Envela Reports Second Quarter 2022 Financial Results
08/03/2022 - 04:00 PM
Quarterly Net Income Up 78.7% Year-over-Year to $3.85 Million
DALLAS, TX / ACCESSWIRE / August 3, 2022 / Envela Corporation (NYSE American:ELA) ("Envela" or the "Company"), the North American re-commerce leader, today reported financial results for its second quarter ended June 30, 2022.
Management Commentary
"This quarter's record performance is a testament to the hard work and relentless focus of our team despite formidable inflationary pressures and other significant global headwinds. The results also reflect the continued fruits of our disciplined financial approach and recent business initiatives designed to expand our customer base and grow sales," said John Loftus, Chairman and CEO of Envela. "Our customers continued to shop this quarter-despite the increased macroeconomic pressures on consumer spending-demonstrating the unique value that our authenticated re-commerce marketplace offers consumers."
Second Quarter 2022 Financial Results
Total revenue for the second quarter of 2022 was $42.6 million compared to $33.7 million in the same year-ago period.
Revenue related to continuing operations of the Company's DGSE subsidiary for the second quarter of 2022 was $30.3 million (71.2% of total revenue), compared to $23.0 million in the same year-ago period. DGSE's resale revenue, including bullion, jewelry, watches, and rare coins, was $28.2 million (92.8% of DGSE total sales), compared to $20.9 million (90.8% of DGSE total sales) in the same year-ago period. DGSE's recycled-material sales were $2.2 million (7.2% of DGSE total sales), compared to $2.1 million (9.2% of DGSE total sales) in the same year-ago period.
Revenue related to the Company's ECHG subsidiary for the Second quarter of 2022 was $12.3 million (28.8% of total revenue), compared to $10.7 million in the same year-ago period. ECHG's resale revenue was $9.1 million (74% of ECHG total sales), compared to $8.5 million (80% of ECHG total sales) in the same year-ago period. ECHG's recycled-material sales were $3.2 million (26% of ECHG total sales), compared to $2.1 million (20% of ECHG total sales) in the same year-ago period.
Consolidated gross profit for the second quarter of 2022 was $11.5 million , compared to $7.1 million in the same year-ago period.
DGSE's gross profit was $4.2 million , compared to $3.1 million in the same year-ago period.DGSE's resale gross profit was $3.7 million , compared to $2.7 million in the same year-ago period. DGSE's recycled-materials gross profit was $0.5 million , compared to $0.4 million in the same year-ago period. ECHG's gross profit was $7.3 million , compared to $4.0 million in the same year-ago period.Resale gross profit was $5.6 million , compared to $3.0 million in the same year-ago period. Recycled-material gross profit was $1.7 million , compared to $1.0 million in the same year-ago period. Net income for the second quarter of 2022 was $3.85 million , or $0.14 per basic and diluted share, compared to $2.15 million , or $0.08 per basic and diluted share, in the same year-ago period.
About Envela
Envela is the North American re-commerce leader, enabling a better world through the circular economy. It empowers buyers and sellers to extend the useful lives of specialty and durable goods, and to seizes retail, recycling, and reverse-logistics supply-chain opportunities. This financially benefits consumers and manufacturers alike. Envela operates primarily via two re-commerce business segments, DGSE and ECHG. DGSE (Envela's B2C portfolio) operates retail stores and online sites offering luxury hard assets and precious metals, including gold, silver, and diamonds. ECHG (Envela's B2B portfolio) re-commercializes consumer electronics and IT equipment, and also provides end-of-life recycling services for products in a variety of industries. Envela conducts its re-commerce operations at retail and wholesale levels, through distributors, resellers, dedicated stores, and online. Holdings in all of Envela's business units have recognized multiple years of growth.
At Envela we Reuse, Recycle, and Reimagine. To learn more, visit Envela.com and follow us on Twitter , Instagram , Facebook and LinkedIn .
Forward-Looking Statements
This press release includes statements that may constitute "forward-looking" statements, including statements regarding acquisitions, and the potential future success of business lines and strategies. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, market conditions and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release except as required by law.
Investor Relations Contact:
Investor Relations 1901 Gateway Drive | Irving, TX 75038investorrelations@envela.com
Envela Corporation Condensed Consolidated Statements of Operations
Three Months Ended June 30, Six Months Ended June 30, (Unaudited)
2022 2021 2022 2021 Revenue:
Sales
$ 42,639,718 $ 33,724,006 $ 90,054,816 $ 59,214,447 Cost of goods sold
31,161,718 26,596,116 68,865,782 45,782,293
Gross margin
11,478,000 7,127,890 21,189,034 13,432,154
Expenses:
Selling, General & Administrative Expenses
7,083,903 4,831,225 13,643,658 8,984,454 Depreciation and Amortization
279,516 216,219 571,463 421,131
Total operating expenses
7,363,419 5,047,444 14,215,121 9,405,585
Operating income
4,114,581 2,080,446 6,973,913 4,026,569 Other income (expense), net
(95,429 ) 283,055 (154,005 ) 554,996 Interest expense
121,042 177,704 244,281 356,726
Income before income taxes
3,898,110 2,185,797 6,575,627 4,224,839 Income tax expense
50,252 32,685 80,544 63,455
Net income
$ 3,847,858 $ 2,153,112 $ 6,495,083 $ 4,161,384 Basic earnings per share:
Net income
$ 0.14 $ 0.08 $ 0.24 $ 0.15 Diluted earnings per share:
Net income
$ 0.14 $ 0.08 $ 0.24 $ 0.15 Weighted average shares outstanding:
Basic
26,924,631 26,924,381 26,924,631 26,924,381 Diluted
26,939,631 26,939,631 26,939,631 26,939,631
These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on August 3, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.
Envela Corporation Condensed Consolidated Balance Sheets
June 30, December 31, 2022 2021 Assets
(unaudited) Current assets:
Cash and cash equivalents
$ 13,935,476 $ 10,138,148 Trade receivables, net of allowances
5,688,882 7,166,533 Inventories
17,804,096 14,048,436 Current right-of-use assets from operating leases
1,649,034 1,604,736 Prepaid expenses
1,420,656 439,038 Other current assets
265,866 969,624 Total current assets
40,764,010 34,366,515 Property and equipment, net
9,662,401 9,806,188 Goodwill
6,357,453 6,140,465 Intangible assets, net
2,800,495 3,024,245 Operating lease right-of-use assets
5,039,806 5,692,141 Other assets
186,761 237,761 Total assets
$ 64,810,926 $ 59,267,315 Liabilities and stockholders' equity
Current liabilities:
Accounts payable-trade
$ 3,303,090 $ 2,488,396 Line of credit
- 1,700,000 Notes payable
1,241,480 1,065,794 Current operating lease liabilities
1,631,270 1,573,824 Accrued expenses
1,741,794 1,789,366 Customer deposits and other liabilities
2,198,587 1,179,224 Total current liabilities
10,116,221 9,796,604 Notes payable, less current portion
15,350,254 15,970,337 Long-term operating lease liabilities, less current portion
5,222,051 5,873,057 Total liabilities
30,688,526 31,639,998 Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized;
no shares issued and outstanding
- - Common stock, $0.01 par value; 60,000,000 shares authorized;
26,924,631 shares issued and outstanding
269,246 269,246 Additional paid-in capital
40,173,000 40,173,000 Accumulated deficit
(6,319,846 ) (12,814,929 ) Total stockholders' equity
34,122,400 27,627,317 Total liabilities and stockholders' equity
$ 64,810,926 $ 59,267,315
These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on August 3, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.
Envela Corporation Condensed Consolidated Statement of Cash Flows
For the Six Months Ended June 30,
2022 2021 (Unaudited) (Unaudited) Operations
Net income
$ 6,495,083 $ 4,161,384 Adjustments to reconcile net income to net cash provided by operations:
Depreciation, amortization, and other
571,463 421,131 Bad debt expense
25,000 6,249 Changes in operating assets and liabilities:
Trade receivables
1,452,651 (3,365,999 ) Inventories
(3,755,662 ) (2,579,991 ) Prepaid expenses
(981,616 ) (169,373 ) Other assets
754,759 (146,042 ) Accounts payable and accrued expenses
767,122 1,574,520 Operating leases
14,478 20,493 Customer deposits and other liabilities
1,019,363 341,260
Net cash provided by operations
6,362,641 263,632
Investing
Investment in note receivable
- (654,958 ) Purchase of property and equipment
(203,929 ) (484,594 ) Acquisition of CExchange assets and liabilities, net of cash acquired
- 13,136 Adjustment to the purchase price of the Avail Transaction
(216,988 ) -
Net cash used in investing
(420,917 ) (1,126,416 ) Financing
Payments on notes payable, related party
- (144,787 ) Payments on notes payable
(444,396 ) (79,353 ) Payments on line of credit
(1,700,000 ) -
Net cash used in financing
(2,144,396 ) (224,140 )
Net change in cash and cash equivalents
3,797,328 (1,086,924 ) Cash and cash equivalents, beginning of period
10,138,148 9,218,036
Cash and cash equivalents, end of period
$ 13,935,476 $ 8,131,112 Supplemental Disclosures
Cash paid during the period for:
Interest
$ 252,431 $ 359,253 Income taxes
$ 98,000 $ 56,900 Non cash activites:
Acquisition of CExchange assets and liabilities
$ - $ 1,555,892
These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on August 3, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.
SOURCE: Envela Corporation
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