Educational Development Corporation (NASDAQ:EDUC) Q2 2024 Earnings Conference Call October 12, 2023 4:30 PM ET Company Participants Steven Hooser - IR Craig White - President and CEO Dan O’Keefe - CFO Heather Cobb - Chief Sales & Marketing Officer Conference Call Participants Randy Freed - R L Capital LLC Operator Good afternoon, ladies and gentlemen. Welcome to the Educational Development Corporation Second Quarter Fiscal Year 2024, Earnings Conference Call. At this time, all lines are in a listen-only mo ...

Educational Development Corporation (NASDAQ:EDUC) Q1 2024 Earnings Conference Call July 13, 2023 4:30 PM ET Company Participants Jean Marie Young - IR, Three Part Advisors Craig White - President and Chief Executive Officer Dan O'Keefe - Chief Financial Officer Heather Cobb - Chief Sales and Marketing Officer Conference Call Participants Frank Goodell - Gene Goodell Associates Operator Good afternoon, ladies and gentlemen, and welcome to the Educational Development Corporation's First Quarter Fiscal Year 20 ...

Financial Performance - Net revenues for the three months ended May 31, 2023, decreased by $8.6 million, or 37.2%, to $14.5 million compared to $23.2 million for the same period in 2022[68]. - Gross margin decreased by $5.9 million, or 38.5%, to $9.4 million during the three months ended May 31, 2023, compared to $15.3 million in the same period last year[68]. - Operating expenses decreased by $4.8 million, or 31.9%, to $10.2 million for the three months ended May 31, 2023, compared to $15.0 million for the same period in 2022[68]. - PaperPie net revenues decreased by $7.4 million, or 37.0%, to $12.6 million during the three months ended May 31, 2023, compared to $20.0 million in the same period last year[73]. - Publishing division's net revenues decreased by $1.2 million, or 38.7%, to $1.9 million during the three-month period ended May 31, 2023, primarily due to the stoppage of distribution of Usborne products[82]. - Gross margin for the Publishing division decreased by $0.5 million, or 33.3%, to $1.0 million during the three-month period ended May 31, 2023, from $1.5 million in the same quarter last year[83]. - Operating income for the PaperPie segment decreased by $1.6 million, or 48.5%, to $1.7 million during the three months ended May 31, 2023, compared to $3.3 million in the same quarter last year[80]. Active Brand Partners - The average number of active brand partners decreased by 9,000, or 28.0%, to 23,200 in the first quarter of fiscal 2024 from 32,200 in the first quarter of fiscal 2023[73]. - Approximately 9.0% of active Brand Partners maintained consignment inventory, totaling $1.4 million as of May 31, 2023[109]. Discounts and Sales Impact - Discounts as a percentage of gross sales increased from 26.8% in the first quarter of fiscal 2023 to 29.9% in the first quarter of fiscal 2024, impacting net revenues by approximately $0.5 million[76]. Cash Flow and Financing - EDC reported cash inflows from operations of $1,177,100 during the first three months of fiscal year 2024, despite a net loss of $872,800[87]. - The company reduced inventories by $1,430,400, contributing positively to cash inflows[87]. - Cash used in investing activities totaled $300,900, primarily for capital expenditures on software upgrades amounting to $288,100[88]. - Financing activities resulted in a cash outflow of $689,200, including net borrowings of $324,700 and payments on term debt of $450,000[89]. - As of the end of the first fiscal quarter of 2024, EDC's revolving bank credit facility loan balance was $11.0 million, with $3.0 million in available capacity[86]. - The company anticipates using cash generated from operations to purchase inventory and pay down existing debt[90]. - The company executed a new Credit Agreement with BOKF, NA, establishing a fixed rate term loan of $15,000,000 and a floating rate term loan of $21,000,000[91]. Compliance and Inventory - The company expects to be out of compliance with the fixed charge ratio covenant during fiscal year 2024, raising substantial doubt about its ability to continue as a going concern[96]. - Noncurrent inventory balances were $6.4 million as of May 31, 2023, with valuation allowances of $0.5 million[107]. Compensation and Incentives - During the first three months of fiscal year 2024, the Company recognized $0.1 million of compensation expense associated with the shares granted[113]. - The restricted share awards under the 2019 and 2022 Long-Term Incentive Plans contain both service and performance conditions[112].

Financial Performance - Net revenues for fiscal year 2023 were $87.83 million, a decrease of 38.2% from $142.23 million in fiscal year 2022[57]. - Operating expenses for fiscal year 2023 totaled $58.65 million, down from $87.69 million in fiscal year 2022, primarily due to a reduction in sales commissions and operating costs[57]. - The company reported a net loss of $2,504,900 for fiscal year 2023, despite generating positive cash flows from operations of $58,500[71]. - Operating income decreased by $0.4 million, or 11.1%, to $3.2 million for the fiscal year ended February 28, 2023, compared to $3.6 million in the previous year[69]. Revenue Breakdown - The Publishing division generated 2% of net revenues from national chain bookstores, while 98% came from all other markets[55]. - Publishing division's net revenues remained consistent at $13.3 million for fiscal years ended February 28, 2023, and 2022[66]. - PaperPie net revenues decreased by $54.5 million, or 42.2%, to $74.5 million for the fiscal year ended February 28, 2023, compared to $129.0 million for the previous year[62]. Cost and Margin Analysis - Cost of goods sold decreased to $31.76 million in fiscal year 2023 from $44.30 million in fiscal year 2022, resulting in a gross margin of $56.07 million[57]. - Gross margin for PaperPie decreased by $41.9 million, or 45.6%, to $49.9 million, with gross margin as a percentage of net revenues dropping to 66.9% from 71.2%[63]. - Gross margin for the Publishing division increased by $0.1 million to $6.2 million, with gross margin as a percentage of net revenues rising to 46.4%[67]. Brand Partner Activity - The PaperPie division added 16,500 new Brand Partners in fiscal year 2023, down from 26,100 in fiscal year 2022, with active Brand Partners decreasing to 24,600 from 36,100[45]. - The average number of active Brand Partners decreased by 16,900, or 37.6%, to 28,000 in fiscal year 2023 from 44,900 in fiscal year 2022[62]. - Approximately 8.5% of active Brand Partners maintained consignment inventory at the end of fiscal year 2023, with total consignment inventory costs of $1.5 million[98]. Debt and Interest - Interest expense increased to $2.17 million in fiscal year 2023 from $0.92 million in fiscal year 2022, attributed to increased borrowings and rising interest rates[59]. - The Company has a Fixed Rate Term Loan with an interest rate of 4.26% and a Floating Rate Term Loan with an effective rate of 6.28% as of February 28, 2023[83]. - The company anticipates not meeting the fixed charge ratio during fiscal year 2024, which could represent an Event of Default under the Credit Agreement[80]. Inventory Management - Noncurrent inventory balances were $5.1 million and $2.4 million at February 28, 2023, and February 28, 2022, respectively, with valuation allowances of $0.4 million for both years[97]. - The Company does not expect inventory to increase in fiscal year 2024 as it continues to sell down excess inventory[87]. - The total cost of inventory on consignment with Brand Partners was $1.5 million as of February 28, 2023, compared to $1.4 million in the previous year[98]. Other Income and Expenses - Other income decreased to $1.33 million in fiscal year 2023 from $1.91 million in fiscal year 2022, influenced by prior year recoveries not repeating[60]. - The effective tax rate increased to 26.9% for fiscal year 2023 from 26.1% in fiscal year 2022, reflecting fluctuations in sales mix between states[61]. - The Company recognized $0.9 million and $1.0 million in share-based compensation expense for fiscal years 2023 and 2022, respectively[92].

Educational Development Corporation (NASDAQ:EDUC) Q4 2023 Earnings Conference Call May 11, 2023 4:30 PM ET Company Participants Steven Hooser - Investor Relations Craig White - President & Chief Executive Officer Dan O'Keefe - Chief Financial Officer Heather Cobb - Chief Sales & Marketing Officer Conference Call Participants Operator Good afternoon, everyone, and thank you for participating in today's conference call to discuss Educational Development Corporation's Financial and Operating Results for its Fi ...

Financial Data and Key Metrics Changes - Net revenues for Q3 2023 were $30.3 million, a decrease of $14.8 million or 32.8% compared to $45.1 million in Q3 2022, but an increase of 56.2% from $19.4 million in the previous quarter [8] - Net earnings for the quarter were zero, down from $2.6 million, resulting in earnings per share of zero compared to $0.31 on a fully diluted basis [9] - Year-to-date loss totaled $600,000, a significant decrease from $8.6 million during the same period last year [10] Business Line Data and Key Metrics Changes - Average active UBAM sales consultants totaled 27,100, down from 41,500 in the same period a year ago, but stabilized compared to 26,800 in the previous quarter [3][4] - The decline in active consultants is attributed to the normalization post-pandemic, as schools reopened and families returned to work [4] Market Data and Key Metrics Changes - The company faced macroeconomic pressures from record inflation, impacting the purchasing power of target customers, primarily families with young children [2] - The company implemented additional discounts and incentives to support customers and energize the sales force, generating over $30 million in net sales [2] Company Strategy and Development Direction - The company has rebranded its direct sales division to "PaperPie," aiming to create a recognizable name that encompasses its product offerings [13][35] - The launch of the SmartLab Toys product line is expected to have an immediate sales impact, with plans for additional product releases [15][40] - The company plans to reinstate quarterly dividends as profitability improves, which is a top priority for management [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by inflation and rising costs, particularly in freight, but expressed confidence in returning to higher profitability [16][38] - The successful rebranding and the excitement surrounding the new name are expected to drive positive momentum and increase the brand partner count [39] Other Important Information - The company has made changes to improve profitability, including increasing freight charges and reducing operating expenses [38] - The longstanding dividend program remains paused to preserve cash, improving cash flows by approximately $1 million per quarter [33] Q&A Session Summary Question: What is the trend in UBAM's net sales per average consultant? - Management noted that the decline in sales per consultant is primarily due to economic factors, and they do not anticipate this trend continuing [45][61] Question: Is Usborne planning to launch its own MLM business to compete with PaperPie? - Management clarified that Usborne is not launching a competing MLM division; the rebranding is to protect their global brand [62] Question: How has inflation impacted year-over-year and quarter-over-quarter growth? - Management stated that while they cannot quantify inflation's impact, it affects discretionary purchases for families [65] Question: Will discounts and incentives continue in the next quarters? - Management indicated that promotions are reactive to market conditions and not a company-wide decision [67] Question: Are there plans to add more products to the SmartLab Toys line? - Management confirmed that they are exploring additional products and have retained a creator from the previous team to assist in development [71][79]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2022 OR ☐ TRANSITION REPORT UNDER 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) Delaware 73-0750007 (State or o ...

Educational Development Corporation (NASDAQ:EDUC) Q2 2023 Earnings Conference Call October 6, 2022 4:30 PM ET Company Participants Steven Hooser - Investor Relations Craig White - President and Chief Executive Officer Dan O'Keefe - Chief Financial Officer & Secretary Heather Cobb - Chief Sales & Marketing Officer Conference Call Participants Operator Good afternoon, everyone. And thank you for participating in today's conference call to discuss Educational Development Corporation’s Financial and Operating R ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2022 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |---------------------------------------------------------------------------------------|-----------------------------------------------------| | For the transition period | to . | ...

Educational Development Corporation (NASDAQ:EDUC) Q1 2023 Earnings Conference Call July 6, 2022 5:00 PM ET Company Participants Craig White - President & CEO Dan O’Keefe - CFO Heather Cobb - Chief Sales & Marketing Officer Operator Thank you for joining the Educational Development Corporation's first quarter earnings call. Before beginning the call, we would like to remind you that some of the statements made today will be forward-looking and are protected under the Private Securities Litigation Reform Act ...