Envela Reports First Quarter 2021 Financial Results
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Envela Reports First Quarter 2021 Financial Results

Wednesday, May 5, 2021 4:00 PM
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Envela Corporation

Quarterly Net Income Up 71% Year-over-Year to $2.0 Million

DALLAS, TX / ACCESSWIRE / May 5, 2021 / Envela Corporation (NYSE American:ELA) ("Envela" or the "Company"), today reported financial results for its first quarter ended March 31, 2021.

Management Commentary

"Envela delivered another period of solid profits in the first quarter of 2021 despite a historic Texas winter freeze and associated power outages that temporarily impacted our operations," said John Loftus, Chairman and CEO of Envela. "Our ability to address these issues expeditiously reflects the Company's operational acumen and business resiliency. Envela's business continues to benefit from several growth drivers, including accelerated sustainability trends and an increasing supply of used electronics. Overall, we remain confident in our ability to drive profitable growth through 2021 and beyond."

First Quarter 2021 Financial Results

Total revenue for the first quarter of 2021 was $25.5 million compared to $25.8 million in the same year-ago period.

Revenue related to continuing operations of the Company's DGSE subsidiary for the first quarter of 2021 was $18.9 million (74% of total revenue), compared to $20.4 million in the same year-ago period. DGSE's resale revenue, including bullion, jewelry, watches, and rare coins, was $17.3 million (92% of DGSE total sales), compared to $18.5 million (91% of DGSE total sales) in the same year-ago period. DGSE's recycled-material sales were $1.6 million (8% of DGSE total sales), compared to $1.8 million (9% of DGSE total sales) in the same year-ago period.

Revenue related to the Company's ECHG subsidiary for the first quarter of 2021 was $6.6 million (26% of total revenue), compared to $5.5 million in the same year-ago period. ECHG's resale revenue was $4.7 million (72% of ECHG total sales), compared to $3.5 million (65% of ECHG total sales) in the same year-ago period. ECHG's recycled-material sales were $1.8 million (28% of ECHG total sales), compared to $1.9 million (35% of ECHG total sales) in the same year-ago period.

Consolidated gross profit for the first quarter of 2021 was $6.3 million, compared to $5.3 million in the same year-ago period.

  • DGSE's gross profit was $2.8 million, compared to $2.4 million in the same year-ago period.
    • DGSE's resale gross profit was $2.5 million, compared to $2.0 million in the same year-ago period.
    • DGSE's recycled-materials gross profit was $0.4 million, compared to $0.3 million in the same year-ago period.
  • ECHG's gross profit was $3.5 million, compared to $2.9 million in the same year-ago period.
    • Resale gross profit was $2.6 million, compared to $1.4 million in the same year-ago period.
    • Recycled-material gross profit was $0.9 million, compared to $1.5 million in the same year-ago period.

Net income for the first quarter of 2021 was $2.0 million, or $0.07 per basic and diluted share, compared to $1.2 million, or $0.04 per basic and diluted share, in the same year-ago period.

About Envela

Envela and its subsidiaries engage in diverse business activities within the recommerce sector. These include recommercializing luxury hard assets, consumer electronics and IT equipment; and end-of-life recycling solutions. Envela assesses its inventory of recommerce purchases for their potential to be refurbished and resold as whole goods, or to be recycled for component parts or precious-metal value. Envela also offers comprehensive recycling solutions for a variety of other companies seeking responsibly to dispose of end-of-life products. Envela operates primarily via two recommerce business segments. Through DGSE, LLC the Company recommercializes luxury hard assets via Dallas Gold and Silver Exchange, Charleston Gold & Diamond Exchange, and Bullion Express brands (collectively, "DGSE"). Through ECHG, LLC, the Company operates Echo Environmental Holdings, ITAD USA Holdings, and Teladvance (collectively, "ECHG"), which recommercialize primarily consumer electronics and IT equipment, and provide end-of-life recycling services for various companies across many industries. Envela conducts its recommerce operations at retail and wholesale levels, through distributors, resellers, dedicated stores and online. The Company also owns and operates other businesses and brands engaged in a variety of activities, as identified herein. Envela is a Nevada corporation, headquartered in Dallas, Texas.

Additional information about Envela is available at its investor-relations site, Envela.com.

Forward-Looking Statements

This press release includes statements that may constitute "forward-looking" statements, including statements regarding the potential future success of the Company, its 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:

Matt Glover and John Yi
Gateway Investor Relations

1-949-574-3860

[email protected]

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 
  (Unaudited)     (Unaudited)  
Three Months Ended March 31,
  2021     2020  
Revenue:
           
Sales
  $ 25,490,441     $ 25,829,143  
Cost of goods sold
    19,186,177       20,527,863  
 
               
Gross margin
    6,304,264       5,301,280  
 
               
Expenses:
               
Selling, General & Administrative Expenses
    4,153,229       3,825,200  
Depreciation and Amortization
    204,912       179,729  
 
               
Total operating expenses
    4,358,141       4,004,929  
 
               
Operating income
    1,946,123       1,296,351  
Other income, net
    271,941       41,690  
Interest expense
    179,022       145,315  
 
               
Income before income taxes
    2,039,042       1,192,726  
Income tax expense
    30,770       18,577  
 
               
Net income
  $ 2,008,272     $ 1,174,149  
 
               
Basic earnings per share:
               
Net income
  $ 0.07     $ 0.04  
 
               
Diluted earnings per share:
               
Net income
  $ 0.07     $ 0.04  
 
               
Weighted average shares outstanding:
               
Basic
    26,924,631       26,924,381  
Diluted
    26,939,631       26,939,631  

The accompanying notes to the 10-Q filed with the SEC on May 5, 2021, are an integral part of these condensed consolidated financial statements.

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 
  March 31,     December 31,  
 
  2021     2020  
Assets
  (unaudited)        
Current assets:
           
Cash and cash equivalents
  8,396,997     9,218,036  
Trade receivables, net of allowances
    3,184,473       2,846,619  
Notes receivable
    123,472       -  
Inventories
    11,630,383       10,006,897  
Current right-of-use assets from operating leases
    1,057,511       1,157,077  
Prepaid expenses
    858,299       281,719  
 
               
Total current assets
    25,251,135       23,510,348  
Notes receivable, less current portion
    2,100,000       2,100,000  
Property and equipment, net
    6,984,653       6,888,601  
Goodwill
    1,367,109       1,367,109  
Intangible assets, net
    2,892,073       2,992,473  
Operating lease right-of-use assets
    3,344,732       3,522,923  
Other long-term assets
    297,638       197,638  
 
               
Total assets
  42,237,340     40,579,092  
 
               
Liabilities and stockholders' equity
               
Current liabilities:
               
Accounts payable-Trade
  1,192,454     1,510,697  
Notes payable, related party
    311,067       307,032  
Notes payable
    1,825,487       1,813,425  
Current operating lease liabilities
    1,054,599       1,148,309  
Accrued expenses
    922,159       844,324  
Customer deposits and other liabilities
    689,592       428,976  
 
               
Total current liabilities
    5,995,358       6,052,763  
Notes payable, related party, less current portion
    8,976,922       9,052,810  
Notes payable, less current portion
    4,188,357       4,240,658  
Long-term operating lease liabilities, less current portion
    3,489,989       3,654,419  
 
               
Total liabilities
    22,650,626       23,000,650  
 
               
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
    (20,855,532 )     (22,863,804 )
 
               
Total stockholders' equity
    19,586,714       17,578,442  
 
               
Total liabilities and stockholders' equity
  42,237,340     40,579,092  

The accompanying notes to the 10-Q filed with the SEC on May 5, 2021, are an integral part of these condensed consolidated financial statements.

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,
  2021     2020  
 
  (Unaudited)     (Unaudited)  
Operations
           
Net income
  2,008,272     1,174,149  
             
Depreciation, amortization, and other
    204,912       179,729  
Bad debt expense
    6,249       -  
Changes in operating assets and liabilities:
               
Trade receivables
    (344,103 )     525,519  
Inventories
    (1,623,485 )     111,931  
Prepaid expenses
    (576,578 )     (163,312 )
Other assets
    (100,000 )     5,120  
Accounts payable and accrued expenses
    (240,410 )     (647,804 )
Operating leases
    19,616       (34,907 )
Customer deposits and other liabilities
    260,615       (118,710 )
 
               
Net cash provided by (used in) operations
    (384,912 )     1,031,715  
 
               
Investing
               
Investment in note receivable
    (123,472 )     (1,500,000 )
Purchase of property and equipment
    (200,563 )     (29,046 )
 
               
Net cash used in investing
    (324,035 )     (1,529,046 )
 
               
Financing
               
Payments on notes payable, related party
    (71,853 )     (69,404 )
Payments on notes payable
    (40,239 )     -  
 
               
Net cash used in financing
    (112,092 )     (69,404 )
 
               
Net change in cash and cash equivalents
    (821,039 )     (566,735 )
Cash and cash equivalents, beginning of period
    9,218,036       4,510,660  
 
               
Cash and cash equivalents, end of period
  8,396,997     3,943,925  
 
               
Supplemental Disclosures
               
Cash paid during the period for:
               
Interest
  179,082     121,718  
Income taxes
  -     -  

The accompanying notes to the 10-Q filed with the SEC on May 5, 2021, are an integral part of these condensed consolidated financial statements.

SOURCE: Envela Corporation

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