Educational Development Corporation (“EDC”, or the “Company”)
(NASDAQ: EDUC) (http://www.edcpub.com) today reports record first
quarter net revenues and increased earnings per share results for
the quarter ended May 31, 2021.
First Quarter Highlights Compared to the
Prior Year First Quarter
- Net revenues of $40.8 million, an
increase of $2.5 million, or 6.5%, compared to $38.3 million.
- Average active UBAM sales
consultants totaled 55,100.
- Earnings before income taxes were
$4.7 million, an increase of $2.1 million, or 80.8%, compared to
$2.6 million.
- Net earnings totaled $3.4 million,
compared to $1.9 million, an increase of $1.5 million, or
78.9%.
- Earnings per share totaled $0.41,
compared to $0.23, up 78.3% on a fully diluted basis.
“I am truly pleased by our record breaking
fiscal 2022 first quarter sales, and the translation of those sales
into significant earnings growth for our shareholders,” said
Randall White, President and CEO. “This quarter’s results reflect
the positive impacts from several strategic changes that were made
during our fourth quarter last year. We restructured our freight
contract with our small package carrier to reduce price increases
and increased the minimum charges on customer orders to further
offset our overall net shipping costs on each package. These
changes, along with increased discounts and rebates on longer print
runs with our publishers, have driven increased profitability for
the quarter. We expect continued profitability from these changes,
and other future strategic improvements, to further drive
shareholder returns,” commented Mr. White.
Net revenues for the direct sales division,
Usborne Books & More (“UBAM”), totaled $37.6 million for the
fiscal first quarter ended May 31, 2021, an increase of 1.9% from
$36.9 million for the same quarter a year ago. This increase
in revenues over the same quarter last year is especially relevant
as the $36.9 million for quarter ended May 31st, 2020, was the
Company’s largest revenue quarter at that time and reflected an
increase of 41.8% over the quarter ended May 31st, 2019. Also, last
year’s record quarter was achieved during the COVID-19 pandemic,
which suffered approximately $8 million in lost revenues from
school book fairs and booth sales due to closures. We estimate the
combined missed revenues from these two sales streams exceeded $30
million for the year ended February 28, 2021. The Company is
confident that revenues from these two channels are returning
during this fiscal year as restrictions are lifted from schools and
group gatherings.
Net revenues in the Publishing division
increased 128.6%, to $3.2 million for the fiscal first quarter
ended May 31, 2021, from $1.4 million for the same quarter a year
ago. The Publishing divisions gross sales grew by over 132.3%,
reflecting the resurgence of increased sales through retail
stores.
Per Mr. White, “During the first and second
quarters last year we saw an increase in demand for our products
from parents needing additional content in the home. This increased
demand resulted in unusually large sales volumes for what are not
typically our largest quarters of the year, due to the seasonal
nature of our business. The increase in revenues over the first
quarter last year indicates that this increase in Usborne Books
& More is sales consultant driven rather than driven by the
issues associated with the COVID-19 pandemic.”
Mr. White concluded, “The Company has a strong
financial position and is and expects an increase in revenues and
profitability for the fiscal year ending February 28, 2022.”
Once again, the board approved a quarterly cash
dividend of $0.10 per share, which will be paid on, or around,
September 7, 2021 to shareholders of record on August 24, 2021.
EDUCATIONAL DEVELOPMENT CORPORATION |
CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) |
|
|
Three Months EndedMay 31, |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
NET REVENUES |
|
$ |
40,807,900 |
|
|
$ |
38,291,700 |
|
|
|
|
|
|
|
|
EARNINGS BEFORE INCOME
TAXES |
|
|
4,660,600 |
|
|
|
2,643,900 |
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
1,222,500 |
|
|
|
712,800 |
NET EARNINGS |
|
$ |
3,438,100 |
|
|
$ |
1,931,100 |
|
|
|
|
|
|
|
|
BASIC AND DILUTED
EARNINGS |
|
|
|
|
|
|
|
PER SHARE: |
|
|
|
|
|
|
|
Basic |
|
$ |
0.43 |
|
|
$ |
0.23 |
Diluted |
|
$ |
0.41 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
DIVIDENDS PER SHARE |
|
$ |
0.10 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF |
|
|
|
|
|
|
|
COMMON AND EQUIVALENT
SHARES |
|
|
|
|
|
|
|
OUTSTANDING: |
|
|
|
|
|
|
|
Basic |
|
|
8,029,264 |
|
|
|
8,352,424 |
Diluted |
|
|
8,481,980 |
|
|
|
8,352,424 |
EDC will host its First Quarter Fiscal 2022
Earnings Call, including a live Q&A webcast, on Thursday, July
8, 2021 at 3:00 PM CT (4:00 PM ET). Randall White, the Company’s
Chief Executive Officer and President, Craig White, Chief Operating
Officer, Heather Cobb, Chief Sales and Marketing Officer and Dan
O’Keefe, Chief Financial Officer and Secretary, will present the
first quarter results and be available for questions following the
presentation. Phone lines for participants will be available at
(855) 639-3876. The conference ID
is 9852428.
Audio 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 trade
co-publisher of the line of educational children’s books produced
in the United Kingdom by Usborne Publishing Limited (“Usborne”) and
we also exclusively publish books through our ownership of Kane
Miller Book Publisher (“Kane Miller”); both international
award-winning publishers of 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 4,000 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
CorporationRandall White, (918) 622-4522
Investor Relations:Three Part Advisors,
LLCSteven Hooser, (214) 872-2710
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, the COVID-19 pandemic, as well as
those factors discussed in our Annual Report on Form 10-K for the
year ended February 28, 2021, 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 28, 2021 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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