Eaco Corp 10-Q for FY2023 Q3

Eaco Corp (EACO)

10-Q 2023-07-10 For: 2023-05-31

Added on April 06, 2026

About this 10-Q

Eaco Corp filed this 10-Q on July 10, 2023, covering the quarter ended May 31, 2023 (FY2023 Q3).

Headline figures

Quarter ended May 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $80.25M; up 3.2% from $77.8M a year earlier
Net income: $5.32M; down 0.2% from net income of $5.33M a year earlier
Diluted EPS: $1.09; unchanged from $1.09 a year earlier

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Florida	59-2597349
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒
Smaller reporting company	☒	Emerging growth company	☐


	Three Months Ended				Nine Months Ended
	May 31,				May 31,
	2023		2022		2023		2022
Net sales	$	80,249	$	77,797	$	233,493	$	208,206
Cost of sales		57,008		56,207		166,325		150,313
Gross margin		23,241		21,590		67,168		57,893
Operating expenses:
Selling, general and administrative expenses		16,277		14,547		47,568		36,881
Income from operations		6,964		7,043		19,600		21,012

Other income (expense):
Net gain on trading securities		163		213		784		135
Interest and other (expense)		(36)		(48)		(38)		(153)
Other income (expense), net		127		165		746		(18)
Income before income taxes		7,091		7,208		20,346		20,994
Provision for income taxes		1,772		1,878		5,216		5,471
Net income		5,319		5,330		15,130		15,523
Cumulative preferred stock dividend		(19)		(19)		(57)		(57)
Net income attributable to common shareholders	$	5,300	$	5,311	$	15,073	$	15,466
Basic and diluted earnings per common share:	$	1.09	$	1.09	$	3.10	$	3.18
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


	Three Months Ended				Nine Months Ended
	May 31,				May 31,
	2023		2022		2023		2022
Net income	$	5,319	$	5,330	$	15,130	$	15,523
Other comprehensive gain (loss), net of tax:
Foreign translation gain (loss)		(50)		(43)		(135)		(498)
Total comprehensive income	$	5,269	$	5,287	$	14,995	$	15,025


	May 31,		August 31,
	2023		2022*
ASSETS
Current Assets:
Cash and cash equivalents	$	1,348	$	17,386
Restricted cash		10		10
Trade accounts receivable, net		40,523		44,637
Inventory, net		56,464		48,808
Marketable securities, trading		28,447		3,925
Prepaid expenses and other current assets		3,755		5,008
Total current assets		130,547		119,774
Non-current Assets:
Property, equipment and leasehold improvements, net		8,073		8,479
Operating lease right-of-use assets		10,390		10,389
Other assets, net		1,141		1,039
Total assets	$	150,151	$	139,681
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	$	19,768	$	21,762
Accrued expenses and other current liabilities		12,623		15,020
Current portion of operating lease liabilities		3,801		3,375
Current portion of long-term debt		120		119
Total current liabilities		36,312		40,276
Non-current Liabilities:
Long-term debt		4,377		4,465
Operating lease liabilities		6,776		7,192
Total liabilities		47,465		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		39		174
Retained earnings		90,219		75,146
Total shareholders’ equity		102,686		87,748
Total liabilities and shareholders’ equity	$	150,151	$	139,681


	Convertible						Additional		Accumulated Other				Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares	Amount		Shares	Amount		Capital		Income		Earnings		Equity
For the three and nine months ended May 31, 2023
Balance, August 31, 2022 *	36,000	$	1	4,861,590	$	49	$	12,378	$	174	$	75,146	$	87,748
Preferred dividends	—		—	—		—		—		—		(19)		(19)
Foreign translation loss	—		—	—		—		—		(86)		—		(86)
Net income	—		—	—		—		—		—		4,711		4,711
Balance, November 30, 2022	36,000	$	1	4,861,590	$	49	$	12,378	$	88	$	79,838	$	92,354
Preferred dividends	—		—	—		—		—		—		(19)		(19)
Foreign translation gain	—		—	—		—		—		1		—		1
Net income	—		—	—		—		—		—		5,100		5,100
Balance, February 28, 2023	36,000	$	1	4,861,590	$	49	$	12,378	$	89	$	84,919	$	97,436

Preferred dividends	—		—	—		—		—		—		(19)		(19)
Foreign translation loss	—		—	—		—		—		(50)		—		(50)
Net income	—		—	—		—		—		—		5,319		5,319
Balance, May 31, 2023	36,000	$	1	4,861,590	$	49	$	12,378	$	39	$	90,219	$	102,686

For the three and nine months ended May 31, 2022
Balance, August 31, 2021 *	36,000	$	1	4,861,590	$	49	$	12,378	$	780	$	53,914	$	67,122
Preferred dividends	—		—	—		—		—		—		(19)		(19)
Foreign translation loss	—		—	—		—		—		(480)		—		(480)
Net income	—		—	—		—		—		—		6,786		6,786
Balance, November 30, 2021	36,000	$	1	4,861,590	$	49	$	12,378	$	300	$	60,681	$	73,409
Preferred dividends	—		—	—		—		—		—		(19)		(19)
Foreign translation gain	—		—	—		—		—		25		—		25
Net income	—		—	—		—		—		—		3,407		3,407
Balance, February 28, 2022	36,000	$	1	4,861,590	$	49	$	12,378	$	325	$	64,069	$	76,822
Preferred dividends	—		—	—		—		—		—		(19)		(19)
Foreign translation loss	—		—	—		—		—		(43)		—		(43)
Net income	—		—	—		—		—		—		5,330		5,330
Balance, May 31, 2022	36,000	$	1	4,861,590	$	49	$	12,378	$	282	$	69,380	$	82,090

	EACO CORPORATION
	(Registrant)

Date: July 10, 2023	/s/ Glen Ceiley
	Glen Ceiley
	Chief Executive Officer
	(Principal Executive Officer & Principal Financial Officer)

	/s/ Michael Narikawa
	Michael Narikawa
	Controller
	(Principal Accounting Officer)

No.		Exhibit
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Date: July 10, 2023	/S/ GLEN CEILEY
	Glen Ceiley
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive Officer and Principal Financial Officer)

Dated: July 10, 2023	/S/ GLEN CEILEY
	Glen Ceiley
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive Officer and Principal Financial Officer)


	Nine Months Ended
	May 31,
	2023		2022
Operating activities:
Net income	$	15,130	$	15,523
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,052		1,122
Bad debt expense		201		54
Net unrealized gain on trading securities		(784)		(135)
Increase (decrease) in cash from changes in:
Trade accounts receivable		3,913		(8,843)
Inventory		(7,656)		(7,045)
Prepaid expenses and other assets		1,151		(462)
Operating lease right-of-use assets		(1)		416
Trade accounts payable		(1,885)		3,959
Accrued expenses and other current liabilities		(2,397)		230
Operating lease liabilities		10		(363)
Net cash provided by operating activities		8,734		4,456
Investing activities:
Purchase of property, equipment, and leasehold improvements		(646)		(827)
Net purchases of marketable securities, trading		(23,738)		(959)
Net cash used in investing activities		(24,384)		(1,786)
Financing activities:
Repayments on long-term debt		(87)		(87)
Preferred stock dividend		(57)		(57)
Net change in bank overdraft		(109)		(1,056)
Net cash (used in) financing activities		(253)		(1,200)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(135)		(498)
Net (decrease) increase in cash, cash equivalents, and restricted cash		(16,038)		972
Cash, cash equivalents, and restricted cash - beginning of period		17,396		4,465
Cash, cash equivalents, and restricted cash - end of period	$	1,358	$	5,437
Supplemental disclosures of cash flow information:
Cash paid for interest	$	152	$	153
Cash paid for income taxes	$	7,217	$	3,979


	Three Months Ended
	May 31,						$		%
	2023			2022			Change		Change
Income tax provision	$	1,772		$	1,878		$	(106)	(5.6)	%
Percent of pre-tax income		25.0	%		26.1	%			(1.1)	%


	Nine Months Ended
	May 31,						$		%
	2023			2022			Change		Change

Income tax provision	$	5,216		$	5,471		$	255	4.7	%
Percent of pre-tax income		25.6	%		26.1	%			(0.5)	%