Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
May 31, 2018 | Jul. 09, 2018 | |
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 | 4,093,481 | |
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 | May 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED BALANCE SHEETS (UNAUD
CONDENSED BALANCE SHEETS (UNAUDITED) - USD ($) | May 31, 2018 | Feb. 28, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,430,900 | $ 2,723,300 |
Accounts receivable, less allowance for doubtful accounts $347,200 (May 31) and $297,100 (February 28) | 2,772,300 | 2,913,700 |
Inventories—Net | 27,715,700 | 26,618,600 |
Prepaid expenses and other assets | 959,200 | 1,259,000 |
Total current assets | 35,878,100 | 33,514,600 |
INVENTORIES—Net | 490,300 | 435,900 |
PROPERTY, PLANT AND EQUIPMENT—Net | 27,705,600 | 27,860,500 |
OTHER ASSETS | 26,900 | 26,900 |
TOTAL ASSETS | 64,100,900 | 61,837,900 |
CURRENT LIABILITIES: | ||
Accounts payable | 13,229,500 | 12,469,000 |
Deferred revenues | 442,400 | 693,000 |
Current maturities of long-term debt | 891,100 | 881,200 |
Accrued salaries and commissions | 1,910,800 | 2,007,900 |
Income taxes payable | 2,285,200 | 1,798,800 |
Dividends payable | 409,000 | 0 |
Other current liabilities | 3,132,800 | 3,517,900 |
Total current liabilities | 22,300,800 | 21,367,800 |
LONG-TERM DEBT—Net of current maturities | 19,563,900 | 19,825,100 |
DEFERRED INCOME TAXES—Net | 325,000 | 136,900 |
OTHER LONG-TERM LIABILITIES | 106,000 | 106,000 |
Total liabilities | 42,295,700 | 41,435,800 |
COMMITMENTS (Note 7) | ||
SHAREHOLDERS’ EQUITY: | ||
Common stock, $0.20 par value; Authorized 8,000,000 shares; Issued 6,046,040 (May 31 and February 28) shares; Outstanding 4,090,034 (May 31) and 4,089,806 (February 28) shares | 1,209,200 | 1,209,200 |
Capital in excess of par value | 8,573,300 | 8,573,300 |
Retained earnings | 22,940,100 | 21,532,500 |
32,722,600 | 31,315,000 | |
Less treasury stock, at cost | (10,917,400) | (10,912,900) |
Total shareholders’ equity | 21,805,200 | 20,402,100 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 64,100,900 | $ 61,837,900 |
CONDENSED BALANCE SHEETS (UNAU3
CONDENSED BALANCE SHEETS (UNAUDITED) (Parentheticals) - USD ($) | May 31, 2018 | Feb. 28, 2018 |
Allowance for doubtful accounts (in Dollars) | $ 347,200 | $ 297,100 |
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 | 6,046,040 | 6,046,040 |
Common Stock, shares outstanding | 4,090,034 | 4,089,806 |
CONDENSED STATEMENTS OF EARNING
CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
REVENUES | $ 30,022,300 | $ 26,941,200 |
COST OF GOODS SOLD | 9,669,700 | 8,598,800 |
Gross margin | 20,352,600 | 18,342,400 |
OPERATING EXPENSES: | ||
Operating and selling | 4,752,200 | 4,226,800 |
Sales commissions | 9,373,100 | 8,509,200 |
General and administrative | 3,892,500 | 3,713,900 |
Total operating expenses | 18,017,800 | 16,449,900 |
INTEREST EXPENSE | 213,400 | 281,500 |
OTHER INCOME | (374,400) | (371,200) |
EARNINGS BEFORE INCOME TAXES | 2,495,800 | 1,982,200 |
INCOME TAXES | 679,200 | 756,900 |
NET EARNINGS | $ 1,816,600 | $ 1,225,300 |
BASIC AND DILUTED EARNINGS PER SHARE: | ||
Basic (in Dollars per share) | $ 0.44 | $ 0.30 |
Diluted (in Dollars per share) | $ 0.44 | $ 0.30 |
WEIGHTED AVERAGE NUMBER OF COMMON AND EQUIVALENT SHARES OUTSTANDING: | ||
Basic (in Shares) | 4,088,595 | 4,090,143 |
Diluted (in Shares) | 4,092,504 | 4,093,878 |
Dividends per share (in Dollars per share) | $ 0.10 | $ 0 |
Gross revenue [Member] | ||
REVENUES | $ 39,074,800 | $ 34,511,100 |
Discounts and Allowances [Member] | ||
REVENUES | (11,901,400) | (10,270,500) |
Transportation Revenue [Member] | ||
REVENUES | $ 2,848,900 | $ 2,700,600 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - 3 months ended May 31, 2018 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Balance at Feb. 28, 2018 | $ 1,209,200 | $ 8,573,300 | $ 21,532,500 | $ (10,912,900) | $ 20,402,100 |
Balance (in Shares) at Feb. 28, 2018 | 6,046,040 | 1,956,234 | |||
Purchases of treasury stock | $ (29,600) | (29,600) | |||
Purchases of treasury stock (in Shares) | 1,423 | ||||
Sales of treasury stock | $ 25,100 | 25,100 | |||
Sales of treasury stock (in Shares) | (1,651) | ||||
Dividends declared ($0.10/share) | (409,000) | (409,000) | |||
Net earnings | 1,816,600 | 1,816,600 | |||
Balance at May. 31, 2018 | $ 1,209,200 | $ 8,573,300 | $ 22,940,100 | $ (10,917,400) | $ 21,805,200 |
Balance (in Shares) at May. 31, 2018 | 6,046,040 | 1,956,006 |
CONDENSED STATEMENT OF CHANGES6
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parentheticals) | 3 Months Ended |
May 31, 2018$ / shares | |
Dividends declared /share | $ 0.10 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 1,816,600 | $ 1,225,300 |
Depreciation | 352,800 | 293,300 |
Deferred income taxes, net | 188,100 | 54,500 |
Provision for doubtful accounts | 85,000 | 90,300 |
Provision for inventory valuation allowance | 92,100 | 205,600 |
Accounts receivable | 56,400 | (395,000) |
Inventories, net | (1,243,600) | 4,389,100 |
Prepaid expenses and other assets | 299,800 | (3,400) |
Accounts payable | 1,366,700 | (7,133,900) |
Accrued salaries and commissions, and other liabilities | (482,200) | 355,200 |
Deferred revenues | (250,600) | (86,100) |
Income tax payable | 486,400 | 663,100 |
Total adjustments | 950,900 | (1,567,300) |
Net cash provided by (used in) operating activities | 2,767,500 | (342,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (804,100) | (236,800) |
Net cash used in investing activities | (804,100) | (236,800) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term debt | (251,300) | (219,000) |
Cash received from sale of treasury stock | 25,100 | 9,000 |
Cash used to purchase treasury stock | (29,600) | 0 |
Net borrowings under line of credit | 0 | 677,400 |
Net cash provided by (used in) financing activities | (255,800) | 467,400 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,707,600 | (111,400) |
CASH AND CASH EQUIVALENTS—BEGINNING OF PERIOD | 2,723,300 | 699,200 |
CASH AND CASH EQUIVALENTS—END OF PERIOD | 4,430,900 | 587,800 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Cash paid for interest | 229,300 | 275,200 |
Cash paid for income taxes (net of refunds) | (6,100) | 0 |
NON-CASH TRANSACTIONS: | ||
Accrued capital expenditures | $ 33,300 | $ 0 |
Note 1 - BASIS OF PRESENTATION
Note 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
May 31, 2018 | |
Disclosure Text Block [Abstract] | |
Business Description and Basis of Presentation [Text Block] | Note 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Unaudited Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim condensed financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. The Unaudited Condensed Financial Statements include all adjustments considered necessary for a fair presentation of the financial position and results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the Unaudited Condensed Financial Statements do not include all of the information and notes required by GAAP for complete financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim Unaudited Condensed Financial Statements should be read in conjunction with our audited financial statements as of and for the year ended February 28, 2018 included in our Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year due to the seasonality of our product sales. Reclassifications Certain reclassifications have been made to the fiscal 2018 condensed balance sheets, condensed statement of earnings and consolidated statement of cash flows to conform to the classifications used in fiscal 2019. These reclassifications had no effect on net earnings. Use of Estimates in the Preparation of Financial Statements The preparation of the Unaudited Condensed Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Significant Accounting Policies Our significant accounting policies are consistent with those disclosed in Note 1 to our audited financial statements as of and for the year ended February 28, 2018 included in our Form 10-K. New Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. We have reviewed the recently issued accounting standards updates (“ASU”) and concluded that the following recently issued accounting standards apply to us . In May 2014, FASB issued ASU No. 2014-09, and amended with ASU No. 2015-14 “Revenue from Contracts with Customers,” (Topic 606) which provides a single revenue recognition model which is intended to improve comparability over a range of industries, companies and geographical boundaries and will also result in enhanced disclosures. The changes are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The amendments in this series of updates shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company adopted Topic 606, Revenue from Contracts with Customers, with a date of initial application of March 1, 2018, using the full retrospective method applied to all contracts. Results for all reporting periods are presented under Topic 606. As a result of adopting this new accounting guidance, the Company has changed the method of accounting for its hostess awards program from reporting the net cost of these awards in operating and selling expenses to allocating a portion of the transaction price to the material right and reporting these in gross sales and discounts with the associated costs in cost of goods sold. The new reporting of these awards increases gross sales and increases discounts and allowances for a similar amount, having an immaterial effect on net revenues and no effect on net earnings or retained earnings, but lowering the Company’s gross margin percentage. The Company has also removed the allowance for sales returns from the net accounts receivable amount reported on the balance sheet. The allowance for sales returns has been adjusted to reflect a refund liability and a return asset. The cumulative impact of adoption of the new revenue recognition standard had a $0 impact to net earnings and retained earnings (See Note 11). In February 2016, FASB issued ASU No. 2016-02, “Leases,” which is intended to establish a comprehensive new lease accounting model. The new standard clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset. The new standard is effective for interim and annual periods beginning after December 15, 2018, which means the first quarter of our fiscal year 2020. The new standard requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. We are currently reviewing the ASU and evaluating the potential impact on our financial statements. In June 2016, FASB issued ASU No. 2016-13 “Financial Instruments—Credit Losses”, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, which means the first quarter of our fiscal year 2020. We anticipate this ASU having minimal impact on our financial statements. In August 2016, FASB issued ASU No. 2016-15 “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments.” The guidance’s objective is to reduce diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standards required date of adoption is effective for fiscal years beginning after December 15, 2017. This standard was adopted as of March 1, 2018. Adoption of this new standard did not have a material impact on our financial statements. In May 2017, FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” This update amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The new standard is required to be applied prospectively. The guidance was effective March 1, 2018, and the adoption of this ASU did not have a material impact on our financial statements. |
Note 2 - INVENTORIES
Note 2 - INVENTORIES | 3 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 2 Inventories consist of the following: 2018 May 31, February 28, Current: Book inventory $ 28,177,200 $ 27,078,600 Inventory valuation allowance (461,500 ) (460,000 ) Inventories net–current $ 27,715,700 $ 26,618,600 Noncurrent: Book inventory $ 838,800 $ 707,700 Inventory valuation allowance (348,500 ) (271,800 ) Inventories net–noncurrent $ 490,300 $ 435,900 Book inventory quantities in excess of what we expect will be sold within the normal operating cycle, based on 2.5 years of anticipated sales, are included in non-current inventory. Significant portions of our inventory purchases are concentrated with an England-based publishing company, Usborne Publishing, Ltd. (“Usborne”). Purchases from this company were approximately $7.6 million and $1.9 million for the three months ended May 31, 2018 and 2017, respectively. Total inventory purchases from all suppliers were $11.0 million and $5.4 million for the three months ended May 31, 2018 and 2017, respectively. |
Note 3 - DEBT
Note 3 - DEBT | 3 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 3 Debt consists of the following: 2018 May 31, February 28, Line of credit $ - $ - Long-term debt $ 20,455,000 $ 20,706,300 Less current maturities (891,100 ) (881,200 ) Long-term debt, net of current maturities $ 19,563,900 $ 19,825,100 We have a Loan Agreement dated as of March 10, 2016 (as amended the “Loan Agreement”) with MidFirst Bank (“the Bank”) which includes multiple loans. Term Loan #1 is comprised of Tranche A totaling $13.4 million and Tranche B totaling $5.0 million, both with the maturity date of December 1, 2025. Tranche A has a fixed interest rate of 4.23% and interest is payable monthly. For Tranche B, interest is payable monthly at the bank adjusted LIBOR Index plus a tiered pricing rate based on the Company’s Adjusted Funded Debt to EBITDA Ratio (5.03% at May 31, 2018). Term Loan #1 is secured by the primary office, warehouse and land. We also have Term Loan #2 with the Bank in the amount of $4.0 million with the maturity date of June 28, 2021, and interest payable The President and Chief Executive Officer and his wife have executed a Guaranty Agreement obligating them to repay $3,680,000 of any unpaid amount of Term Loan #1, unpaid accrued interest thereon, and any recourse amounts as defined in the Continuing Guaranty Agreement (See Note 12). The Tranche B, the line of credit and the Term Loan #2 accrue interest at a tiered rate based on our Adjusted Funded Debt to EBITDA Ratio, which is payable monthly. The variable interest pricing tier is as follows: Pricing Tier Adjusted Funded Debt to EBITDA Ratio LIBOR Margin (bps) I >3.00 350.50 II >2.50 but < 337.50 III >2.00 but < 325.00 IV < 312.50 EBITDA is defined in the Loan Agreement as earnings before interest expense, income tax expense (benefit) and depreciation and amortization expenses. We had no borrowings outstanding on our revolving credit agreement at May 31, 2018 and February 28, 2018. Available credit under the revolving credit agreement was $10,448,800 and $9,424,000 at May 31, 2018 and at February 28, 2018, respectively. The Loan 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 15, 2018 (see Note 12), 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. For the quarter ended May 31, 2018, we had no letters of credit outstanding. The Loan 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, leasing transactions we can make on a quarterly basis. Additionally, the Loan Agreement places limitations on the amount of dividends that may be distributed and certain stock buyback transactions. The following table reflects aggregate future maturities of long-term debt during the next five fiscal years and thereafter as follows: Year ending February 28 (29), 2019 $ 735,800 2020 926,300 2021 968,100 2022 1,016,800 2023 1,065,300 Thereafter 15,742,700 $ 20,455,000 |
Note 4 - EARNINGS PER SHARE
Note 4 - EARNINGS PER SHARE | 3 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Note 4 Basic earnings per share (“EPS”) is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted EPS is based on the combined weighted average number of common shares outstanding and dilutive potential common shares issuable which include, where appropriate, the assumed exercise of options. In computing diluted EPS we have utilized the treasury stock method. The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted EPS is shown below. Three Months Ended May 31, 2018 2017 Earnings Per Share: Net earnings applicable to common shareholders $ 1,816,600 $ 1,225,300 Shares: Weighted average shares outstanding–basic 4,088,595 4,090,143 Assumed exercise of options 3,909 3,735 Weighted average shares outstanding–diluted 4,092,504 4,093,878 Diluted Earnings Per Share: Basic $ 0.44 $ 0.30 Diluted $ 0.44 $ 0.30 |
Note 5 - STOCK-BASED COMPENSATI
Note 5 - STOCK-BASED COMPENSATION | 3 Months Ended |
May 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 5 We account for stock-based compensation whereby share-based payment transactions with employees, such as stock options and restricted stock, are measured at estimated fair value at date of grant and recognized as compensation expense over the vesting period. No such transactions occurred in the three months |
Note 6 - SHIPPING AND HANDLING
Note 6 - SHIPPING AND HANDLING COSTS | 3 Months Ended |
May 31, 2018 | |
Disclosure Text Block [Abstract] | |
Other Operating Income and Expense [Text Block] | Note 6 SHIPPING AND HANDLING COSTS We classify shipping and handling costs as operating and selling expenses in the statements of earnings. Shipping and handling costs include postage, freight, handling costs, as well as, shipping materials and supplies. These costs were |
Note 7 - COMMITMENTS
Note 7 - COMMITMENTS | 3 Months Ended |
May 31, 2018 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Note 7 – In connection with the purchase of our 400,000 square-foot facility on 40-acres, in 2015, we entered in to a 15-year lease with the seller, a non-related third party, who leases 181,300 square feet, or 45.3% of the facility. The lease is being accounted for as an operating lease. The cost of the leased space upon acquisition was estimated at $10,159,000, which was also the carrying cost as of May 31, 2018. The lessee pays $110,100 per month, through the lease anniversary date of December 2018, with a 2.0% annual increase adjustment on each anniversary date thereafter. The lease terms allow for one five-year extension, which is not a bargain renewal option, at the expiration of the 15-year term. Revenue associated with the lease is being recorded on a straight-line basis and is reported in other income on the statements of earnings. At May 31, 2018, we had outstanding purchase commitments for inventory totaling approximately $18,398,300 which will be due during fiscal year 2019. Of these commitments, $13,298,100 were with Usborne, $4,873,900 with various Kane Miller publishers and the remaining $226,300 with other suppliers. |
Note 8 - BUSINESS SEGMENTS
Note 8 - BUSINESS SEGMENTS | 3 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 8 We have two reportable segments: Usborne Books & More (“UBAM”) and Publishing. These reportable segments are business units that offer different methods of distribution to different types of customers. They are managed separately based on the fundamental differences in their operations. Our Publishing segment markets its products to retail accounts, which include book, school supply, toy and gift stores and museums, through commissioned sales representatives, trade and specialty wholesalers and an internal tele-sales group. Our UBAM segment markets its products through a network of independent sales consultants using a combination of direct sales, home shows, book fairs and internet sales. 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 reporting segment for the three-month period ended May 31, 2018 and 2017, follows: NET REVENUES 2018 2017 Publishing $ 2,306,200 $ 2,122,100 UBAM 27,716,100 24,819,100 Total $ 30,022,300 $ 26,941,200 EARNINGS (LOSS) BEFORE INCOME TAXES 2018 2017 Publishing $ 506,300 $ 569,100 UBAM 5,099,000 4,379,500 Other (3,109,500 ) (2,966,400 ) Total $ 2,495,800 $ 1,982,200 |
Note 9 - FAIR VALUE MEASUREMENT
Note 9 - FAIR VALUE MEASUREMENTS | 3 Months Ended |
May 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 9 The valuation hierarchy included in U.S. GAAP considers the transparency of inputs used to value assets and liabilities as of the measurement date. A financial instrument’s classification within the valuation hierarchy is based on the lowest level of input that is significant to its fair value measurement. The three levels of the valuation hierarchy and the classification of our financial assets and liabilities within the hierarchy are as follows: 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 at May 31, 2018 and February 28, 2018. The estimated fair value of our term notes payable is estimated by management to approximate $19,294,100 and $19,454,500 at May 31, 2018 and February 28, 2018, respectively. Management’s estimates are based on the obligations’ characteristics, including floating interest rate, maturity, and collateral. Such valuation inputs are considered a Level 2 measurement in the fair value valuation hierarchy. |
Note 10 - DEFERRED REVENUES
Note 10 - DEFERRED REVENUES | 3 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 10 As of the end of our first quarter, we had received approximately $442,400 in payments for sales orders which were shipped out subsequent to the quarter end. As of May 31, 2018, these prepaid sales orders are included in deferred revenues on the condensed balance sheet. |
Note 11 - REVENUE RECOGNITION
Note 11 - REVENUE RECOGNITION | 3 Months Ended |
May 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Note 11 Revenue is derived from the sales of children’s books and related products which are generally capable of being distinct and accounted for as single performance obligation to deliver tangible goods. Substantially all of our books are sold to end consumers and publishing retail outlets. Accordingly, revenues are recognized at shipping point, which is the point in time the customer obtains control of the products. Shipping and handling fees are recorded as operating and selling expenses as fulfillment costs when the product is shipped and revenue is recognized. The Company estimates product returns based on historical return rates. The majority of the Company's contracts have a single performance obligation and are short term in nature. Sales taxes, that are collected from customers and remitted to governmental authorities, are accounted for on a net basis and therefore are excluded from net sales. Adoption of ASC Topic 606, “Revenue from Contracts with Customers” On March 1, 2018, the Company adopted Topic 606, as prescribed by the FASB, using the full retrospective method. Results for all reporting periods are presented under Topic 606. There was no change to net earnings or retained earnings due to the adoption of Topic 606, with the impact primarily related to the recording of our hostess award program in gross sales and discounts and allowances, as opposed to recording the net costs in operating and selling expenses. Disaggregation of Revenue Please refer to Note 8 – Business Segments for revenue by segment. Arrangements with Multiple Performance Obligations Certain contracts associated with the hostess awards program include sales incentives, such as discounted or free products. These incentives provide a separate performance obligation in the contract and material right to the customer. The transaction price is allocated to the material right based on its relative standalone selling price and is recognized in revenue as the performance obligations are satisfied, which occurs at shipping point or at the expiration of the material right. As our sales incentives are delivered with the associated products ordered, there is no deferral required. Revenue allocated to the material right are recognized in gross sales, discounts and allowances and cost of goods sold in our condensed statement of earnings. Practical Expedients and Exemptions The Company generally expenses sales commissions when incurred. These costs are recorded within operating expenses. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Impact on Financial Statements As a result of applying Topic 606, the impact to the Company’s condensed consolidated balance sheet as of February 28, 2018 was as follows: As Reported Adjustments Without Adoption ASSETS Accounts receivable—Net $ 2,913,700 $ (99,900 ) $ 2,813,800 Inventories—Net 26,618,600 (100 ) 26,618,500 Prepaid expenses and other assets 1,259,000 (117,000 ) 1,142,000 Total current assets 33,514,600 (217,000 ) 33,297,600 TOTAL ASSETS 61,837,900 (217,000 ) 61,620,900 LIABILITIES Other current liabilities 3,517,900 (217,000 ) 3,300,900 Total liabilities 41,435,800 (217,000 ) 41,218,800 As a result of applying Topic 606, the impact to the Company’s condensed statement of earnings for the three months ended May 31, 2017 was as follows: As Reported Adjustments Without Adoption GROSS SALES $ 34,511,100 $ (3,337,200 ) $ 31,173,900 Less discounts and allowances (10,270,500 ) 3,326,800 (6,943,700 ) Transportation revenue 2,700,600 - 2,700,600 NET REVENUES 26,941,200 (10,400 ) 26,930,800 COST OF GOODS SOLD 8,598,800 (1,174,000 ) 7,424,800 Gross margin 18,342,400 1,163,600 19,506,000 OPERATING EXPENSES: Operating and selling 4,226,800 1,165,600 5,392,400 Sales commissions 8,509,200 - 8,509,200 General and administrative 3,713,900 - 3,713,900 Total operating expenses 16,449,900 1,165,600 17,615,500 INTEREST EXPENSE 281,500 - 281,500 OTHER INCOME (371,200 ) (2,000 ) (373,200 ) EARNINGS BEFORE INCOME TAXES 1,982,200 - 1,982,200 INCOME TAXES 756,900 - 756,900 NET EARNINGS $ 1,225,300 $ - $ 1,225,300 As a result of applying Topic 606, the impact to the Company’s operating results by reporting segment for the three months ended May 31, 2017 was as follows: UBAM As Reported Adjustments Without Adoption GROSS SALES $ 29,986,300 $ (3,337,900 ) $ 26,648,400 Less discounts and allowances (7,860,700 ) 3,327,500 (4,533,200 ) Transportation revenue 2,693,500 - 2,693,500 NET REVENUES 24,819,100 (10,400 ) 24,808,700 COST OF GOODS SOLD 7,473,700 (1,174,000 ) 6,299,700 Gross margin 17,345,400 1,163,600 18,509,000 OPERATING EXPENSES: Operating and selling 3,165,200 1,164,900 4,330,100 Sales commissions 8,423,700 8,423,700 General and administrative 1,377,000 1,377,000 Total operating expenses 12,965,900 1,164,900 14,130,800 OPERATING INCOME $ 4,379,500 $ (1,300 ) $ 4,378,200 Publishing As Reported Adjustments Without Adoption GROSS SALES $ 4,524,800 $ 700 $ 4,525,500 Less discounts and allowances (2,409,800 ) (700 ) (2,410,500 ) Transportation revenue 7,100 - 7,100 NET REVENUES 2,122,100 - 2,122,100 COST OF GOODS SOLD 1,125,100 - 1,125,100 Gross margin 997,000 - 997,000 OPERATING EXPENSES: Operating and selling 244,900 - 244,900 Sales commissions 83,500 - 83,500 General and administrative 99,500 - 99,500 Total operating expenses 427,900 - 427,900 OPERATING INCOME $ 569,100 $ - $ 569,100 |
Note 12 - SUBSEQUENT EVENT
Note 12 - SUBSEQUENT EVENT | 3 Months Ended |
May 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 12 On June 15, 2018, the Company executed the Eighth Amendment Loan Agreement with the Bank related to our Loan Agreement dated as of March 10, 2016, as amended. The Amendment modifies the Loan Agreement, extending the termination date until August 15, 2019, reduces the interest rate pricing grid for all floating rate borrowings covered by the Loan Agreement, establishes a new $3,000,000 advancing term loan to be used for capital expansions to increase daily shipping capacity, releases the Guaranty Agreement of Randall W. White and Carol White, along with other covenant restrictions being lessened. The amendment also includes an adjustment to the Adjusted Funded Debt to EBITDA ratio for covenant compliance. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying Unaudited Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim condensed financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. The Unaudited Condensed Financial Statements include all adjustments considered necessary for a fair presentation of the financial position and results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the Unaudited Condensed Financial Statements do not include all of the information and notes required by GAAP for complete financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim Unaudited Condensed Financial Statements should be read in conjunction with our audited financial statements as of and for the year ended February 28, 2018 included in our Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year due to the seasonality of our product sales. |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain reclassifications have been made to the fiscal 2018 condensed balance sheets, condensed statement of earnings and consolidated statement of cash flows to conform to the classifications used in fiscal 2019. These reclassifications had no effect on net earnings. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates in the Preparation of Financial Statements The preparation of the Unaudited Condensed Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. We have reviewed the recently issued accounting standards updates (“ASU”) and concluded that the following recently issued accounting standards apply to us . In May 2014, FASB issued ASU No. 2014-09, and amended with ASU No. 2015-14 “Revenue from Contracts with Customers,” (Topic 606) which provides a single revenue recognition model which is intended to improve comparability over a range of industries, companies and geographical boundaries and will also result in enhanced disclosures. The changes are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The amendments in this series of updates shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company adopted Topic 606, Revenue from Contracts with Customers, with a date of initial application of March 1, 2018, using the full retrospective method applied to all contracts. Results for all reporting periods are presented under Topic 606. As a result of adopting this new accounting guidance, the Company has changed the method of accounting for its hostess awards program from reporting the net cost of these awards in operating and selling expenses to allocating a portion of the transaction price to the material right and reporting these in gross sales and discounts with the associated costs in cost of goods sold. The new reporting of these awards increases gross sales and increases discounts and allowances for a similar amount, having an immaterial effect on net revenues and no effect on net earnings or retained earnings, but lowering the Company’s gross margin percentage. The Company has also removed the allowance for sales returns from the net accounts receivable amount reported on the balance sheet. The allowance for sales returns has been adjusted to reflect a refund liability and a return asset. The cumulative impact of adoption of the new revenue recognition standard had a $0 impact to net earnings and retained earnings (See Note 11). In February 2016, FASB issued ASU No. 2016-02, “Leases,” which is intended to establish a comprehensive new lease accounting model. The new standard clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset. The new standard is effective for interim and annual periods beginning after December 15, 2018, which means the first quarter of our fiscal year 2020. The new standard requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. We are currently reviewing the ASU and evaluating the potential impact on our financial statements. In June 2016, FASB issued ASU No. 2016-13 “Financial Instruments—Credit Losses”, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, which means the first quarter of our fiscal year 2020. We anticipate this ASU having minimal impact on our financial statements. In August 2016, FASB issued ASU No. 2016-15 “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments.” The guidance’s objective is to reduce diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standards required date of adoption is effective for fiscal years beginning after December 15, 2017. This standard was adopted as of March 1, 2018. Adoption of this new standard did not have a material impact on our financial statements. In May 2017, FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” This update amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The new standard is required to be applied prospectively. The guidance was effective March 1, 2018, and the adoption of this ASU did not have a material impact on our financial statements. |
Note 2 - INVENTORIES (Tables)
Note 2 - INVENTORIES (Tables) | 3 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory [Table Text Block] | Inventories consist of the following: 2018 May 31, February 28, Current: Book inventory $ 28,177,200 $ 27,078,600 Inventory valuation allowance (461,500 ) (460,000 ) Inventories net–current $ 27,715,700 $ 26,618,600 Noncurrent: Book inventory $ 838,800 $ 707,700 Inventory valuation allowance (348,500 ) (271,800 ) Inventories net–noncurrent $ 490,300 $ 435,900 |
Note 3 - DEBT (Tables)
Note 3 - DEBT (Tables) | 3 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Debt consists of the following: 2018 May 31, February 28, Line of credit $ - $ - Long-term debt $ 20,455,000 $ 20,706,300 Less current maturities (891,100 ) (881,200 ) Long-term debt, net of current maturities $ 19,563,900 $ 19,825,100 |
Schedule of Long-term Debt Instruments [Table Text Block] | The Tranche B, the line of credit and the Term Loan #2 accrue interest at a tiered rate based on our Adjusted Funded Debt to EBITDA Ratio, which is payable monthly. The variable interest pricing tier is as follows: Pricing Tier Adjusted Funded Debt to EBITDA Ratio LIBOR Margin (bps) I >3.00 350.50 II >2.50 but < 337.50 III >2.00 but < 325.00 IV < 312.50 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Year ending February 28 (29), 2019 $ 735,800 2020 926,300 2021 968,100 2022 1,016,800 2023 1,065,300 Thereafter 15,742,700 $ 20,455,000 |
Note 4 - EARNINGS PER SHARE (Ta
Note 4 - EARNINGS PER SHARE (Tables) | 3 Months Ended |
May 31, 2018 | |
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 EPS is shown below. Three Months Ended May 31, 2018 2017 Earnings Per Share: Net earnings applicable to common shareholders $ 1,816,600 $ 1,225,300 Shares: Weighted average shares outstanding–basic 4,088,595 4,090,143 Assumed exercise of options 3,909 3,735 Weighted average shares outstanding–diluted 4,092,504 4,093,878 Diluted Earnings Per Share: Basic $ 0.44 $ 0.30 Diluted $ 0.44 $ 0.30 |
Note 8 - BUSINESS SEGMENTS (Tab
Note 8 - BUSINESS SEGMENTS (Tables) | 3 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Information by reporting segment for the three-month period ended May 31, 2018 and 2017, follows: NET REVENUES 2018 2017 Publishing $ 2,306,200 $ 2,122,100 UBAM 27,716,100 24,819,100 Total $ 30,022,300 $ 26,941,200 EARNINGS (LOSS) BEFORE INCOME TAXES 2018 2017 Publishing $ 506,300 $ 569,100 UBAM 5,099,000 4,379,500 Other (3,109,500 ) (2,966,400 ) Total $ 2,495,800 $ 1,982,200 |
Note 11 - REVENUE RECOGNITION (
Note 11 - REVENUE RECOGNITION (Tables) | 3 Months Ended |
May 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | As Reported Adjustments Without Adoption ASSETS Accounts receivable—Net $ 2,913,700 $ (99,900 ) $ 2,813,800 Inventories—Net 26,618,600 (100 ) 26,618,500 Prepaid expenses and other assets 1,259,000 (117,000 ) 1,142,000 Total current assets 33,514,600 (217,000 ) 33,297,600 TOTAL ASSETS 61,837,900 (217,000 ) 61,620,900 LIABILITIES Other current liabilities 3,517,900 (217,000 ) 3,300,900 Total liabilities 41,435,800 (217,000 ) 41,218,800 As Reported Adjustments Without Adoption GROSS SALES $ 34,511,100 $ (3,337,200 ) $ 31,173,900 Less discounts and allowances (10,270,500 ) 3,326,800 (6,943,700 ) Transportation revenue 2,700,600 - 2,700,600 NET REVENUES 26,941,200 (10,400 ) 26,930,800 COST OF GOODS SOLD 8,598,800 (1,174,000 ) 7,424,800 Gross margin 18,342,400 1,163,600 19,506,000 OPERATING EXPENSES: Operating and selling 4,226,800 1,165,600 5,392,400 Sales commissions 8,509,200 - 8,509,200 General and administrative 3,713,900 - 3,713,900 Total operating expenses 16,449,900 1,165,600 17,615,500 INTEREST EXPENSE 281,500 - 281,500 OTHER INCOME (371,200 ) (2,000 ) (373,200 ) EARNINGS BEFORE INCOME TAXES 1,982,200 - 1,982,200 INCOME TAXES 756,900 - 756,900 NET EARNINGS $ 1,225,300 $ - $ 1,225,300 |
Disaggregation of Revenue [Table Text Block] | As Reported Adjustments Without Adoption GROSS SALES $ 29,986,300 $ (3,337,900 ) $ 26,648,400 Less discounts and allowances (7,860,700 ) 3,327,500 (4,533,200 ) Transportation revenue 2,693,500 - 2,693,500 NET REVENUES 24,819,100 (10,400 ) 24,808,700 COST OF GOODS SOLD 7,473,700 (1,174,000 ) 6,299,700 Gross margin 17,345,400 1,163,600 18,509,000 OPERATING EXPENSES: Operating and selling 3,165,200 1,164,900 4,330,100 Sales commissions 8,423,700 8,423,700 General and administrative 1,377,000 1,377,000 Total operating expenses 12,965,900 1,164,900 14,130,800 OPERATING INCOME $ 4,379,500 $ (1,300 ) $ 4,378,200 As Reported Adjustments Without Adoption GROSS SALES $ 4,524,800 $ 700 $ 4,525,500 Less discounts and allowances (2,409,800 ) (700 ) (2,410,500 ) Transportation revenue 7,100 - 7,100 NET REVENUES 2,122,100 - 2,122,100 COST OF GOODS SOLD 1,125,100 - 1,125,100 Gross margin 997,000 - 997,000 OPERATING EXPENSES: Operating and selling 244,900 - 244,900 Sales commissions 83,500 - 83,500 General and administrative 99,500 - 99,500 Total operating expenses 427,900 - 427,900 OPERATING INCOME $ 569,100 $ - $ 569,100 |
Note 2 - INVENTORIES (Details)
Note 2 - INVENTORIES (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Note 2 - INVENTORIES (Details) [Line Items] | ||
Payments for Purchase of Other Assets | $ 11 | $ 5.4 |
England Based Publishing Company [Member] | ||
Note 2 - INVENTORIES (Details) [Line Items] | ||
Payments for Purchase of Other Assets | $ 7.6 | $ 1.9 |
Note 2 - INVENTORIES (Details)
Note 2 - INVENTORIES (Details) - Schedule of Inventory - USD ($) | May 31, 2018 | Feb. 28, 2018 |
Note 2 - INVENTORIES (Details) - Schedule of Inventory [Line Items] | ||
Inventories net–non-current | $ 490,300 | $ 435,900 |
Inventories net–current | 27,715,700 | 26,618,600 |
Inventory, Current [Member] | ||
Note 2 - INVENTORIES (Details) - Schedule of Inventory [Line Items] | ||
Book inventory | 28,177,200 | 27,078,600 |
Inventory valuation allowance | (461,500) | (460,000) |
Inventories net–current | 27,715,700 | 26,618,600 |
Inventory, Noncurrent [Member] | ||
Note 2 - INVENTORIES (Details) - Schedule of Inventory [Line Items] | ||
Book inventory | 838,800 | 707,700 |
Inventory valuation allowance | (348,500) | (271,800) |
Inventories net–non-current | $ 490,300 | $ 435,900 |
Note 3 - DEBT (Details)
Note 3 - DEBT (Details) - USD ($) | Mar. 10, 2016 | May 31, 2018 | Feb. 28, 2018 |
Note 3 - DEBT (Details) [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 10,448,800 | $ 9,424,000 | |
Term Loan #2 [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 3,680,000 | ||
Term Loan #2 [Member] | Line of Credit [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000,000 | ||
Line of Credit Facility, Expiration Date | Jun. 15, 2018 | ||
Line of Credit Facility, Interest Rate at Period End | 5.03% | ||
Notes Payable to Banks [Member] | Term Loan #1, Tranche A [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 13,400,000 | ||
Line of Credit Facility, Expiration Date | Dec. 1, 2025 | ||
Notes Payable to Banks [Member] | Term Loan #1, Tranche B [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | ||
Debt Instrument, Payment Terms | interest is payable monthly | ||
Notes Payable to Banks [Member] | Term Loan #2 [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Debt Instrument, Payment Terms | interest payable monthly | ||
Debt Instrument, Face Amount | $ 4,000,000 | ||
Debt Instrument, Maturity Date | Jun. 28, 2021 | ||
Medium-term Notes [Member] | Term Loan #1, Tranche A [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable to Banks [Member] | Term Loan #1, Tranche B [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Line of Credit Facility, Interest Rate at Period End | 5.03% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable to Banks [Member] | Term Loan #2 [Member] | |||
Note 3 - DEBT (Details) [Line Items] | |||
Debt Instrument, Interest Rate During Period | 5.03% |
Note 3 - DEBT (Details) - Sched
Note 3 - DEBT (Details) - Schedule of Debt - USD ($) | May 31, 2018 | Feb. 28, 2018 |
Schedule of Debt [Abstract] | ||
Line of credit | $ 0 | $ 0 |
Long-term debt | 20,455,000 | 20,706,300 |
Less current maturities | (891,100) | (881,200) |
Long-term debt, net of current maturities | $ 19,563,900 | $ 19,825,100 |
Note 3 - DEBT (Details) - Sch30
Note 3 - DEBT (Details) - Schedule of Long-term Debt Instruments | 9 Months Ended |
Nov. 30, 2017 | |
Pricing Tier I [Member] | |
Debt Instrument [Line Items] | |
Adjusted Funded Debt to EBITDA Ratio | >3.00 |
Pricing Teir II [Member] | |
Debt Instrument [Line Items] | |
Adjusted Funded Debt to EBITDA Ratio | >2.50 but <3.00 |
Pricing Tier III [Member] | |
Debt Instrument [Line Items] | |
Adjusted Funded Debt to EBITDA Ratio | >2.00 but <2.50 |
Pricing Tier IV [Member] | |
Debt Instrument [Line Items] | |
Adjusted Funded Debt to EBITDA Ratio | <2.00 |
London Interbank Offered Rate (LIBOR) [Member] | Pricing Tier I [Member] | |
Debt Instrument [Line Items] | |
LIBOR Margin | 350.50% |
London Interbank Offered Rate (LIBOR) [Member] | Pricing Teir II [Member] | |
Debt Instrument [Line Items] | |
LIBOR Margin | 337.50% |
London Interbank Offered Rate (LIBOR) [Member] | Pricing Tier III [Member] | |
Debt Instrument [Line Items] | |
LIBOR Margin | 325.00% |
London Interbank Offered Rate (LIBOR) [Member] | Pricing Tier IV [Member] | |
Debt Instrument [Line Items] | |
LIBOR Margin | 312.50% |
Note 3 - DEBT (Details) - Sch31
Note 3 - DEBT (Details) - Schedule of Maturities of Long-term Debt - USD ($) | May 31, 2018 | Feb. 28, 2018 |
Schedule of Maturities of Long-term Debt [Abstract] | ||
2,019 | $ 735,800 | |
2,020 | 926,300 | |
2,021 | 968,100 | |
2,022 | 1,016,800 | |
2,023 | 1,065,300 | |
Thereafter | 15,742,700 | |
$ 20,455,000 | $ 20,706,300 |
Note 4 - EARNINGS PER SHARE (D
Note 4 - EARNINGS PER SHARE (Details) - Schedule of Earnings Per Share - USD ($) | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Earnings Per Share: | ||
Net earnings applicable to common shareholders (in Dollars) | $ 1,816,600 | $ 1,225,300 |
Shares: | ||
Weighted average shares outstanding–basic | 4,088,595 | 4,090,143 |
Assumed exercise of options | 3,909 | 3,735 |
Weighted average shares outstanding–diluted | 4,092,504 | 4,093,878 |
Diluted Earnings Per Share: | ||
Basic (in Dollars per share) | $ 0.44 | $ 0.30 |
Diluted (in Dollars per share) | $ 0.44 | $ 0.30 |
Note 6 - SHIPPING AND HANDLIN33
Note 6 - SHIPPING AND HANDLING COSTS (Details) - USD ($) | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Note 6 - SHIPPING AND HANDLING COSTS (Details) [Line Items] | ||
Cost of Goods and Services Sold | $ 9,669,700 | $ 8,598,800 |
Shipping and Handling [Member] | ||
Note 6 - SHIPPING AND HANDLING COSTS (Details) [Line Items] | ||
Cost of Goods and Services Sold | $ 4,399,000 | $ 3,852,300 |
Note 7 - COMMITMENTS (Details)
Note 7 - COMMITMENTS (Details) | 3 Months Ended | |
May 31, 2018USD ($)ft²a | Nov. 30, 2017USD ($) | |
Note 7 - COMMITMENTS (Details) [Line Items] | ||
Area of Real Estate Property (in Square Feet) | ft² | 181,300 | |
Area of Land (in Acres) | a | 40 | |
Lessee, Operating Lease, Term of Contract | 15 years | |
Area of Real Estate Property, as a Percentage of the Facility | 45.30% | |
Operating Lease, Liability | $ 10,159,000 | |
Description of Lessor Leasing Arrangements, Operating Leases | The lessee pays $110,100 per month, through the lease anniversary date of December 2018, with a 2.0% annual increase adjustment on each anniversary date | |
Operating Leases, Income Statement, Minimum Lease Revenue | $ 110,100 | |
Lessor, Operating Lease, Renewal Term | 5 years | |
Purchase Obligation, Due in Next Twelve Months | $ 18,398,300 | |
Purchase Obligation, Future Minimum Payments, Remainder of Fiscal Year | $ 226,300 | |
Building [Member] | ||
Note 7 - COMMITMENTS (Details) [Line Items] | ||
Area of Real Estate Property (in Square Feet) | ft² | 400,000 | |
Usborne Books and More [Member] | ||
Note 7 - COMMITMENTS (Details) [Line Items] | ||
Purchase Obligation, Due in Next Twelve Months | $ 13,298,100 | |
Kane Miller [Member] | ||
Note 7 - COMMITMENTS (Details) [Line Items] | ||
Purchase Obligation, Due in Next Twelve Months | $ 4,873,900 |
Note 8 - BUSINESS SEGMENTS (Det
Note 8 - BUSINESS SEGMENTS (Details) | 3 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Note 8 - BUSINESS SEGMENTS (D36
Note 8 - BUSINESS SEGMENTS (Details) - Schedule of Information by Industry Segment - USD ($) | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net Revenues | $ 30,022,300 | $ 26,941,200 |
Earnings (Loss) Before Income Taxes | 2,495,800 | 1,982,200 |
Publishing [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Revenues | 2,306,200 | 2,122,100 |
Earnings (Loss) Before Income Taxes | 506,300 | 569,100 |
Usborne Books and More [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Revenues | 27,716,100 | 24,819,100 |
Earnings (Loss) Before Income Taxes | 5,099,000 | 4,379,500 |
Other Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Earnings (Loss) Before Income Taxes | $ (3,109,500) | $ (2,966,400) |
Note 9 - FAIR VALUE MEASUREME37
Note 9 - FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 2 [Member] - USD ($) | May 31, 2018 | Feb. 28, 2018 |
Note 9 - FAIR VALUE MEASUREMENTS (Details) [Line Items] | ||
Lines of Credit, Fair Value Disclosure | $ 0 | |
Long-term Debt, Fair Value | $ 19,294,100 | $ 19,454,500 |
Note 10 - DEFERRED REVENUES (De
Note 10 - DEFERRED REVENUES (Details) | 3 Months Ended |
May 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Deferred Revenue, Additions | $ 442,400 |
Note 11 - REVENUE RECOGNITION39
Note 11 - REVENUE RECOGNITION (Details) - Schedule of New Accounting Pronouncements and Changes in Accounting Principles - USD ($) | 3 Months Ended | ||
May 31, 2018 | May 31, 2017 | Feb. 28, 2018 | |
ASSETS | |||
Accounts receivable—Net | $ 2,772,300 | $ 2,913,700 | |
Inventories—Net | 27,715,700 | 26,618,600 | |
Prepaid expenses and other assets | 959,200 | 1,259,000 | |
Total current assets | 35,878,100 | 33,514,600 | |
TOTAL ASSETS | 64,100,900 | 61,837,900 | |
LIABILITIES | |||
Other current liabilities | 3,132,800 | 3,517,900 | |
Total liabilities | 42,295,700 | 41,435,800 | |
REVENUES | 30,022,300 | $ 26,941,200 | |
COST OF GOODS SOLD | 9,669,700 | 8,598,800 | |
Gross margin | 20,352,600 | 18,342,400 | |
OPERATING EXPENSES: | |||
Operating and selling | 4,752,200 | 4,226,800 | |
Sales commissions | 9,373,100 | 8,509,200 | |
General and administrative | 3,892,500 | 3,713,900 | |
Total operating expenses | 18,017,800 | 16,449,900 | |
INTEREST EXPENSE | 213,400 | 281,500 | |
OTHER INCOME | (374,400) | (371,200) | |
EARNINGS BEFORE INCOME TAXES | 2,495,800 | 1,982,200 | |
INCOME TAXES | 679,200 | 756,900 | |
NET EARNINGS | 1,816,600 | 1,225,300 | |
Topic 606 [Member] | |||
ASSETS | |||
Accounts receivable—Net | (99,900) | ||
Inventories—Net | (100) | ||
Prepaid expenses and other assets | (117,000) | ||
Total current assets | (217,000) | ||
TOTAL ASSETS | (217,000) | ||
LIABILITIES | |||
Other current liabilities | (217,000) | ||
Total liabilities | (217,000) | ||
REVENUES | (10,400) | ||
COST OF GOODS SOLD | (1,174,000) | ||
Gross margin | 1,163,600 | ||
OPERATING EXPENSES: | |||
Operating and selling | 1,165,600 | ||
Sales commissions | 0 | ||
General and administrative | 0 | ||
Total operating expenses | 1,165,600 | ||
INTEREST EXPENSE | 0 | ||
OTHER INCOME | (2,000) | ||
EARNINGS BEFORE INCOME TAXES | 0 | ||
INCOME TAXES | 0 | ||
NET EARNINGS | 0 | ||
Without Adoption [Member] | |||
ASSETS | |||
Accounts receivable—Net | 2,813,800 | ||
Inventories—Net | 26,618,500 | ||
Prepaid expenses and other assets | 1,142,000 | ||
Total current assets | 33,297,600 | ||
TOTAL ASSETS | 61,620,900 | ||
LIABILITIES | |||
Other current liabilities | 3,300,900 | ||
Total liabilities | $ 41,218,800 | ||
REVENUES | 26,930,800 | ||
COST OF GOODS SOLD | 7,424,800 | ||
Gross margin | 19,506,000 | ||
OPERATING EXPENSES: | |||
Operating and selling | 5,392,400 | ||
Sales commissions | 8,509,200 | ||
General and administrative | 3,713,900 | ||
Total operating expenses | 17,615,500 | ||
INTEREST EXPENSE | 281,500 | ||
OTHER INCOME | (373,200) | ||
EARNINGS BEFORE INCOME TAXES | 1,982,200 | ||
INCOME TAXES | 756,900 | ||
NET EARNINGS | 1,225,300 | ||
Gross revenue [Member] | |||
LIABILITIES | |||
REVENUES | 39,074,800 | 34,511,100 | |
Gross revenue [Member] | Topic 606 [Member] | |||
LIABILITIES | |||
REVENUES | (3,337,200) | ||
Gross revenue [Member] | Without Adoption [Member] | |||
LIABILITIES | |||
REVENUES | 31,173,900 | ||
Discounts and Allowances [Member] | |||
LIABILITIES | |||
REVENUES | (11,901,400) | (10,270,500) | |
Discounts and Allowances [Member] | Topic 606 [Member] | |||
LIABILITIES | |||
REVENUES | 3,326,800 | ||
Discounts and Allowances [Member] | Without Adoption [Member] | |||
LIABILITIES | |||
REVENUES | (6,943,700) | ||
Transportation Revenue [Member] | |||
LIABILITIES | |||
REVENUES | $ 2,848,900 | 2,700,600 | |
Transportation Revenue [Member] | Topic 606 [Member] | |||
LIABILITIES | |||
REVENUES | 0 | ||
Transportation Revenue [Member] | Without Adoption [Member] | |||
LIABILITIES | |||
REVENUES | $ 2,700,600 |
Note 11 - REVENUE RECOGNITION40
Note 11 - REVENUE RECOGNITION (Details) - Disaggregation of Revenue - USD ($) | 3 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
REVENUES | $ 30,022,300 | $ 26,941,200 |
COST OF GOODS SOLD | 9,669,700 | 8,598,800 |
Gross margin | 20,352,600 | 18,342,400 |
OPERATING EXPENSES: | ||
Operating and selling | 4,752,200 | 4,226,800 |
Sales commissions | 9,373,100 | 8,509,200 |
General and administrative | 3,892,500 | 3,713,900 |
Total operating expenses | 18,017,800 | 16,449,900 |
Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (10,400) | |
COST OF GOODS SOLD | (1,174,000) | |
Gross margin | 1,163,600 | |
OPERATING EXPENSES: | ||
Operating and selling | 1,165,600 | |
Sales commissions | 0 | |
General and administrative | 0 | |
Total operating expenses | 1,165,600 | |
Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 26,930,800 | |
COST OF GOODS SOLD | 7,424,800 | |
Gross margin | 19,506,000 | |
OPERATING EXPENSES: | ||
Operating and selling | 5,392,400 | |
Sales commissions | 8,509,200 | |
General and administrative | 3,713,900 | |
Total operating expenses | 17,615,500 | |
UBAM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 24,819,100 | |
COST OF GOODS SOLD | 7,473,700 | |
Gross margin | 17,345,400 | |
OPERATING EXPENSES: | ||
Operating and selling | 3,165,200 | |
Sales commissions | 8,423,700 | |
General and administrative | 1,377,000 | |
Total operating expenses | 12,965,900 | |
OPERATING INCOME | 4,379,500 | |
UBAM [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (10,400) | |
COST OF GOODS SOLD | (1,174,000) | |
Gross margin | 1,163,600 | |
OPERATING EXPENSES: | ||
Operating and selling | 1,164,900 | |
Sales commissions | 0 | |
General and administrative | 0 | |
Total operating expenses | 1,164,900 | |
OPERATING INCOME | (1,300) | |
UBAM [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 24,808,700 | |
COST OF GOODS SOLD | 6,299,700 | |
Gross margin | 18,509,000 | |
OPERATING EXPENSES: | ||
Operating and selling | 4,330,100 | |
Sales commissions | 8,423,700 | |
General and administrative | 1,377,000 | |
Total operating expenses | 14,130,800 | |
OPERATING INCOME | 4,378,200 | |
Publishing [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 2,122,100 | |
COST OF GOODS SOLD | 1,125,100 | |
Gross margin | 997,000 | |
OPERATING EXPENSES: | ||
Operating and selling | 244,900 | |
Sales commissions | 83,500 | |
General and administrative | 99,500 | |
Total operating expenses | 427,900 | |
OPERATING INCOME | 569,100 | |
Publishing [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 0 | |
COST OF GOODS SOLD | 0 | |
Gross margin | 0 | |
OPERATING EXPENSES: | ||
Operating and selling | 0 | |
Sales commissions | 0 | |
General and administrative | 0 | |
Total operating expenses | 0 | |
OPERATING INCOME | 0 | |
Publishing [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 2,122,100 | |
COST OF GOODS SOLD | 1,125,100 | |
Gross margin | 997,000 | |
OPERATING EXPENSES: | ||
Operating and selling | 244,900 | |
Sales commissions | 83,500 | |
General and administrative | 99,500 | |
Total operating expenses | 427,900 | |
OPERATING INCOME | 569,100 | |
Gross revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 39,074,800 | 34,511,100 |
Gross revenue [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (3,337,200) | |
Gross revenue [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 31,173,900 | |
Gross revenue [Member] | UBAM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 29,986,300 | |
Gross revenue [Member] | UBAM [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (3,337,900) | |
Gross revenue [Member] | UBAM [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 26,648,400 | |
Gross revenue [Member] | Publishing [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 4,524,800 | |
Gross revenue [Member] | Publishing [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 700 | |
Gross revenue [Member] | Publishing [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 4,525,500 | |
Discounts and Allowances [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (11,901,400) | (10,270,500) |
Discounts and Allowances [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 3,326,800 | |
Discounts and Allowances [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (6,943,700) | |
Discounts and Allowances [Member] | UBAM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (7,860,700) | |
Discounts and Allowances [Member] | UBAM [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 3,327,500 | |
Discounts and Allowances [Member] | UBAM [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (4,533,200) | |
Discounts and Allowances [Member] | Publishing [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (2,409,800) | |
Discounts and Allowances [Member] | Publishing [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (700) | |
Discounts and Allowances [Member] | Publishing [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | (2,410,500) | |
Transportation Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | $ 2,848,900 | 2,700,600 |
Transportation Revenue [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 0 | |
Transportation Revenue [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 2,700,600 | |
Transportation Revenue [Member] | UBAM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 2,693,500 | |
Transportation Revenue [Member] | UBAM [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 0 | |
Transportation Revenue [Member] | UBAM [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 2,693,500 | |
Transportation Revenue [Member] | Publishing [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 7,100 | |
Transportation Revenue [Member] | Publishing [Member] | Topic 606 [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | 0 | |
Transportation Revenue [Member] | Publishing [Member] | Without Adoption [Member] | ||
Disaggregation of Revenue [Line Items] | ||
REVENUES | $ 7,100 |
Note 12 - SUBSEQUENT EVENT (Det
Note 12 - SUBSEQUENT EVENT (Details) - Subsequent Event [Member] | Jun. 15, 2018USD ($) |
Note 12 - SUBSEQUENT EVENT (Details) [Line Items] | |
Long-term Debt, Maturity Date | Aug. 15, 2019 |
Debt Instrument, Face Amount | $ 3,000,000 |