Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming fundamental factors is essential to maintain momentum in stocks [1][2]. Group 1: Stock Performance - Envela Corporation (ELA) has shown a solid price increase of 28.1% over the past 12 weeks, indicating strong investor interest [4]. - ELA has also experienced a price increase of 11.4% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, ELA is trading at 107.9% 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]. - The Zacks Rank system has a strong historical performance, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with sufficient fundamental strength to maintain their uptrend [3]. - In addition to ELA, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities [8]. - The effectiveness of stock-picking strategies can be backtested using the Zacks Research Wizard, which includes successful stock-picking strategies [9].

Core Viewpoint - Envela Corporation reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.04 per share, and matching the earnings from the same quarter last year, indicating a 50% earnings surprise [1] Financial Performance - Envela's revenues for the quarter ended June 2024 were $45.3 million, surpassing the Zacks Consensus Estimate by 25.76%, although this represents a decline from $50.3 million in the same quarter last year [2] - Over the last four quarters, Envela has exceeded consensus EPS estimates two times and has also topped consensus revenue estimates two times [2] Stock Performance and Outlook - Envela shares have decreased by approximately 4.3% since the beginning of the year, contrasting with the S&P 500's gain of 9.9% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $39.85 million, while for the current fiscal year, the estimate is $0.18 on revenues of $157.1 million [7] - The estimate revisions trend for Envela is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Retail - Jewelry industry, to which Envela belongs, is currently ranked in the bottom 17% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Performance - For the three months ended June 30, 2024, the consolidated net income was $1,564,179, compared to $1,603,709 for the same period in 2023, reflecting a slight decrease [100]. - Adjusted EBITDA for the six months ended June 30, 2024, was $4,955,117, compared to $5,904,092 for the same period in 2023, indicating a decline in operational performance [101]. - Consolidated sales decreased by $5,798,875, or 11.3%, to $45,297,002 for the three months ended June 30, 2024, compared to $51,095,877 in the same period in 2023 [105]. - Net income for the period was a loss of $177,958, compared to a profit of $1,742,137 in the same period last year [105]. - Consolidated net income decreased by $658,308, or 15.9%, to $3,471,718 for the six months ended June 30, 2024, compared to $4,130,026 in the same period in 2023 [163]. Segment Performance - The consumer segment reported a net loss of $177,958 for the three months ended June 30, 2024, compared to net income of $1,168,309 in the same period in 2023, a decrease of $1,346,267 [128]. - The commercial segment's net income increased by $1,306,737, or 300.1%, to $1,742,137 for the three months ended June 30, 2024, compared to $435,400 in the same period in 2023 [129]. - Consumer segment sales decreased by $7,651,406, or 19.3%, to $31,990,028, primarily due to demand softness for bullion and inventory carry from new Arizona stores [106]. - Commercial segment sales increased by $1,852,531, or 16.2%, to $13,306,974, driven by strong performance in personal technology assets and shredded electronic scrap grades [107]. - Consumer segment sales decreased by $16,129,786, or 21.1%, to $60,216,045, primarily due to demand softness for bullion and inventory carry from new stores [134]. - Commercial segment sales increased by $379,159, or 1.5%, to $24,938,737, attributed to strong performance in personal technology assets and shredded electronic scrap [135]. Cost and Expenses - Consolidated cost of goods sold decreased by $6,426,285, or 15.9%, to $33,907,545, compared to $40,333,830 in the same period in 2023 [107]. - Selling, general and administrative expenses increased by $755,494, or 9.0%, to $9,118,048, representing 20.1% of consolidated sales [115]. - Consumer segment selling, general and administrative expenses increased by $2,391,960, or 49.1%, to $7,260,958, due to operational costs for new stores [147]. - Commercial segment selling, general and administrative expenses decreased by $1,904,793, or 16.7%, to $9,494,066, focusing on human capital costs and processing efficiencies [148]. - Consolidated depreciation and amortization expense increased by $26,093, or 7.8%, to $362,267 for the three months ended June 30, 2024, compared to $336,174 in the same period in 2023 [118]. Cash Flow and Liquidity - The company reported a net cash position of $3,037,135 as of June 30, 2024, an increase from $2,920,362 as of December 31, 2023, demonstrating improved liquidity [102]. - Cash flows provided by operating activities totaled $3,002,262, an increase of $253,772, or 9.2%, compared to $2,748,490 in the same period in 2023 [168]. - Cash flows used in financing activities increased to $2,247,110 in the six months ended June 30, 2024, from $815,062 in the same period of 2023, a change of $1,432,048 [170]. - The primary source of liquidity and capital resources consists of cash generated from operating activities, with no amounts drawn from the line of credit as of June 30, 2024 [170]. Strategic Focus - The consumer segment focuses on expanding locations throughout the U.S. and evaluating complementary product offerings to enhance sales [96]. - The commercial segment aims for growth through both organic expansion and acquisitions, supported by an enhanced management team and operational systems [97]. - The company continues to focus on ethical sourcing and sustainability in its consumer segment, particularly in the sale of pre-owned luxury items and recycled diamonds [94]. - The company emphasizes a reuse-first philosophy in its commercial segment, ensuring data security and environmental sustainability in IT asset disposition services [95]. Other Financial Metrics - Basic and diluted earnings per share remained at $0.06 for the three months ended June 30, 2024, unchanged from the same period in 2023 [130]. - The effective income tax rate was 22.8% for the three months ended June 30, 2024, compared to 23.7% for the same period in 2023 [125]. - Other income increased by $71,765, or 46.7%, to $225,417 for the three months ended June 30, 2024, compared to $153,652 in the same period in 2023 [120]. - Other income increased by $99,514, or 27.3%, to $463,945 for the six months ended June 30, 2024, compared to $364,431 in the same period in 2023 [154].

Financial Performance - For the three months ended March 31, 2024, consolidated sales were $39,857,780, a decrease from $49,809,532 in the same period of 2023, representing a decline of approximately 20%[137] - Adjusted EBITDA for the three months ended March 31, 2024, was $2,683,708, compared to $3,504,599 for the same period in 2023, indicating a decrease of approximately 23.5%[133] - Operating income for the consolidated entity was $2,340,143, which is a decrease from $3,150,248 in the prior year, reflecting a decline of approximately 25.7%[137] - Consolidated sales decreased by $9,951,752, or 20.0%, to $39,857,780 for the three months ended March 31, 2024, compared to $49,809,532 in the same period in 2023[140] - Net income decreased by $618,778, or 24.5%, to $1,907,539 for the three months ended March 31, 2024, compared to $2,526,317 in the same period in 2023[176] - Earnings per share decreased by $0.02, or 22.2%, to $0.07 for the three months ended March 31, 2024, compared to $0.09 in the same period in 2023[179] Segment Performance - The consumer segment's sales were $28,226,017, while the commercial segment generated $11,631,763 in sales for the quarter ended March 31, 2024[137] - Consumer segment sales fell by $8,478,380, or 23.1%, to $28,226,017, primarily due to inventory allocation for new Arizona stores[141] - Commercial segment sales decreased by $1,473,372, or 11.2%, to $11,631,763, attributed to lower demand for reuse hard drives[142] - Net income in the consumer segment decreased by $1,048,408, or 92.2%, to $88,476 for the three months ended March 31, 2024, compared to $1,136,884 in the same period in 2023[177] - Net income in the commercial segment increased by $429,630, or 30.9%, to $1,819,063 for the three months ended March 31, 2024, compared to $1,389,433 in the same period in 2023[177] Expenses and Costs - The gross margin for the consumer segment was $3,549,189, accounting for 25.9% of sales, while the commercial segment's gross margin was $6,771,495, representing 58.1% of its sales[137] - Selling, general, and administrative expenses increased to $7,636,976, representing 19.2% of consolidated sales, compared to 15.9% in the same quarter of 2023[137] - Cost of goods sold decreased by $8,862,534, or 23.1%, to $29,537,096, reflecting a reduction in sales volume[144] - Gross margin declined by $1,089,218, or 9.5%, to $10,320,684, with a gross margin percentage of 25.9%[149] - Selling, general and administrative expenses decreased by $268,327, or 3.4%, to $7,636,976, with a percentage of consolidated sales at 19.2%[153] Cash Flow and Financial Position - The company reported a net cash position of $5,162,145 as of March 31, 2024, an increase from $2,920,362 at the end of 2023[136] - Cash flows provided by operating activities increased by $867,696, or 29.7%, to $3,791,721 for the three months ended March 31, 2024, compared to $2,924,025 in the same period in 2023[181] - Cash used in investing activities totaled $(644,792) for the three months ended March 31, 2024, compared to $569,522 in the same period in 2023, a change of $(1,214,314)[182] - Cash used in financing activities increased by $(906,108) to $(1,216,915) for the three months ended March 31, 2024, compared to $(310,807) in the same period in 2023[183] - The company does not anticipate the need to fund operations via the line of credit and has no amounts drawn as of March 31, 2024[184] Strategic Plans - The company plans to expand its consumer segment by opening new locations throughout the U.S. and evaluating complementary product offerings[127] - The commercial segment aims for growth through both organic expansion and acquisitions, supported by enhancements in management and operating systems[128] Economic Conditions - The company continues to monitor economic conditions, including high interest rates and inflation, which may impact consumer spending and demand for its services[120] Other Income and Expenses - Other income increased by $27,749, or 13.2%, to $238,528, driven by improved cash flow management in the commercial segment[163] - Interest expense rose by $3,790, or 3.2%, to $120,854, reflecting increased borrowing costs[170] - The consumer segment's selling, general and administrative expenses increased by $855,465, or 35.7%, due to costs associated with opening new stores[155] - The commercial segment's other income increased by $43,278, or 23.1%, to $230,523, attributed to improved cash flow from accounts receivable management[166] - Interest expense in the consumer segment increased by $4,783, or 8.0%, to $64,401 for the three months ended March 31, 2024, compared to $59,618 in the same period in 2023[171] - Income tax expense decreased by $167,368, or 23.3%, to $550,278 for the three months ended March 31, 2024, compared to $717,646 in the same period in 2023[174]

Business Operations - Envela's mission focuses on extending the useful lives of manufactured goods through re-commerce, which includes reselling and recycling previously owned items [19]. - The company operates through two segments: commercial services and direct-to-consumer, with revenue and operating expenses reported accordingly [22]. - The commercial services segment provides asset disposition solutions, purchasing replaced IT equipment for resale or recycling, maximizing value for clients [25]. - Envela's direct-to-consumer segment specializes in luxury hard assets, including jewelry and precious metals, with a focus on providing liquidity and value [33]. - Envela offers comprehensive lifecycle solutions for electronic devices, including trade-in, repair, refurbishment, and recycling [26]. - The company has made acquisitions to expand its service offerings and product lines, which may involve additional risks [63]. Market Presence - The company opened a new retail location in Phoenix, Arizona, during Q4 of Fiscal 2023, expanding its footprint in the market [38]. - The company operates six retail locations and plans to open a ninth location in Phoenix, Arizona, during 2024 [38]. - Envela's consumer segment has been a destination for luxury goods for over 50 years, focusing on re-commerce of items like jewelry and precious metals [33]. Financial Performance - The company has reported seven consecutive years of unprecedented profitability since the management transformation in 2016 [42]. - Envela has not paid dividends on its Common Stock and does not anticipate doing so in the foreseeable future, focusing instead on reinvesting earnings for growth [70]. - Envela requires continued access to capital, and a significant reduction in cash flows from operations could materially affect its planned growth and operating results [64]. - High interest rates and fluctuations may increase borrowing costs, making it difficult to secure financing [67]. Competition and Market Risks - Envela's business is subject to competition from larger firms with greater resources, which may impact revenue and profitability [54]. - The company faces intense competition across all markets, which may lead to lower revenue or operating margins [79]. - The unpredictability of the precious metals market could lead to adverse consequences for the Company's bullion business [90]. - A significant portion of the consumer segment's profit is generated from buying and selling pre-owned jewelry, making it sensitive to price fluctuations in precious metals [95]. Economic and Operational Challenges - Envela's operations are subject to various risks, including economic conditions that could materially affect operating results and cash flows [58]. - Changes in consumer demand and spending habits could adversely impact the company's revenue and results of operations [85]. - Adverse economic conditions in key markets could materially affect the Company's operating results due to declines in consumer confidence and spending [87]. - Public health emergencies, such as the COVID-19 pandemic, have materially affected the Company's business and could continue to do so in the future [99]. - Geopolitical conflicts and military actions have resulted in market disruptions that could adversely affect the Company's financial condition [102]. - The company is expanding into unfamiliar geographical regions, which poses management and operational challenges [72]. Inventory and Asset Management - Misjudging consumer demand could lead to high inventory levels, adversely affecting future operating results and profitability [91]. - A failure to manage and protect clients' assets during the electronics disposition process could impair future business and damage the company's reputation [77]. - The company may incur reputational risks and compliance costs related to conflict-mineral diligence processes [96]. - The SEC's conflict-mineral rules require annual disclosure on the source and use of certain minerals, including gold, affecting less than 1% of annual worldwide gold production [96]. - The company may incur reputational risks if it cannot verify the origin of relevant metals due to the complexity of the global supply chain [98]. Employment and Workforce Development - As of December 31, 2023, Envela employed 288 full-time equivalent employees, with plans to develop a workforce for new locations in 2024 [52]. - Envela's largest shareholder, N10TR, owns 48.3% of the total outstanding shares, while Eduro holds 24.0% [61].

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 September 30, 2023 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) (I.R.S. EMPL ...

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 June 30, 2023 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 INCO ...

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, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to ENVELA CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) __________________________ Nevada 88-0097334 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENT ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 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 _______________________ Nevada 88-0097334 (STATE OF INCORPORATION) (I.R ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated Filer ☒ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-Q _____________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period Fr ...