Educational Development Corporation (NASDAQ:EDUC) Q2 2021 Earnings Conference Call October 13, 2020 4:00 PM ET Company Participants Randall White - CEO Heather Cobb - Chief Sales and Marketing Officer Craig White - Chief Operating Officer Dan O'Keefe - CFO Operator Ladies and gentlemen, thank you for standing by and welcome to the Fiscal 2021 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. I would now like to hand the conference over to your speaker today, ...

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, 2020 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 ...

Financial Data and Key Metrics Changes - Net revenues for Q1 2021 were approximately $38.3 million, an increase of $10.7 million or 38.8% from $27.6 million in Q1 2020 [4] - Pretax profits for Q1 totaled $2.6 million, up $800,000 from $1.8 million in the same quarter last year, with pretax profit as a percentage of net revenues increasing from 6.7% to 6.9% [4] - Net earnings for Q1 2021 were $1.9 million compared to $1.4 million in Q1 2020, representing a 41.6% growth in pretax earnings [4] - Earnings per share on a fully diluted basis increased from $0.17 to $0.23, a rise of 35.3% [4] Business Line Data and Key Metrics Changes - Publishing sales were down in March due to store closures, but there was a significant recovery in April with a 60% increase compared to the previous year [5][7] - May saw an even more remarkable increase of approximately 116% compared to last May, with sales reaching around $16 million [7] - The company added 10,700 new consultants during April and May, indicating strong growth in its sales force [7] Market Data and Key Metrics Changes - The company experienced a significant increase in stock trading volume, with 800,000 shares traded in a short period, indicating heightened market interest [9] - June revenues for publishing began to recover as stores reopened, although the retail environment remains uncertain [12] Company Strategy and Development Direction - The company is focusing on keeping up with increased demand through the fall selling season, which is typically three times higher than summer sales [13] - There are plans for significant expansion of facilities to handle potential increases in volume, although no specific forecasts are made [13] - The company aims to maintain a strong cash position while considering options for debt management and dividend increases [21][25] Management's Comments on Operating Environment and Future Outlook - Management noted the unusual circumstances of the quarter due to COVID-19, with initial declines in sales followed by a strong recovery [5][6] - The company is optimistic about future growth, citing the highest number of active consultants in its history and record revenue months [10][12] - There is a cautious outlook on the retail environment, with management acknowledging the potential for store closures despite recent recoveries [12] Other Important Information - The company received a PPP loan of $1.44 million to support its workforce during the downturn [6] - Management expressed confidence in the financial stability of its primary tenant, which has a strong profit history [17] Q&A Session Summary Question: Concerns about renters' ability to pay due to COVID-19 - Management reassured that the primary tenant is financially stable and that a 90-day rent abatement was granted without concern [17] Question: Thoughts on selling stock to pay off debt - Management indicated that they do not need to sell stock to pay off debt, as the company generates significant cash flow from prepaid orders [20] Question: Stock price appreciation and cash management - Management discussed the balance between paying down debt, increasing dividends, and investing in inventory, emphasizing the importance of cash flow [21][25]

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 May 31, 2020 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 | --- | --- | |---------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Net revenues for Q4 2020 were approximately $20.2 million, down $3.4 million or 14.7% from approximately $23 million in Q4 2019 [3] - Full fiscal 2020 net revenues were approximately $113 million, down $5.8 million or 4.9% from approximately $118.8 million in fiscal 2019 [4] - Net earnings in fiscal 2020 were $5.6 million, down $1.1 million or 15.5% from $6.7 million in fiscal 2019 [5] - Earnings per share on a fully diluted basis decreased from $0.81 in fiscal 2019 to $0.68 in fiscal 2020 [5] Business Line Data and Key Metrics Changes - The retail division experienced a significant decline, with sales down about 60% to 70% due to store closings [9] - The UBAM division saw a revenue increase of about 60% in April compared to the previous year, despite the absence of school and library business [11] Market Data and Key Metrics Changes - March revenue was down 25%, attributed to disruptions in retail and school sales [8] - The company applied for a PPP loan of $1.44 million in response to the downturn, which was paid back shortly after due to improved business conditions [10] Company Strategy and Development Direction - The company is focusing on building a strong foundation for future growth, with new recruitment and IT programs in place [8] - Management expressed optimism about the potential for continued growth, drawing parallels to rapid growth experienced in 2016 [15][19] - The company is preparing for increased demand by ordering significant inventory and expanding operational capacity [37] Management's Comments on Operating Environment and Future Outlook - Management noted that there has not been a negative trend since April, with consistent weekly improvements in business performance [17] - The company is experiencing a surge in new sales recruits, indicating a positive trend in direct selling [12][20] - There is a strong demand for educational materials, particularly in the homeschooling sector, which is expected to continue [19] Other Important Information - The company transitioned to a virtual convention, attracting over 6,200 registrants, which is expected to be profitable [24] - Management emphasized the importance of early success for new consultants in maintaining momentum in sales [21] Q&A Session Summary Question: Concerns about the sustainability of improvements post-COVID - Management believes the current growth trend may continue, similar to the rapid growth seen in 2016, and that many individuals are looking for side gigs due to job losses [15][16] Question: Impact of unemployment on business opportunities - Management acknowledged the high unemployment rate but sees it as an opportunity for individuals to explore direct selling as a viable income source [18] Question: Handling increased demand and operational capacity - Management confirmed that they have ramped up operations to handle increased order volumes, with the ability to expand shifts as needed [32][33]

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, 2020 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 | --- | --- | |------------------------------------------------------------------------------------------------------------- ...

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, 2019 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 | --- | --- | |----------------------------------------------- ...

Financial Data and Key Metrics Changes - Net revenues for Q2 fiscal 2020 were approximately $24.4 million, down $0.3 million or 1% from $24.7 million in Q2 fiscal 2019 [5] - Earnings before income taxes totaled approximately $1.4 million, a decrease of $0.6 million or 30% from approximately $2 million in Q2 fiscal 2019 [5] - Net earnings in Q2 fiscal 2020 were approximately $1 million, a decrease of $0.5 million or 33% from approximately $1.5 million in Q2 fiscal 2019 [6] - Earnings per share on a fully diluted basis decreased $0.06 or 33% from $0.18 in Q2 fiscal 2019 to $0.12 in Q2 fiscal 2020 [6] - Pretax profit as a percentage of net revenues was 5.6% in Q2 fiscal 2020 compared to 8.1% in Q2 fiscal 2019 [6] Business Line Data and Key Metrics Changes - The UBAM division historically has the lowest net revenue quarter in Q2, which started slower than the previous year [7] - Sales in the published division increased just under 4% over last year's Q2 net earnings, attributed to improved distribution [9] - The company recruited over 10,000 new sales consultants in July, leading to an 8% increase in August net revenues compared to the previous year [8] Market Data and Key Metrics Changes - The company has a significant inventory buffer due to long lead times for product orders, which helps mitigate the impact of tariffs expected to start in December [50][51] - Approximately 70% of the company's products are produced in China, and tariffs are anticipated to affect these products [49] Company Strategy and Development Direction - The company is focusing on enhancing its IT infrastructure, including a mobile-friendly Consultant Back Office and an upgraded e-commerce site [12][13] - A partnership with PayPal has been established to improve payment processing and user experience [14] - The company aims to continue its trend of declaring dividends and share repurchase programs, indicating confidence in its valuation [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth during the fall selling season following a successful recruiting effort [8] - The company acknowledges challenges in the direct selling industry but emphasizes its ethical business practices [22][23] - Management is confident in the strength of its business model, even during the softest revenue quarter [21] Other Important Information - The company repurchased 60,000 shares for $400,000 during the quarter, indicating a commitment to shareholder value [21] - The company has leased out part of its older building, generating an annualized revenue of approximately $140,000 [56][57] Q&A Session Summary Question: Were there any one-time benefits in last year's expense structure that should be considered for modeling? - Management acknowledged a $400,000 rebate from a large supplier recognized in the fourth quarter of the previous year but did not identify any unusual adjustments in the third quarter [27] Question: How should incremental operating margins be viewed? - Management explained that the UBAM division has a different expense structure, with a significant portion of expenses recorded below the line, making it challenging to provide a direct dollar-to-dollar comparison [28][31] Question: What is the current consultant count? - The consultant count was approximately 35,000, but management noted that this number changes frequently as new consultants sign up and others drop out [32] Question: Is there any expectation of changes from Facebook affecting online sales? - Management anticipates that Facebook may implement changes, but the consultant base has shown resilience and creativity in adapting to challenges [40][41] Question: Are there any plans regarding capital expenditures for the upcoming fiscal year? - Management indicated that they do not project significant capital expenditures, as they are traditionally a low CapEx company [53][54]

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, 2019 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 (NASDAQ:EDUC) Q1 2020 Earnings Conference Call July 16, 2019 4:00 PM ET Company Representatives Randall White - Chief Executive Officer, President Craig White - Chief Operating Officer Dan O'Keefe - Chief Financial Officer Conference Call Participants Operator Good day, ladies and gentlemen, and welcome to the Educational Development, First Quarter Fiscal Year 2020 Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct the ...