8-K
EACO CORP (EACO)
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): November 3, 2023
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 October 31, 2023, EACO Corporation, a Florida corporation, issued a press release announcing our forth quarter and fiscal year 2023 financial results and other information. A copy of the press release is furnished as Exhibit 99.1 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. |
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(d) Exhibits
| Exhibit<br><br><br><br>No. | Description |
|---|---|
| 99.1 | Press release dated October 31, 2023 reporting the financial results of EACO Corporation for the forth quarter and fiscal year ended August 31, 2023. |
| 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: November 3, 2023 | EACO CORPORATION | |
|---|---|---|
| By: | /S/ GLEN CEILEY | |
| Glen Ceiley, Chief Executive Officer |
Exhibit 99.1
Michael Narikawa
EACO Corporation
| (714) 876-2490 | October 31, 2023 |
|---|
EACO CORPORATION REPORTS RECORD ANNUAL NETSALES AND RECORD QUARTER NET SALES & NET INCOME
ANAHEIM, CALIFORNIA – EACO Corporation (OTC Pink:EACO) today reported the results for its year ended August 31, 2023.
Net sales, net income and earnings per share were as follows for the year ended August 31, 2023 (dollars in thousands, except per share information):
| Three Months Ended August 31, | % | ||||||
|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change | |||||
| (unaudited) | (unaudited) | ||||||
| Net sales | $ | 85,904 | $ | 84,356 | 1.8 | % | |
| Net income | $ | 6,055 | $ | 5,785 | 4.7 | % | |
| Basic and diluted earnings per common share | $ | 1.24 | $ | 1.19 | 4.2 | % | |
| Year Ended August 31, | % | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2022* | Change | |||||
| (unaudited) | |||||||
| Net sales | $ | 319,397 | $ | 292,562 | 9.2 | % | |
| Net income | $ | 21,185 | $ | 21,308 | (0.6 | %) | |
| Basic and diluted earnings per common share | $ | 4.34 | $ | 4.37 | (0.7 | %) |
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2022 filed with the U.S. Securities and Exchange Commission on November 4, 2022.
The Company had 394 sales employees at August 31, 2023, an increase of 49 or 14% from the prior year quarter. The Company’s sales force is divided into sales focus teams (SFT’s). The Company had 107 SFT’s as of August 31, 2023, an increase of 6 from the prior year quarter. Management anticipates continued growth in both our headcount and SFT’s in fiscal year 2024. 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, | |||
|---|---|---|---|
| 2023 | 2022* | ||
| ASSETS | |||
| Current Assets: | |||
| Cash and cash equivalents | 8,558 | $ | 17,386 |
| Restricted cash | 10 | 10 | |
| Trade accounts receivable, net | 46,654 | 44,637 | |
| Inventory, net | 56,270 | 48,808 | |
| Marketable securities, trading | 27,228 | 3,925 | |
| Prepaid expenses and other current assets | 3,843 | 5,008 | |
| Total current assets | 142,563 | 119,774 | |
| Non-current Assets: | |||
| Property, equipment and leasehold improvements, net | 8,041 | 8,479 | |
| Operating lease right-of-use assets | 9,988 | 10,389 | |
| Other assets, net | 1,652 | 1,039 | |
| Total assets | 162,244 | $ | 139,681 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current Liabilities: | |||
| Trade accounts payable | 22,505 | $ | 21,762 |
| Accrued expenses and other current liabilities | 16,375 | 15,020 | |
| Current portion of operating lease liabilities | 3,950 | 3,375 | |
| Current portion of long-term debt | 120 | 119 | |
| Total current liabilities | 42,950 | 40,276 | |
| Non-current Liabilities: | |||
| Long-term debt | 4,348 | 4,465 | |
| Operating lease liabilities | 6,225 | 7,192 | |
| Total liabilities | 53,523 | 51,933 | |
| 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 | 38 | 174 | |
| Retained earnings | 96,255 | 75,146 | |
| Total shareholders’ equity | 108,721 | 87,748 | |
| Total liabilities and shareholders’ equity | 162,244 | $ | 139,681 |
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, 2022 filed with the U.S. Securities and Exchange Commission on November 4, 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>August 31, | Year Ended<br> <br>August 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022* | |||||||||
| Revenues | $ | 85,904 | $ | 84,356 | $ | 319,397 | $ | 292,562 | ||||
| Cost of revenues | 60,656 | 58,747 | 226,981 | 209,060 | ||||||||
| Gross margin | 25,248 | 25,609 | 92,416 | 83,502 | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative expenses | 17,368 | 17,089 | 64,936 | 53,970 | ||||||||
| Income from operations | 7,880 | 8,520 | 27,480 | 29,532 | ||||||||
| Other (expense) income: | ||||||||||||
| Net (loss) gain on trading securities | 500 | (348 | ) | 1,284 | (213 | ) | ||||||
| Interest and other expense | (21 | ) | (48 | ) | (59 | ) | (201 | ) | ||||
| Other income (expense), net | 479 | (396 | ) | 1,225 | (414 | ) | ||||||
| Income before income taxes | 8,359 | 8,124 | 28,705 | 29,118 | ||||||||
| Provision for income taxes | 2,304 | 2,339 | 7,520 | 7,810 | ||||||||
| Net income | 6,055 | 5,785 | 21,185 | 21,308 | ||||||||
| Cumulative preferred stock dividend | (19 | ) | (19 | ) | (76 | ) | (76 | ) | ||||
| Net income attributable to common shareholders | $ | 6,036 | $ | 5,766 | $ | 21,109 | $ | 21,232 | ||||
| Basic and diluted earnings per common share: | $ | 1.24 | $ | 1.19 | $ | 4.34 | $ | 4.37 | ||||
| Basic and diluted weighted average common shares outstanding | 4,861,590 | 4,861,590 | 4,861,590 | 4,861,590 |
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2022 filed with the U.S. Securities and Exchange Commission on November 4, 2022.
EACO Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Year Ended August 31, | ||||
|---|---|---|---|---|
| 2023 | 2022* | |||
| Operating activities: | ||||
| Net income | $ | 21,185 | $ | 21,308 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 1,398 | 1,491 | ||
| Bad debt expense | 614 | 38 | ||
| Unrealized (gain) loss on trading securities | (448) | 351 | ||
| Deferred tax provision | (581) | 333 | ||
| Increase (decrease) in cash flow from change in: | ||||
| Trade accounts receivable | (2,631) | (10,746) | ||
| Inventory | (7,462) | (8,360) | ||
| Prepaid expenses and other assets | 1,133 | 2,069 | ||
| Operating lease right-of-use assets | 401 | 695 | ||
| Trade accounts payable | (1,150) | 6,390 | ||
| Accrued expenses and other current liabilities | 1,355 | 4,056 | ||
| Operating lease liabilities | (392) | (621) | ||
| Net cash provided by operating activities | 13,422 | 17,004 | ||
| Investing activities: | ||||
| Additions to property, equipment, and leasehold improvements | (960) | (1,701) | ||
| (Purchase) of marketable securities, trading | (22,855) | (535) | ||
| Net cash used in by investing activities | (23,815) | (2,236) | ||
| Financing activities: | ||||
| Repayments on long-term debt | (116) | (114) | ||
| Preferred stock dividend | (76) | (76) | ||
| Bank overdraft | 1,893 | (1,041) | ||
| Net cash used in by financing activities | 1,701 | (1,231) | ||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (136) | (606) | ||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (8,828) | 12,931 | ||
| Cash, cash equivalents, and restricted cash - beginning of period | 17,396 | 4,465 | ||
| Cash, cash equivalents, and restricted cash - end of period | $ | 8,568 | $ | 17,396 |
| Supplemental disclosures of cash flow information: | ||||
| Cash paid for interest | $ | 202 | $ | 205 |
| Cash paid for income taxes | $ | 7,473 | $ | 3,222 |
* Derived from the Company’s audited financial statements included in its Form 10-K for the year ended August 31, 2022 filed with the U.S. Securities and Exchange Commission on November 4, 2022.