Educational Development Corporation (“EDC”) (NASDAQ:EDUC)
(http://www.edcpub.com) today reports record net sales and earnings
per share results for the second quarter ended August 31,
2017.
Randall White, CEO of Educational Development Corporation,
announced that for the fiscal second quarter ended August 31, 2017,
the Company reports net revenues of $24,181,300, a decrease of
$1,711,700, or 6.6%, when compared to $25,893,000 for the second
quarter of the previous year. Net earnings totaled $1,036,900
for the quarter ended August 31, 2017, compared to $318,500 for the
quarter ended August 31, 2016, an increase of 225.6%.
Earnings per share for the quarter were $0.25 compared
to $0.08 for the same quarter in the previous year, up 212.5% on a
fully diluted basis.
Our direct sales division, Usborne Books & More (“UBAM”),
continues to be the largest operating segment of the Company.
Net revenues of this division for the second quarter ending August
31, 2017 were $22,204,300, a decrease of 6.9% from $23,857,400
reported in the second quarter ended August 31, 2016. The
average number of active direct sales consultants increased 6,300,
or 26.9%, to 29,700 for the quarter ended August 31, 2017, over the
average active consultant count in the second quarter of last
year.
Our Publishing’s divisions revenues remained consistent at
$1,977,000 for the second fiscal quarter ended August 31, 2017 as
compared to $2,035,600 for the same quarter a year ago.
The Company’s year to date net revenues in the first two
quarters of the year were $51,112,100, an increase of $2,434,900,
or 5%, from $48,677,200 reported in the same period last
year. Year to date earnings increased $0.32, or 140%, from
$0.23 for the six months ended August 31, 2016 to $0.55 for the six
months ended August 31, 2017.
Per Mr. White, “Our UBAM division experienced a slight decline
in revenues from the second fiscal quarter of last year.
However, during the second quarter of last year we
experienced incredible growth in new consultants and revenues which
overshadowed the typical seasonal decline that we experience in the
second quarter. Our second quarter includes the summer months
when order sizes are typically smaller than our fiscal first and
fiscal third quarters. Also during the second quarter we hold
our annual convention and host our annual incentive trip, in which
our top earners typically participate and has an impact on
their sales during the quarter.
“During the second quarter we continued our efforts to expand
our daily shipping capacity and implement additional technology
enhancements which we expect will continue to improve our operating
margins. These efforts started when we first began
experiencing rapid growth in our UBAM Division dating back to
fiscal 2015. Since that time, we have overcome several
obstacles including last year’s decision to replace a failed
software program that was purchased from an outside vendor.
Since that difficult decision was made, we have reported steady
improvements in our operating margins and earnings. These
margins improvements would not have been possible without the hard
work and commitment of our IT staff, which have replaced the failed
software product with our own proprietary program and made further
enhancements to our warehouse distribution system.
“Our second quarter’s earnings per share grew 212% to $0.25,
over the $0.08 reported in the same quarter last year, which had
higher sales. Our earnings growth is primarily attributed to
efficiencies in our warehouse operation. Over the past year
we have implemented changes to our packaging types which has
reduced packaging costs, weight and related outbound shipping
costs. During the second quarter we also implemented new
equipment and software changes in our picking lines which has
significantly increased our daily shipping capacity.
With this increase in capacity, we are excited about our ability to
stay current with shipping orders during the Fall Selling Season,
which is our busiest time of the year.”
EDUCATIONAL DEVELOPMENT
CORPORATION |
CONDENSED STATEMENTS OF EARNINGS
(UNAUDITED) |
|
|
Three Months Ended August 31, |
|
Six Months Ended August 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
NET REVENUES |
|
|
24,181,300 |
|
|
25,893,000 |
|
|
51,112,100 |
|
|
48,677,200 |
|
|
|
|
|
|
|
EARNINGS BEFORE INCOME
TAXES |
|
|
1,682,700 |
|
|
520,700 |
|
|
3,664,900 |
|
|
1,525,300 |
|
|
|
|
|
|
|
INCOME TAXES |
|
|
645,800 |
|
|
202,200 |
|
|
1,402,700 |
|
|
586,600 |
NET EARNINGS |
|
$ |
1,036,900 |
|
$ |
318,500 |
|
$ |
2,262,200 |
$ |
938,700 |
|
|
|
|
|
|
|
BASIC AND DILUTED
EARNINGS |
|
|
|
|
|
|
PER
SHARE: |
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
$ |
0.08 |
|
$ |
0.55 |
|
$ |
0.23 |
Diluted |
|
$ |
0.25 |
|
$ |
0.08 |
|
$ |
0.55 |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER
SHARE |
|
$ |
0.00 |
|
$ |
0.09 |
|
$ |
0.00 |
|
$ |
0.18 |
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF |
|
|
|
|
|
|
COMMON
AND EQUIVALENT SHARES |
|
|
|
|
|
|
OUTSTANDING: |
|
|
|
|
|
|
Basic |
|
|
4,085,648 |
|
|
4,074,469 |
|
|
4,087,895 |
|
|
4,071,574 |
Diluted |
|
|
4,090,629 |
|
|
4,080,039 |
|
|
4,092,253 |
|
|
4,077,318 |
|
|
|
|
|
|
|
EDC will host its second quarter fiscal 2018 results Investor
Call including a live Q&A webcast on Monday, October 16, 2017,
at 2 PM CT (3 PM ET). Randall White, the Company’s CEO and
President and Dan O’Keefe, CFO and Secretary, will present the
annual results and be available for questions following the
presentation. Phone lines for participants will be available
at (844) 395-9253 (International callers can use (478)
219-0506). The conference passcode is 2285140. The weblink to
the call is https://edge.media-server.com/m6/p/fi838cdi.
The link to the webcast, including replays will be available
following the event at www.edcpub.com/investors.aspx.
About Educational Development Corporation
(EDC)EDC is a publishing company specializing in books for
children. EDC is the exclusive United States distributor of the
UK-based Usborne Books and owns Kane Miller Publishers;
award-winning publishers of international children’s books. EDC’s
current catalog contains over 2,000 titles, with new additions
semi-annually. Both Usborne and Kane Miller products are sold via
5,000 retail outlets and by independent consultants, who hold book
showings in individual homes, through social media, book fairs with
school and public libraries, direct and internet sales.
Contact:
Educational Development
Corporation
Randall White, (918) 622-4522
Cautionary Statement for the Purpose of the “Safe
Harbor” Provision of the Private Securities Litigation Reform Act
of 1995.
The information discussed in this Press Release
includes “forward-looking statements.” These forward-looking
statements are identified by their use of terms and phrases such as
“may,” “expect,” “estimate,” “project,” “plan,” “believe,”
“intend,” “achievable,” “anticipate,” “continue,” “potential,”
“should,” “could,” and similar terms and phrases. Although we
believe that the expectations reflected in these forward-looking
statements are reasonable, they do involve certain assumptions,
risks and uncertainties and we can give no assurance that such
expectations or assumptions will be achieved. Known and
unknown risks, uncertainties and other factors may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by forward-looking statements. Factors that could
cause or contribute to such differences include, but are not
limited to, our success in recruiting and retaining new
consultants, our ability to locate and procure desired books, our
ability to ship the volume of orders that are received without
creating backlogs, our ability to obtain adequate financing
for working capital and capital expenditures, economic and
competitive conditions, regulatory changes and other uncertainties,
as well as those factors discussed in our Annual Report on Form
10-K for the year ended February 29, 2016, all of which are
difficult to predict. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed may not
occur. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements in this paragraph and
elsewhere in our Annual Report on Form 10-K for the year ended
February 29, 2016 and speak only as of the date of this Press
Release. Other than as required under the securities laws, we
do not assume a duty to update these forward-looking statements,
whether as a result of new information, subsequent events or
circumstances, changes in expectations or otherwise.
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