Form 8-K - Current report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

CURRENT REPORT

 

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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 10, 2024 (October 10, 2024)

 

EDUCATIONAL DEVELOPMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware	000-04957	73-0750007
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S Employer Identification No.)

 

5402 S 122nd E Avenue, Tulsa, Oklahoma 74146

(Address of principal executive offices and Zip Code)

 

[phone]

(Registrant’s telephone number, including area code)

 

                                                                                  

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Common Stock, $.20 par value	EDUC	NASDAQ
(Title of class)	(Trading symbol)	(Name of each exchange on which registered)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 ☐

 

 

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The information disclosed in these Items 2.02, 7.01 and 9.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

 

ITEM 2.02         RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On October 10, 2024, Educational Development Corporation announced, via press release, fiscal 2025 second quarter financial results. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

ITEM 7.01         REGULATION FD DISCLOSURE

 

On October 10, 2024, Educational Development Corporation announced, via press release, fiscal 2025 second quarter financial results. Educational Development Corporation’s fiscal 2025 earnings call will be held on Thursday, October 10, 2024, at 3:30 PM CT (4:30 PM ET). A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

ITEM 9.01         FINANCIAL STATEMENTS AND EXHIBITS

 

(d)         EXHIBITS

 

Exhibit Number	Description
99.1	Press release dated as of October 10, 2024
104	Cover Page Interactive Data File (formatted as Inline XBRL)

 

 

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SIGNATURE

 

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Educational Development Corporation
By:	/s/ Craig M. White
	Craig M. White
	President and Chief Executive Officer
Date:	October 10, 2024

 

 

 

EXHIBIT 99.1

 

 

 

EDUCATIONAL DEVELOPMENT CORPORATION

ANNOUNCES FISCAL 2025 SECOND QUARTER RESULTS

 

TULSA, OK, October 10, 2024—Educational Development Corporation (“EDC”, or the “Company”) (NASDAQ: EDUC), a publishing company specializing in books and educational products for children, today reports financial results for the fiscal second quarter ended August 31, 2024.

 

 

Second Quarter Summary Compared to the Prior Year Second Quarter

 

	●	Net revenues were $6.5 million compared to $10.6 million.
	●	Average active PaperPie Brand Partners totaled 13,900 compared to 18,100.
	●	Earnings (loss) before income taxes were $(2.5) million, compared to $1.5 million.
	●	Net earnings (loss) totaled $(1.8) million, compared to $1.1 million.
	●	Earnings (loss) per share totaled $(0.22) compared to $0.13 on a fully diluted basis.

 

Year-to-Date Summary Compared to the Prior Year

 

	●	Net revenues of $16.5 million, compared to $25.1 million.
	●	Average active PaperPie Brand Partners totaled 13,700, compared to 20,600.
	●	Earnings (loss) before income taxes of $(4.2) million, compared to $0.3 million.
	●	Net earnings (loss) totaled $(3.1) million, compared to $0.2 million.
	●	Earnings (loss) per share totaled $(0.37), compared to $0.02 on a fully diluted basis.

 

 

Per Craig White, Chief Executive Officer, “Throughout this year we have continued to focus on additional cost reductions and efficiency gains in efforts to restore profitability. In July we leased approximately 50% of our office and warehouse space in the Hilti Complex to a new tenant, reducing our overall footprint and generating income from underutilized space. In August, we switched our outbound freight carrier which has reduced the average cost per shipment by approximately 20% and in September we consolidated our warehouse operations in Utah into our Tulsa facility. We will see the impact of all of these strategic changes in the upcoming quarters and beyond.”

 

“The largest improvement in our financial performance will occur when we sell our Hilti Complex and eliminate our borrowings with our bank. On September 19^th we executed a Letter of Intent to sell/lease back the Hilti Complex. The agreement excludes the 17 acres of excess land which will remain under the EDC’s ownership. The proceeds from the sale, which is expected to be completed around the end of this calendar year, are expected to fully pay back the bank leaving us with no debt and we expect to have limited borrowing needs moving forward.”

 

“Additionally, during the second quarter last year we received an Employee Retention Tax Credit totaling $3.8 million which changed the pre-tax loss for the quarter of $2.3 million to a pre-tax gain of $1.5 million.”

 

“The results from these key changes reflect our commitment to returning to profitability for our shareholders. I would like to again thank our stakeholders for your ongoing support, including our Brand Partners, Customers, Employees, Vendors and Shareholders. Through your support, we remain steadfast in our mission to improve children’s literacy,” concluded Mr. White. 

 

 

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EDUCATIONAL DEVELOPMENT CORPORATION
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
		Three Months Ended August 31,								Six Months Ended August 31,
		2024				2023				2024				2023
NET REVENUES		$	6,509,200			$	10,593,100			$	16,502,600			$	25,117,100
EARNINGS (LOSS) BEFORE INCOME TAXES			(2,466,100	)			1,452,900				(4,213,100	)			252,300
INCOME TAX EXPENSE (BENEFIT)			(662,700	)			391,200				(1,130,700	)			63,400
NET EARNINGS (LOSS)		$	(1,803,400	)		$	1,061,700			$	(3,082,400	)		$	188,900
WEIGHTED AVERAGE NUMBER OF COMMON AND EQUIVALENT SHARES OUTSTANDING
Basic			8,272,217				8,269,771				8,269,494				8,273,910
Diluted			8,272,217				8,269,771				8,269,494				8,283,221

 

 

Fiscal 2025 Second Quarter Earnings Call

 

Date: Thursday, October 10, 2024

Time: 3:30 PM CT (4:30 PM ET)

Dial-in number: [phone]

Conference ID: 47709

 

The conference call will be broadcast live and audio replays will be available following the event at www.edcpub.com/investors.

 

About Educational Development Corporation (EDC)

 

EDC began as a publishing company specializing in books for children. EDC is the owner and exclusive publisher of Kane Miller Books (“Kane Miller”); Learning Wrap-Ups, maker of educational manipulatives; and SmartLab Toys, maker of STEAM-based toys and games. EDC is also the exclusive United States MLM distributor of Usborne Publishing Limited (“Usborne”) children’s books. EDC-owned products are sold via 4,000 retail outlets and EDC and Usborne products are offered by independent brand partners who hold book showings through social media, book fairs with schools and public libraries, in individual homes, as well as other in-person events and internet sales.

 

Contact:

Educational Development Corporation

Craig White, [phone]

 

Investor Relations:

Three Part Advisors, LLC

Steven Hooser [phone]

 

 

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Cautionary Statement for the Purpose of the “Safe Harbor” Provision of the Private Securities Litigation Reform Act of 1995.

 

The information discussed in this Press Release includes “forward-looking statements.” These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties and we can give no assurance that such expectations or assumptions will be achieved. Known and unknown risks, uncertainties and other factors may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our success in recruiting and retaining new brand partners, our ability to locate and procure desired books, our ability to ship the volume of orders that are received without creating backlogs, our ability to obtain adequate financing for working capital and capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, cybersecurity threats and incidents, the COVID-19 pandemic, as well as those factors discussed in our Annual Report on Form 10-K for the year ended February 29, 2024, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in our Annual Report on Form 10-K for the year ended February 29, 2024 and speak only as of the date of this Press Release. Other than as required under the securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

 

 

 

Document And Entity Information	Oct. 10, 2024
Document Information Line Items
Entity Registrant Name	EDUCATIONAL DEVELOPMENT CORPORATION
Trading Symbol	EDUC
Document Type	8-K
Amendment Flag	false
Entity Central Index Key	0000031667
Document Period End Date	Oct. 10, 2024
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	DE
Entity File Number	000-04957
Entity Tax Identification Number	73-0750007
Entity Address, Address Line One	5402 S 122nd E Avenue
Entity Address, City or Town	Tulsa
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	74146
City Area Code	(918)
Local Phone Number	622-4522
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.20 par value
Security Exchange Name	NASDAQ

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