Educational Development Corp., which has experienced explosive sales growth over the last two years, saw sales fall 6.6% in the second quarter ended August 31. Revenue was $24.2 million, down from $25.9 million a year ago. While sales fell, earnings rose. Net income jumped to just over $1 million in the quarter, up from $318,500 in last year’s second quarter.

EDC’s largest division is it home party unit which uses home-based reps to sell its books. Company chairman Randall White attributed the revenue decline to the huge volume of sales EDC was dealing with last summer. While the increase in demand generated higher sales, it led to unhappy customers and sales reps as EDC struggled to fill all orders. The company has now largely replaced the number of reps who left and, as the publisher enters the holiday season, it has about 30,000 consultants.

White also pointed to the marked improvement in the bottom line, something he attributed to the investment EDC has made over the last year to improve its efficiency, particularly in its warehouse operations. In a conference call with analysts, White observed that when volume was at a much lower level, “we ran a very tight operation, but added that with the growth in business “we are not tight yet—we can do a lot better.”

Even with the second quarter sales decline, revenue for the first half of fiscal 2018 was $51.1 million, a 5% increase over the first six months of fiscal 2017, while net income more than doubled, to $2.3 million from $938,700.

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