Executive Summary
In Q4 2024, Educational Development Corporation (EDUC) reported a substantial revenue decline of 40.13% year-over-year, generated $8.97 million compared to $14.98 million in the same quarter last year. The company continues to face headwinds as it grapples with increased operational expenses and a drop in sales across its publishing segments. The operating loss of $2.04 million, which marks an increase of 112.17% year-over-year, underscores the challenges of maintaining profitability in a competitive educational publishing market.
Management has indicated that market volatility and changing consumer preferences have significantly impacted sales, particularly in physical retail spaces. Despite these challenges, there are efforts underway to expand the digital product line and enhance direct-to-consumer sales channels. Investors are advised to monitor how these initiatives progress in mitigating revenue losses.
Key Performance Indicators
QoQ: -47.07% | YoY:-40.13%
QoQ: -50.10% | YoY:-38.59%
QoQ: -272.81% | YoY:-112.17%
QoQ: -181.87% | YoY:15.89%
QoQ: -183.33% | YoY:13.04%
Key Insights
**Revenue:** $8,968,500 (QoQ: -47.07%, YoY: -40.13%)
**Gross Profit:** $5,560,200 (Gross Profit Margin: 61.99%, QoQ: -50.10%, YoY: -38.59%)
**Operating Income:** -$2,044,500 (Operating Income Ratio: -22.80%, QoQ: -272.81%, YoY: -112.17%)
**Net Income:** -$1,614,600 (Net Income Ratio: -18.00%, QoQ: -181.87%, YoY: 15.89%)
**EPS:** -$0.20 (QoQ: -183.33%, YoY: 13.04%)
**Current Ratio:** 3.88 (indicating strong liquidity)
**Debt to Equity Ratio:** 0.78 (creates a perception of risk due to...
Financial Highlights
Revenue: $8,968,500 (QoQ: -47.07%, YoY: -40.13%)
Gross Profit: $5,560,200 (Gross Profit Margin: 61.99%, QoQ: -50.10%, YoY: -38.59%)
Operating Income: -$2,044,500 (Operating Income Ratio: -22.80%, QoQ: -272.81%, YoY: -112.17%)
Net Income: -$1,614,600 (Net Income Ratio: -18.00%, QoQ: -181.87%, YoY: 15.89%)
EPS: -$0.20 (QoQ: -183.33%, YoY: 13.04%)
Current Ratio: 3.88 (indicating strong liquidity)
Debt to Equity Ratio: 0.78 (creates a perception of risk due to high leverage).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.97M |
-40.13% |
-47.07% |
| Gross Profit |
5.56M |
-38.59% |
-50.10% |
| Operating Income |
-2.04M |
-112.17% |
-272.81% |
| Net Income |
-1.61M |
15.89% |
-181.87% |
| EPS |
-0.20 |
13.04% |
-183.33% |
Key Financial Ratios
operatingProfitMargin
-22.8%
operatingCashFlowPerShare
$-0.35
freeCashFlowPerShare
$-0.37
Management Commentary
Market Conditions:
Management reflected on the challenging market conditions, stating, "We are facing unprecedented disruptions in our traditional sales channels, requiring us to pivot our strategies toward more agile and technology-driven solutions."
Future Strategy:
They further emphasized, "We are focusing on enhancing our online presence, utilizing digital outreach efforts to engage our customers, which is crucial for our growth amidst declining bookstore sales."
"We are facing unprecedented disruptions in our traditional sales channels, requiring us to pivot our strategies toward more agile and technology-driven solutions."
â Management
"We are focusing on enhancing our online presence, utilizing digital outreach efforts to engage our customers, which is crucial for our growth amidst declining bookstore sales."
â Management
Forward Guidance
Decisions to transition part of the sales strategy to digital platforms indicate a response to current challenges. Management indicated that they expect a gradual recovery in revenue as new pathways are established, particularly in online sales, forecasting a potential 20% increase in digital sales for the upcoming quarter. Investors should observe whether these strategies yield results in the coming quarters and if operational costs can be optimized without sacrificing product quality.