Core Insights - Educational Development Corporation (EDC) reported a net revenue of $10.0 million for the first quarter of fiscal 2025, a decrease from $14.5 million in the same period last year [8] - The company experienced a net loss of $(1.3) million, compared to a loss of $(0.9) million in the prior year, with a loss per share of $(0.15) compared to $(0.11) [8][11] - EDC's average active PaperPie Brand Partners decreased to 13,400 from 23,200 year-over-year, although recent promotions have added over 3,700 new partners, bringing the total to 14,700 by the end of June [8][9] Financial Performance - Net revenues for the three months ended May 31, 2024, were $9,993,400, down from $14,524,000 in 2023 [11] - Loss before income taxes was $(1,747,000) compared to $(1,200,600) in the previous year [11] - The weighted average number of common and equivalent shares outstanding remained relatively stable at 8,266,771 compared to 8,278,049 [11] Strategic Developments - The company has focused on inventory reduction, generating $2.9 million in positive cash flows, which helped cover historically negative cash outflows [3] - EDC signed a lease agreement for half of its space in the Hilti Complex, expected to generate approximately $1.0 million in new cash flow annually [3] - A sale/leaseback agreement for the Hilti Complex was executed for $35.5 million, which is anticipated to fully pay back bank borrowings and minimize future borrowing needs [10]

Group 1 - Educational Development Corporation (EDC) announced the date and time for its Fiscal Year 2025 First Quarter Earnings Call, scheduled for July 11, 2024, at 3:30 PM CT (4:30 PM ET) [2][3] - The earnings call will feature presentations from key executives, including Craig White (CEO), Heather Cobb (Chief Sales and Marketing Officer), and Dan O'Keefe (CFO), followed by a Q&A session [3] - Participants can join the call via phone at (800) 717-1738, with a Conference ID of 40168, and audio replays will be available post-event [3] Group 2 - EDC specializes in publishing children's books and owns brands such as Kane Miller Books, Learning Wrap-Ups, and SmartLab Toys, focusing on educational products [4] - The company is the exclusive U.S. distributor for Usborne Publishing Limited's children's books, with products sold through 4,000 retail outlets and independent brand partners [4]

. ● . Educational Development Corporation Announces Executed Fifth Amendment to Credit Agreement June 17, 2024 4:12 PM EDT | Source: Educational Development Corporation Tulsa, Oklahoma--(Newsfile Corp. - June 17, 2024) - Educational Development Corporation (NASDAQ: EDUC) (the "Company") executed the Fifth Amendment ("Amendment") to the Existing Credit Agreement ("Amendment") with BOKF, NA (the "Lender"). The Amendment, effective May 31, 2024, adjusts the maximum availability of the Revolving Loan commitment ...

. . Contact: Educational Development Corporation Craig White, (918) 622-4522 Investor Relations: Three Part Advisors, LLC Steven Hooser (214) 872-2710 ent To view the source version of this press release, please visit https://www.newsfilecorp.com/release/212567 . Educational Development Corporation Announces Sale and Leaseback Agreement of Headquarters and Warehouse Facility June 12, 2024 8:00 AM EDT | Source: Educational Development Corporation Tulsa, Oklahoma--(Newsfile Corp. - June 12, 2024) - Educationa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 29, 2024 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 000-04957 EDUCATIONAL DEVELOPMENT CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of inc ...

Financial Performance - Net revenues for fiscal 2024 were $51.0 million, a decrease of 42% compared to $87.8 million in the prior year[4] - Net earnings improved to $0.5 million, an increase of $3.0 million compared to a net loss of $2.5 million in the previous year[4] - Earnings per share for fiscal 2024 was $0.07, compared to a loss of $(0.31) in the prior year[4] - Loss before income taxes improved by $0.4 million to $(2.2) million in the fourth quarter compared to the prior year[4] Operational Changes - Average active PaperPie Brand Partners decreased to 18,300 from 28,000, reflecting a decline of approximately 35%[4] - The company continues to focus on reducing spending and limiting capital expenses to navigate high inflation challenges[3] - The new e-commerce platform launched in January aims to enhance user experience and drive revenue growth[3] Cash Flow and Debt Management - Inventory levels were reduced from $63.8 million to $55.6 million, generating $8.2 million in cash flows[3] - Bank borrowings decreased from $45.7 million to $33.9 million, aided by inventory reductions and proceeds from asset sales[3] - The planned sale/leaseback of the headquarters facility is expected to generate approximately $40.0 million, which could fully pay off bank borrowings[3]

Educational Development Corporation Announces Fiscal Fourth Quarter and Fiscal 2024 Results May 21, 2024 4:00 PM EDT | Source: Educational Development Corporation Tulsa, Oklahoma--(Newsfile Corp. - May 21, 2024) - Educational Development Corporation (NASDAQ: EDUC) ("EDC", or the "Company"), a publishing company specializing in books and educational products for children, today reports financial results for the fiscal fourth quarter and fiscal year ended February 29, 2024. Fiscal Year Summary Compared to the ...

Financial Data and Key Metrics Changes - Earnings before income taxes totaled $2.7 million compared to breakeven last year, with after-tax income of $2 million versus breakeven last year, resulting in income per share of $0.24 [38] - Net revenues for the third quarter totaled $16.9 million, a decrease of $13.4 million or 44% compared to $30.3 million in the same quarter last year [43] - Average active PaperPie brand partners decreased to 16,400 from 27,100, a decline of 39% [43] - Net inventories decreased by $6.3 million from $64.3 million to $57.9 million [44] Business Line Data and Key Metrics Changes - Sales in the Publishing division were lower due to the stoppage of selling Usborne products, but this was partially offset by strong orders for SmartLab Toys and increased sales of Kane Miller books and Learning Wrap-Ups [36][42] - The PaperPie division experienced a 30% decrease in sales compared to the previous year, primarily due to lower active brand partner levels [41] Market Data and Key Metrics Changes - The company has stabilized its active brand partner count during the summer and maintained consistent levels through the fiscal third quarter, which is typically the largest sales quarter [35] Company Strategy and Development Direction - The company is focused on reducing excess inventory levels and improving long-term brand partner success, which is seen as essential for generating future brand partner success [37] - The company plans to sell its current headquarters for $40 million, with proceeds expected to pay off line of credit and term loans, thereby improving financial performance [56][57] - A new e-commerce platform is set to launch, aimed at enhancing customer experience and sales opportunities [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving operating profitability even at a stabilized revenue level of $40 million, emphasizing the need to increase sales [68][69] - The reinstatement of quarterly dividends is a priority, but management wants to ensure profitability is on the horizon before making such decisions [71] Other Important Information - The company executed a fourth amendment to its credit agreement, increasing borrowing availability to $8 million [39] - The company has switched its credit card processor to Nexio, which has released cash reserves held during the quarter [46] Q&A Session Summary Question: What was your cash flow from operations for the quarter? - The cash flow from operations was not available during the call but was expected to be published later [63] Question: What is your ongoing CapEx looking like? - Ongoing CapEx is primarily tied to IT development, with non-IT CapEx being minimal [65] Question: Can the company achieve operating profitability at a $40 million revenue level? - Management is confident that they can achieve operating profitability at that level [69] Question: Will the company consider reinstating dividends before achieving operating profitability? - Management indicated that they would want to be confident in profitability before reinstating dividends [71] Question: Can you discuss the circumstances around the resignation of John Clerico from the Board? - His resignation was due to personal health issues and was not related to any disagreements with management [73][75]

Financial Performance - Net revenues for the three months ended November 30, 2023, decreased by 44.0% to $16,944,800 compared to $30,269,400 for the same period in 2022[93]. - Gross margin for the three months ended November 30, 2023, decreased by 42.2% to $11,142,400, with a gross margin percentage of 65.7% compared to 63.6% in the same period last year[93][108]. - Total operating expenses for the three months ended November 30, 2023, decreased by 36.5% to $12,083,500 compared to $19,015,300 for the same period in 2022[93]. - Operating income for the PaperPie segment decreased by 46.7% to $1,610,700 during the three months ended November 30, 2023, compared to $3,019,800 in the same quarter last year[111]. - PaperPie gross revenues decreased by $25.5 million, or 33.1%, to $51.6 million for the nine months ended November 30, 2023, compared to $77.1 million for the same period last year[112]. - Gross margin decreased by $16.9 million, or 40.4%, to $24.9 million for the nine months ended November 30, 2023, with gross margin as a percentage of net revenues decreasing to 66.2%[115]. - Total operating expenses decreased by $12.4 million, or 36.8%, to $21.3 million during the nine-month period ended November 30, 2023[116]. - Operating income of the PaperPie segment decreased by $4.4 million, or 55.0%, to $3.6 million during the nine months ended November 30, 2023[117]. - The Publishing division's net revenues decreased by $7.0 million, or 61.4%, to $4.4 million during the nine-month period ended November 30, 2023, primarily due to the stoppage of Usborne product distribution[123]. - Gross margin for the Publishing division decreased by $2.7 million, or 51.9%, to $2.5 million during the nine-month period ended November 30, 2023, with gross margin as a percentage of net revenues increasing to 56.4%[124]. Discounts and Sales - Discounts as a percentage of gross sales increased from 27.1% to 31.2%, resulting in an additional $0.9 million in discounts during the quarter[106]. - Discounts as a percentage of gross sales increased from 27.7% to 31.1%, impacting net revenues by approximately $1.8 million during the first nine months of fiscal 2024[113]. Operational Metrics - Average number of active brand partners decreased by 39.5% to 16,400 during the three months ended November 30, 2023, compared to 27,100 in the same period last year[104]. - The average number of active brand partners decreased by 9,500, or 33.1%, to 19,200 during the nine-month period ended November 30, 2023, from 28,700 in the same period a year ago[112]. Income and Expenses - Other income increased by 1,000.0% to $4,363,300 for the three months ended November 30, 2023, primarily due to the sale of the old HQ building[96]. - Interest expense increased by 16.7% to $726,200 for the three months ended November 30, 2023, compared to $600,600 in the same period last year[95]. - Income tax expense increased to $723,900 for the three months ended November 30, 2023, from $300 in the same period last year, reflecting a 100.0% increase[97]. - Total operating expenses not associated with a reporting segment decreased by 27.5% to $2,978,200 for the three months ended November 30, 2023, compared to $4,000,000 for the same period last year[94]. Cash Flow and Financing - Cash inflows from operations for the first nine months of fiscal year 2024 were $11,618,800, including net earnings of $2,161,000[128]. - Cash used in financing activities was $12,249,400, which included net payments on the line of credit of $5,636,400 and payments on term debt of $6,049,100[131]. - The Company entered into a swap transaction converting $18,000,000 of its $21,000,000 Floating Rate Term Loan to a fixed interest rate of 4.73% for two years, effective June 7, 2023[137]. - The Third Amendment to the Revised Credit Agreement reduced the Revolving Loan commitment from $13,500,000 to $4,000,000 by January 31, 2024, and increased the borrowing rate to 30-Day Term SOFR Rate + 4.50%, or 9.83% as of November 30, 2023[138]. - As of November 30, 2023, available credit under the $5,000,000 revolving line of credit was approximately $1,900[139]. - The Company is required to list its real estate property at 5402 South 122nd Ave., Tulsa, Oklahoma for sale if it fails to meet terms of the Revised Credit Agreement, with a market value of $41,970,000[140]. - Future scheduled maturities of long-term debt total $29,050,900 over the next five fiscal years, with $450,000 due in 2024 and $23,200,900 in 2028[141]. - The Fourth Amendment to the Credit Agreement, effective December 1, 2023, increases the Revolving Loan commitment to $8,000,000 and extends the maturity date to May 31, 2024[141]. Inventory and Reserves - The Company has estimated a reserve for sales returns of $0.2 million as of November 30, 2023[148]. - An allowance for doubtful accounts of $0.1 million was estimated as of November 30, 2023[149]. - Noncurrent inventory balances were $10.2 million as of November 30, 2023, with valuation allowances of $0.5 million[151]. - The total cost of inventory on consignment with brand partners was $1.4 million as of November 30, 2023[153].

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited condensed financial statements for the quarterly period ended August 31, 2023, highlighting revenue decline, a shift to net profit due to a tax credit, and significant debt structure changes Condensed Balance Sheet Highlights (Unaudited) | Account | August 31, 2023 | February 28, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$98,961,000** | **$99,936,800** | | Total current assets | $59,905,600 | $63,551,600 | | Inventories – net (Current) | $53,682,200 | $59,086,500 | | **Total Liabilities** | **$53,877,300** | **$54,705,000** | | Line of credit | $9,723,100 | $10,634,500 | | Current maturities of term debt | $1,800,000 | $34,894,900 | | Long-term debt – net | $32,217,300 | - | | **Total Shareholders' Equity** | **$45,083,700** | **$45,231,800** | Condensed Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Aug 31, 2023 | Three Months Ended Aug 31, 2022 | Six Months Ended Aug 31, 2023 | Six Months Ended Aug 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | **$10,593,100** | **$19,418,300** | **$25,117,100** | **$42,579,200** | | Gross Margin | $6,908,800 | $12,478,600 | $16,282,400 | $27,787,900 | | Earnings (Loss) Before Income Taxes | $1,452,900 | $(1,105,600) | $252,300 | $(820,400) | | **Net Earnings (Loss)** | **$1,061,700** | **$(801,900)** | **$188,900** | **$(586,100)** | | **Basic and Diluted EPS** | **$0.13** | **$(0.10)** | **$0.02** | **$(0.07)** | Condensed Statements of Cash Flows Highlights (Unaudited, Six Months Ended) | Cash Flow Activity | August 31, 2023 | August 31, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4,715,400 | $(3,628,900) | | Net cash used in investing activities | $(470,500) | $(254,000) | | Net cash provided by (used in) financing activities | $(2,375,300) | $4,354,200 | [Note 6 – Debt](index=15&type=section&id=Note%206%20%E2%80%93%20Debt) The Third Amendment to the credit agreement significantly altered debt terms, including a reduced revolving commitment and increased borrowing rates, raising substantial doubt about the company's going concern ability - The Third Amendment to the credit agreement, executed on August 9, 2023, extended the Revolving Loan maturity to January 31, 2024, and introduced a stepdown in the Revolving Commitment from **$13.5 million to $4.0 million** by January 2024[53](index=53&type=chunk) - The amendment increased the borrowing rate on the Revolving Loan to **30-Day Term SOFR Rate + 4.50% (9.81% at Aug 31, 2023)** and restricts the company from entering into new purchase orders[53](index=53&type=chunk) - The short-term duration of the Revolving Loan and uncertainty in meeting stepdown requirements raise substantial doubt about the Company's ability to continue as a going concern; management's plan involves selling its Hilti Complex to pay off debt if covenants are violated[56](index=56&type=chunk) [Note 8 – Business Concentration](index=17&type=section&id=Note%208%20%E2%80%93%20Business%20Concentration) The company faces termination risk from its key supplier Usborne due to unmet purchase requirements, significantly impacting the Publishing division's sales - The company did not meet minimum purchase volumes for the fiscal period ending January 31, 2023, under its agreement with Usborne, giving Usborne the right to terminate the agreement; as of the report date, no termination notice had been received[61](index=61&type=chunk) Usborne Product Sales and Purchases | Metric | Three Months Ended Aug 31, 2023 | Three Months Ended Aug 31, 2022 | Six Months Ended Aug 31, 2023 | Six Months Ended Aug 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Gross Sales of Usborne Products | $6,227,900 | $18,677,100 | $17,330,200 | $38,919,800 | | Usborne Purchases as % of Total | 21.9% | 38.1% | 25.8% | 52.3% | [Note 13 – Business Segments](index=20&type=section&id=Note%2013%20%E2%80%93%20Business%20Segments) Both PaperPie and Publishing segments experienced significant year-over-year revenue declines and reduced earnings for the three and six-month periods ended August 31, 2023 Net Revenues by Segment (Six Months Ended August 31) | Segment | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | PaperPie | $21,917,200 | $35,949,000 | -39.0% | | Publishing | $3,199,900 | $6,630,200 | -51.7% | | **Total** | **$25,117,100** | **$42,579,200** | **-41.0%** | Earnings (Loss) Before Income Taxes by Segment (Six Months Ended August 31) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | PaperPie | $2,022,900 | $5,029,200 | | Publishing | $896,600 | $1,565,600 | | Other | $(2,667,200) | $(7,415,200) | | **Total** | **$252,300** | **$(820,400)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant revenue decline to reduced brand partners, inflation, rebranding disruption, and cessation of product distribution, with liquidity constrained by new debt covenants and going concern doubts - PaperPie net revenues decreased **41.5%** in Q2 2024, primarily due to a **32.5%** decrease in the average number of active brand partners (from **26,800 to 18,100**), record inflation impacting consumer disposable income, and disruption from the division's rebranding[101](index=101&type=chunk) - Publishing division's net revenues decreased **62.9%** in Q2 2024, mainly due to the stoppage of Usborne product distribution to retail accounts as per the new distribution agreement[113](index=113&type=chunk) - Other income increased by **$3.9 million** in Q2 2024, primarily due to the receipt of a **$3.8 million** Employee Retention Credit (ERC) under the CARES Act[93](index=93&type=chunk)[59](index=59&type=chunk) - The company's liquidity is constrained; the short-term duration of its revolving loan, strict stepdown requirements, and uncertainty of renewal raise substantial doubt about its ability to continue as a going concern; management's plan to alleviate this involves selling excess inventory and, if necessary, selling its main 'Hilti Complex' property to repay debt[136](index=136&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has indicated that this section is not applicable for this reporting period - Not applicable[151](index=151&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of August 31, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[153](index=153&type=chunk) - There have been no changes in the company's internal control over financial reporting during the second quarter that have materially affected, or are reasonably likely to materially affect, internal controls[154](index=154&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that there are no legal proceedings to disclose for this period - Not applicable[156](index=156&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Educational Development Corporation is not required to provide this information in its Form 10-Q - Not required by smaller reporting company[157](index=157&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during the three-month period ending August 31, 2023, with 376,393 shares remaining available under the current repurchase plan - No shares were purchased by the company during the three months ended August 31, 2023[158](index=158&type=chunk) - As of August 31, 2023, there were **376,393 shares** that may yet be repurchased under the publicly announced plan from February 4, 2019[158](index=158&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there were no defaults upon senior securities during the period - Not applicable[159](index=159&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that there are no mine safety disclosures - None[160](index=160&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company reports that there is no other information to disclose - None[161](index=161&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists key agreements and certifications filed as exhibits, including the Usborne Distribution Agreement, Credit Agreement amendments, and Sarbanes-Oxley Act certifications - Lists key agreements filed as exhibits, including the Usborne Distribution Agreement (10.1), the Credit Agreement with BOKF, NA (10.2), and its First, Second, and Third Amendments (10.3, 10.4, 10.5)[163](index=163&type=chunk) - Includes certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[163](index=163&type=chunk)