EACO Corporation delivered a solid Q4 2024 with revenue of $96.52 million, up 12.36% year over year and 0.42% quarter over quarter. Gross profit reached $29.69 million for a gross margin of 30.76%, and operating income of $9.84 million yielded an operating margin of 10.20%. EBITDA was $10.45 million (EBITDA margin ~10.83%), contributing to a net income of $6.49 million and a net margin of 6.72%. Despite a positive bottom line, GAAP earnings per share (EPS) were reported negative (-$1.73 basic, -$1.71 diluted) driven by unusual per-share accounting dynamics and the reported share count, underscoring a disconnect between NOPAT profitability and reported per-share metrics in this period.
Cash flow generation remained robust: net cash provided by operating activities was $9.684 million and free cash flow was $9.60 million. The company ended the period with cash and cash equivalents of approximately $0.843 million and total cash and short-term investments of about $15.9 million, with net debt around $11.0 million and a strong liquidity profile (current ratio 2.54, quick ratio 1.30). The balance sheet shows a durable asset base of $188.5 million and equity of $123.6 million, supporting a conservative debt footprint (total debt $11.94 million; debt-to-capitalization 8.81%).
From a margin perspective, operating and net margins improved meaningfully vs prior periods, aided by gross margin expansion (gross margin 30.76%) and disciplined SG&A. The company’s ROE and ROA remain modest but positive at ~5.25% and ~3.44%, respectively, signaling a constructive but still developing profitability profile for a technology distributor centered on high-value components via Bisco Industries. Valuation remains modest by traditional tech-distributor benchmarks (P/E ~6.2x, P/B ~1.30x, P/S ~1.66x), suggesting the stock could offer a favorable risk-reward if operating momentum persists.
Key near-term considerations include ongoing management focus on working capital efficiency, product mix optimization toward higher-margin offerings, and the sustainability of the cost structure in a volatile component market. The quarter's delta in SG&A and non-operating items appears to have a material influence on per-share metrics, but cash generation and balance sheet strength position EACO to fund growth initiatives and potential selective investments.