The Retail-Wholesale group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Envela Corporation (ELA) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Retail-Wholesale sector should help us answer this question.Envela Corporation is a member of our Retail-Wholesale group, which includes 201 different companies and currently sits at #11 in the Zacks Sector Rank. The Za ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's unaudited financial statements and management's analysis of financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the periods ended June 30, 2025 and 2024 [CONDENSED CONSOLIDATED STATEMENTS OF INCOME](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Three Months Ended June 30: | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales | $54,876,833 | $45,297,002 | | Cost of goods sold | $42,488,910 | $33,907,545 | | Gross margin | $12,387,923 | $11,389,457 | | Operating income | $3,255,445 | $1,909,142 | | Net income | $2,752,399 | $1,564,179 | | Basic EPS | $0.11 | $0.06 | | Diluted EPS | $0.11 | $0.06 | Six Months Ended June 30: | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales | $103,132,662 | $85,154,782 | | Cost of goods sold | $78,776,715 | $63,444,641 | | Gross margin | $24,355,947 | $21,710,141 | | Operating income | $6,373,866 | $4,249,285 | | Net income | $5,245,746 | $3,471,718 | | Basic EPS | $0.20 | $0.13 | | Diluted EPS | $0.20 | $0.13 | [CONDENSED CONSOLIDATED BALANCE SHEETS](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025 and December 31, 2024: | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,851,869 | $20,609,003 | | Total current assets | $56,580,655 | $51,603,807 | | Total assets | $82,715,760 | $77,870,489 | | Total current liabilities | $12,360,432 | $12,518,134 | | Total liabilities | $24,939,202 | $25,218,351 | | Total stockholders' equity | $57,776,558 | $52,652,138 | [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Six Months Ended June 30: | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operations | $3,722,594 | $3,002,262 | | Net cash used in investing | $(879,509) | $(1,265,004) | | Net cash used in financing | $(600,219) | $(2,247,110) | | Net change in cash and cash equivalents | $2,242,866 | $(509,852) | | Cash and cash equivalents, end of period | $22,851,869 | $17,344,001 | [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Three Months Ended June 30, 2025: | Metric | Amount | | :--- | :--- | | Balance as of April 1, 2025 | $55,142,859 | | Net Income | $2,752,399 | | Shares repurchased | $(118,700) | | Balance as of June 30, 2025 | $57,776,558 | Six Months Ended June 30, 2025: | Metric | Amount | | :--- | :--- | | Balance as of January 1, 2025 | $52,652,138 | | Net Income | $5,245,746 | | Shares repurchased | $(121,326) | | Balance as of June 30, 2025 | $57,776,558 | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [NOTE 1 – BASIS OF PRESENTATION](index=9&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION) - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC regulations, and should be read in conjunction with the 2024 Annual Report on Form 10-K[22](index=22&type=chunk) [NOTE 2 – PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS](index=9&type=section&id=NOTE%202%20%E2%80%93%20PRINCIPLES%20OF%20CONSOLIDATION%20AND%20NATURE%20OF%20OPERATIONS) - Envela operates as a holding company through subsidiaries in re-commerce and recycling sectors, with all intercompany transactions eliminated[24](index=24&type=chunk) - The Consumer Segment focuses on online and brick-and-mortar sales of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds, luxury watches, and secondary market bullion, emphasizing environmentally responsible options[25](index=25&type=chunk) - The Commercial Segment specializes in de-manufacturing end-of-life electronic assets for commodity reclamation and IT asset disposition (ITAD), promoting a circular economy through reuse and recycling[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [NOTE 3 – ACCOUNTING POLICIES AND ESTIMATES](index=13&type=section&id=NOTE%203%20%E2%80%93%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - Revenue recognition follows ASC 606, with the Consumer Segment recognizing revenue upon merchandise delivery or point of sale for retail, and shipment for e-commerce[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The Commercial Segment recognizes refining revenue upon transfer of control of goods at the destination port, with an estimate for variable consideration based on precious metal spot price and weight[34](index=34&type=chunk)[35](index=35&type=chunk) - For the six months ended June 30, 2025, **two customers accounted for 50.3% of sales and 19.1% of accounts receivable**, indicating significant customer concentration[43](index=43&type=chunk) Shipping and Handling Costs (Three Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $13,914 | $49,350 | | Commercial | $926,483 | $1,194,203 | Shipping and Handling Costs (Six Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $30,600 | $49,789 | | Commercial | $1,917,808 | $2,588,280 | Advertising Costs (Three Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $290,277 | $324,868 | | Commercial | $124,873 | $61,672 | Advertising Costs (Six Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $570,440 | $572,982 | | Commercial | $206,008 | $132,977 | - The Company had a **deferred tax asset of $90,858** as of June 30, 2025, up from $49,526 as of December 31, 2024, with no valuation allowance recorded[52](index=52&type=chunk) - The FASB issued ASU 2024-03 in November 2024, requiring additional expense disaggregation disclosures, effective for annual periods beginning after December 15, 2026[74](index=74&type=chunk) [NOTE 4 – INVENTORIES](index=22&type=section&id=NOTE%204%20%E2%80%93%20INVENTORIES) Inventories as of June 30, 2025 and December 31, 2024: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer Trade inventories | $25,221,844 | $23,973,333 | | Commercial Trade inventories | $2,159,340 | $1,732,191 | | **Total Inventories** | **$27,381,184** | **$25,705,524** | [NOTE 5 – GOODWILL](index=22&type=section&id=NOTE%205%20%E2%80%93%20GOODWILL) Goodwill Changes as of June 30, 2025 and December 31, 2024: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer Opening balance | $— | $300,000 | | Consumer Additions (reductions) | $— | $(300,000) | | Commercial Opening balance | $3,621,453 | $3,621,453 | | Commercial Additions (reductions) | $— | $— | | **Total Goodwill** | **$3,621,453** | **$3,621,453** | - The **decrease in consumer goodwill by $300,000** in Fiscal 2024 was due to measurement period adjustments related to the Scottsdale Transaction (acquisition of a jewelry fabricator)[77](index=77&type=chunk) [NOTE 6 – PROPERTY AND EQUIPMENT, NET](index=23&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT,%20NET) Property and Equipment, Net as of June 30, 2025 and December 31, 2024: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer Sub-total | $9,540,555 | $9,315,672 | | Commercial Sub-total | $595,203 | $677,491 | | Corporate Sub-total | $3,666,682 | $3,521,999 | | **Total Property and Equipment, Net** | **$13,802,440** | **$13,515,162** | - Construction in progress for Consumer and Corporate segments totaled **$62,211 and $83,185** respectively, as of June 30, 2025, and are not yet depreciable[79](index=79&type=chunk) [NOTE 7 – INTANGIBLE ASSETS, NET](index=24&type=section&id=NOTE%207%20%E2%80%93%20INTANGIBLE%20ASSETS,%20NET) Intangible Assets, Net as of June 30, 2025 and December 31, 2024: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer Sub-total | $42,382 | $46,297 | | Commercial Sub-total | $3,358,418 | $3,673,145 | | Corporate Sub-total | $379,966 | $378,336 | | **Total Intangible Assets, Net** | **$3,780,766** | **$4,097,778** | Estimated Future Amortization Expense as of June 30, 2025: | Year | Consumer | Commercial | Corporate | Total | | :--- | :--- | :--- | :--- | :--- | | 2025 | $4,464 | $314,724 | $54,280 | $373,468 | | 2026 | $8,928 | $629,448 | $108,562 | $746,938 | | 2027 | $8,928 | $629,448 | $108,562 | $746,938 | | 2028 | $8,056 | $629,448 | $108,562 | $746,066 | | 2029 | $3,273 | $539,923 | $— | $543,196 | | Thereafter | $4,809 | $615,427 | $— | $620,236 | | **Total** | **$38,458** | **$3,358,418** | **$379,966** | **$3,776,842** | [NOTE 8 – ACCRUED EXPENSES](index=25&type=section&id=NOTE%208%20%E2%80%93%20ACCRUED%20EXPENSES) Accrued Expenses as of June 30, 2025 and December 31, 2024: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer Sub-total | $582,565 | $506,113 | | Commercial Sub-total | $1,624,310 | $2,407,191 | | Corporate Sub-total | $176,021 | $302,039 | | **Total Accrued Expenses** | **$2,382,896** | **$3,215,343** | [NOTE 9 – SEGMENT INFORMATION](index=25&type=section&id=NOTE%209%20%E2%80%93%20SEGMENT%20INFORMATION) Operating Income (Three Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $726,955 | $(100,657) | | Commercial | $2,528,490 | $2,009,799 | | Consolidated | $3,255,445 | $1,909,142 | Operating Income (Six Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $869,320 | $103,366 | | Commercial | $5,504,546 | $4,145,919 | | Consolidated | $6,373,866 | $4,249,285 | Capital Expenditures (Three Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $291,521 | $435,671 | | Commercial | $52,271 | $108,222 | | Corporate | $153,380 | $333,139 | | **Total** | **$497,172** | **$877,032** | Capital Expenditures (Six Months Ended June 30): | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Consumer | $560,474 | $704,624 | | Commercial | $52,271 | $108,222 | | Corporate | $269,414 | $449,175 | | **Total** | **$882,159** | **$1,262,021** | Total Assets as of: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer | $43,903,025 | $40,454,328 | | Commercial | $16,001,230 | $33,068,887 | | Corporate | $22,811,505 | $4,347,274 | | **Total** | **$82,715,760** | **$77,870,489** | [NOTE 10 – REVENUE](index=29&type=section&id=NOTE%2010%20%E2%80%93%20REVENUE) Sales and Gross Margin (Three Months Ended June 30): | Segment | 2025 Sales | 2025 Gross Margin | 2025 Margin % | 2024 Sales | 2024 Gross Margin | 2024 Margin % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consumer | $43,173,758 | $4,657,986 | 10.8% | $31,990,028 | $4,021,329 | 12.6% | | Commercial | $11,703,075 | $7,729,937 | 65.5% | $13,306,974 | $7,368,128 | 65.5% | | **Consolidated** | **$54,876,833** | **$12,387,923** | **22.6%** | **$45,297,002** | **$11,389,457** | **25.1%** | Sales and Gross Margin (Six Months Ended June 30): | Segment | 2025 Sales | 2025 Gross Margin | 2025 Margin % | 2024 Sales | 2024 Gross Margin | 2024 Margin % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consumer | $79,944,362 | $8,868,889 | 11.1% | $60,216,045 | $7,570,518 | 12.6% | | Commercial | $23,188,300 | $15,487,058 | 66.8% | $24,938,737 | $14,139,623 | 56.7% | | **Consolidated** | **$103,132,662** | **$24,355,947** | **23.6%** | **$85,154,782** | **$21,710,141** | **25.5%** | Contract Liabilities (Customer Deposits and Gift Cards): | Segment | Opening Balance - 1/1/2025 | Closing Balance - 6/30/2025 | | :--- | :--- | :--- | | Consumer | $435,508 | $1,601,699 | | Commercial | $— | $3,623 | [NOTE 11 – LEASES](index=30&type=section&id=NOTE%2011%20%E2%80%93%20LEASES) Future Minimum Lease Payments as of June 30, 2025: | Year | Consumer Operating Leases | Commercial Operating Leases | Total | | :--- | :--- | :--- | :--- | | 2025 | $503,126 | $621,338 | $1,124,464 | | 2026 | $1,186,142 | $474,320 | $1,660,462 | | 2027 | $887,803 | $33,454 | $921,257 | | 2028 | $652,641 | $— | $652,641 | | 2029 | $533,234 | $— | $533,234 | | Thereafter | $203,191 | $— | $203,191 | | **Total minimum lease payments** | **$3,966,137** | **$1,129,112** | **$5,095,249** | | Less: imputed interest | $(342,884) | $(23,498) | $(366,382) | | **Sub-total** | **$3,623,253** | **$1,105,614** | **$4,728,867** | | Less: current portion | | | $(1,818,941) | | **Total non-current** | | | **$2,909,926** | Leasing Costs (Six Months Ended June 30): | Cost Type | 2025 | 2024 | | :--- | :--- | :--- | | Operating lease cost | $1,208,522 | $984,880 | | Variable lease cost | $420,664 | $387,028 | | Short-term lease cost | $100,977 | $180,729 | | **Total** | **$1,730,163** | **$1,552,637** | - As of June 30, 2025, the **weighted average remaining lease term** for operating leases was **2.8 years**, with a **weighted average discount rate of 4.2%**[89](index=89&type=chunk) [NOTE 12 – BASIC AND DILUTED AVERAGE SHARES](index=31&type=section&id=NOTE%2012%20%E2%80%93%20BASIC%20AND%20DILUTED%20AVERAGE%20SHARES) Weighted Average Shares Outstanding (Three Months Ended June 30): | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic | 25,991,979 | 26,248,554 | | Diluted | 25,991,979 | 26,263,554 | Weighted Average Shares Outstanding (Six Months Ended June 30): | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic | 25,993,802 | 26,333,796 | | Diluted | 25,993,802 | 26,348,796 | - The Board approved a stock repurchase program on March 14, 2023, authorizing up to **1.0 million shares** at a price not exceeding $9.00, expiring March 31, 2026[91](index=91&type=chunk) - An additional **100,000 shares** were authorized on March 27, 2025, bringing the total to **1.1 million shares**[92](index=92&type=chunk) Share Repurchases (Six Months Ended June 30, 2025): | Period | Shares Purchased | Average Price Paid per Share | Total Price Paid | | :--- | :--- | :--- | :--- | | January 1 - June 30, 2025 | 20,663 | $5.87 | $121,326 | [NOTE 13 – DEBT](index=34&type=section&id=NOTE%2013%20%E2%80%93%20DEBT) Long-Term Debt Obligations as of June 30, 2025 and December 31, 2024: | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumer Sub-total | $5,160,828 | $5,285,948 | | Commercial Sub-total | $5,442,691 | $5,735,838 | | Corporate Sub-total | $2,439,767 | $2,500,393 | | **Total** | **$13,043,286** | **$13,522,179** | | Less: current portion | $(3,374,442) | $(3,591,351) | | **Total non-current** | **$9,668,844** | **$9,930,828** | Future Principal Payments on Long-Term Debt as of June 30, 2025: | Year | Consumer | Commercial | Corporate | Total | | :--- | :--- | :--- | :--- | :--- | | 2025 | $550,619 | $127,986 | $2,439,767 | $3,118,372 | | 2026 | $2,473,027 | $5,314,705 | $— | $7,787,732 | | 2027 | $116,040 | $— | $— | $116,040 | | 2028 | $120,234 | $— | $— | $120,234 | | 2029 | $125,011 | $— | $— | $125,011 | | Thereafter | $1,775,897 | $— | $— | $1,775,897 | | **Total** | **$5,160,828** | **$5,442,691** | **$2,439,767** | **$13,043,286** | - The Company was in **compliance with all debt obligation covenants** for the three and six months ended June 30, 2025 and 2024[98](index=98&type=chunk) [NOTE 14 – STOCK-BASED COMPENSATION](index=38&type=section&id=NOTE%2014%20%E2%80%93%20STOCK-BASED%20COMPENSATION) - Shareholders approved the 2025 Equity Incentive Plan on June 25, 2025, authorizing up to **1.1 million shares** of Common Stock for awards, effective for 10 years[102](index=102&type=chunk) - **No awards have been granted** under this plan as of June 30, 2025, resulting in no stock-based compensation expense for the reported periods[103](index=103&type=chunk) [NOTE 15 – RELATED PARTY TRANSACTIONS](index=38&type=section&id=NOTE%2015%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) - The Company utilizes space owned by a related party for material processing, with no consideration exchanged, and estimates any potential costs would be immaterial[104](index=104&type=chunk) [NOTE 16 – CONTINGENCIES](index=38&type=section&id=NOTE%2016%20%E2%80%93%20CONTINGENCIES) - Management believes that the resolution of currently pending lawsuits, claims, and proceedings will **not have a material adverse effect** on the Company's financial position, results of operations, or liquidity[105](index=105&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial condition, operational results, liquidity, and capital resources [Forward-Looking Statements](index=39&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements subject to safe harbors, and actual results may differ materially due to various risks and uncertainties[107](index=107&type=chunk) [Introduction](index=39&type=section&id=Introduction) - This section discusses operations for the three and six months ended June 30, 2025 and 2024, and should be read with the 2024 Annual Report and unaudited condensed consolidated financial statements[108](index=108&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were **no material changes** to the Company's critical accounting policies and estimates from those described in the 2024 Annual Report[109](index=109&type=chunk) [Economic Conditions](index=39&type=section&id=Economic%20Conditions) - The 'One Big Beautiful Bill Act' signed on July 4, 2025, includes federal tax law changes, but the Company **does not expect a material impact** on its financial results[109](index=109&type=chunk)[110](index=110&type=chunk) - High interest rates, inflation, and commodity price risks may affect consumer spending, but the Company adjusts inbound purchase prices to counterbalance these economic cycles[111](index=111&type=chunk)[112](index=112&type=chunk) - Tariffs do not directly impact the Consumer Segment, while the Commercial Segment may face increased costs for international personal technology assets and parts[114](index=114&type=chunk)[115](index=115&type=chunk) [Our Business](index=41&type=section&id=Our%20Business) - Envela operates as a holding company with subsidiaries in re-commerce and recycling, including a Consumer Segment for luxury goods and a Commercial Segment for electronics[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - The Commercial Segment specializes in de-manufacturing end-of-life electronic assets for commodity reclamation and IT asset disposition (ITAD), emphasizing data security and environmental sustainability[120](index=120&type=chunk) [Segment Activities](index=43&type=section&id=Segment%20Activities) - The Consumer Segment aims to **expand its physical store footprint** across the U.S. and evaluate complementary product and service offerings[122](index=122&type=chunk) - The Commercial Segment plans to **grow both organically and through acquisitions**, leveraging its bolstered management team and operating systems[123](index=123&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) [Comparison of the Three Months Ended June 30, 2025 and 2024](index=44&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) Consolidated Sales (Three Months Ended June 30): | Year | Sales | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $54,876,833 | $9,579,831 | 21.1% | | 2024 | $45,297,002 | | | - Consumer Segment sales **increased by 35.0% to $43,173,758**, driven by stronger volumes and pricing in wholesale precious metals and favorable retail store performance[126](index=126&type=chunk)[129](index=129&type=chunk) - Commercial Segment sales **decreased by 12.1% to $11,703,075**, primarily due to unfavorable performance in electronic scrap grades and lower ITAD revenue[127](index=127&type=chunk)[130](index=130&type=chunk) Consolidated Cost of Goods Sold (Three Months Ended June 30): | Year | Cost of Goods Sold | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $42,488,910 | $8,581,365 | 25.3% | | 2024 | $33,907,545 | | | - Consumer Segment cost of goods sold **increased by 37.7% to $38,515,772**, mainly due to higher sales volumes and rising gold prices[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - Commercial Segment cost of goods sold **decreased by 33.1% to $3,973,138**, attributed to lower sales volumes and higher margins from personal technology assets and ITAD[135](index=135&type=chunk)[136](index=136&type=chunk) Consolidated Gross Margin (Three Months Ended June 30): | Year | Gross Margin | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $12,387,923 | $998,466 | 8.8% | | 2024 | $11,389,457 | | | - Consumer Segment gross margin **increased by 15.8% to $4,657,986**[137](index=137&type=chunk)[139](index=139&type=chunk) - Commercial Segment gross margin **increased by 4.9% to $7,729,937**[140](index=140&type=chunk) Consolidated Selling, General and Administrative (Three Months Ended June 30): | Year | SG&A | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $8,672,067 | $(445,981) | (4.9)% | | 2024 | $9,118,048 | | | - Consumer Segment SG&A **decreased by 6.8% to $3,735,427**, due to cost reductions from store onboarding and optimizing headcount[141](index=141&type=chunk)[143](index=143&type=chunk) - Commercial Segment SG&A **decreased by 3.4% to $4,936,640**, primarily due to reduced ERP onboarding support and variable-cost production expenses[144](index=144&type=chunk) Consolidated Depreciation and Amortization (Three Months Ended June 30): | Year | D&A | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $460,411 | $98,144 | 27.1% | | 2024 | $362,267 | | | - Consumer Segment D&A **increased by 73.8% to $195,604**, mainly due to depreciation of assets from new retail stores[145](index=145&type=chunk)[147](index=147&type=chunk) Consolidated Other Income (Three Months Ended June 30): | Year | Other Income | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $394,251 | $168,834 | 74.9% | | 2024 | $225,417 | | | - Consumer Segment other income **increased by 1,851.2% to $156,158**, primarily due to an employee retention credit and earnings on excess cash balances[149](index=149&type=chunk)[151](index=151&type=chunk) - Commercial Segment other income **increased by 9.5% to $238,093**, mainly due to earnings on excess cash balances[153](index=153&type=chunk) Consolidated Interest Expense (Three Months Ended June 30): | Year | Interest Expense | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $(106,228) | $2,913 | (2.7)% | | 2024 | $(109,141) | | | Consolidated Income Tax Expense (Three Months Ended June 30): | Year | Income Tax Expense | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $(791,069) | $(329,830) | 71.5% | | 2024 | $(461,239) | | | - The **effective income tax rate was 22.3% in 2025** and 22.8% in 2024[162](index=162&type=chunk) Consolidated Net Income (Three Months Ended June 30): | Year | Net Income | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $2,752,399 | $1,188,220 | 76.0% | | 2024 | $1,564,179 | | | - Consumer Segment net income **increased by $821,329**, moving from a net loss of $177,958 in 2024 to a net income of $643,371 in 2025[163](index=163&type=chunk)[165](index=165&type=chunk) - Commercial Segment net income **increased by 21.1% to $2,109,028**[166](index=166&type=chunk) Consolidated Basic and Diluted EPS (Three Months Ended June 30): | Year | EPS | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $0.11 | $0.05 | 83.3% | | 2024 | $0.06 | | | [Comparison of the Six Months Ended June 30, 2025 and 2024](index=57&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) Consolidated Sales (Six Months Ended June 30): | Year | Sales | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $103,132,662 | $17,977,880 | 21.1% | | 2024 | $85,154,782 | | | - Consumer Segment sales **increased by 32.8% to $79,944,362**, driven by stronger volumes and pricing in wholesale precious metals and contributions from retail stores[169](index=169&type=chunk)[171](index=171&type=chunk) - Commercial Segment sales **decreased by 7.0% to $23,188,300**, due to lower sales of personal technology assets, ITAD revenue share settlements, and electronic scrap volumes[172](index=172&type=chunk) Consolidated Cost of Goods Sold (Six Months Ended June 30): | Year | Cost of Goods Sold | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $78,776,715 | $15,332,074 | 24.2% | | 2024 | $63,444,641 | | | - Consumer Segment cost of goods sold **increased by 35.0% to $71,075,473**, primarily due to higher wholesale precious metals transactions[175](index=175&type=chunk)[176](index=176&type=chunk) - Commercial Segment cost of goods sold **decreased by 28.7% to $7,701,242**, attributed to lower sales volumes and higher margins from personal technology assets and ITAD[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) Consolidated Gross Margin (Six Months Ended June 30): | Year | Gross Margin | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $24,355,947 | $2,645,806 | 12.2% | | 2024 | $21,710,141 | | | - Consumer Segment gross margin **increased by 17.2% to $8,868,889**[180](index=180&type=chunk)[182](index=182&type=chunk) - Commercial Segment gross margin **increased by 9.5% to $15,487,058**[183](index=183&type=chunk) Consolidated Selling, General and Administrative (Six Months Ended June 30): | Year | SG&A | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $17,076,329 | $321,305 | 1.9% | | 2024 | $16,755,024 | | | - Consumer Segment SG&A **increased by 5.0% to $7,623,333**, due to full cost structures of new stores, partially offset by reduced onboarding costs[184](index=184&type=chunk)[186](index=186&type=chunk) Consolidated Depreciation and Amortization (Six Months Ended June 30): | Year | D&A | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $905,752 | $199,920 | 28.3% | | 2024 | $705,832 | | | - Consumer Segment D&A **increased by 82.5% to $376,236**, primarily due to depreciation of assets from new retail stores[188](index=188&type=chunk)[190](index=190&type=chunk) Consolidated Other Income (Six Months Ended June 30): | Year | Other Income | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $599,856 | $135,911 | 29.3% | | 2024 | $463,945 | | | - Consumer Segment other income **increased by 880.8% to $157,007**, mainly due to an employee retention credit and earnings on excess cash balances[192](index=192&type=chunk)[194](index=194&type=chunk) - Commercial Segment other income **decreased by 1.1% to $442,849**, attributed to a reduction in earned interest rates and rental income[196](index=196&type=chunk) Consolidated Interest Expense (Six Months Ended June 30): | Year | Interest Expense | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $(212,549) | $17,446 | (7.6)% | | 2024 | $(229,995) | | | Consolidated Income Tax Expense (Six Months Ended June 30): | Year | Income Tax Expense | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $(1,515,427) | $(503,910) | 49.8% | | 2024 | $(1,011,517) | | | - The **effective income tax rate was 22.4% in 2025** and 22.6% in 2024[204](index=204&type=chunk) Consolidated Net Income (Six Months Ended June 30): | Year | Net Income | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $5,245,746 | $1,774,028 | 51.1% | | 2024 | $3,471,718 | | | - Consumer Segment net income **increased by $801,947**, moving from a net loss of $89,482 in 2024 to a net income of $712,465 in 2025[205](index=205&type=chunk)[207](index=207&type=chunk) - Commercial Segment net income **increased by 27.3% to $4,533,281**[208](index=208&type=chunk) Consolidated Basic and Diluted EPS (Six Months Ended June 30): | Year | EPS | Change Amount | Change % | | :--- | :--- | :--- | :--- | | 2025 | $0.20 | $0.07 | 53.8% | | 2024 | $0.13 | | | [Non-U.S. GAAP Financial Measures](index=67&type=section&id=Non-U.S.%20GAAP%20Financial%20Measures) - The Company uses non-U.S. GAAP financial measures, such as Adjusted EBITDA and Net Cash, to provide a meaningful presentation of its operating and financial performance[211](index=211&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended June 30): | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income (loss) | $2,752,399 | $1,564,179 | | Depreciation and amortization | $460,411 | $362,267 | | Other income | $(394,251) | $(225,417) | | Interest expense | $106,228 | $109,141 | | Income tax expense | $791,069 | $461,239 | | **Adjusted EBITDA** | **$3,715,856** | **$2,271,409** | Adjusted EBITDA Reconciliation (Six Months Ended June 30): | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $5,245,746 | $3,471,718 | | Depreciation and amortization | $905,752 | $705,832 | | Other income | $(599,856) | $(463,945) | | Interest expense | $212,549 | $229,995 | | Income tax expense | $1,515,427 | $1,011,517 | | **Adjusted EBITDA** | **$7,279,618** | **$4,955,117** | Net Cash as of: | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total cash | $22,851,869 | $20,609,003 | | Less: debt obligations | $(13,043,286) | $(13,522,179) | | **Net Cash** | **$9,808,583** | **$7,086,824** | [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30): | Activity | 2025 | 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Operating activities | $3,722,594 | $3,002,262 | $720,332 | 24.0% | | Investing activities | $(879,509) | $(1,265,004) | $385,495 | (30.5)% | | Financing activities | $(600,219) | $(2,247,110) | $1,646,891 | (73.3)% | | Net change in cash and cash equivalents | $2,242,866 | $(509,852) | $2,752,718 | NM | - Cash provided by operations **increased by 24.0% to $3,722,594**, driven by higher net income and changes in operating assets and liabilities[219](index=219&type=chunk)[220](index=220&type=chunk) - Cash used in investing activities **decreased by 30.5% to $879,509**, primarily due to reduced spending on the ERP system[221](index=221&type=chunk) - Cash used in financing activities **decreased by 73.3% to $600,219**, mainly due to a reduction in share buybacks[222](index=222&type=chunk) - The Company's primary liquidity source is cash from operating activities, with **no current draws on its line of credit**[223](index=223&type=chunk)[224](index=224&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=73&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Envela Corporation is not required to provide these disclosures - Envela Corporation is **exempt from disclosing** quantitative and qualitative information about market risk due to its status as a 'smaller reporting company'[226](index=226&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=73&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of the Company's disclosure controls and procedures and reports on internal control changes [Evaluation of Disclosure Controls and Procedures](index=73&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2025, providing reasonable assurance of timely reporting[227](index=227&type=chunk) [Changes in Internal Control over Financial Reporting](index=75&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were **no material changes** in internal control over financial reporting during the period covered by this Quarterly Report[229](index=229&type=chunk) [PART II. OTHER INFORMATION](index=76&type=section&id=PART%20II.%20OTHER%20INFORMATION) Covers legal proceedings, risk factors, share repurchases, and other required disclosures [ITEM 1. LEGAL PROCEEDINGS](index=76&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section addresses pending legal actions and their expected financial impact - Management believes that the ultimate resolution of current legal proceedings will **not materially adversely affect** the Company's financial condition, results of operations, or cash flow[231](index=231&type=chunk) [ITEM 1A. RISK FACTORS](index=76&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section states there have been no material changes to previously disclosed risk factors - **No material changes** have occurred to the risk factors previously disclosed in the Company's 2024 Annual Report[232](index=232&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=76&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES,%20USE%20OF%20PROCEEDS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) This section details the Company's share repurchase activities for the three months ended June 30, 2025 Share Repurchases (Three Months Ended June 30, 2025): | Fiscal Period | Total Number of Shares Purchased | Average Price Paid Per Share ($) | Total Price Paid | Maximum Number of Shares that May Yet be Purchased Under the Plan | | :--- | :--- | :--- | :--- | :--- | | Balance as of March 31, 2025 | 929,430 | $4.92 | $4,571,449 | 170,570 | | April 1 - 30, 2025 | — | — | — | 170,570 | | May 1 - 31, 2025 | — | — | — | 170,570 | | June 1 - 30, 2025 | 20,163 | $5.89 | $118,700 | 150,407 | | **Balance as of June 30, 2025** | **949,593** | **$4.94** | **$4,690,149** | **150,407** | - The stock repurchase program authorizes the repurchase of up to **1.1 million shares** and expires on March 31, 2026[235](index=235&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=78&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is not applicable to the Company for the reporting period - This item is **not applicable**[235](index=235&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=78&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the Company for the reporting period - This item is **not applicable**[235](index=235&type=chunk) [ITEM 5. OTHER INFORMATION](index=78&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section indicates that there is no other information to report for the period - No other information is reported under this item[236](index=236&type=chunk) [ITEM 6. EXHIBITS](index=79&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q - Key exhibits include the 2025 Equity Incentive Plan, certifications pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350, and various XBRL documents[237](index=237&type=chunk) [SIGNATURE](index=80&type=section&id=SIGNATURE) This section contains the certifying signature of the Chief Financial Officer - The report was signed by John G. DeLuca, Chief Financial Officer, on August 6, 2025[239](index=239&type=chunk) [GLOSSARY OF DEFINED TERMS](index=81&type=section&id=GLOSSARY%20OF%20DEFINED%20TERMS) This section provides definitions for key terms used throughout the document - A glossary of defined terms is provided to clarify terminology used in the document[240](index=240&type=chunk)

Group 1 - The 'Trump Tariffs' situation is stabilizing, with the index rising 13% since April 8, nearly recovering year-to-date losses [1] Group 2 - The company specializes in analyzing restaurant stocks across various segments, including QSR, fast casual, casual dining, fine dining, and family dining [2] - Advanced analytical models and specialized valuation techniques are employed to provide insights and strategies for investors [2] - The company engages in academic and journalistic initiatives, contributing to institutions that promote economic freedom [2]

Group 1: Earnings Performance - Envela Corporation reported quarterly earnings of $0.10 per share, exceeding the Zacks Consensus Estimate of $0.04 per share, and up from $0.07 per share a year ago, representing an earnings surprise of 150% [1] - The company posted revenues of $48.26 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.62%, compared to year-ago revenues of $39.9 million [2] - Over the last four quarters, Envela has consistently surpassed consensus EPS estimates and revenue estimates [2] Group 2: Stock Performance and Outlook - Envela shares have declined approximately 7.5% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $48.92 million, and for the current fiscal year, it is $0.29 on revenues of $197.28 million [7] Group 3: Industry Context - The Retail - Jewelry industry, to which Envela belongs, is currently ranked in the top 9% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The Zacks Rank for Envela is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 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 001-11048 Envela Corporation (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Nevada 88-0097334 (STATE OF INCORPORATION ...

Company Overview - Envela Corporation (NYSE: ELA) is highlighted as a potentially valuable investment opportunity, suggesting that it may have significant implications for investors [1]. Analyst Background - The analyst specializes in restaurant stocks, with a strong foundation in Business Administration and Accounting, and holds an MBA in Forensic Accounting and Controllership [1]. - The analyst leads Goulart's Restaurant Stocks, focusing on various segments of the U.S. restaurant market, including QSR, fast casual, casual dining, fine dining, and family dining [1]. - Advanced analytical models and specialized valuation techniques are employed to provide insights and strategies for investors [1]. Engagement and Contributions - The analyst actively participates in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1]. - Previous contributions include writing for Investing, discussing topics such as monetary policy, financial education, and financial modeling [1].

Sales Performance - In Fiscal 2024, the consumer segment sold 2.2 metric tons of refining-grade precious metals, an increase from 2.0 metric tons in Fiscal 2023[37] - The commercial segment sold 1,267,632 individual units of secondary electronics and components in Fiscal 2024, compared to 1,202,838 units in Fiscal 2023[39] - The commercial segment also sold 12,837.7 metric tons of electronic scrap in Fiscal 2024, slightly down from 12,862.4 metric tons in Fiscal 2023[39] Business Expansion - The company opened 5 new stores under the Four Nines brand in Fiscal 2024, enhancing its bricks-and-mortar footprint[22] - The consumer segment entered into a purchase agreement for the acquisition of a bespoke jewelry fabricator in Scottsdale, Arizona in September 2024[21] - The company aims to maximize market reach through a multi-brand retail strategy, consolidating multiple retail merchants[17] Operational Focus - The commercial segment focused on unifying its systems and enhancing business intelligence platforms in Fiscal 2024[23] - The company’s electricity, natural gas, and water consumption costs represented 0.2% and 0.3% of sales for Fiscal 2024 and 2023, respectively[34] - The company employed 309 persons in Fiscal 2024, an increase from 289 in Fiscal 2023[42] Compliance and Governance - The company emphasizes a culture of trust and compliance, providing confidential reporting channels for employees[43] - The company is subject to various federal, state, and local laws, which may impact future compliance costs due to business expansion[51] - The company is classified as a "Smaller Reporting Company," exempting it from certain market risk disclosures[200] Safety and Reporting - Safety performance is tracked using total recordable injury frequency rate (TRIFR) and total lost time injury frequency rate (LTIFR)[44] - Annual and quarterly reports are filed with the SEC and are available on the company's website[54] - The company uses its website to disclose material non-public information in compliance with Regulation FD[55] Financial Information - Interest payments on notes payable are based on rates effective as of December 31, 2024, with actual payments potentially differing[201] - The company is incorporated in Nevada and its common stock is listed on the NYSE under the symbol "ELA"[53]

Core Viewpoint - The article emphasizes the importance of timing and sustainability in stock trends for successful short-term investing, highlighting that sound fundamentals and positive earnings revisions are crucial for maintaining momentum in stock prices [1][2]. Group 1: Stock Performance - Envela Corporation (ELA) has shown a solid price increase of 12.8% over the past 12 weeks, indicating strong investor interest [4]. - ELA has also experienced a price increase of 3.8% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, ELA is trading at 87.5% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - ELA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for investors to identify stocks like ELA that are on an uptrend supported by strong fundamentals [3]. - The article suggests that there are multiple stocks passing through this screen, providing additional investment opportunities for trend-focused investors [8].

Core Insights - Envela Corporation (ELA) reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, marking a 100% earnings surprise [1] - The company achieved revenues of $46.9 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 17.69% and showing an increase from $36.27 million year-over-year [2] - Envela has outperformed consensus EPS estimates three times in the last four quarters [2] Earnings Performance - The earnings surprise of 100% indicates strong performance relative to expectations, with a previous quarter's surprise of 50% when earnings were $0.06 against an expectation of $0.04 [1] - The current consensus EPS estimate for the upcoming quarter is $0.05, with projected revenues of $41.37 million, and for the current fiscal year, the estimate is $0.21 on revenues of $166.37 million [7] Stock Performance and Outlook - Envela shares have increased by approximately 10.5% since the beginning of the year, while the S&P 500 has gained 19.8%, indicating underperformance relative to the broader market [3] - The company's Zacks Rank is currently 3 (Hold), suggesting that shares are expected to perform in line with the market in the near future [6] Industry Context - The Retail - Jewelry industry, to which Envela belongs, is currently ranked in the bottom 12% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - For the three months ended September 30, 2024, the consolidated Adjusted EBITDA was $2,435,251, compared to $2,287,902 for the same period in 2023, reflecting an increase of approximately 6.4%[157] - Adjusted EBITDA for the nine months ended September 30, 2024, was $7,390,368, compared to $8,191,994 for the same period in 2023, indicating a decrease of approximately 9.8%[158] - Consolidated sales increased by $10,023,073, or 27.2%, to $46,899,559 for the three months ended September 30, 2024, compared to $36,876,486 in the same period of Fiscal 2023[165] - Consolidated sales decreased by $5,727,554, or 4.2%, to $132,054,341 for the nine months ended September 30, 2024, compared to $137,781,895 in the same period of Fiscal 2023[209] - Net income decreased by $22,454, or 1.3%, to $1,685,039 for the three months ended September 30, 2024[202] - Net income for the nine months ended September 30, 2024, was $5,156,757, compared to $5,837,519 in the same period of Fiscal 2023[209] Segment Performance - The consumer segment focuses on expanding locations throughout the U.S. and evaluating complementary product and service offerings[152] - The commercial segment aims for growth through both organic expansion and acquisitions, enhancing management and operating systems to support this strategy[153] - Consumer segment sales rose by $6,875,398, or 25.6%, to $33,756,600, driven by increased revenue from wholesale channels and online business[167] - Commercial segment sales increased by $3,147,675, or 31.5%, to $13,142,959, attributed to strong performance in the ITAD business[168] - Consumer segment sales decreased by $9,254,388, or 9%, to $93,972,645, primarily due to softness in demand for bullion and inventory carry issues[211] - Commercial segment sales increased by $3,526,834, or 10.2%, to $38,081,696, driven by strong performance in personal technology assets and ITAD business growth[212] Cost and Expenses - Cost of goods sold increased by $8,293,116, or 30.6%, to $35,435,320, compared to $27,142,204 in the same period of Fiscal 2023[169] - Selling, general and administrative expenses rose by $1,582,608, or 21.3%, to $9,028,988, reflecting operational costs from new store openings[179] - Selling, general and administrative expenses increased by $2,069,775, or 8.7%, to $25,784,012, reflecting operational costs from new store openings[224] - Total operating expenses increased to $26,904,623, representing 20.3% of consolidated sales, up from 18.0% in the previous year[224] Margins - Gross margin improved by $1,729,957, or 17.8%, to $11,464,239, with a gross margin percentage of 24.4%[175] - Consumer segment gross margin increased by $327,052, or 9.1%, to $3,916,315, with a gross margin percentage of 11.6%[176] - Commercial segment gross margin increased by $1,402,905, or 22.8%, to $7,547,924, with a gross margin percentage of 57.4%[177] - Gross margin increased by $1,268,149, or 4.0%, to $33,174,380, with a gross margin percentage of 25.1% compared to 23.2% in the prior year[220] - Consumer segment gross margin decreased by $182,040, or 1.6%, to $11,486,833, impacted by decreased sales and cost of goods sold[221] - Commercial segment gross margin increased by $1,450,189, or 7.2%, to $21,687,547, benefiting from increased sales and cost management[222] Cash Flow and Liquidity - The total cash as of September 30, 2024, was $17,752,199, a slight decrease from $17,853,853 on December 31, 2023, while debt obligations decreased from $14,933,491 to $13,841,785, resulting in a net cash increase from $2,920,362 to $3,910,414[160] - Net cash provided by operating activities increased by $2,979,773, or 85.9%, to $6,449,764 for the nine months ended September 30, 2024[249] - Cash flows from operations increased by $2,979,773, or 85.9%, to $6,449,764 for the nine months ended September 30, 2024, compared to $3,469,991 in the same period of Fiscal 2023[250] - Cash flows used in investing activities rose by $2,175,355, or 200.4%, to $3,260,717 during the nine months ended September 30, 2024, compared to $1,085,362 in the same period of Fiscal 2023[251] - Cash flows used in financing activities increased by $1,041,492, or 46.3%, to $3,290,701 for the nine months ended September 30, 2024, compared to $2,249,209 in the same period of Fiscal 2023[252] - The company has no amounts drawn from its line of credit as of September 30, 2024, relying primarily on cash generated from operating activities for liquidity[253] Other Financial Metrics - Other income increased by $147,914, or 76.9%, to $340,351 for the three months ended September 30, 2024[187] - Other income increased by $247,428, or 44.4%, to $804,296 for the nine months ended September 30, 2024[233] - Basic and diluted earnings per share remained at $0.06 for the three months ended September 30, 2024[205] - Basic and diluted earnings per share decreased by $0.02, or 9.1%, to $0.20 for the nine months ended September 30, 2024[248] - Interest expense decreased by $11,027, or 9.4%, to $106,139 for the three months ended September 30, 2024[194] - Interest expense decreased by $12,784, or 3.7%, to $336,134 for the nine months ended September 30, 2024[239] Economic Environment - The company operates in a challenging economic environment characterized by high interest rates and inflation, which may impact consumer spending and demand for resale technology assets[144] Capital Expenditures and Investments - Capital expenditures in Fiscal 2024 are focused on growth, maintenance, and enhancements to the enterprise resource planning system, funded mainly through operating cash flow[254] - The company does not have any off-balance sheet arrangements that materially affect its financial condition or operations[256] - As a smaller reporting company, the company is not required to disclose certain market risk information[257]