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Envela (ELA) - 2024 Q2 - Quarterly Report
Envela Envela (US:ELA)2024-08-07 21:01

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].