Envela (US:ELA)2025-11-05 21:01Revenue and Sales Performance - For the three months ended September 30, 2025, consolidated sales reached $57,389,411, a 22.3% increase from $46,899,559 in the same period of 2024[84]. - Total sales for the nine months ended September 30, 2025, reached $160,522,073, a 21.5% increase from $132,054,341 in 2024[87]. - The company’s consolidated income before income taxes for the nine months ended September 30, 2025, was $11,090,586, compared to $6,737,919 in 2024, marking a 64.5% increase[86]. Cost and Profitability - The cost of goods sold for the same period was $44,321,481, resulting in a gross profit of $13,067,930, compared to a gross profit of $11,464,239 in 2024[84]. - Operating income for the three months ended September 30, 2025, was $4,201,528, compared to $2,020,472 in 2024, reflecting a significant improvement in operational efficiency[84]. - The gross margin for consolidated sales for the three months ended September 30, 2025, was 22.8%, down from 24.4% in 2024[87]. Segment Performance - For the nine months ended September 30, 2025, the commercial segment's shipping and handling costs were $2,905,726, down from $3,716,832 in 2024[43]. - The gross margin for the Consumer segment for the nine months ended September 30, 2025, was 11.3%, down from 12.2% in 2024, while the Commercial segment's gross margin improved to 65.8% from 57.0%[87]. - The operating income for the Commercial segment for the nine months ended September 30, 2025, was $8,536,235, compared to $6,326,714 in 2024, indicating a 35.0% increase[86]. Expenses and Liabilities - The company reported an interest expense of $318,306 for the nine months ended September 30, 2025, compared to $336,134 in 2024, reflecting a decrease of 5.3%[86]. - The total long-term debt obligations amounted to $12,485,632, down from $13,522,179 as of December 31, 2024, indicating a reduction of 7.7%[100]. - Accrued expenses totaled $1,949,806 as of September 30, 2025, down from $3,215,343 at the end of 2024, indicating a decrease of 39.3%[83]. Assets and Investments - Total inventories as of September 30, 2025, amounted to $29,066,264, up from $25,705,524 as of December 31, 2024, indicating a 9.3% increase[78]. - The company's total property and equipment, net, was $13,722,647 as of September 30, 2025, compared to $13,515,162 at the end of 2024, showing a slight increase of 1.5%[80]. - Intangible assets, net, decreased to $3,593,998 as of September 30, 2025, from $4,097,778 at the end of 2024, reflecting a reduction of 12.3%[81]. Shareholder Activities - The company repurchased 11,562 shares for $67,582 at an average price of $5.85 during the three months ended September 30, 2025[94]. - For the nine months ended September 30, 2025, the company repurchased 32,225 shares for $188,908, averaging $5.86 per share[95]. - The company has authorized the repurchase of up to 1.1 million shares under its stock repurchase program, which is set to expire on March 31, 2026[93][94]. Compliance and Governance - The Company was in compliance with all debt obligation covenants for the three and nine months ended September 30, 2025 and 2024[104]. - The Company has a corporate policy for related party transactions, ensuring they are in the best interests of the Company and its shareholders[109]. - The Company does not believe that pending lawsuits will have a material adverse effect on its financial position[110]. Accounting and Reporting - The company applies a five-step approach to revenue recognition under ASC 606, ensuring accurate timing and amount of revenue recognized[30]. - The company is currently evaluating the potential impact of new accounting standards on its consolidated financial statements and related disclosures[73][74][76]. - The estimated future amortization expense related to intangible assets for 2025 is projected to be $186,833[82].