EACO Corporation (OTCBB:EACO) today reported the results for the first quarter ended November 30, 2011.
Net sales, net income and earnings per share were as follows for the three month periods ended November 30 (dollars in thousands, except per share information):
Three Months Ended November 30, | |||||||||
2011 | 2010 | Change | |||||||
(unaudited) | |||||||||
Net sales/revenue | $ | 26,461 | $ | 25,656 | 3.1 | % | |||
Net income | $ | 625 | $ | 600 | 4.2 | % | |||
Basic and diluted earnings per common share | $ | 0.12 | $ | 0.12 | 0 | % | |||
There were 272 sales employees as of November 30, 2011, an increase of 10.1% from the 247 sales employees on November 30, 2010. The Company's sales force is divided into Sales Focus Teams (SFT). The Company had 82 SFT's as of November 30, 2011, an increase of 22% from 67 SFT's on November 30, 2010.
EACO Corporation and Subsidiaries | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(in thousands, except share information) | ||||||||
November 30, 2011 | August 31, 2011 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 1,352 | $ | 1,368 | ||||
Trade accounts receivable, net | 12,342 | 12,348 | ||||||
Inventory, net | 12,695 | 11,389 | ||||||
Marketable securities, trading | 1,171 | 892 | ||||||
Prepaid expenses and other current assets | 234 | 320 | ||||||
Deferred tax asset, current | 1,055 | 1,062 | ||||||
Total current assets | 28,849 | 27,379 | ||||||
Non-current assets: | ||||||||
Restricted cash | 636 | 632 | ||||||
Real estate properties held for leasing, net | 10,007 | 10,085 | ||||||
Equipment and leasehold improvements, net | 1,017 | 972 | ||||||
Deferred tax asset | 2,478 | 2,623 | ||||||
Other assets, principally deferred charges, net of accumulated amortization | 1,165 | 1,187 | ||||||
Total assets | $ | 44,152 | $ | 42,878 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Trade accounts payable | $ | 9,100 | $ | 8,541 | ||||
Accrued expenses and other current liabilities | 1,510 | 2,325 | ||||||
Liabilities of discontinued operations - short-term | 147 | 147 | ||||||
Current portion of long-term debt | 784 | 778 | ||||||
Total current liabilities | 11,541 | 11,791 | ||||||
Non-current Liabilities: | ||||||||
Liabilities of discontinued operations - long-term | 2,681 | 2,708 | ||||||
Deposit liability | 147 | 147 | ||||||
Long-term debt | 16,328 | 15,626 | ||||||
Total liabilities | 30,697 | 30,272 | ||||||
Shareholders' equity: | ||||||||
Convertible preferred stock of $0.01 par value; authorized 10,000,000
shares; 36,000 shares outstanding at November 30, 2011 and August 31, 2011 (liquidation value $900) | 1 | 1 | ||||||
Common stock of $0.01 par value; authorized 8,000,000 shares;
4,861,590 shares outstanding at November 30, 2011 and August 31, 2011 | 49 | 49 | ||||||
Additional paid-in capital | 12,378 | 12,378 | ||||||
Accumulated other comprehensive income | 778 | 554 | ||||||
Retained earnings (accumulated deficit) | 249 | (376 | ) | |||||
Total shareholders' equity | 13,455 | 12,606 | ||||||
Total liabilities and shareholders' equity | $ | 44,152 | $ | 42,878 |
EACO Corporation and Subsidiaries | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(in thousands, except per share information) | ||||||||
Three Months Ended | ||||||||
November 30, | ||||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
Distribution sales | $ | 26,150 | $ | 25,344 | ||||
Cost of goods sold | 18,878 | 18,477 | ||||||
Gross margin | 7,272 | 6,867 | ||||||
Rental revenue | 311 | 312 | ||||||
Cost of rental operations | 193 | 235 | ||||||
Gross margin from rental operations | 118 | 77 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative expenses | 6,530 | 6,120 | ||||||
Income from operations | 860 | 824 | ||||||
Other non-operating income (expense): | ||||||||
Realized gain on sale of trading securities | - | 6 | ||||||
Unrealized gain on trading securities | 193 | 209 | ||||||
Interest and other income | 4 | - | ||||||
Interest expense | (185 | ) | (195 | ) | ||||
Net income from continuing operations before income taxes | 872 | 844 | ||||||
Provision for income taxes | (247 | ) | (244 | ) | ||||
Net income | 625 | 600 | ||||||
Undeclared cumulative preferred stock dividend | (19 | ) | (19 | ) | ||||
Net income attributable to common shareholders | $ | 606 | $ | 581 | ||||
Basic and diluted net income per share: | ||||||||
Net income | $ | 0.12 | $ | 0.12 | ||||
Basic and diluted weighted average common shares outstanding | 4,861,590 | 4,861,590 |
EACO Corporation and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(in thousands) | ||||||||
Three Months Ended | ||||||||
November 30, | ||||||||
2011 | 2010 | |||||||
Operating activities: | ||||||||
Net income | $ | 625 | $ | 600 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 188 | 204 | ||||||
Bad debt expense | - | 52 | ||||||
Change in inventory reserve | (15 | ) | 35 | |||||
Net gain on investments | (193 | ) | (215 | ) | ||||
(Increase) decrease in: | ||||||||
Trade accounts receivable | 6 | (566 | ) | |||||
Inventory | (1,291 | ) | (712 | ) | ||||
Prepaid expenses and other assets | 108 | (447 | ) | |||||
Deferred tax asset | 152 | 31 | ||||||
Increase (decrease) in: | ||||||||
Trade accounts payable | 298 | (34 | ) | |||||
Accrued expenses and other current liabilities | (815 | ) | (499 | ) | ||||
Liabilities of discontinued operations | (27 | ) | (56 | ) | ||||
Net cash used in operating activities | (964 | ) | (1,607 | ) | ||||
Investing activities: | ||||||||
Purchase of property and equipment | (155 | ) | (23 | ) | ||||
Purchase of marketable securities, trading | (86 | ) | 70 | |||||
Change in restricted cash | (4 | ) | 234 | |||||
Net cash (used in) provided by investing activities | (245 | ) | 281 | |||||
Financing activities: | ||||||||
Net (payments) borrowings on revolving credit facility | (700 | ) | 603 | |||||
Borrowings of long-term debt | 1,600 | - | ||||||
Payments on long-term debt | (192 | ) | (58 | ) | ||||
Bank overdraft | 261 | - | ||||||
Net cash provided by financing activities | 969 | 545 | ||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | 224 | 254 | ||||||
Net decrease in cash and cash equivalents | (16 | ) | (527 | ) | ||||
Cash and cash equivalents - beginning of period | 1,368 | 1,260 | ||||||
Cash and cash equivalents - end of period | $ | 1,352 | $ | 733 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 186 | $ | 76 | ||||
Cash paid for taxes | $ | 415 | $ | 96 |
EACO Corporation
Marta Araujo, 714-876-2490