EDC(US:EDUC)2021-10-06 16:00Financial Performance - The Company reported net revenues for fiscal year 2021 remained stable despite the COVID-19 pandemic, with fiscal 2022 results showing normalization[20]. - Net earnings applicable to common shareholders for the three months ended August 31, 2021, were $1,898,200, a decrease of 55.4% compared to $4,255,000 for the same period in 2020[44]. - Basic earnings per share for the three months ended August 31, 2021, were $0.24, down 52.9% from $0.51 in the prior year[44]. - Total net revenues for the three months ended August 31, 2021, were $32,994,400, a decline of 44.3% from $59,250,100 in the same period of 2020[56]. - The UBAM segment generated net revenues of $29,518,100 for the three months ended August 31, 2021, compared to $56,911,600 in 2020, reflecting a decrease of 48.8%[56]. - Net revenues for the six-month period ended August 31, 2021, decreased by $26.7 million, or 28.5%, to $67.1 million compared to $93.8 million from the same period a year ago[84]. - Publishing division's net revenues increased by $3.0 million, or 81.1%, to $6.7 million during the six-month period ended August 31, 2021, from $3.7 million reported in the same period last year[94]. Inventory and Purchases - Current inventory as of August 31, 2021, was $64,707,400, an increase of 25% from $51,762,400 as of February 28, 2021[26]. - Total inventory purchases for the three months ended August 31, 2021, were $18,779,100, up 52% from $12,370,600 in the same period of 2020[28]. - The total cost of inventory on consignment with consultants was $1.2 million at August 31, 2021, and $1.1 million at February 28, 2021[118]. - The estimated valuation allowance for both current and noncurrent inventory, including reserves for consigned inventory, was $0.8 million at August 31, 2021, and $0.7 million at February 28, 2021[119]. Operating Expenses - Total operating expenses for the three months ended August 31, 2021, decreased by $15.8 million, or 50.8%, to $15.3 million compared to $31.1 million in the same quarter a year ago[82]. - Operating and selling expenses for the three months ended August 31, 2021, decreased by $4.9 million, or 53.8%, to $4.2 million compared to $9.1 million in the same quarter a year ago[82]. - Total operating expenses decreased by $16.7 million, or 32.4%, to $34.8 million for the six-month period ended August 31, 2021, compared to $51.5 million for the same period last year[87]. - Total operating expenses of the Publishing segment increased by $0.5 million, or 71.4%, to $1.2 million during the six-month period ended August 31, 2021, from $0.7 million reported in the same period last year[96]. Debt and Financing - The Company executed an Amended and Restated Loan Agreement on February 15, 2021, which included a $20.0 million revolving loan with an effective interest rate of 2.75% as of August 31, 2021[36]. - Outstanding borrowings on the line of credit increased to $16,653,800 as of August 31, 2021, compared to $5,245,300 as of February 28, 2021[36]. - The outstanding borrowings on Term Loan 1 were $10.7 million as of August 31, 2021, with a fixed interest rate reduced to 3.12%[103]. - Cash provided by financing activities was $14,741,300, which included proceeds from term debt and net borrowings under the line of credit[101]. Shareholder Information - The Board of Directors approved a $0.10 dividend to be paid to shareholders of record on November 18, 2021[65]. - The company expects cash generated from operations to support ongoing operations and plans to use excess cash to increase inventory and distribute to shareholders[102]. Segment Performance - Operating income for the UBAM segment decreased by $4.1 million, or 42.3%, to $5.6 million during the three months ended August 31, 2021[83]. - Operating income of the UBAM segment decreased by $2.1 million, or 13.5%, to $13.4 million during the six months ended August 31, 2021, compared to $15.5 million reported in the same period last year[88]. - Gross margin for the three months ended August 31, 2021, decreased by $19.9 million, or 48.8%, to $20.9 million, with a gross margin percentage of 70.7%[81]. - Gross margin for the six-month period ended August 31, 2021, decreased by $18.8 million, or 28.1%, to $48.2 million, with a gross margin percentage of 71.9%[86]. - Gross margin increased by $1.2 million, or 66.7%, to $3.0 million during the six-month period ended August 31, 2021, from $1.8 million reported in the same period last year[95]. Compensation and Taxes - Share-based compensation expense for the three months ended August 31, 2021, was $261,700, an increase of 21.0% from $216,200 in the same period of 2020[51]. - The Company expects to recognize total unrecognized share-based compensation expense of $2,355,000 over a weighted-average period of 32.0 months[51]. - Income taxes for the three months ended August 31, 2021, decreased by $0.7 million, or 46.7%, to $0.8 million from $1.5 million for the same quarterly period a year ago[73].