8-K - EACO - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) ofthe Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 16, 2022

EACO CORPORATION

(Exact name of registrant as specified in its charter)

Florida	000-14311	59-2597349
(State or other jurisdiction of<br><br> <br>incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5065 East Hunter Avenue

Anaheim, California 92807

(Address of Principal Executive Offices)

(714) 876-2490

(Registrant’s Telephone No.)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities<br>Act
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act
---	---
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act
---	---
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act
---	---

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02	Results of Operations and Financial Condition.

On August 16, 2022, EACO Corporation, a Florida corporation, issued a press release announcing the unaudited financial results for the quarter ended November 30, 2021. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

On August 18, 2022, EACO Corporation issued a press release announcing the unaudited financial results for the quarter ended February 28, 2022. A copy of the press release is furnished as Exhibit 99.2 and is incorporated herein by reference.

On August 22, 2022, EACO Corporation issued a press release announcing the unaudited financial results for the quarter ended May 31, 2022. A copy of the press release is furnished as Exhibit 99.3 and is incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, regardless of any general incorporation language contained in such filing.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits

Exhibit

No.	Description
99.1	Press release dated August 16, 2022 reporting the financial results of EACO Corporation for the quarter ended November 30, 2021.
99.2	Press release dated August 18, 2022 reporting the financial results of EACO Corporation for the quarter ended February 28, 2022.
99.3	Press release dated August 22, 2022 reporting the financial results of EACO Corporation for the quarter ended May 31, 2022.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 22, 2022	EACO CORPORATION
	By:	/S/ GLEN CEILEY
		Glen Ceiley, Chief Executive Officer

Exhibit 99.1

Michael Narikawa

EACO Corporation

(714) 876-2490	August 16, 2022

EACO CORPORATION REPORTS RECORD QUARTERLY NET INCOME AND RECORD 1^ST^ QUARTER NET SALES

ANAHEIM, CALIFORNIA – EACO Corporation (OTCQB:EACO) today reported the results for three months ended November 30, 2021.

Net sales, net income and earnings per share were as follows for the three months ended November 30, 2021 (dollars in thousands, except per share information):

	Three Months Ended <br> November 30,
	2021			2020		% Change
	(unaudited)			(unaudited)
Net sales	$	63,822		$	53,403		19.5	%
Net income	$	6,786	*	$	851		697.4	%
Basic and diluted earnings per common share	$	1.39		$	0.17		717.6	%

*Includes an income benefit of $3.4 million as a result of qualifiedfederal tax credits related to the Employee Retention Credit.

The Company had 328 sales employees at November 30, 2021, a decrease of 29 or 8.7% 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 November 30, 2021, the same as the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2022. The Company believes it continues to gain market share through its local presence business model.

Safe Harbor Statement under the Private Securities Litigation ReformAct 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, the impact of products offered by our competitors from time to time, and the impact of the Covid-19 pandemic. 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,
		2021*
ASSETS
Current Assets:
Cash and cash equivalents	5,583	$	4,455
Restricted cash	10		10
Trade accounts receivable, net	34,168		33,939
Inventory, net	42,542		40,448
Marketable securities, trading	3,684		3,741
Prepaid expenses and other current assets	11,395		6,780
Total current assets	97,382		89,363
Non-current Assets:
Property, equipment and leasehold improvements, net	8,173		8,269
Operating lease right-of-use assets	11,304		11,084
Other assets, net	1,404		1,669
Total assets	118,263	$	110,385
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	17,047	$	16,413
Accrued expenses and other current liabilities	11,708		10,964
Current portion of operating lease liabilities	3,301		3,096
Current portion of long-term debt	119		113
Total current liabilities	32,175		30,586
Non-current Liabilities:
Long-term debt	4,552		4,585
Operating lease liabilities	8,127		8,092
Total liabilities	44,854		43,263
Commitments and Contingencies (Note 8)
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	300		780
Retained earnings	60,681		53,914
Total shareholders’ equity	73,409		67,122
Total liabilities and shareholders’ equity	118,263	$	110,385

All values are in US Dollars.

* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2020 filed with the U.S. Securities and Exchange Commission on November 30, 2020.

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except for share and per share information)

(unaudited)

	Three Months Ended<br> <br>November 30,
	2021			2020
Net sales	$	63,822		$	53,403
Cost of sales		45,644			38,951
Gross margin		18,178			14,452
Operating expenses:
Selling, general and administrative expenses		8,895			12,681
Income from operations		9,283			1,771
Other (expense):
Net loss on trading securities		(56	)		(553	)
Interest and other expense, net		(52	)		(69	)
Other (expense), net		(108	)		(622	)
Income before income taxes		9,175			1,149
Provision for income taxes		2,389			298
Net income		6,786			851
Cumulative preferred stock dividend		(19	)		(19	)
Net income attributable to common shareholders	$	6,767		$	832
Basic and diluted earnings per common share:	$	1.39		$	0.17
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<br> November 30,
	2021			2020
Operating activities:
Net income	$	6,786		$	851
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		382			377
Bad debt expense		9			––
Net gain on trading securities		56			553
Increase (decrease) in cash from changes in
Trade accounts receivable		(248	)		1,634
Inventory		(2,094	)		(71	)
Prepaid expenses and other assets		(4,350	)		716
Operating lease right-of-use assets		(220	)		417
Trade accounts payable		1,642			666
Accrued expenses and other current liabilities		744			(723	)
Operating lease liabilities		240			(524	)
Net cash provided by operating activities		2,947			3,896
Investing activities:
Additions to property, equipment, and leasehold improvements		(286	)		(179	)
Sale of marketable securities, trading		1			24
Net change in liabilities for short sales of trading securities		––			286
Net cash (used in) provided by investing activities		(285	)		131
Financing activities:
Payments on revolving credit facility, net		––			(2,187	)
Payments on long-term debt		(27	)		––
Preferred stock dividend		(19	)		(19	)
Bank overdraft		(1,008	)		(867	)
Net cash used in financing activities		(1,054	)		(3,073	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(480	)		(82	)
Net increase in cash, cash equivalents, and restricted cash		1,128			872
Cash, cash equivalents, and restricted cash - beginning of period		4,465			8,995
Cash, cash equivalents, and restricted cash - end of period	$	5,593		$	9,867
Supplemental disclosures of cash flow information:
Cash paid for interest	$	52		$	48

Exhibit 99.2

Michael Narikawa

EACO Corporation

(714) 876-2490	August 18, 2022

EACO CORPORATION REPORTS RECORD QUARTERLY NET SALES AND RECORD 2^nd^ QUARTER NET INCOME

ANAHEIM, CALIFORNIA – EACO Corporation (OTCMKTS:EACO) today reported the results for its quarter ended February 28, 2022.

Net sales, net income and earnings per share were as follows for the three months ended February 28, 2022 (dollars in thousands, except per share information):

	Three Months Ended <br><br>February 28,
	2022		2021		% Change
	(unaudited)		(unaudited)
Net sales	$	66,587	$	55,751		19.4	%
Net income	$	3,407	$	1,394		144.4	%
Basic and diluted earnings per common share	$	0.70	$	0.28		150.0	%

The Company had 338 sales employees at February 28, 2022, a decrease of 5 employees or 1.5%, from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 102 SFT’s as of February 28, 2022, two more than the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2022. The Company believes it continues to gain market share through its local presence business model.

Safe Harbor Statement under the Private Securities Litigation ReformAct of 1995:

EACO Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share information)

(unaudited)

		August 31,
		2021*
ASSETS
Current Assets:
Cash and cash equivalents	5,622	$	4,455
Restricted cash	10		10
Trade accounts receivable, net	36,861		33,929
Inventory, net	44,724		40,448
Marketable securities, trading	4,598		3,741
Prepaid expenses and other current assets	8,416		6,780
Total current assets	100,231		89,363
Non-current Assets:
Property, equipment and leasehold improvements, net	8,162		8,269
Operating lease right-of-use assets	11,030		11,084
Other assets, net	1,407		1,669
Total assets	120,830	$	110,385
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	19,756	$	16,413
Accrued expenses and other current liabilities	8,440		10,964
Current portion of operating lease liabilities	3,385		3,096
Current portion of long-term debt	119		113
Total current liabilities	31,700		30,586
Non-current Liabilities:
Long-term debt	4,425		4,585
Operating lease liabilities	7,784		8,092
Total liabilities	41,737		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	325		780
Retained earnings	64,069		53,914
Total shareholders’ equity	76,822		67,122
Total liabilities and shareholders’ equity	120,830	$	110,385

All values are in US Dollars.

* Derived from the Company’s audited financialstatements included in its Form 10-K for the year ended August 31, 2021 filed with the U.S. Securities and Exchange Commission on July6, 2022.

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except for share and per share information)

(unaudited)

	Three Months Ended						Six Months Ended
	February 28,						February 28,
	2022			2021			2022			2021
Net sales	$	66,587		$	55,751		$	130,409		$	109,154
Cost of sales		48,462			40,727			94,106			79,678
Gross margin		18,125			15,024			36,303			29,476
Operating expenses:
Selling, general and administrative expenses		13,439			12,540			22,334			25,221
Income from operations		4,686			2,484			13,969			4,255
Other income (expense):
Net (loss) gain on trading securities		(22	)		(506	)		(78	)		(1,059	)
Interest and other (expense)		(53	)		(60	)		(105	)		(129	)
Other (expense) income, net		(75	)		(566	)		(183	)		(1,188	)
Income before income taxes		4,611			1,918			13,786			3,067
Provision for income taxes		1,204			524			3,593			822
Net income		3,407			1,394			10,193			2,245
Cumulative preferred stock dividend		(19	)		(19	)		(38	)		(38	)
Net income attributable to common shareholders	$	3,388		$	1,375		$	10,155		$	2,207
Basic and diluted earnings per share:	$	0.70		$	0.28		$	2.09		$	0.45
Basic weighted average common shares outstanding		4,861,590			4,861,590			4,861,590			4,861,590
Diluted weighted average common shares<br> outstanding		4,901,590			4,901,590			4,901,590			4,901,590

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six Months Ended<br> <br>February 28,
	2022			2021
Operating activities:
Net income	$	10,193		$	2,245
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		751			751
Bad debt expense		26			55
Loss on sale of real property		–			–
Net unrealized loss on trading securities		78			1,059
Increase (decrease) in cash from changes in:
Trade accounts receivable		(2,958	)		866
Inventory		(4,276	)		(635	)
Prepaid expenses and other assets		(1,374	)		1,298
Operating lease right-of-use assets		54			847
Trade accounts payable		4,404			561
Accrued expenses and other current liabilities		(2,524	)		(2,579	)
Operating lease liabilities		(19	)		(928	)
Net cash provided by operating activities		4,355			3,540
Investing activities:
Purchase of property, equipment, and leasehold improvements		(644	)		(290	)
Net (purchases) sales of marketable securities, trading		(935	)		(3,846	)
Net change in liabilities for short sales of trading securities		––			(1,622	)
Net cash (used in) investing activities		(1,579	)		(5,758	)
Financing activities:
Payments on revolving credit facility, net		––			(5,100	)
Repayments on long-term debt		(55	)		(53	)
Preferred stock dividend		(38	)		(38	)
Net change in bank overdraft		(1,061	)		2,526
Net cash (used in) financing activities		(1,154	)		(2,665	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(455	)		9
Net increase (decrease) in cash, cash equivalents, and restricted cash		1,167			(4,874	)
Cash, cash equivalents, and restricted cash - beginning of period		4,465			8,995
Cash, cash equivalents, and restricted cash - end of period	$	5,632		$	4,121
Supplemental disclosures of cash flow information:
Cash paid for interest	$	105		$	121
Cash paid for income taxes	$	3,979		$	2,509

Exhibit 99.3

Michael Narikawa

EACO Corporation

(714) 876-2490	August 22, 2022

EACO CORPORATION REPORTS RECORD QUARTERLY NET SALES AND RECORD 3^rd^ QUARTER NET INCOME

ANAHEIM, CALIFORNIA – EACO Corporation (OTCMKTS:EACO) today reported the results for its quarter ended May 31, 2022.

Net sales, net income and earnings per share were as follows for the three months ended May 31, 2022 (dollars in thousands, except per share information):

	Three Months Ended May 31,
	2022		2021		% Change
	(unaudited)		(unaudited)
Net sales	$	77,797	$	62,676		24.1	%
Net income	$	5,330	$	3,080		73.1	%
Basic and diluted earnings per common share	$	1.09	$	0.63		73.0	%

The Company had 340 sales employees at May 31, 2022, a decrease of 9 (2.6%) from the prior year quarter. The Company’s sales force is divided into Sales focus teams (SFT’s). The Company had 103 SFT’s as of May 31, 2022 the same from the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2022. The Company believes it continues to gain market share through its local presence business model.

Safe Harbor Statement under the Private Securities Litigation ReformAct of 1995:

EACO Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share information)

(unaudited)

		August 31,
		2021*
ASSETS
Current Assets:
Cash and cash equivalents	5,427	$	4,455
Restricted cash	10		10
Trade accounts receivable, net	42,718		33,929
Inventory, net	47,493		40,448
Marketable securities, trading	4,835		3,741
Prepaid expenses and other current assets	7,500		6,780
Total current assets	107,983		89,363
Non-current Assets:
Property, equipment and leasehold improvements, net	7,974		8,269
Operating lease right-of-use assets	10,668		11,084
Other assets, net	1,411		1,669
Total assets	128,036	$	110,385
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	19,316	$	16,413
Accrued expenses and other current liabilities	11,194		10,964
Current portion of operating lease liabilities	3,233		3,096
Current portion of long-term debt	119		113
Total current liabilities	33,862		30,586
Non-current Liabilities:
Long-term debt	4,492		4,585
Operating lease liabilities	7,592		8,092
Total liabilities	45,946		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	282		780
Retained earnings	69,380		53,914
Total shareholders’ equity	82,090		67,122
Total liabilities and shareholders’ equity	128,036	$	110,385

All values are in US Dollars.

* Derived from the Company’s audited financialstatements included in its Form 10-K for the year ended August 31, 2021 filed with the U.S. Securities and Exchange Commission on July6, 2022.

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except for share and per share information)

(unaudited)

	Three Months Ended <br><br>May 31,						Nine Months Ended <br><br>May 31,
	2022			2021			2022			2021
Net sales	$	77,797		$	62,676		$	208,206		$	171,830
Cost of sales		56,207			45,826			150,313			125,504
Gross margin		21,590			16,850			57,893			46,326
Operating expenses:
Selling, general and administrative expenses		14,547			12,800			36,881			38,021
Income from operations		7,043			4,050			21,012			8,305
Other income (expense):
Net gain (loss) on trading securities		213			196			135			(863	)
Interest and other (expense)		(48	)		(45	)		(153	)		(174	)
Other income (expense), net		165			151			(18	)		(1,037	)
Income before income taxes		7,208			4,201			20,994			7,268
Provision for income taxes		1,878			1,121			5,471			1,943
Net income		5,330			3,080			15,523			5,325
Cumulative preferred stock dividend		(19	)		(19	)		(57	)		(57	)
Net income attributable to common shareholders	$	5,311		$	3,061		$	15,466		$	5,268
Basic and diluted earnings per share:	$	1.09		$	0.63		$	3.18		$	1.08
Basic and diluted weighted average common shares outstanding		4,861,590			4,861,590			4,861,590			4,861,590
Diluted weighted average common shares outstanding		4,901,590			4,901,590			4,901,590			4,901,590

EACO Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine Months Ended<br> <br>May 31,
	2022			2021
Operating activities:
Net income	$	15,523		$	5,325
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		1,122			1,136
Bad debt expense		54			62
Loss on sale of real property		–			–
Net unrealized (gain) loss on trading securities		(135	)		863
Increase (decrease) in cash from changes in:
Trade accounts receivable		(8,843	)		(3,239	)
Inventory		(7,045	)		(861	)
Prepaid expenses and other assets		(462	)		1,568
Operating lease right-of-use assets		416			1,400
Trade accounts payable		3,959			2,895
Accrued expenses and other current liabilities		230			(1,291	)
Operating lease liabilities		(363	)		(1,454	)
Net cash provided by operating activities		4,456			6,404
Investing activities:
Purchase of property, equipment, and leasehold improvements		(827	)		(757	)
Net (purchases) sales of marketable securities, trading		(959	)		(4,419	)
Net change in liabilities for short sales of trading securities		–			(2,916	)
Net cash (used in) investing activities		(1,786	)		(8,092	)
Financing activities:
Payments on revolving credit facility, net		–			(5,100	)
Borrowings on construction loan		–			–
Repayments on long-term debt		(87	)		(82	)
Preferred stock dividend		(57	)		(57	)
Net change in bank overdraft		(1,056	)		144
Net cash (used in) financing activities		(1,200	)		(5,095	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(498	)		223
Net increase (decrease) in cash, cash equivalents, and restricted cash		972			(6,560	)
Cash, cash equivalents, and restricted cash - beginning of period		4,465			8,995
Cash, cash equivalents, and restricted cash - end of period	$	5,437		$	2,435
Supplemental disclosures of cash flow information:
Cash paid for interest	$	153		$	172
Cash paid for income taxes	$	3,979		$	2,509