Educational Development Corporation Announces Third Quarter Fiscal 2019 Results

Globe Newswire 10-Jan-2019 4:45 PM

TULSA, Okla., Jan. 10, 2019 (GLOBE NEWSWIRE) -- Educational Development Corporation ("EDC", or the "Company") (NASDAQ:EDUC) (http://www.edcpub.com) today reports record net sales and earnings per share results for the third quarter ended November 30, 2018.   

Randall White, CEO of Educational Development Corporation, announced that for the fiscal third quarter ended November 30, 2018, the Company reports net revenues of $40,482,600, an increase of $1,572,700, or 4.0%, when compared to $38,909,900 for the third quarter of the previous year.  Net earnings totaled $2,815,600 for quarter ended November 30, 2018, compared to $2,128,400 for the quarter ended November 30, 2017, an increase of 32.3%. Earnings per share for the quarter were $0.34 compared to $0.26 for the same quarter in the previous year, up 30.8% on a fully diluted basis.

Our direct sales division, Usborne Books & More ("UBAM"), continues to be the largest operating segment of the Company.  Net revenues of this division for the third quarter ending November 30, 2018 were $37,321,300, an increase of 2.3% from $36,470,300 reported in the third quarter ended November 30, 2017.  The average number of active direct sales consultants decreased 900, or 2.9%, to 30,200 for the quarter ended November 30, 2018, over our average active consultant count in the third quarter of last year.

Our Publishing's division net revenues for the quarter ended November 30, 2018 were $3,161,300, an increase of $721,700, or 29.6% from the revenues reported in the third quarter of last year totaling $2,439,600. 

The Company's year to date net revenues in the first three quarters of the fiscal year totaled $95,185,900, an increase of $5,147,900, or 5.7%, from $90,038,000 reported in the same period last year.  Net earnings totaled $6,122,900 for nine months ended November 30, 2018, compared to $4,390,600 for the nine months ended November 30, 2018, an increase of 39.5%.   Year to date earnings per share increased $0.21, or 38.9%, from $0.54 for the nine months ended November 30, 2017 to $0.75 for the nine months ended November 30, 2018, on a fully diluted basis.

Per Mr. White, "I am pleased to announce our continued record net revenues in the fiscal third quarter, our busiest quarter of the year.   During this quarter we saw increased sales activity from our active consultants and also experienced the return of net sales from our Publishing division to historical levels. 

Mr. White continued, "The growth in the active consultant count of our UBAM Division has been challenged over the past few quarters, s has the entire Direct Selling Industry, which has experienced a multi-year decline.  Our sales increase, while modest, reflects a much more positive result when compared to the overall industry statistics.  These results can be attributed to our dedicated, loyal sales force, the outstanding quality and value of our product line, the successful efforts of our marketing department and the shipment execution from our operations department.  During the third quarter, our shipments kept pace with the increased volume of incoming orders without creating a large backlog, which increased revenues and improved our overall customer satisfaction."

Per Mr. White, "We are also reporting record profits for the quarter.  These profits result from increased volumes and operational improvements that were made during the last two years.  These improvements were evidenced in the reduced number of seasonal employees utilized.  During the third quarter, we employed only one warehouse shift, whereas last year when we utilized two shifts for the majority of the third quarter.  While there was additional overtime this year in our warehouse operations, the savings from not using a second shift of seasonal employees resulted in increased efficiencies and profits during the quarter."

Mr. White continued, "All of these sales improvements and improved execution have made us poised for additional growth in the upcoming quarters." 

Mr. White concluded,  "Our Board has approved the continued payment of dividends this quarter and authorized a $0.05 per share cash dividend which will be paid on or around Thursday, March 12, 2019 to shareholders of record February 21, 2019.  We are pleased to continue our recent practice of paying quarterly dividends."   

 
EDUCATIONAL DEVELOPMENT CORPORATION
CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
  Three Months Ended November 30   Nine Months Ended November 30
    2018   2017     2018   2017
           
NET REVENUES     40,482,600     38,909,900     95,185,900   90,038,000
           
EARNINGS BEFORE INCOME TAXES     3,804,200   3,482,800        8,335,600     7,097,700
           
INCOME TAXES     988,600     1,304,400       2,212,700     2,707,100
NET EARNINGS $  2,815,600 $  2,128,400   $     6,122,900 $     4,390,600
                   
BASIC AND DILUTED EARNINGS                  
PER SHARE:                  
Basic $     0.34 $     0.26   $      0.75 $     0.54
Diluted $   0.34 $   0.26   $     0.75 $     0.54
                   
                   
DIVIDENDS PER SHARE $     0.10 $ 0.00   $     0.15 $     0.00
                   
WEIGHTED AVERAGE NUMBER OF                  
COMMON AND EQUIVALENT SHARES                  
OUTSTANDING:                  
Basic     8,194,072     8,174,536      8,185,561     8,175,372
Diluted     8,201,776     8,180,022      8,193,206     8,180,106
                   

EDC will host its third quarter fiscal 2019 results Investor Call including a live Q&A webcast on Tuesday, January 15, 2019, at 3:00 PM CT (4:00 PM ET).  Randall White, the Company's CEO and President, Craig White, Chief Operating Officer, Heather Cobb, Chief Sales and Marketing Officer and Dan O'Keefe, CFO and Secretary, will present the fiscal third quarter and results and be available for questions following the presentation.  Phone lines for participants will be available at (844) 395-9253 (International callers can use (478) 219-0506.  The conference passcode is 1792807.

The weblink to the call is: https://edge.media-server.com/m6/p/qcipe2bg  

The link to the webcast, including 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 Corporation
Randall White, (918) 622-4522

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, as well as those factors discussed in our Annual Report on Form 10-K for the year ended February 28, 2018, 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, 2018 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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