Like they have since sales and profits peaked in the fiscal year ended February 28, 2021, executives at Educational Development Corp. devoted the bulk of the fiscal year ended February 28, 2025, to attempt to get their financial house in order.
The end of the pandemic left EDC, which features a multi-level sales force plus a traditional publishing arm, with too much inventory and a rapidly declining home rep sales team as children returned to school and home-based reps found other jobs. The pandemic growth spurt had also led the Oklahoma City-based company to overexpand its physical footprint.
"Throughout fiscal 2025, we continued to run promotions with discounted pricing, prioritizing cash flow over profitability to reduce debt and lower inventory as part of our plan with the bank,” said CEO Craig White, in a statement. These decisions, he added, “have generated cash which was used to pay down debt and past due invoices with our vendors. The positive outcome from these decisions allowed us to reduce our vendor payables by $2.0 million and reduce our bank debts.”
Meanwhile, EDC’s sales and bottom line took another hit in fiscal 2025, with sales falling 33% from fiscal 2024, to $34.2 million, and the company posted a net loss of $5.3 million, down from net income of $546,400 in fiscal 2024. Sales were hurt, White acknowledged, by the lack of new titles for its reps to sell. White said he hopes that when EDC has reduced its debts, it will begin to acquire new content.
On the bottom line, White explained that in fiscal 2024, EDC benefitted from two one-time items: the receipt of an employee retention credit of $3.8 million and the $4 million gain from the sale of its old headquarters building. The proceeds from those transactions, along with the cash flow generated from inventory reductions in fiscal 2024 of $8.2 million, allowed EDC to reduce its bank borrowings from $45.7 million to $33.9 million.
The company is currently involved in ongoing negotiations to sell its headquarters, a transaction that could, White said, let the company pay down its debt. White added that he was encouraged that EDC’s loss in the fourth quarter of fiscal 2025 ($1.3 million) was much lower than the $1.6 million loss a year ago, despite a 26% decline in sales, to $6.6 million.
