Educational Development Corporation (NASDAQ:EDUC) Q1 2020 Earnings Conference Call July 16, 2019 4:00 PM ET
Randall White - Chief Executive Officer, President
Craig White - Chief Operating Officer
Dan O'Keefe - Chief Financial Officer
Randall White - 首席执行官，总裁
Craig White - 首席运营官
Dan O'Keefe - 首席财务官
Good day, ladies and gentlemen, and welcome to the Educational Development, First Quarter Fiscal Year 2020 Results Conference Call.
At this time all participants are in a listen-only mode. Later we will conduct the question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference call is being recorded.
I would now like to turn the conference over to your host, Mr. Randall White, Chief Executive Officer and President. Sir, you may begin.
- 此时所有参与者都处于只听模式。 稍后我们将进行问答环节，届时将进行说明。 [操作员说明]。 提醒一下，此电话会议正在录制中。
- 我现在想把会议转交给你的主持人，首席执行官兼总裁兰德尔怀特先生。 先生，你可以开始吧。
Thank you, Valarie. Welcome to the call gentlemen and ladies. Here with me today, I want to introduce Craig White, our Chief Operating Officer and also Dan O'Keefe, our Chief Financial Officer, and I think we are going to start with Dan. He’ll give you a highlight of the previous earnings release.
谢谢Valarie。 欢迎来电致绅士和女士们。 今天和我在一起，我想介绍我们的首席运营官Craig White以及我们的首席财务官Dan O'Keefe，我想我们将从Dan开始。 他会给你一个上一个收益发布的亮点。
Thank you, Randall. As a recap of our earnings for the quarter, net revenues for the first quarter of fiscal 2020 were approximately $27.6 million, down $2.4 million or 8% from approximately $30 million reported in the first quarter of fiscal 2019.
Earnings before income taxes totaled approximately $1.8 million, a decrease of $0.6 million or 26% from approximately $2.5 million in the first quarter of fiscal 2019.
Pre-tax profit as a percentage of net revenues were 6.7% in the first quarter of fiscal 2020, compared to 8.3% reported in the first quarter of fiscal 2019. Net earnings in the first quarter of fiscal 2020 totaled approximately $1.4 million, a decrease of $0.4 million or 25% from approximately $1.8 million in the first quarter of fiscal 2019.
Earnings per share on a fully diluted basis decreased $0.05 a share or 23% from $0.22 per share reported in the first quarter of fiscal 2019 to $0.17 per share reported in the first quarter of fiscal 2020.
This concludes our earnings results and I’ll pass the call back to Randall.
Okay Dan, thanks. Well, investors this is a first quarter that I've had report reclined [ph] sales in a very long time. This is not an indication of where we're headed for the fiscal year beyond, I don't think, because we continue to expect grow in both divisions of the company actually.
The decline, was in the – to explain what happened, the decline resulted from a very successful recruiting program in February of 2018 which was in the quarter we are comparing to and we had 8,800 new consultants that month and pretty much that resulted in the 10% of revenue built for the quarter.
So we actually grew our average consultants between quarter four last year and quarter one of this year. So that big negative comparison in the first quarter is not likely in the remaining quarters. But as I told you guys before, the average number of active consultants is not exactly a firm number, but it is a guideline. But we’ll tell you that we've had a very successful current recruiting effort and so far halfway through the month we are up about, more like 400% over the same month last year, July. So we are having another very nice surge in recruiting and I think it's coming from the fact that we had a very successful national convention.
The commission unit also this year, which we have it every year, we had attendance; it was up about 40% at 1,700 people here. That's pretty significant in the fact that of course they pay their way to come here, that’s all expense to the consultant to attend, so that’s 1,700 people who want to do better, apparently.
So that’s very encouraging that that’s up 40% over last year, and again the recruiting special. We left them with encouraging reports from the company and they've gone back and halfway through the month of July have had a very successful recurring effort.
We are also really excited about the technology improvements that we are rolling out this summer and how that will affect our existing consultants and improve the experiences of our new recruits.
We hear a lot about the industry, probably not surprising to anybody on the call that the new young people are very impatient with any type of technology, it's not just the most latest up-to-date. So we have rolled out our back office platform on a test basis already, which offers that phone mobility, that mobility for the handset. They've been asking for this platform to be mobile friendly and we are delivering it. It's in the test phase right now and it should be rolled out very soon; we’re pretty excited about that. I hope they are as excited as we are.
But today, literally they want a punch a button on that drone delivery on the porch [ph] in about 30 minutes. We're not quite there yet of course, but certainly making your business mobile friendly where they can all – where they can translate their entire business on their phone, away from home.
Here is some of the other changes we had in quarter one. Our publishing division continued to grow a little bit, and we expect that to grow in the near future. We're picking up new accounts, obviously there’s back in that, and the sales department, yes, we are already looking at some new accounts that we’re adding and we think we can return that back to levels that we previously had.
下降，是 - 解释发生了什么，下降是由于2018年2月非常成功的招聘计划，这是我们正在比较的季度，我们当月有8,800名新顾问，几乎导致10本季度营收的百分比。
但是今天，从字面上看，他们希望在大约30分钟内在门廊[ph]上按下无人机按钮。当然，我们还没有完全实现这一目标，但肯定会让您的企业在所有人都可以移动友好的地方 - 他们可以通过手机远离家乡翻译他们的整个业务。
The pre-tax profit of 6.7% reflects the strength of our business model, even when revenues declined. I think for the whole year last year, full year we did 7.7% and while 8.7% for the quarter a year ago, but the fact that we had that much decline shows that we do keep control of our costs and our model is good. Our sales are down, but we are still earning – we’re still profitable.
We also used $300,000 in the quarter to repurchase shares. We have a buyback program and we are continuing the repurchase of shares into quarter two when it seems advantages to us. We’ve also declared our dividend for quarter one and quarter two, that if you annualize it, it’s returning over 3% today on stock prices, the current price around $6.50, $7 in that range. Clearly our stock is a pretty good value today for us and we can resume our growth, which we expect to do.
So this concludes the business update and let’s open it up for questions. Who’s got a question?
税前利润6.7％反映了我们业务模式的优势，即使收入下降。 我认为去年全年，全年我们做了7.7％而一年前的这一季度为8.7％，但事实上我们有这么大的下降表明我们确实控制了我们的成本，我们的模型很好。 我们的销售额下降了，但我们仍在赚钱 - 我们仍然有利可图。
我们还在本季度使用了30万美元来回购股票。 我们有一个回购计划，当我们对它们有利时，我们继续将股票回购到第二季度。 我们还宣布了第一季度和第二季度的股息，如果你将其年化，它今天的股票价格回报率超过3％，当前价格在6.50美元左右，在该范围内为7美元。 很明显，我们的股票今天对我们来说是一个非常好的价值，我们可以恢复增长，我们期望这样做。
So I must have answered every question you ever want to know about the company in the quarter and where we’re headed.
Okay, I hope that’s the answer and not lack of interest. We're optimistic here guys. It's a tough business, a lot tougher than it used to be. We have to fact things that have nothing to do with us like other companies in the industry that have had different problems than we do and we don't have those kind of problems. There are other companies in the industry that may not operate as effectively as we do and that’s having effects on us, but when you're in the direct selling industry sometimes we get painted with the same brush.
So apparently there's no questions. So guys, thank you very much for listening and we'll report on our next quarter.
好的，我希望这是答案，而不是缺乏兴趣。 我们在这里很乐观。 这是一项艰巨的业务，比以往更加艰难。 事实上，与我们无关的事情就像业内其他公司一样，我们遇到的问题与我们不同，而且我们没有这些问题。 业内其他公司可能无法像我们一样有效运作，并且对我们产生影响，但是当您进入直销行业时，我们有时会使用相同的画笔。
Thank you. Ladies and gentlemen, this does conclude today’s conference. Thank you for your participation. You may all disconnect.
谢谢。 女士们，先生们，今天的会议确实结束了。 感谢您的参与。 你可能都断开了。
Thank you, Valarie.
You’re welcome. Have a great day!
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