EDC(US:EDUC)2020-07-15 21:43Financial Data and Key Metrics Changes - Net revenues for Q1 2021 were approximately $38.3 million, an increase of $10.7 million or 38.8% from $27.6 million in Q1 2020 [4] - Pretax profits for Q1 totaled $2.6 million, up $800,000 from $1.8 million in the same quarter last year, with pretax profit as a percentage of net revenues increasing from 6.7% to 6.9% [4] - Net earnings for Q1 2021 were $1.9 million compared to $1.4 million in Q1 2020, representing a 41.6% growth in pretax earnings [4] - Earnings per share on a fully diluted basis increased from $0.17 to $0.23, a rise of 35.3% [4] Business Line Data and Key Metrics Changes - Publishing sales were down in March due to store closures, but there was a significant recovery in April with a 60% increase compared to the previous year [5][7] - May saw an even more remarkable increase of approximately 116% compared to last May, with sales reaching around $16 million [7] - The company added 10,700 new consultants during April and May, indicating strong growth in its sales force [7] Market Data and Key Metrics Changes - The company experienced a significant increase in stock trading volume, with 800,000 shares traded in a short period, indicating heightened market interest [9] - June revenues for publishing began to recover as stores reopened, although the retail environment remains uncertain [12] Company Strategy and Development Direction - The company is focusing on keeping up with increased demand through the fall selling season, which is typically three times higher than summer sales [13] - There are plans for significant expansion of facilities to handle potential increases in volume, although no specific forecasts are made [13] - The company aims to maintain a strong cash position while considering options for debt management and dividend increases [21][25] Management's Comments on Operating Environment and Future Outlook - Management noted the unusual circumstances of the quarter due to COVID-19, with initial declines in sales followed by a strong recovery [5][6] - The company is optimistic about future growth, citing the highest number of active consultants in its history and record revenue months [10][12] - There is a cautious outlook on the retail environment, with management acknowledging the potential for store closures despite recent recoveries [12] Other Important Information - The company received a PPP loan of $1.44 million to support its workforce during the downturn [6] - Management expressed confidence in the financial stability of its primary tenant, which has a strong profit history [17] Q&A Session Summary Question: Concerns about renters' ability to pay due to COVID-19 - Management reassured that the primary tenant is financially stable and that a 90-day rent abatement was granted without concern [17] Question: Thoughts on selling stock to pay off debt - Management indicated that they do not need to sell stock to pay off debt, as the company generates significant cash flow from prepaid orders [20] Question: Stock price appreciation and cash management - Management discussed the balance between paying down debt, increasing dividends, and investing in inventory, emphasizing the importance of cash flow [21][25]