Earnings call transcript Q4 2023

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Educational Development Corporation's Financial and Operating Results for its Fiscal Fourth Quarter and Fiscal 2023 Year-to-date Results.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Steven Hooser, Investor Relations. Please go ahead sir.

Steven Hooser

good and Jenny, you, afternoon everyone. Thank for fourth quarter you joining earnings us Corporation's Development Educational for and today call. Thank fiscal year-to-date XXXX

and and Dan with Craig Chief Financial Cobb, On today O'Keefe, Sales Chief President Chief Officer; call Heather Executive Marketing the and Officer. Officer; me White, are

on an also XXXX its company's the the results the After filed fourth closed be year-to-date. a scheduled quarter afternoon, this and market fiscal The for will release press available company and www.evcpub.com. at the X-K release website announcing

turning a the remind of Corporation's factors. Act Educational forward-looking Private the detailed condition. may you to today filings refer Before to would the recent discussion prepared like variety financial Reform be you statements XXXX. of for differ remarks, those of due materially from a to Actual will Development and I We the under expressed with SEC Litigation or of are results protected company's that further the some Securities made to implied

With Craig? that, company's Executive the Chief call President and now White, Officer. turn to Craig over the like I'd to

Craig White

Thank with you, the in Dan general provide an Heather welcome sales marketing. Steven, to our call. will and regard some I quarter. to the Then comments through call start today's off to financials and I pass the will and to run call and everyone update on

the wrap with comments and some up will call Finally, outlook. I on strategy XXXX

that onetime had we events During results. several quarter our the fourth impacted

executed last rebrand direct agreement we Usborne part updated division First of distribution was and to PaperPie. of foremost was This planned rebranding sales the our that June. our

achievement formally in the I also marketing December created disruption sales. the our closing PaperPie our new This bell a were and to some direct efforts able great Heather with significant quarter division was Aimed and rebrand sales XXth. fourth NASDAQ but on at sales from announce to team

report more we $X and two in to that fourth XX,XXX these our and SmartLab I sold introduced been encouraged have full since of products theme-based We over to over the generating progress sales. am in see products our January our units the have additional the of to toys introduce introduced Toys million quarter, over Toys. gross quarter during line recent March product additional to edition pleased have great of are we Also These we three are toys suite addition of first impact XX the once and plans years. many released. SmartLab full next products, each

one-time contributed total detail profitability. also to were later be cover the loss and There several return we to Many in those more these will of I that cost teachers for incurred expense the beneficial company our quarterly year. call. the will quarter during as the to in costs

provide Dan to a that, over With overview turn Dan? call the the like to O'Keefe financials. to brief of I'd

Dan O'Keefe

Thank you Craig.

to the Average XX,XXX in XX,XXX or quarter. million revenues year loss XX% net $XX the per the year. compared PaperPie $X.XX totaled compared fourth last totaled $X.X million a period basis. fully decrease million, $XXX,XXX, share to of on in of -- quarter were compared ago. $X.X $XX.X for a diluted decrease compared same fourth Turning quarter Net of income fourth Loss the or to million. totaled for taxes a income $X.X quarter before $X.XX partners the the to million, to brand active a Earnings $X.X million

with rebranding same XXXX. extent rising a period to decline We full net a recorded of Now, and million of partners to during distraction. XX% primarily active due the $XXX.X inflation compared our $XX.X million of $XX.X fiscal year to year The to the lesser million highlights. revenues turning brand was XXXX the decrease or lower coupled

continue seen numbers continuing we work and brand to compared families Last many have year, year, school Our work closures to home. open pre-pandemic we members XX,XXX fiscal for pandemic XX,XXX and average totaled inflated to return our from remained active brand levels saw as partner XXXX. when This partners levels. to schools for returned

before million, XXXX. fiscal Net million for $X.X of million compared decrease last $XX.X $X.X XXXX a Year-to-date date to loss to $X.X $XX.X taxes was of fiscal year million. million a loss income totaled compared for during to $XX.X million decrease

of loss decreased Year-to-date our quarter $XX.X Inventory to last the $X.XX. February per million as from per the everyone earnings of $X.XX $XX.X levels, XX, of update XXXX. on compared million share levels capital totaled share to working year at To end third

million During the $X fourth quarter, $XX.X line million. from increased to on borrowings capital our working

in working capital reductions inventory these used further paydowns. from reductions generated expect will to be continue line fiscal XXXX. Cash on We primarily

banking to our Turning relationship.

presentation have some financial our of We our long-term with impacted statements. have bank debt in our that recent developments

Our loss fixed resulted default covenant charge previous information covenant our months. bank. loan in in from with fourth quarter the agreement of financial the calculation a This includes our XX

As will during quarter's impact such, this calculation the XXXX. loss fiscal negatively

four with next and the We executed the the ratio amendment charge waive compliance for quarter violation our in to be fourth requirement to the the of first forecast quarter an not fixed XXXX. do quarters. bank with covenant for recently We during fiscal

long-term the However, compliance XXXX we debts be period encompass to did not do waiver entire as guidance we current because in requires and fiscal classify accounting expect liabilities. this not our

the to have agreements allow and us bank working this and plans to to compliance back diligently new with in We summer execute long be that debt reclassify are term. will made our

detail. to Cobb marketing the update, about now the and talk over Heather sales and the concludes to into financial That I'll opportunities call Heather? turn

Heather Cobb

Thank you, Dan.

our and earlier, evaluate market mentioned to customers. force continue to Craig we make feel we and conditions engage adjustments motivate needed As are sales

new fourth update up, with efforts to containing to proud to materials logo the during the we These fiscal platforms, quarter of other very distraction efforts partners effects Once with and seeing social are videos pie. the direct the our some withering PaperPie brand marketing tagline media this paper division accomplishments. brand are our quarter, name back business a sales their appreciate announced and and materials information. and we into along, During made continue partners all personal rebranding that library XXXX. their branded our new sales great still resource own We training were rebranded brand our we to a efforts made

eight see Craig we our a mentioned rebrand pivotal series toys either count. Squishy active opportunities. initially SmartLab human up signed hands-on learning our have as We PaperPie best-selling rolled for as starting out summer partner brand in every toys and Along award-winning a sale made partner. partner time the partner ages lab toys educational will brand laboratory Toys by will our these products with And tiny a line electronic steam-based have this as a they offering then, PaperPie product or brand January, as up body include new science and children brand

up three followed the holiday launched for in more product an to We by and both our almost in products Toys XXXX the extremely items remaining several also to products say additional year, excited includes This been with fall new line. and customers beyond. We three have Needless in brand followed introduce have launch even SmartLab and are XX XX the to products XX this season. fiscal this products produced. in plan the never be January another in March. of will our are development end summer partners and more new retail and about By to we that

back to over marketing my sales Craig I and remarks. call turn will the concludes more update. for This

Craig White

to talk a like These Dan. changes. of recent and last history saw and year Heather both in the is I'd profitability. prices. you families, sales hit some inflation XXXX. inflation hardest in continue our our are decades-long Thank which to price us food about impacted. customer, This EDC we other to for young target record increases in fuel a negatively be headwind retailers were We see fiscal similar

Rebranding not items. expensive. our There on writing only old distracting, onetime fiscal lots XXXX This was including Reduced issues one but time were was was and only off sales rebranding division money performance. and drove of element. spent it

reduced from saw I spent onetime time it on was revenues Salesforce business am also a our but event. items. updating of the glad accomplishment proud We

one had rebate reverse $X million also volume our largest to We vendors. with of

fall operating several increase and adjustments charges to reduce increased saw change we was One costs the impacted year, the margins. our we in last to example freight we made As sales shipping made $X.XX We've increase with orders seen change average size as every savings from with to orders. offered look order shipping this rates on our higher on for customers opportunity. lower dollar $X.XX smaller

is to return have continue payroll other and line face focus rising opportunity We rates we and every to borrowings. interest to profitability. year on last to performance operating to improve bottom on challenge us faced costs reduced and order continue for One in

will We have too excess and levels. inventory Lower We inventory. cash much interest need turn result our into to with lower excess borrowers it debt pay debt and performance. our our increased too in and sell down inventory associated much

possible. as quickly as happen this making to committed are We

our want our new March to of releases. titles with I new sales. and to introduced in generating smaller on inventory. releases year, titles times expand a four reduce We October with plan Purchases major drive

infra of this Our a they they year were what and quarter year half purchases were were pre-pandemic. last what

So reducing we we're our purchases fact, on amounts. titles, are purchasing to not And aggressively new in even inventory. minimum

debt and myself profitability, our past our priority to practice to to paying dividends quarterly for reinstating top shareholders. our continues Returning paying down and a be of shareholders,

these excited our a initial about us engine offerings. additional has sales PaperPie. long-term a success, This new marketing talk line has opportunities SmartLab sales never to history our like and about I'd makes This with long had line product Lastly, but very of product like Toys. start

we operator have over a the activity. provided I the now to will Q&A. that call Now, for recent some back of summary -- turn

Craig White

us support All to in and report questions. a few additional everyone update Thank one we for when joining you your quarter call our look right. appreciate a calls, July. expected We But today. few forward continued you. providing I thanks on

have June, will Additionally, virtually conference the at then. another three-part we I presentation where advisor will in be

you thank So And great a day. everyone. have

Operator

Ladies for Thank gentlemen, has conference you and you. the all now joining. ended. Thank

You may all disconnect.

Educational Development (EDUC) 11 May 232023 Q4 Earnings call transcript