Attached files
| file | filename |
|---|---|
| 8-K - 8-K - EACO CORP | v456684_8k.htm |
Exhibit 99.1
| Marta Arciniega | January 5, 2017 |
| EACO Corporation | |
| (714) 876-2490 |
EACO CORPORATION REPORTS RECORD Q1 NET SALES
ANAHEIM, CALIFORNIA – EACO Corporation (QTCQB:EACO) today reported the results for its quarter ended November 30, 2016.
Net sales, net income and earnings per share were as follows for the three months ended November 30, 2016 (dollars in thousands, except per share information):
| Three Months Ended November 30, | ||||||||||||
| 2015 | 2016 | % Change | ||||||||||
| (unaudited) | ||||||||||||
| Net sales | $ | 37,207 | $ | 34,293 | 8.5 | % | ||||||
| Net income | $ | 661 | $ | 500 | 32.2 | % | ||||||
| Basic and diluted earnings per common share | $ | 0.13 | $ | 0.10 | 30.0 | % | ||||||
The Company had 314 sales employees at November 30, 2016, a decrease of 6 from the prior year. The Company’s sales force is divided into Sales focus teams (SFTs). The Company had 94 SFTs as of November 30, 2016, a decrease of two from the prior year. Management anticipates growth in both our headcount and SFTs in fiscal year 2017. The Company has continued to gain market share through its local presence business model.
EACO Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share information)
(unaudited)
| November 30, | August 31, | |||||||
| 2016 | 2016* | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 5,088 | $ | 4,878 | ||||
| Restricted cash, current | 1,864 | 1,425 | ||||||
| Trade accounts receivable, net | 18,620 | 18,797 | ||||||
| Inventory, net | 23,356 | 21,532 | ||||||
| Marketable securities, trading | 204 | 540 | ||||||
| Prepaid expenses and other current assets | 1,230 | 1,135 | ||||||
| Total current assets | 50,362 | 48,307 | ||||||
| Non-current Assets: | ||||||||
| Equipment and leasehold improvements, net | 1,811 | 1,395 | ||||||
| Other assets | 885 | 890 | ||||||
| Total assets | $ | 53,058 | $ | 50,592 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Trade accounts payable | $ | 13,402 | $ | 12,727 | ||||
| Accrued expenses and other current liabilities | 2,290 | 5,600 | ||||||
| Liability for short sales of trading securities | 1,864 | 1,425 | ||||||
| Total current liabilities | 17,556 | 19,752 | ||||||
| Non-current Liabilities: | ||||||||
| Long-term debt | 4,079 | ― | ||||||
| Total liabilities | 21,635 | 19,752 | ||||||
| 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 | 671 | 730 | ||||||
| Retained earnings | 18,324 | 17,682 | ||||||
| Total shareholders’ equity | 31,423 | 30,840 | ||||||
| Total liabilities and shareholders’ equity | $ | 53,058 | $ | 50,592 | ||||
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2016 as filed with the U.S. Securities and Exchange Commission on November 23, 2016.
EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except for share and per share information)
(unaudited)
| Three Months Ended | ||||||||
| November 30, | ||||||||
| 2016 | 2015 | |||||||
| Revenues | $ | 37,207 | $ | 34,293 | ||||
| Cost of revenues | 26,651 | 24,324 | ||||||
| Gross margin | 10,556 | 9,969 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | 9,387 | 9,134 | ||||||
| Income from operations | $ | 1,169 | $ | 835 | ||||
| Other (expense) income: | ||||||||
| Net loss on trading securities | (102 | ) | (9 | ) | ||||
| Interest expense, net | (4 | ) | (6 | ) | ||||
| Total other (expense) income | (106 | ) | (15 | ) | ||||
| Income before income taxes | 1,063 | 820 | ||||||
| Provision for income taxes | 402 | 320 | ||||||
| Net income | 661 | 500 | ||||||
| Cumulative preferred stock dividend | (19 | ) | (19 | ) | ||||
| Net income attributable to common shareholders | $ | 642 | $ | 481 | ||||
| Basic and diluted earnings per share | $ | 0.13 | $ | 0.10 | ||||
| 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)
(unaudited)
| Three Months Ended | ||||||||
| November 30, | ||||||||
| 2016 | 2015 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 661 | $ | 500 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 169 | 144 | ||||||
| Bad debt expense | 4 | 8 | ||||||
| Change in inventory reserve | 135 | 30 | ||||||
| Net loss on investments | 102 | 9 | ||||||
| (Increase) decrease in: | ||||||||
| Trade accounts receivable | 173 | (1,543 | ) | |||||
| Inventory | (1,959 | ) | (248 | ) | ||||
| Prepaid expenses and other assets | (90 | ) | (392 | ) | ||||
| Increase (decrease) in: | ||||||||
| Trade accounts payable | 190 | 1,270 | ||||||
| Accrued expenses and other current liabilities | (3,310 | ) | (2,345 | ) | ||||
| Net cash used in operating activities | (3,925 | ) | (2,567 | ) | ||||
| Investing activities: | ||||||||
| Purchase of property and equipment | (585 | ) | (50 | ) | ||||
| Sale (purchase) of marketable securities, trading | 234 | (831 | ) | |||||
| Net change in securities sold short | 439 | 370 | ||||||
| Change in restricted cash | (439 | ) | (366 | ) | ||||
| Net cash used in investing activities | (351 | ) | (877 | ) | ||||
| Financing activities: | ||||||||
| Borrowings on revolving credit facility | 4,079 | 961 | ||||||
| Preferred dividend | (19 | ) | (19 | ) | ||||
| Bank overdraft | 485 | 1,697 | ||||||
| Payments on long-term debt | ― | (2 | ) | |||||
| Net cash provided by financing activities | 4,545 | 2,637 | ||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (59 | ) | (1 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 210 | (808 | ) | |||||
| Cash and cash equivalents - beginning of period | 4,878 | 5,269 | ||||||
| Cash and cash equivalents - end of period | $ | 5,088 | $ | 4,461 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for income taxes | $ | 2,627 | $ | 2,194 | ||||