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]

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 ...