EACO (EACO) 8-K Eaco Corporation Reports 2010 Fourth Quarter Earnings

Exhibit 99.1

Marta Araujo
EACO Corporation
(714) 876-2490	November 19, 2010

EACO CORPORATION REPORTS
2010 FOURTH QUARTER EARNINGS

ANAHEIM, CALIFORNIA — EACO Corporation (OTCBB:EACO) today reported the results for the fourth quarter and year ended August 31, 2010.

On March 24, 2010, EACO completed the acquisition of Bisco Industries, Inc (“Bisco”), a company under the common control of EACO’s largest shareholder. In connection with the transaction, Bisco became a wholly owned subsidiary of EACO. The transaction was accounted for as a combination of companies under common control using the historical balances of EACO and Bisco. As a result of the merger with Bisco all periods include the historical balances and activities of EACO and Bisco on a combined basis. Refer to our Quarterly Report May 31, 2010 for further information.

Net sales, net income and earnings per share were as follows for the three month period ended August 31 (numbers in thousands, except per share information):

	Three Months Ended
	August 31,
	2010		2009			Change
	(unaudited)
Net sales/revenue	$	26,067	$	20,708			25.8	%
Net income (loss)	$	297	$	(2,481	)		N/A
Basic and diluted earnings	$	0.06	$	(0.51	)		N/A
(loss) per common share

There were 242 sales employees as of August 31, 2010, an increase of 5.2% from the 230 sales employees on August 31, 2009.

EACO Corporation and Subsidiaries
Condensed Consolidated and Combined Balance Sheets
(in thousands)

	August 31,
	2010			2009
ASSETS
Current Assets:
Cash and cash equivalents	$	1,260		$	1,683
Trade accounts receivable, net		11,114			9,090
Inventory, net		10,009			10,293
Marketable securities, trading		817			2,032
Prepaid expenses and other current assets		260			437
Deferred tax asset, current		1,896			216
Total current assets		25,356			23,751
Non-current assets:
Restricted cash		866			2,411
Real estate properties held for leasing, net		10,316			10,299
Equipment and leasehold improvements, net		1,079			1,355
Deferred tax asset		2,561			4,355
Other assets, principally deferred charges, net of accumulated amortization		1,147			1,002
Total assets	$	41,325		$	43,173
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable	$	9,226		$	6,752
Accrued expenses and other current liabilities		1,919			2,334
Line of credit		8,900			8,467
Liabilities of discontinued operations — short-term		147			147
Liabilities for short sale of marketable trading securities		—			1,101
Current portion of long-term debt and obligation under capital lease		300			7,559
Total current liabilities		20,492			26,360
Liabilities of discontinued operations — long-term		2,928			3,174
Deposit liability		147			107
Long-term debt		7,074			—
Obligation under capital lease		—			1,562
Total liabilities		30,641			31,203
Commitments and contingencies
Shareholders’ equity:
Convertible preferred stock of $0.01 par value; authorized 10,000,000 shares; 36,000* shares outstanding at August 31, 2010 and 2009 (liquidation value $900)		1			1
Common stock of $0.01 par value; authorized 8,000,000 shares; 4,862,079** shares outstanding at August 31, 2010 and 2009		49			49
Additional paid-in capital		12,378			12,378
Accumulated other comprehensive income		638			476
Accumulated deficit		(2,382	)		(934	)
Total shareholders’ equity		10,684			11,970
Total liabilities and shareholders’ equity	$	41,325		$	43,173

*	Reflects 1 for 25 reverse stock split effected on March 23, 2010
**	Reflects 1 for 25 reverse stock split effected on March 23, 2010 and issuance of 4,705,669 shares effective March 24, 2010 in connection with the merger with Bisco

EACO Corporation and Subsidiaries
Condensed Consolidated and Combined Statements of Operations
(In thousands, except per share information)

										Eight
										Months
	Three Months Ended						Year Ended			Ended
	August 31,						August 31			August 31,
	2010			2009			2010			2009 #
	(unaudited)
Distribution sales	$	25,759		$	20,412		$	91,547		$	54,365
Cost of goods sold		19,036			14,935			67,048			38,112
Gross margin		6,723			5,477			24,499			16,253
Rental revenue		308			316			1,086			647
Cost of rental operations		259			338			1,706			796
Gross margin (loss) from rental operations		49			(22	)		(620	)		(149	)
Operating expenses:
Selling, general and administrative expenses		6,026			4,942			21,763			15,615
Loss on disposition of equipment		—			—			—			146
Total operating expenses		6,026			4,942			21,763			15,761
Income from operations		746			513			2,116			343
Other non-operating income (expense):
Loss on sale of trading securities		—			(2,339	)		(3,481	)		(6,386	)
Unrealized gain (loss) on trading securities		(95	)		865			1,314			4,233
Gain on extinguishment of obligation under capital lease		—			—			—			949
Interest and other income		4			—			26			8
Interest expense		(111	)		(184	)		(796	)		(1,032	)
Net income (loss) from continuing operations before income taxes		544			(1,145	)		(821	)		(1,885	)
Provision for income taxes		228			1,317			532			741
Income (loss) from continuing operations		316			(2,462	)		(1,353	)		(2,626	)
Discontinued operations:
Gain from discontinued operations, net of tax		—			—			—			138
Net income (loss)		316			(2,462	)		(1,353	)		(2,488	)
Undeclared cumulative preferred stock dividend		(19	)		(19	)		(76	)		(57	)
Net income (loss) attributable to common shareholders	$	297		$	(2,481	)	$	(1,429	)	$	(2,545	)

										Eight
										Months
		Three Months Ended					Year Ended			Ended
		August 31,					August 31			August 31,
		2010		2009			2010			2009 #
		(unaudited)
Basic net income (loss) per share:
Continuing operations		$	0.06	$	(0.51	)	$	(0.30	)	$	(0.54	)
Discontinued operations			—		—			—			0.03
Basic net income (loss)		$	0.06	$	(0.51	)	$	(0.30	)	$	(0.51	)
Basic weighted average common shares outstanding			4,862,079		4,862,079			4,862,079			4,862,079
	��
Diluted income (loss) per share:
Continuing operations		$	0.06	$	(0.51	)	$	(0.30	)	$	(0.54	)
Discontinued operations			—		—			—			0.03
Net income (loss)		$	0.06	$	(0.51	)	$	(0.30	)	$	(0.51	)
Diluted weighted average common shares outstanding ##			4,902,079		4,862,079			4,862,079			4,862,079

#

Reflects the actual combined results of operations of EACO and Bisco for the eight month transition period ended August 31, 2009. The Company reported the decision to change its fiscal year end to August 31 in a Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October 5, 2009 and filed its transition report on its 2009 Form 10-K for the eight month transition period ended August 31, 2009.

##

Diluted weighted average common shares outstanding include the effect of preferred shares convertible into 40,000 common shares for the three months ended August 31, 2010. Such shares are not included in prior periods as their effect would be antidilutive.