EDC Q2 2018 Net Revenue Down 6.6%; Usborne Books Down 6.9%
Educational Development Corporation (EDC) recently reported record net sales and earnings per share results for the second quarter ended Aug. 31, 2017.
Randall White, CEO of EDC, announced that the company had net revenues of $24,181,300, a decrease of $1,711,700, or 6.6 percent, when compared to $25,893,000 for the second quarter of the previous year. Net earnings totaled $1,036,900 for the quarter ended Aug. 31, 2017, compared to $318,500 for the quarter ended August 31, 2016, an increase of 225.6 percent. Earnings per share for the quarter were 25 cents compared to 8 cents for the same quarter in the previous year, up 212.5 percent on a fully diluted basis.
The direct sales division, Usborne Books & More (UBAM), continued to be the largest operating segment of the company. Net revenues of this division was $22,204,300, a decrease of 6.9 percent from $23,857,400 reported in the second quarter ended Aug. 31, 2016. The average number of active direct sales consultants increased 6,300, or 26.9 percent, to 29,700 for the quarter, over the average active consultant count in the second quarter of last year.
The Publishing’s divisions revenues remained consistent at $1,977,000 for the second fiscal quarter ended Aug. 31, 2017 as compared to $2,035,600 for the same quarter a year ago.
The company’s year-to-date net revenue in the first two quarters of the year was $51,112,100, an increase of $2,434,900, or 5 percent, from $48,677,200 reported in the same period last year. Year-to-date earnings increased 32 cents, or 140 percent, from 23 cents for the six months ended Aug. 31, 2016 to 55 cents for the six months ended Aug. 31, 2017.
“Our UBAM division experienced a slight decline in revenues from the second fiscal quarter of last year,” said White. “However, during the second quarter of last year we experienced incredible growth in new consultants and revenues, which overshadowed the typical seasonal decline that we experience in the second quarter. Our second quarter includes the summer months when order sizes are typically smaller than our fiscal first and fiscal third quarters. Also during the second quarter we hold our annual convention and host our annual incentive trip, in which our top earners typically participate and has an impact on their sales during the quarter.
“During the second quarter we continued our efforts to expand our daily shipping capacity and implement additional technology enhancements which we expect will continue to improve our operating margins. These efforts started when we first began experiencing rapid growth in our UBAM Division dating back to fiscal 2015. Since that time, we have overcome several obstacles including last year’s decision to replace a failed software program that was purchased from an outside vendor. Since that difficult decision was made, we have reported steady improvements in our operating margins and earnings. These margins improvements would not have been possible without the hard work and commitment of our IT staff, which have replaced the failed software product with our own proprietary program and made further enhancements to our warehouse distribution system.
“Our second quarter’s earnings per share grew 212 percent to 25 cents, over the 8 cents reported in the same quarter last year, which had higher sales. Our earnings growth is primarily attributed to efficiencies in our warehouse operation. Over the past year we have implemented changes to our packaging types which has reduced packaging costs, weight and related outbound shipping costs. During the second quarter we also implemented new equipment and software changes in our picking lines, which has significantly increased our daily shipping capacity. With this increase in capacity, we are excited about our ability to stay current with shipping orders during the Fall Selling Season, which is our busiest time of the year.”
EDC is a publishing company specializing in books for children. EDC is the exclusive United States distributor of the UK-based Usborne Books and owns Kane Miller Publishers; award-winning publishers of international children’s books. EDC’s current catalog contains over 2,000 titles, with new additions semi-annually. Both Usborne and Kane Miller products are sold via 5,000 retail outlets and by independent consultants, who hold book showings in individual homes, through social media, book fairs with school and public libraries, direct and internet sales.
