114 | 332 | 704 | 601 | |||||
| Net income | 109 | 641 | 1,173 | 1,024 | |||||
| Cumulative preferred stock dividend | (19) | (19) | (38) | (38) | |||||
| Net income attributable to common shareholders | $90 | $622 | $1,135 | $986 | |||||
| Basic and diluted earnings per share | 0.02 | 0.13 | 0.23 | 0.20 | |||||
| Basic and diluted weighted average common shares outstanding | 4,861,590 | 4,861,590 | 4,861,590 | 4,861,590 | |||||
| EACO Corporation and Subsidiaries | |||||||
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Condensed Consolidated Statements of Cash Flows |
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(in thousands) |
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(Unaudited) |
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| Six Months Ended | |||||||
| February 28, | |||||||
| 2014 | 2013 | ||||||
| Operating activities: | |||||||
| Net income | $ | 1,173 | $ | 1,024 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 297 | 316 | |||||
| Bad debt expense | 58 | 5 | |||||
| Change in inventory reserve | 22 | (62) | |||||
| Gain on sale of real estate property | (535) | (540) | |||||
| Net loss on trading securities | 57 | 119 | |||||
| (Increase) decrease in: | |||||||
| Trade accounts receivable | (1,144) | 5 | |||||
| Inventory | 128 | (1,218) | |||||
| Prepaid expenses and other assets | 139 | 24 | |||||
| Deferred tax asset | (43) | 450 | |||||
| Increase (decrease) in: | |||||||
| Trade accounts payable | (128) | (165) | |||||
| Accrued expenses and other current liabilities | (198) | 344 | |||||
| Deposit liability | (24) | (27) | |||||
| Liabilities of discontinued operations | (102) | (74) | |||||
| Net cash (used in) provided by operating activities | (300) | 201 | |||||
| Investing activities: | |||||||
| Purchase of property and equipment | (405) | (123) | |||||
| Sale (purchase) of marketable securities, trading | 921 | (579) | |||||
| Proceeds from securities sold short | 1,576 | 724 | |||||
| Change in restricted cash | (1576) | (724) | |||||
| Proceeds from sale of property | 1,139 | 650 | |||||
| Net cash provided by (used in) investing activities | 1,655 | (52) | |||||
| Financing activities: | |||||||
| Net borrowings on revolving credit facility | 186 | 734 | |||||
| Preferred dividend | (38) | (38) | |||||
| Bank overdraft | 6 | (111) | |||||
| Payments on long-term debt | (124) | (1,604) | |||||
| Payments on long-term real estate held for sale | (362) | - | |||||
| Net cash (used in) financing activities | (332) | (1,019) | |||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | 139 | 156 | |||||
| Net increase (decrease) in cash and cash equivalents | 1,162 | (714) | |||||
| Cash and cash equivalents - beginning of period | 1,507 | 2,568 | |||||
| Cash and cash equivalents - end of period | $ | 2,669 | $ | 1,854 | |||
| Supplemental disclosures of cash flow information: | |||||||
| Cash paid for interest | $ | 212 | $ | 339 | |||
| Cash paid for taxes | $ | 674 | $ | 196 | |||
| Non-cash investing activities: | |||||||
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Transfer of real estate properties held for leasing – net to assets
held for sale |
$ | 7,206 | $ | - | |||
| Non-cash financing activities: | |||||||
| Transfer of long-term debt to liabilities of assets held for sale | $ | 4,917 | $ | - | |||