EACO CORP
For the period ended Feb 29, 2024. Filed Apr 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 29, 2024 · Filed Apr 9, 2024
EACOStored price and day change unavailable
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-11-30; filed 2024-01-16.
0001410578-24-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-02-29; filed 2024-04-09.
0001410578-24-000441
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 47 previous paragraphs and 54 current paragraphs.
19 unchanged; 22 reworded; 11 added; 5 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Critical Accounting Policies and Estimates
Current report
The increase in revenues in the three months ended February 29, 2024 (“Q2 2024”) as compared to the three months ended February 28, 2023 (“Q2 2023”) was largely due to an increased of the sales headcount by 43 employees, increasing from 370 sales employees to 413 sales employees for Q2 2023 and Q2 2024 respectively. Revenues and gross profit for Q2 2024 have increased when compared to Q2 2023 due to higher inventory stock available and sales activity filling the demand for those products.
Current report
Selling, General and Administrative Expenses ($ in thousands)
Current report
Comparison of the Six Months Ended February 29, 2024 and February 28, 2023
Current report
The increase in revenues and gross margins as a percent of revenues in the six months ended February 29, 2024 as compared to the six months ended February 28, 2023 was largely due to a larger amount of inventory available and increased sales employee headcount in the current period.
Current report
Selling, General and Administrative Expenses ($ in thousands)
Current report
SG&A in the six months ended February 29, 2024 increased from the same period in the prior year primarily due to an increase in the number of sales and administrative employees, from 525 employees in Q2 2023 to 584 employees in Q2 2024. During the first quarter of fiscal 2024, the Company recognized an impairment loss of $3.9 million due to the purchase of the Hunter Property and termination of the Hunter Lease. Operating expenses as a percent of revenue in the current period increased from the prior year period primarily due to the impairment loss and higher payroll expenses.
Current report
During the six months ended February 29, 2024, the Company recognized a net loss on trading securities of $21,000 as compared to a net gain of $621,000 in the same period in the prior year. The net trading securities losses and gains, as applicable, in the six months ended February 29, 2024 and February 28, 2023 were primarily due to timing of sales and purchases of investment securities and general market climate for long positions during the applicable period. Further, in the prior year period, there was a higher amount of cash invested than in the current period, which produced higher dividends in the prior period.
Current report
Interest and other income (expense), net, decreased during the six months ended February 29, 2024 compared to the same period in the prior year, which was primarily due to interest expense from carrying a balance on the line of credit during a portion of the current period.
Current report
Income Tax Provision ($ in thousands)
Current report
The provision for income taxes decreased by $948,000 for the six months ended February 29, 2024 when compared to the prior year period. This decrease was primarily due to lower income in the current six month period as compared to the prior year period.
Removed paragraphs (5)
Previous report
Critical Accounting Policies
Previous report
Deferred Tax Assets
Previous report
A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefit, or when future deductibility is uncertain. The Company records net deferred tax assets to the extent management believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income (if any), tax planning strategies and recent financial performance.
Previous report
The increase in net sales and gross margins in the three months ended November 30, 2023 (“Q1 2024”) as compared to the three months ended November 30, 2022 (“Q1 2023”) was largely due to higher demand for products and favorable economic conditions in the current period. Further, the increase in net sales was due to an expansion of the Company’s salesforce by 47 employees, or 13%, over the prior year period and by increasing inventory levels so products could be readily available for shipment.
Previous report
Operating Expenses ($ in thousands)
Reworded paragraphs (22)
Previous wording
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements can be identified by the use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “possible,” “project,” “should,” “will” and similar words or expressions. These forward-looking statements include, but are not limited to, statements regarding our anticipated revenue, expenses, profits and capital needs. These statements are based on our current expectations, estimates, projections, and the impact of certain accounting pronouncements, and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those projected or estimated, including, but not limited to the impact of Covid-19, adverse economic conditions, competitive pressures, unexpected costs and losses from operations or investments, increases in costs and overhead, our ability to maintain an effective system of internal controls over financial reporting, potential losses from trading in securities, our ability to retain key personnel and good relationships with suppliers, the willingness of lenders to extend financing commitments and the availability of capital resources, and the other risks set forth in “Risk Factors” in Part II, Item 1A of this report or identified from time to time in our other filings with the SEC and in public announcements. You should not place undue reliance on these forward-looking statements that speak only as of the date hereof. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statement for any reason, including to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by management or any other person that the objectives or plans of the Company will be achieved.
Current wording
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements can be identified by the use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “possible,” “project,” “should,” “will” and similar words or expressions. These forward-looking statements include, but are not limited to, statements regarding our anticipated revenue, expenses, profits and capital needs. These statements are based on our current expectations, estimates, projections, and the impact of certain accounting pronouncements, and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those projected or estimated, including, but not limited to the impact of adverse economic conditions, competitive pressures, unexpected costs and losses from operations or investments, increases in costs and overhead, our ability to maintain an effective system of internal controls over financial reporting, potential losses from trading in securities, our ability to retain key personnel and good relationships with suppliers, the willingness of lenders to extend financing commitments and the availability of capital resources, and the other risks set forth in “Risk Factors” in Part II, Item 1A of this report or identified from time to time in our other filings with the SEC and in public announcements. You should not place undue reliance on these forward-looking statements that speak only as of the date hereof or the date of any other filing with the SEC, as applicable. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statement for any reason, including to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by management or any other person that the objectives or plans of the Company will be achieved.
Previous wording
EACO is a holding company primarily comprised of its wholly-owned subsidiary, Bisco. Bisco is a distributor of electronic components and fasteners with 51 sales offices and seven distribution centers located throughout the United States and Canada and one sales location located in the Philippines. Bisco supplies parts used in the manufacture of products in a broad range of industries, including the aerospace, circuit board, communication, computer, fabrication, instrumentation, industrial equipment and marine industries.
Current wording
EACO is a holding company primarily comprised of its wholly-owned subsidiary, Bisco. Bisco is a distributor of electronic components and fasteners with 51 sales offices and seven distribution centers located throughout the United States and Canada and one sales office located in the Philippines. Bisco supplies parts used in the manufacture of products in a broad range of industries, including the aerospace, circuit board, communication, computer, fabrication, instrumentation, industrial equipment and marine industries.
Previous wording
The Company’s discussion and analysis of its financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Current wording
Management’s discussion and analysis of its financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Previous wording
Within the context of these critical accounting policies, the Company is not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported. There have been no changes to the Company’s critical accounting policies for the three months ended November 30, 2023.
Current wording
Within the context of these critical accounting policies, management is not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported. There have been no changes to the Company’s critical accounting policies for the three months ended February 29, 2024.
Previous wording
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) 2014-09, Revenue from Contracts with Customers, issued as a new Topic, ASC Topic 606 (“ASU 2014-09”). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the standard is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Current wording
In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, issued as a new Topic, ASC Topic 606 (“ASU 2014-09”). The revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Previous wording
The Company’s performance obligations consist solely of product shipped to customers. Revenue from product sales is recognized upon transfer of control of promised products to customers at a point in time in an amount that reflects the consideration we expect to receive
Current wording
The Company’s performance obligations consist solely of products shipped to customers. Revenue from product sales is recognized upon transfer of control of promised products to customers at a point in time in an amount that reflects the consideration we expect to
Previous wording
in exchange for these products. Revenue is recognized net of returns and any taxes collected from customers. We offer industry standard contractual terms in our purchase orders.
Current wording
receive in exchange for these products. Revenue is recognized net of returns and any taxes collected from customers. We generally offer industry standard contractual terms in our purchase orders.
Previous wording
The Company’s inventory provisions are based upon management’s review of inventories on-hand over their expected future utilization and length of time held by the Company. The Company’s methodology for estimating these adjustments to the cost basis is evaluated for factors that could require changes to the cost basis including significant changes in product demand, market conditions, condition of the inventory or net realizable value. If business or economic conditions change, the Company’s estimates and assumptions may be adjusted as deemed appropriate.
Current wording
The Company’s inventory provisions are based upon management’s review of inventories on-hand over the inventory’s expected future utilization and length of time held by the Company. The Company’s methodology for estimating these adjustments to the cost basis is evaluated for factors that could require changes to the cost basis including significant changes in product demand, market conditions, condition of the inventory or net realizable value. If business or economic conditions change, management’s estimates and assumptions may be adjusted as deemed appropriate.
Previous wording
Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For the purpose of the impairment review, assets are tested on an individual basis. The recoverability of the assets is measured by a comparison of the carrying value of each asset to the future net undiscounted cash flows expected to be generated by such assets. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds their estimated fair value.
Current wording
Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For the purpose of the impairment review, assets are tested on an individual basis. The recoverability of the assets is measured by a comparison of the carrying value of each asset to the future net undiscounted cash flows expected to be generated by such assets. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds such asset’s estimated fair value.
Previous wording
Selling, general and administrative expense (“SG&A”) consists primarily of payroll and related expenses for the Company’s sales and administrative staff, professional fees including accounting, legal and technology costs and expenses. The increase in SG&A is primarily due to an increase in the number of sales and administrative employees, from 520 employees in Q1 2023 to 577 employees in Q1 2024. During Q1 2024, the Company recognized an impairment loss of $[3.9 million] due to purchase of the Hunter Property and termination of the Hunter Lease.
Current wording
Selling, general and administrative expense (“SG&A”) consists primarily of payroll and related expenses for the Company’s sales and administrative staff, professional fees including accounting, legal and technology costs and expenses, and sales and marketing costs. SG&A in Q2 2024 increased from Q2 2023 largely due to increased employee headcount, increasing from 525 employees at Q2 2023 to 584 employees at Q2 2024.
Previous wording
Other (Expense), Net ($ in thousands)
Current wording
Other Income (Expense), Net ($ in thousands)
Previous wording
Other income (expense), net, primarily consists of income or loss on trading in short-term marketable equity securities of publicly-held corporations and interest related to the Company’s debt obligations. The Company’s investment strategy consists of both long and short positions, as well as utilizing options designed to improve returns. During Q1 2024, the Company recognized a net loss on trading securities of $44,000 as compared to a net gain of $442,000 in Q1 2023. The change in net trading securities in Q1 2024 was primarily due to timing of sales and purchases and general market climate for short and long positions during the period. In addition, other expenses increased in Q1 2024 due to an impairment loss associated with the purchase of the Hunter Property.
Current wording
Other income (expense), net, primarily consists of income or loss on trading in short-term marketable equity securities of publicly-held corporations and interest related to the Company’s debt obligations. The Company’s investment strategy consists of both long and short positions, as well as utilizing options designed to improve returns. During Q2 2024, the Company recognized a net gain on trading securities of $23,000 as compared to a net gain of $179,000 in Q2 2023. The net trading securities gains in Q2 2024 and Q2 2023 was primarily due to timing of sales and purchases and general market climate for short and long positions during the applicable period.
Previous wording
Interest and other (expense), net, decreased in Q1 2024 compared to Q1 2023, which was primarily due to interest income earned from US treasury bonds held during the Q1 2024.
Current wording
Interest and other income (expense), net, decreased in Q2 2024 compared to Q2 2023, which was primarily due to interest expense from carrying a balance on the line of credit during portion of Q2 2024 compared to a zero-balance carried during Q2 2023.
Previous wording
The provision for income taxes decreased by $1,044,000 in Q1 2024 over the prior year period. This decrease was due to lower taxable income in the current quarter as compared to the prior year period. The income tax provision as a percent of pre-tax income decreased from 26.1% at Q1 2023 to 25.8% at Q1 2024.
Current wording
The provision for income taxes increased by $96,000 in Q2 2024 over the same prior year period. This increase was primarily due to higher income in the current quarter as compared to the prior year period. The income tax provision as a percent of pre-tax income decreased from 25.9% at Q2 2023 to 25.5% at Q2 2024, which was primarily due to the state tax rate mix and permanent book tax differences.
Previous wording
As of November 30, 2023 and August 31, 2023, the Company held approximately $6,499,000 and $8,558,000 of unrestricted cash and cash equivalents, respectively. The Company also held $4,227,000 and $27,228,000 of marketable securities at November 30, 2023 and August 31, 2023, respectively, which could be liquidated, if necessary.
Current wording
As of February 29, 2024 and August 31, 2023, the Company held approximately $3.984 million and $8.558 million of unrestricted cash and cash equivalents, respectively. The Company also held $1.678 million and $27.228 million of marketable securities at February 29, 2024 and August 31, 2023, respectively, which could be liquidated, if necessary.
Previous wording
As of November 30, 2023, the Company had a $15,000,000 line of credit with the Bank. The Company entered into a Change in Terms Agreement dated November 5, 2022 with the Bank (the “Amendment”), which extended the maturity date of the line of credit from November 5, 2022 to July 5, 2024. The line of credit has a variable interest rate set at the bank prime index rate, but provided that in no event would such interest rate be less than 3.5% per annum. Borrowings are secured by substantially all of the assets of the Company
Current wording
As of February 29, 2024, the Company had an available $15.0 million line of credit with the Bank. The Company entered into a Change in Terms Agreement dated November 5, 2022 with the Bank, which extended the maturity date of the line of credit from November 5, 2022 to July 5, 2024. The line of credit has a variable interest rate set at the bank prime index rate, provided that in no event would such interest rate be less than 3.5% per annum. Borrowings are secured by substantially all of the assets of the Company and its subsidiaries. The line of credit agreement contains certain nonfinancial and financial covenants, including the maintenance of certain financial ratios. As of each of February 29, 2024 and August 31, 2023, the Company was in compliance with all such covenants. The outstanding balance of the line of credit as of each of February 29, 2024 and August 31, 2023 was zero.
Previous wording
The Company entered into a Construction Loan with the Bank to borrow up to $5,000,000 for the primary purpose of financing tenant improvements at the Hunter Property. The Construction Loan was a line of credit evidenced by a Promissory Note in the principal amount of up to $5,000,000 with a maturity date of May 15, 2027. The terms of the Construction Loan provide that the Company may only request advances through July 15, 2020, and thereafter, the Construction Loan would convert to a term loan with a fixed rate of 4.6% and entitled to a .25% rate discount if a demand deposit account is held with the Bank. On July 15, 2020, the amount drawn on the Construction Loan and converted to a term loan was $4,807,000. Interest on the Construction Loan is payable monthly (4.35% at November 30, 2023 and August 31, 2023). Concurrent with the execution of this Construction Loan, Bisco entered into a commercial security agreement, dated July 12, 2019, with the Bank, pursuant to which Bisco granted the Bank a security interest in substantially all of Bisco’s personal property to secure Bisco’s obligations under the Construction Loan. The outstanding balance of the Construction Loan at November 30, 2023 and August 31, 2023 was $4,437,000 and $4,468,000, respectively.
Current wording
The Company entered into a Construction Loan with the Bank to borrow up to $5.0 million for the primary purpose of financing tenant improvements at the Hunter Property. The Construction Loan was a line of credit evidenced by a Promissory Note in the principal amount of up to $5.0 million with a maturity date of May 15, 2027. The terms of the Construction Loan provide that the Company may only request advances through July 15, 2020, and thereafter, the Construction Loan would convert to a term loan with a fixed rate of 4.6%, which is entitled to a .25% rate discount if a demand deposit account is held with the Bank. On July 15, 2020, the amount drawn on the Construction Loan was converted to a term loan in the amount of $4.807 million. Interest on the Construction Loan is payable monthly (4.35% per annum as of each of February 29, 2024 and August 31, 2023). Concurrent with the execution of this Construction Loan, Bisco entered into a commercial security agreement, dated July 12, 2019, with the Bank, pursuant to which Bisco granted the Bank a security interest in substantially all of Bisco’s personal property to secure Bisco’s obligations under the Construction Loan. The outstanding balance of the Construction Loan at February 29, 2024 and August 31, 2023 was $4.406 million and $4.468 million, respectively.
Previous wording
On October 5, 2023, Bisco entered into the Purchase Agreement with the Trust, which is beneficially owned and controlled by Mr. Glen F. Ceiley, the Company’s Chief Executive Officer, Chairman of the Board and a major stockholder. Pursuant to the Purchase Agreement, the Trust agreed to sell the Hunter Property to Bisco for a purchase price of $31,000,000 in cash. The transaction was closed on October 20, 2023.
Current wording
On October 5, 2023, Bisco entered into the Purchase Agreement with the Trust, which is beneficially owned and controlled by Mr. Glen F. Ceiley, the Company’s Chief Executive Officer, Chairman of the Board and a major stockholder. Pursuant to the Purchase Agreement, the Trust agreed to sell the Hunter Property to Bisco for a purchase price of $31.0 million in cash. The transaction closed on October 20, 2023.
Previous wording
Cash provided by operating activities was $301,000 for the three months ended November 30, 2023 as compared with cash provided by operations of $3,207,000 for the three months ended November 30, 2022. Cash provided by operating activities in the current period was primarily due to net income earned in the period, impairment on termination of lease, and a reduction in operating lease right of use assets. Changes related to the impairment and operating lease right of use assets is primarily due to the termination of the Hunter Lease and the purchase of the Hunter Property. This was adversely impacted by an increase in inventory purchases and decrease in accrued expenses and other liabilities for the three months ended November 30, 2023. The prior period cash provided by operating activities was primarily due to net income earned and a decrease in the trade accounts receivable balance in the period. This was also adversely impact to some extent by an increase in inventory purchases for the three months ended November 30, 2022.
Current wording
Cash provided by operating activities was $460,000 for the six months ended February 29, 2024 as compared with cash provided by operating activities of $5.938 million for the six months ended February 28, 2023. Cash provided by operating activities in the current period was primarily due to net income earned in the period and an increase in trade accounts payable. Cash provided by operating activities was adversely impacted to some extent by an increase in inventory and a decrease in accrued expenses at the six months ended February 29, 2024 when compared to the prior year period. The prior period cash provided by operating activities was primarily due to the net income in that period and a decrease in trade accounts receivable.
Previous wording
Cash used in investing activities was $8,910,000 for the three months ended November 30, 2023 as compared with cash used in investing activities of $6,329,000 for the three months ended November 30, 2022. Cash used in investing activities in the three months ended November 30, 2023 was due to the purchase of the Hunter Property in the period, partially offset by sale of marketable securities. The cash used in investing activities for the prior period is primarily due to purchase of marketable securities.
Current wording
Cash used in investing activities was $6.925 million for the six months ended February 29, 2024 as compared with cash used in investing activities of $17.71 million for the six months ended February 28, 2023. Cash used in investing activities in the current period is primarily due to the purchase of the Hunter Property in October 2023, partially offset by net sales of marketable securities. Prior period cash used in investing activities was primarily due to the purchase of marketable securities.
Previous wording
Cash provided by financing activities for the three months ended November 30, 2023 was $6,681,000 as compared with cash used in financing activities of $157,000 for the three months ended November 30, 2022. The cash provided in financing activities for the current period is primarily due to borrowing on revolving credit facility and the change in bank overdraft, which represents outstanding checks in excess of cash due to the nightly sweep feature of the cash account to the line of credit with the Bank. The cash used in financing activities for the prior period is primarily due to a decrease in the bank overdraft balance.
Current wording
Cash provided by financing activities for the six months ended February 29, 2024 was $1.977 million as compared with cash used in financing activities of $205,000 for the six months ended February 28, 2023. The cash provided by financing activities for the current period is primarily due to the net increase in bank overdraft in the current period, which represents outstanding checks in excess of cash due to the nightly sweep feature of the cash account to the line of credit with the Bank. The cash used in financing activities for the prior period is primarily due to a decrease in the bank overdraft balance.
Previous wording
In addition to using cash flow generated from operations, the Company finances its operations through borrowings under its line of credit. These financial obligations are recorded in accordance with accounting rules applicable to the underlying transactions, with the result being that amounts owed under debt agreements and finance leases are recorded as liabilities on the consolidated balance sheets while lease obligations recorded as operating leases are disclosed in the notes to the consolidated financial statements and management’s discussion and analysis of financial condition and results of operations in the Company’s annual report on Form 10-K for the year ended August 31, 2023 as filed with the SEC on November 22, 2023.
Current wording
In addition to using cash flow generated from operations, the Company finances its operations through borrowings under its line of credit. These financial obligations are recorded in accordance with accounting rules applicable to the underlying transactions, with the result being that amounts owed under debt agreements, operating leases, and finance leases are recorded as liabilities on the consolidated balance sheets in the Company’s Annual Report on Form 10-K for the year ended August 31, 2023 as filed with the SEC on November 22, 2023.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net Sales and Gross Profit ($ in thousands)
Current report — wording carried from elsewhere
Other Income (Expense), Net ($ in thousands)
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
and its subsidiaries. The line of credit agreement contains certain nonfinancial and financial covenants, including the maintenance of certain financial ratios. As of November 30, 2023 and August 31, 2023, the Company was in compliance with all such covenants. The outstanding balances of the line of credit at November 30, 2023 and August 31, 2023 were $3,081,000 and $0, respectively.