Educational Development Corp., which late last year announced a 30% sales gain in the third quarter, to $7.8 million, reported a 58% jump in net income, to $764,900 in the period. For the nine months ended November 30, net income was up 38%, to $1.8 million, on a 23% revenue gain, to $19.6 million.
EDC's home business division, which has about 8,000 people selling its Usborne book line through homes, has been the main engine driving the sales gain, and company chairman Randall White expects the unit to continue growing rapidly. EDC continues to aggressively recruit new sales associates, and White estimates that the publisher will have 10,000 home reps by the summer. White noted that the home party business tends to be counter-cyclical "and can do well in a sluggish economy." While smaller towns account for a significant portion of the home business sales, EDC has done well in Seattle, Atlanta and a few other cities. "It really depends on the sales persons in a particular area," White said.
The success of the home business division notwithstanding, the retail market remains an important sales channel for EDC. "We continue to push to get into more outlets," White said, noting that the company will be exhibiting at next month's Toy Fair. Retail sales will be up by about 6% in fiscal 2003 and more than that in fiscal 2004, White predicted.
White estimates that total EDC sales will be about $25 million in the current fiscal year, which ends February 28, 2003, and he has set a revenue target of $100 million by fiscal 2008. Growth will be internally generated; despite a cash balance of about $3 million and no debt, White said he isn't interested in acquisitions. "We've built a culture around Usborne that we don't want to lose," he said. White's immediate use for the cash will be to raise the company's dividend by about 4 cents per share.