Educational Development Corpora (NASDAQ:EDUC)

Educational Development Corp (NASDAQ:EDUC), a publishing company specializing in books for children, yesterday announced its fiscal First quarter 2023 result:

• Sales of $23.2 million  vs $40.8 million in the prior year

• EPS of $0.03 vs. $0.41 in the prior year

“Although the nature of the pandemic has created much volatility in comparing our first quarter numbers, I am pleased that we have continued to remain profitable. During this first quarter of fiscal 2023, demand for children's books was negatively impacted by reduced disposable income resulting from record inflation. Although we see continued sales pressure from inflation, historically inflationary pressures have bolstered our UBAM divisions' active consultant count as more families look for non-traditional income streams to offset their rising expenses. We are working diligently to promote the awareness of UBAM's business opportunity to increase our overall active consultant levels," stated Craig White, President and CEO of Educational Development Corporation.

Conference call sheds some light on dividend reinstatement and expansion into educational toys.

“we are continuing to strengthen our balance sheet. As our inventory turns into cash, we will use this cash to first pay down our working capital line. And then we will look to utilize additional cash flow to reinstate investor dividends.

 Additionally, I've said over the last several calls that I'm wanting to look to expand to get into educational toys, games and puzzles. And so we've been talking with a few vendors that want to create exclusive content for us. It's early on in that process. We've seen a few samples. We've seen second revisions of presentations. But this would be looking for fiscal 2024 or calendar 2023. But we are aggressively looking at additional projects and products.”

Educational Development Corp (NASDAQ:EDUC) ($6.29; $54.8M market cap), a publishing company specializing in books for children, yesterday announced its fiscal fourth quarter and full year 2022 results

We previously mentioned in August 2021 that we reduced our exposure as the company was benefiting from COVID lockdowns.

The results stated:

• Sales of $23.3 million  vs $40.3 million in the prior year
• EPS of $0.04 vs. $0.25 in the prior year

“We are pleased to report that we continue to exceed pre-pandemic levels in our fiscal fourth quarter with increases in net revenues and average number of consultants, resulting in continued profitability. Last year, due to multiple circumstances associated with the COVID-19 pandemic, we saw an unusually positive increase in the demand for our products which resulted in record sales and earnings for fiscal 2021.”

Short term challenges/ suspended dividend:

"We are now in our first quarter of fiscal 2023 and are seeing the sales efforts our UBAM division challenged by record inflation resulting in higher fuel and food costs. These inflationary challenges pull back on the disposable income of our customers and have historically had a short-term impact on sales. As an offset to these challenges, our consultant count is typically bolstered by the addition of consultants looking for additional earning streams. These short-term issues have forced us to look at the current fiscal year with a more conservative outlook.

While we expect short term challenges this year, we are taking steps to conserve cash and maintain profitability. In addition, because we have acquired the bulk of our inventory over the past year, we are protected in the short term from rising inventory prices. During this quarter we have increased our working capital borrowings with our bank to support our increased inventory levels and the board has decided to temporarily suspend our dividend to protect our balance sheet. The dividend has always been a priority for the Company as part of our long-term capital allocation strategy to create shareholder returns. This strategy remains unchanged and as our inventory levels normalize later this year, our priority is to reinstate our historical practice of paying quarterly dividends,”

Educational Development Corp (NASDAQ:EDUC) ($12.10; $104.3M market cap), a publishing company specializing in books for children, announced Q1 2022 results. Please note the company pre-announced Q1 on June 16th 2021.

• Sales of $40.8 million vs $38.3 million in the prior year

• EPS of $0.41 vs $0.23 in the prior year

“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...

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.”

Educational Development Corp (NASDAQ:EDUC) ($12.10; $104.3M market cap), a publishing company specializing in books for children, announced estimated Q1 2022 results:

• Sales of $40.8 million vs $38.2 million in the prior year
• EPS to be $0.38 to $0.41 vs $0.23 in the prior year

“We are pleased to announce record first quarter fiscal 2022 net revenues. Along with this revenue growth, we are continuing to achieve operational improvements that are increasing our overall profitability and wanted to share earnings estimates...

...During April and May last year we experienced a large increase in demand for our products from parents needing educational products in the home due to school closures associated with the Covid-19 pandemic. This increase in demand last year resulted in sales growth that does not traditionally occur in our fiscal first quarter... This fiscal first quarter and our second quarter will have challenging comparisons, but we continue to expect the impact of our active sales consultants will offset the unusual demand increase that occurred during the same periods last year.”

While the top line growth was not as robust as some investors may have wanted, it's worth noting that EDUC is trading at a meager P/E 7.3 and price to sales of 1.65.  Thus, we think investors will focus more on the superior earnings per share growth the company posted for the quarter, which bodes well for it if revenues resume at a more robust pace once the tough COVID-19 comps are in the rear view mirror.

Educational Development Corp (NASDAQ:EDUC) ($16.94; $141.4M market cap), a publishing company specializing in books, announced record monthly sales and active sales consultants.  

March revenues are expected to be approximately $17.9 million, an increase of 132% over March 2020 sales.  The company also finished the month with 56,400 active sales consultants. 

“March 2021 represents our twelfth straight month of reporting record monthly net revenue growth over the comparable month of the prior year. And while this growth has been consistently repeating, our March 2021 sales growth is magnified against its prior period, which saw a 25% reduction of sales due to the negative impact of the pandemic...

...Our active consultant sales force has grown from 29,400 in March 2020 to 56,400 at the end of March 2021. This growth of 27,000 active consultants represents a 92% increase in our sales force. It is this expanded consultant sales force that continues to drive our growth; with more consultants introducing our products to more customers, we continue to generate more orders and increased net revenues.”

Educational Development Corp (NASDAQ:EDUC) ($15.71; $131.2M market cap), a publishing company specializing in books announced Q3 2021 results:

• Sales of $66.7 million vs $40.8 million in the prior year
• EPS of $0.51 vs $0.33 in the prior year

“The net revenues of our direct sales division, Usborne Books and More (“UBAM”) totaled $64,169,700 during the quarter ended November 30, 2020, an increase of 68.4% from $38,100,400 for the quarter ended November 30, 2019. While initially this division received a boost in sales last spring from parents at home with children needing educational materials, our sales growth is now driven by our increased number of active sales consultants. During the third quarter we continued to grow our number of active consultants, beginning in September with 50,300 active consultants and ending in November with 60,500 active consultants.  Our growth in active UBAM consultants continued to drive our growth in sales during the quarter and we expect this increase in sales consultants will continue to grow revenues in our fiscal fourth quarter and into fiscal 2022.

Our retail divisions net revenues decreased 5.3%, to $2,580,600 in the third quarter of fiscal 2021, from $2,724,200 for the same quarter a year ago. Retail Sales continue to be impacted by the Covid-19 pandemic, which forced several of our customer’s stores to temporarily close during this fiscal year. We expect sales to increase in this division during the upcoming quarters as customers are able to reopen stores.”

The company will host a conference call on January 14, 2021 at 4PM EST. 

Educational Development Corp (NASDAQ:EDUC) ($15.13; $126.4M market cap), a publishing company specializing in books for children, announced record estimated second quarter record revenues.

The Company estimates fiscal 2021 second quarter net revenues between $58.5 million to $60.0 million, compared to approximately $24.4 million in net revenues recorded in the second quarter of fiscal 2020, an increase of  approximately 140%-150%.   

• Second quarter of fiscal 2021 was the largest net revenue quarter in the Company’s history.
• Active consultant count in the UBAM division, the largest sales division of the Company, exceeded the milestone of 50,000 active consultants at the end of August 2020, which is the highest active consultant level in the Company’s history.  
• Continued monthly sales growth, along with active consultant growth, bodes well for the company as it enters its fiscal third quarter, which is historically the largest sales quarter of the year.
• The publishing side of the business is finally beginning to experience gains after being temporarily impacted by COVID-19.

Educational Development Corpora (NASDAQ:EDUC) – The company announced it has renewed its revolving credit line of $10 million for another year. 

“Due to our recent growth, we have generated increased cash flows from operations.   We ended the month of July 2020 with no borrowings on the line of credit and over $23.3 million in cash on our balance sheet.   In addition, we expect our cash balances to remain strong through the fall as we experience continued growth in our UBAM division.   UBAM sales are primarily generated through prepaid e-commerce orders which have a positive impact on cash flows.

Having this line of credit provides additional security as we are purchasing increased inventory volumes to keep up with our recent sales growth.” 

Q3 2017 Conference Call Notes:

Funding:

So looking out ahead we must improve our capital structure and we are currently looking at a secondary stock offering to boost capital. You really can't grow -- you really can't fund a growing Company like this on bank debt…

...So we are looking at a long range how to improve capital structure and someone has got to come up with some equity, so we are looking at that...

...Tony, I totally agree with you. It is dilutive, but if you've got a $7 million cap on your bank loan and you're going to go from $110 million to maybe $200 million, you know you are going to do what you've got to do. I don't have the answers all here, but equity is one of them. I do not want -- my plan was if the profits had been comparable to the revenue and we had the stock at $15 to $18, it was $17 a year ago. At $17 you put out 1 million shares from 4 million and get up to 5 million that is not dilutive at all. And that is what I had in mind. $8, I am not crazy about that. I agree with you, but a growing Company cannot be totally funded on bank debt.

Cash Flow and Dividend Security:

That is still the case. I was discussing this with Peter Usborne last week or this week actually. I told him, I said, this Company has come full circle because when I became CEO in 1986 we had a cash flow problem and we couldn't meet payroll. And on Friday afternoon I called everybody together, which is 22 people, and we didn't have enough money to pay them. But we got money in on Monday and it all worked out. And here we are 35 years, later it came down to a specific payroll that was underfunded. And so, I personally loaned the Company the money. And I have reasonable assurance that they are going to pay me back one of these days -- I hope they will.

Well, I tell you, Jeff, when you have a cash flow problem certain things have to go. I cannot tell you what I am going to do with the dividend. But I am trying to change our capital structure because the last person who wants to stop the dividend is me because I get most of it.

So, I can't tell you what is going to happen with the dividend. I can't tell you what is going to happen with the capital structure. But promise you I am working diligently on that program to get my money back from the Company and a dividend…

Debt Covenants:

...So we think that debt to equity out of compliance will be taken care of now. We think it will be in compliance but I don't have any assurance of that. But that is what we think.

...And I would also like to address an issue we had in the financial statements in November as of November 30. We had two issues which caused a delay. One we were out of compliance with the bank covenants in debt to equity. And that is because debt to equity we have a ratio in there and we were out of compliance. However, I would mention that if you look at our statement, in the debt to equity ratio, which we were about 3.75%, and I think we had to be at 3.5, something like that.

Internal Controls and Operational Inefficiencies:

There is inefficiencies everywhere. And for lack of training we shipped to the wrong people.

Finally got down to over nine months to get for customer service and after 9,000 on the Tuesday before Christmas UPS said that is it, no more from you guys. So we just had to accept the fact that we had failures in our service and do the best to move ahead.

I answer a lot of customer service calls and I got the most irate ones

...Another one was the weakness in controls. And the weakness in controls came about from being flooded with orders and deferred revenue and then trying to reconcile that with the cash that came in and -- with the new software. I take responsibility for it. Yes, it was a nightmare trying to process all those orders. We got them done. We still are having some issues from the software Company in the direct sales to the new financial software. And there are still some reconciling items that are occurring now that we think will not happen when we roll back to our own system. So we are not totally out of the woods yet on the weakness in controls; debt to equity we will see...

I mortgaged my house when I got this Company, I will do it again. There is no problem in me being all in, I am all in. If you had breakfast this morning and you had bacon and eggs, well, that chicken was involved, that pig was committed. So I am the big fat pig. I am all in, brother.

Unhappy Distributors:

But their software did not work and it caused us significant loss of revenue and consultants and customers.

Trepidation of retail customers:

And I will tell you, if you talk to our field salespeople they are so excited about the fact that we have caught up on shipping. And there are people who've been sitting on the sidelines and said I am not going to order anything until they get that straightened out. And by the way, that includes our retail stores. It may take a little bit longer for them, but we have every hope that we will get the retail stores' business back and the customers.

Bullish conference call quotes about growth:

We recorded 35 million in sales two years ago, the past year 65 million, this year we will finish up around 110 million. And the growth continues. I am not going to throw out any large numbers here that will make everybody nervous, but the growth is continuing at least on that pace, if not better.

And that is continuing. Over the weekend we got 10,000 orders. And those orders are, again, increasing daily from last Monday -- two weeks ago Monday they are up about 80%. So, yes, and that is more cash that comes in. But we have bills to pay. We have to pay for inventory and UPS and salaries and so normal stuff. But we didn't stop -- we didn't continue to grow at an exponential rate.

So, today, I will tell you that every order that we have in this building has been shipped as of yesterday with the exception of any possible problem orders through customer service or some other unique situation. But other than that we are totally caught up, which means deferred revenue is gone. So that issue on the balance sheet of deferred revenue, which causes other compliance issues, is gone.

In January we had the largest month in our history, $14 million -- I mean, December. Excuse me, December, I am sorry, December.

The field people, this is not my forecast, but I am telling you the people in the field think that we can do 300 million this year.

TULSA, Okla., March 14, 2016 (GLOBE NEWSWIRE) -- Educational Development Corporation (“EDC”) (NASDAQ:EDUC) (http://www.edcpub.com) today reports historic record net revenues for the fiscal year ended February 29, 2016 (unaudited).

Randall White, CEO of Educational Development Corporation, announces that the Company achieved record net revenues of $63.7 million for the fiscal year ended February 29, 2016, which surpassed last year’s previous record of $32.5 million.  Both divisions of the Company had excellent net revenue results with the home business division, Usborne Books & More (UBAM) leading the way with $52.8 million compared to $21.1 million a year ago, an increase of 151%.

UBAM had an excellent year attracting new sales associates which now total over 19,600, compared to 7,800 at the end of fiscal year 2015.  This division has now posted 33 consecutive months of net revenues gains over the same month the previous year.

This unprecedented sales growth is primarily the result of eliminating sales to Amazon and wholesale accounts four years ago to support our retail accounts and our sales consultants.

Preliminary unaudited results indicate a marked increase in pre-tax earnings for the quarter and fiscal year ending February 29, 2016.  In addition, the Company had $2.4 million in orders received in February which were unable to be processed for the month due to the heavy influx of orders and will be included in results for March and the fiscal year ending February 28, 2017.  The Company has monitored the extraordinary growth in sales, which has continued in the first month of fiscal year 2017, and expect sales to exceed $110 million for fiscal year 2017. 

To accommodate this escalating growth, the Company moved to our new location during the month of February, while continuing to ship product.  The Company continues to look for improved efficiencies in operations.  A new small-package processing machine is being installed today which should more than double our quantity shipped each day, allowing us to minimize our backlog.  UBAM will introduce new ecommerce and consultant software in the first fiscal quarter of 2017, which, along with new accounting software, is an investment of over $750,000.

TULSA, Okla., Feb. 11, 2016 (GLOBE NEWSWIRE) -- Randall White, CEO, Educational Development Corporation (“EDC”) (NASDAQ:EDUC) announces record net revenues for January 2016.

Net revenues for the month ended January 31, 2016, were a Company record for January of $4,753,100 when compared to $2,016,100 for the same month last year, an increase of 136%.

Net revenues for the home business division, Usborne Books & More (“UBAM”) were $4,037,200 for January 2016, compared to $1,199,900 for the same period in fiscal year 2015, up 236%.  The net revenue gain was primarily driven by the continued increase in the number of sales associates joining the organization, with 1,200 new consultants during the month of January 2016, compared to 200 in January last year.  At January 31, 2016, Usborne Books & More had just under 18,000 active consultants compared to 7,900 active at the same time last year.

As previously reported, the extraordinary growth in sales necessitated the Company to acquire larger facilities to accommodate the distribution of its products.  The new facilities will be operational on Monday, February 15, 2016.  Our current facility, previously for sale, has been removed from the market as it has been determined that the continued sales growth necessitates retaining the existing facility to accommodate the increased operational requirements.

TULSA, Okla., Sept. 16, 2015 (GLOBE NEWSWIRE) -- Educational Development Corporation ("EDC") (NASDAQ:EDUC) (http://www.edcpub.com) would like to announce we have acquired Demibooks Inc. EDC is the United States publisher of Usborne and Kane Miller books and operates a direct-to-consumer sales division, Usborne Books & More.  EDC was an early investor in Demibooks.

As part of the acquisition, EDC will continue to operate Demibooks Storytime, a curated marketplace for children's picture book apps.  Publishers can create content for Storytime using Demibooks Composer Pro, the premier book app authoring platform on the iPad.  Demibooks will discontinue Demibooks Composer Studio and a service to publish apps to the App Store.  CEO Rafiq Ahmed and CTO Dan Hotop will consult with EDC during a transition period.

Demibooks CEO Rafiq Ahmed said, "It has been a fantastic journey since Demibooks Composer first launched in 2011.  We are grateful to everyone who has helped build Demibooks along the way. We pioneered interactive book app authoring on the iPad, and have reached amazing customers in digital publishing, schools and beyond.  We have had a close working relationship with EDC since their early investment in us, and are confident the Demibooks brand and digital publishing business will continue to grow within the EDC family."

Randall White, President and CEO of EDC, stated: "We are excited for the opportunity to distribute these products through our direct marketing division.  We also see potential for licensing the Composer platform to schools and other publishers."

- See more at: http://globenewswire.com/news-release/2015/09/16/768819/10149652/en/Educational-Development-Corporation-Announces-Acquisition-of-Demibooks-Inc.html#sthash.cjiSKEQc.dpuf

TULSA, Okla., Sept. 3, 2015 (GLOBE NEWSWIRE) -- Randall White, CEO, Educational Development Corporation ("EDC") (EDUC) (http://www.edcpub.com) announces record net revenues for the month of August 2015 of $5,042,200 compared to $2,454,800 for August last year, an increase of 205%. Both divisions of EDC posted significant increases in net revenues with Usborne Books & More (UBAM) leading the way with $3,893,000 compared to $1,339,900 for August last year, an increase of 191%. EDC Publishing had net revenues of $1,149,300 compared to $1,114,900 for August last year, a 3% increase.

The Company also recorded the largest net revenue for any quarter in our history of $12,620,500. The previous record was quarter ending November 30, 2014 of $10,936,700.

Mr. White states that preliminary, unaudited results for July and August indicate a significant improvement in operational margins which resulted from the increased net revenue and cost saving programs previously implemented. The increase in UBAM's net revenue was partially due to 5,000 new sales associates joining the organization from June 15 through July 31, 2015.

Mr. White announces his purchase of EDUC stock in the open market of 5,152 shares in his individual account and 4,296 shares in his IRA.

The Board of Directors had previously authorized a $0.09 per share cash dividend, a 12.5% increase, which will be paid on September 18, 2015 to shareholders of record September 11, 2015.