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Eaco Corp. (EACO0.00%) has submitted its 10-Q filing for the quarterly period ended November 30, 2024.
The filing includes financial statements for the quarter, showing an increase in net sales to $93.92 million from $80.26 million in the same quarter the previous year. This increase is attributed to an expanded sales force and higher inventory availability.
Cost of sales for the quarter was $66.14 million, representing 70% of sales, compared to 71% in the same quarter of the previous year. Gross margin improved slightly to 29.6% from 29.4%.
The company reported a net income of $6.89 million for the quarter, compared to $1.76 million in the previous year. This improvement is primarily due to increased sales and the absence of a $3.9 million impairment charge related to the termination of a lease recorded in the prior year.
Selling, general, and administrative expenses increased to $18.94 million from $17.22 million, primarily due to higher personnel costs.
Net gain on trading securities was $454,000, compared to a net loss of $44,000 in the previous year. Interest and other expenses increased slightly.
Cash provided by operating activities was $2.01 million, while cash used in investing activities was $5.69 million, primarily due to the purchase of marketable securities.
As of November 30, 2024, Eaco Corp. held $591,000 in cash and cash equivalents and $20.52 million in marketable securities.
The company has a $20 million line of credit with Citizens Business Bank, with no outstanding balance as of November 30, 2024.
Eaco Corp. is in the process of settling a class action lawsuit for approximately $7.5 million, which is expected to be funded from existing cash and cash equivalents.
The filing also notes a material weakness in the company's internal control over financial reporting, which management is in the process of addressing.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Eaco Corp. quarterly 10-Q report dated January 13, 2025. To report an error, please email earnings@qz.com.