Net earnings at Educational Development Corp. jumped 82% in the fiscal year ended February 28, 2018, over fiscal 2017, rising to $5.2 million. The big jump in profits came on a 6% increase in sales, with revenue reaching $112 million.
In a statement, Randall White, CEO of EDC, attributed the strong earnings performance to the investments the company has made over the last several years to keep pace with its rapid sales growth. Between fiscal 2015 and 2018, EDC’s revenue soared 245%, driven by large gains in the company’s direct sales division. While the growth spurt caused some operational problems early on, the publisher has put most of those issues behind it.
Sales in the direct sales division rose 6% in fiscal 2018, to $103.7 million. The increase was due in part to a 38% increase in the number of EDC sales consultants. The publisher finished fiscal 2018 with 35,500 direct sales reps.
Sales in the publishing group fell 8% in fiscal 2018 from a year ago, dropping to $8.3 million. EDC said the sales decline was due to a drop in business with Barnes & Noble and Books-A-Million.
With the improvements in EDC’s profitability, the increase in cash on hand, and EDC’s ability to access additional cash through a $15 million credit line, the publisher said it expects to have sufficient cash flow to fund its future growth. It is, therefore, reinstating its dividend, which will be 10 cents per share.