Educational Development (EDUC) 10-Q 7 Oct 15 2016 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Aug. 31, 2015	Oct. 02, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Educational Development Corp
Document Type	10-Q
Current Fiscal Year End Date	--02-28
Entity Common Stock, Shares Outstanding		4,057,364
Amendment Flag	false
Entity Central Index Key	31,667
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Aug. 31, 2015
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONDENSED BALANCE SHEETS (UNAUD

CONDENSED BALANCE SHEETS (UNAUDITED) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 312,100	$ 383,900
Accounts receivable, less allowance for doubtful accounts and sales returns of $397,700 (August 31) and $334,500 (February 28)	4,164,100	3,076,700
Inventories—Net	13,356,000	11,181,000
Prepaid expenses and other assets	422,500	374,200
Deferred income taxes	255,900	249,800
Total current assets	18,510,600	15,265,600
INVENTORIES—Net	304,500	350,800
PROPERTY, PLANT AND EQUIPMENT—Net	2,403,900	2,073,200
OTHER ASSETS	243,400	243,400
DEFERRED INCOME TAXES	68,800	80,200
TOTAL ASSETS	21,531,200	18,013,200
CURRENT LIABILITIES:
Accounts payable	4,571,600	2,237,700
Line of credit	1,350,000	1,400,000
Accrued salaries and commissions	1,394,800	618,100
Income taxes payable	293,500	63,600
Dividends payable	364,400	322,000
Other current liabilities	854,300	1,043,500
Total current liabilities	$ 8,828,600	$ 5,684,900
COMMITMENTS
SHAREHOLDERS’ EQUITY:
Common stock, $0.20 par value; Authorized 8,000,000 shares; Issued 6,041,040 (August 31 and February 28) shares; Outstanding 4,049,335 (August 31) and 4,024,539 (February 28) shares	$ 1,208,200	$ 1,208,200
Capital in excess of par value	8,548,000	8,548,000
Retained earnings	14,138,800	13,857,200
	23,895,000	23,613,400
Less treasury stock, at cost	(11,192,400)	(11,285,100)
Total shareholders' equity	12,702,600	12,328,300
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 21,531,200	$ 18,013,200

CONDENSED BALANCE SHEETS (UNAU3

CONDENSED BALANCE SHEETS (UNAUDITED) (Parentheticals) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Allowance for doubtful accounts and sales returns (in Dollars)	$ 397,700	$ 334,500
Common Stock, par value (in Dollars per share)	$ 0.20	$ 0.20
Common Stock, shares authorized	8,000,000	8,000,000
Common Stock, shares issued	6,041,040	6,041,040
Common Stock, shares outstanding	4,049,335	4,024,539

CONDENSED STATEMENTS OF EARNING

CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
GROSS SALES	$ 17,685,600	$ 11,335,200	$ 30,988,700	$ 22,055,600
Discounts and allowances	(5,994,500)	(4,811,200)	(10,202,100)	(8,613,100)
Transportation revenue	915,700	284,200	1,458,000	544,000
NET REVENUES	12,606,800	6,808,200	22,244,600	13,986,500
COST OF SALES	4,577,400	3,013,100	8,151,200	5,856,600
Gross margin	8,029,400	3,795,100	14,093,400	8,129,900
OPERATING EXPENSES:
Operating and selling	3,395,400	2,065,700	6,118,700	4,124,300
Sales commissions	3,060,800	1,177,200	5,375,400	2,597,100
General and administrative	512,500	532,800	996,900	1,005,100
Total operating expenses	6,968,700	3,775,700	12,491,000	7,726,500
OTHER EXPENSE	(21,700)	(11,100)	(31,700)	(7,500)
EARNINGS BEFORE INCOME TAXES	1,039,000	8,300	1,570,700	395,900
INCOME TAXES	394,600	12,200	601,700	160,100
NET EARNINGS	$ 644,400	$ (3,900)	$ 969,000	$ 235,800
BASIC AND DILUTED EARNINGS PER SHARE:
Basic (in Dollars per share)	$ 0.16	$ 0	$ 0.24	$ 0.06
Diluted (in Dollars per share)	0.16	0	0.24	0.06
DIVIDENDS PER SHARE (in Dollars per share)	$ 0.09	$ 0.08	$ 0.17	$ 0.16
WEIGHTED AVERAGE NUMBER OF COMMON AND EQUIVALENT SHARES OUTSTANDING:
Basic (in Shares)	4,045,219	3,998,170	4,039,055	3,992,365
Diluted (in Shares)	4,045,219	3,998,170	4,039,055	3,992,365

CONDENSED STATEMENT OF CHANGES

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - 6 months ended Aug. 31, 2015 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
Balance at Feb. 28, 2015	$ 1,208,200	$ 8,548,000	$ 13,857,200	$ (11,285,100)	$ 12,328,300
Balance (in Shares) at Feb. 28, 2015	6,041,040			2,016,501
Purchases of treasury stock				$ (200)	(200)
Purchases of treasury stock (in Shares)				59
Sales of treasury stock				$ 92,900	92,900
Sales of treasury stock (in Shares)				(24,855)
Dividends paid ($.08/share)			(323,000)		(323,000)
Dividends declared ($.09/share)			(364,400)		(364,400)
Net earnings			969,000		969,000
Balance at Aug. 31, 2015	$ 1,208,200	$ 8,548,000	$ 14,138,800	$ (11,192,400)	$ 12,702,600
Balance (in Shares) at Aug. 31, 2015	6,041,040			1,991,705

CONDENSED STATEMENT OF CHANGES6

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parentheticals) - Retained Earnings [Member]	6 Months Ended
	Aug. 31, 2015$ / shares
Dividends paid	$ 0.08
Dividends declared	$ 0.09

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:	$ 927,800	$ (2,429,500)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(397,300)	(114,300)
Net cash used in investing activities	(397,300)	(114,300)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash paid to acquire treasury stock	(200)	(4,400)
Cash received from sales of treasury stock	92,900	85,500
Borrowings under revolving credit agreement	1,550,000	2,900,000
Payments under revolving credit agreement	(1,600,000)	(400,000)
Dividends paid	(645,000)	(637,400)
Net cash (used in) provided by financing activities	(602,300)	1,943,700
NET DECREASE IN CASH AND CASH EQUIVALENTS	(71,800)	(600,100)
CASH AND CASH EQUIVALENTS—BEGINNING OF PERIOD	383,900	680,000
CASH AND CASH EQUIVALENTS—END OF PERIOD	312,100	79,900
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	43,400	20,000
Cash paid for income taxes	$ 366,600	$ 326,500

Note 1

Note 1	6 Months Ended
	Aug. 31, 2015
Disclosure Text Block [Abstract]
Business Description and Basis of Presentation [Text Block]	Note 1 These financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Ex-change Commission for interim reporting and should be read in conjunction with the audited financial statements and accompanying notes contained in our annual report on Form 10-K for the fiscal year ended February 28, 2015.

Note 2

Note 2	6 Months Ended
	Aug. 31, 2015
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	Note 2 We had $1,350,000 in borrowings outstanding on our revolving credit agreement at August 31, 2015 and $1,400,000 in borrowings at February 28, 2015. Available credit under the revolving credit agreement was $2,650,000 at August 31, 2015. This agreement also contains a provision for our use of the Bank’s letters of credit. The Bank agrees to issue, or obtain issuance of commercial or stand-by letters of credit provided that no letters of credit will have an expiry date later than June 30, 2016, and that the sum of the line of credit plus the letters of credit would not exceed the borrowing base in effect at the time. The agreement contains provisions that require us to maintain specified financial ratios, restrict transactions with related parties, prohibit mergers or consolidation, disallow additional debt, and limit the amount of compensation, salaries, investments, capital expenditures and leasing transactions. For the quarter ended August 31, 2015, we had no letters of credit outstanding.

Note 3

Note 3	6 Months Ended
	Aug. 31, 2015
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]	Note 3 2015 August 31, February 28, Current: Book inventory $ 13,381,000 $ 11,206,000 Inventory valuation allowance (25,000 ) (25,000 ) Inventories net–current $ 13,356,000 $ 11,181,000 Non-current: Book inventory $ 651,500 $ 718,900 Inventory valuation allowance (347,000 ) (368,100 ) Inventories net–non-current $ 304,500 $ 350,800

Note 4

Note 4	6 Months Ended
	Aug. 31, 2015
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	Note 4 Earnings Per Share: Three Months Ended August 31, Six Months Ended August 31, 2015 2014 2015 2014 Net earnings $ 644,400 $ (3,900 ) $ 969,000 $ 235,800 Shares: Weighted average shares outstanding - basic 4,045,219 3,998,170 4,039,055 3,992,365 Assumed exercise of options - - - - Weighted average shares outstanding - diluted 4,045,219 3,998,170 4,039,055 3,992,365 Basic Earnings Per Share $ 0.16 $ (0.00 ) $ 0.24 $ 0.06 Diluted Earnings Per Share $ 0.16 $ (0.00 ) $ 0.24 $ 0.06 Stock options not considered above because they were antidilutive 10,000 10,000 10,000 10,000 Our Board of Directors has adopted a stock repurchase plan in which we may purchase up to a total of 3,000,000 shares as market conditions warrant. This plan has no expiration date. During the six months ended August 31, 2015, we purchased 59 shares of common stock. The maximum number of shares that can be repurchased in the future is 303,256.

Note 5

Note 5	6 Months Ended
	Aug. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 5

Note 6

Note 6	6 Months Ended
	Aug. 31, 2015
Disclosure Text Block [Abstract]
Other Operating Income and Expense [Text Block]	Note 6 Outbound freight and handling costs incurred are included in operating and selling expenses and were $1,547,700 and $799,200 for the three months ended August 31, 2015 and 2014, respectively. These costs were $2,605,100 and $1,539,900 for the six months ended August 31, 2015 and 2014, respectively.

Note 7

Note 7	6 Months Ended
	Aug. 31, 2015
Segment Reporting [Abstract]
Segment Reporting Disclosure [Text Block]	Note 7 The accounting policies of the segments are the same as those of the rest of the Company. We evaluate segment performance based on earnings before income taxes of the segments, which is defined as segment net sales reduced by cost of sales and direct expenses. Corporate expenses, depreciation, interest expense and income taxes are not allocated to the segments, but are listed in the “other” row below. Corporate expenses include the executive department, accounting department, information services department, general office management and building facilities management. Our assets and liabilities are not allocated on a segment basis Information by industry segment for the three and six-month periods ended August 31, 2015 and 2014, follows: NET REVENUES Three Months Ended August 31, Six Months Ended August 31, 2015 2014 2015 2014 EDC Publishing $ 3,674,100 $ 3,260,100 $ 6,293,700 $ 6,024,000 UBAM 8,932,700 3,548,100 15,950,900 7,962,500 Total $ 12,606,800 $ 6,808,200 $ 22,244,600 $ 13,986,500 EARNINGS BEFORE INCOME TAXES Three Months Ended August 31, Six Months Ended August 31, 2015 2014 2015 2014 EDC Publishing $ 1,248,100 $ 965,400 $ 1,966,700 $ 1,774,700 UBAM 1,084,600 154,100 2,036,600 769,500 Other (1,293,700 ) (1,111,200 ) (2,432,600 ) (2,148,300 ) Total $ 1,039,000 $ 8,300 $ 1,570,700 $ 395,900

Note 8

Note 8	6 Months Ended
	Aug. 31, 2015
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	Note 8 .

Note 9

Note 9	6 Months Ended
	Aug. 31, 2015
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]	Note 9 Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 - Observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly. If an asset or liability has a specified term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Unobservable inputs for the asset or liability. We do not report any assets or liabilities at fair value in the financial statements. However, the estimated fair value of our line of credit is estimated by management to approximate the carrying value of $1,350,000 at August 31, 2015, and $1,400,000 at February 28, 2015. Management's estimates are based on the obligation’s characteristics, including a floating interest rate, maturity, and collateral. Such valuation inputs are considered a Level 2 measurement in the fair value valuation hierarchy.

Note 10

Note 10	6 Months Ended
	Aug. 31, 2015
Subsequent Events [Abstract]
Subsequent Events [Text Block]	Note 10

Note 11

Note 11	6 Months Ended
	Aug. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]	Note 11

Note 3 (Tables)

Note 3 (Tables)	6 Months Ended
	Aug. 31, 2015
Inventory Disclosure [Abstract]
Schedule of Inventory [Table Text Block]	Inventories consist of the following: 2015 August 31, February 28, Current: Book inventory $ 13,381,000 $ 11,206,000 Inventory valuation allowance (25,000 ) (25,000 ) Inventories net–current $ 13,356,000 $ 11,181,000 Non-current: Book inventory $ 651,500 $ 718,900 Inventory valuation allowance (347,000 ) (368,100 ) Inventories net–non-current $ 304,500 $ 350,800

Note 4 (Tables)

Note 4 (Tables)	6 Months Ended
	Aug. 31, 2015
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share (“EPS”) is shown below. Earnings Per Share: Three Months Ended August 31, Six Months Ended August 31, 2015 2014 2015 2014 Net earnings $ 644,400 $ (3,900 ) $ 969,000 $ 235,800 Shares: Weighted average shares outstanding - basic 4,045,219 3,998,170 4,039,055 3,992,365 Assumed exercise of options - - - - Weighted average shares outstanding - diluted 4,045,219 3,998,170 4,039,055 3,992,365 Basic Earnings Per Share $ 0.16 $ (0.00 ) $ 0.24 $ 0.06 Diluted Earnings Per Share $ 0.16 $ (0.00 ) $ 0.24 $ 0.06 Stock options not considered above because they were antidilutive 10,000 10,000 10,000 10,000

Note 7 (Tables)

Note 7 (Tables)	6 Months Ended
	Aug. 31, 2015
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Information by industry segment for the three and six-month periods ended August 31, 2015 and 2014, follows: NET REVENUES Three Months Ended August 31, Six Months Ended August 31, 2015 2014 2015 2014 EDC Publishing $ 3,674,100 $ 3,260,100 $ 6,293,700 $ 6,024,000 UBAM 8,932,700 3,548,100 15,950,900 7,962,500 Total $ 12,606,800 $ 6,808,200 $ 22,244,600 $ 13,986,500 EARNINGS BEFORE INCOME TAXES Three Months Ended August 31, Six Months Ended August 31, 2015 2014 2015 2014 EDC Publishing $ 1,248,100 $ 965,400 $ 1,966,700 $ 1,774,700 UBAM 1,084,600 154,100 2,036,600 769,500 Other (1,293,700 ) (1,111,200 ) (2,432,600 ) (2,148,300 ) Total $ 1,039,000 $ 8,300 $ 1,570,700 $ 395,900

Note 2 (Details)

Note 2 (Details) - USD ($)	Jul. 07, 2015	Aug. 31, 2015	Feb. 28, 2015
Debt Disclosure [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity	$ 4,000,000
Line of Credit Facility, Expiration Date	Jun. 30, 2016
Line of Credit Facility, Frequency of Payment and Payment Terms	Interest is payable monthly at the prime rate
Long-term Line of Credit		$ 1,350,000	$ 1,400,000
Line of Credit Facility, Remaining Borrowing Capacity		2,650,000
Letters of Credit Outstanding, Amount		$ 0

Note 3 (Details)

Note 3 (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Note 3 (Details) [Line Items]
Payments for Purchase of Other Assets	$ 5.5	$ 4.1	$ 11.2	$ 8.1
England Based Publishing Company [Member]
Note 3 (Details) [Line Items]
Payments for Purchase of Other Assets	$ 4.1	$ 3.4	$ 8.5	$ 6.7

Note 3 (Details) - Schedule of

Note 3 (Details) - Schedule of Inventory - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Note 3 (Details) - Schedule of Inventory [Line Items]
Inventories net–non-current	$ 304,500	$ 350,800
Inventories net–current	13,356,000	11,181,000
Inventory, Current [Member]
Note 3 (Details) - Schedule of Inventory [Line Items]
Book inventory	13,381,000	11,206,000
Inventory valuation allowance	(25,000)	(25,000)
Inventories net–current	13,356,000	11,181,000
Inventory, Noncurrent [Member]
Note 3 (Details) - Schedule of Inventory [Line Items]
Book inventory	651,500	718,900
Inventory valuation allowance	(347,000)	(368,100)
Inventories net–non-current	$ 304,500	$ 350,800

Note 4 (Details)

Note 4 (Details)	6 Months Ended
	Aug. 31, 2015shares
Earnings Per Share [Abstract]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	3,000,000
Stock Repurchased During Period, Shares	59
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	303,256

Note 4 (Details) - Schedule of

Note 4 (Details) - Schedule of Earnings Per Share - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Schedule of Earnings Per Share [Abstract]
Net earnings (in Dollars)	$ 644,400	$ (3,900)	$ 969,000	$ 235,800
Shares:
Weighted average shares outstanding - basic	4,045,219	3,998,170	4,039,055	3,992,365
Assumed exercise of options	0	0	0	0
Weighted average shares outstanding - diluted	4,045,219	3,998,170	4,039,055	3,992,365
Basic Earnings Per Share (in Dollars per share)	$ 0.16	$ 0	$ 0.24	$ 0.06
Diluted Earnings Per Share (in Dollars per share)	$ 0.16	$ 0	$ 0.24	$ 0.06
Stock options not considered above because they were antidilutive	10,000	10,000	10,000	10,000

Note 5 (Details)

Note 5 (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Allocated Share-based Compensation Expense	$ 0	$ 0

Note 6 (Details)

Note 6 (Details) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Disclosure Text Block [Abstract]
Shipping, Handling and Transportation Costs	$ 1,547,700	$ 799,200	$ 2,605,100	$ 1,539,900

Note 7 (Details)

Note 7 (Details)	6 Months Ended
	Aug. 31, 2015
Segment Reporting [Abstract]
Number of Reportable Segments	2

Note 7 (Details) - Schedule of

Note 7 (Details) - Schedule of Information by Industry Segment - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Segment Reporting Information [Line Items]
Net Revenues	$ 12,606,800	$ 6,808,200	$ 22,244,600	$ 13,986,500
Earnings (Loss) Before Income Taxes	1,039,000	8,300	1,570,700	395,900
Publishing [Member]
Segment Reporting Information [Line Items]
Net Revenues	3,674,100	3,260,100	6,293,700	6,024,000
Earnings (Loss) Before Income Taxes	1,248,100	965,400	1,966,700	1,774,700
Usborne Books and More [Member]
Segment Reporting Information [Line Items]
Net Revenues	8,932,700	3,548,100	15,950,900	7,962,500
Earnings (Loss) Before Income Taxes	1,084,600	154,100	2,036,600	769,500
Other Segments [Member]
Segment Reporting Information [Line Items]
Earnings (Loss) Before Income Taxes	$ (1,293,700)	$ (1,111,200)	$ (2,432,600)	$ (2,148,300)

Note 9 (Details)

Note 9 (Details) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Fair Value, Inputs, Level 2 [Member]
Note 9 (Details) [Line Items]
Lines of Credit, Fair Value Disclosure	$ 1,350,000	$ 1,400,000

Note 10 (Details)

Note 10 (Details) - Subsequent Event [Member]	Sep. 18, 2015$ / shares
Note 10 (Details) [Line Items]
Dividends Payable, Date to be Paid	Sep. 18, 2015
Common Stock, Dividends, Per Share, Cash Paid	$ 0.09
Dividends Payable, Date of Record	Sep. 11, 2015

Note 11 (Details)

Note 11 (Details)	Oct. 02, 2015USD ($)
Subsequent Event [Member]
Note 11 (Details) [Line Items]
Buildings and Improvements, Gross	$ 1,509,900