EACO Corporation (EACO) Q3 2024 Earnings Report

EACO Corporation delivered a solid QQ3 2024 (quarter ending May 31, 2024) with strong topline momentum and robust cash generation, but with margin compression driven by elevated operating expenses. Revenue rose to $96.1 million, up 19.8% year-over-year and 15.3% quarter-over-quarter, supported by continued demand for electronic components and fasteners distributed through Bisco Industries. Gross profit reached $27.9 million, yielding a gross margin of 29.1%, indicating pricing power and efficient sourcing amid a competitive distribution landscape.

However, operating margin remained modest at 1.68% (operating income of $1.61 million) as SG&A and other operating costs consumed a larger share of the top line. Net income was $1.18 million (net margin 1.23%), and earnings per share were $0.24. Cash flow from operations was healthy at $3.93 million, with free cash flow of $3.61 million, though the company deployed $8.14 million in investing activities and ended the period with cash on hand of $0.75 million. The balance sheet remains solid with total equity of ~$117.1 million and a leverage profile that is conservative by historic standards, though liquidity metrics show a near-term concentration of cash (cash ratio of 0.0139x) given a modest cash balance and working capital needs.

Given the absence of formal QQ3 2024 guidance in the accompanying disclosures, investors should monitor internal initiatives to optimize working capital, potential SG&A leverage as revenue scales, and any shifts in supplier terms or product mix that could influence margin trajectory. Relative to peers in technology distribution, EACO exhibits stronger gross margins but lags on operating profitability and liquidity discipline, which will be key to watch as the company seeks to translate topline growth into durable earnings power.