Envela Reports Second Quarter 2021 Financial Results
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Envela Reports Second Quarter 2021 Financial Results

Wednesday, August 4, 2021 4:00 PM
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Quarterly Net Income Up 280% Year-over-Year to $2.2 Million

DALLAS, TX / ACCESSWIRE / August 4, 2021 / Envela Corporation (NYSE American:ELA) ("Envela" or the "Company"), today reported financial results for its second quarter ended June 30, 2021.

Management Commentary
"We concluded the second quarter with solid top-line and bottom-line results across both the ECHG and DGSE segments of our business thanks to our team's ability to execute," said John Loftus, Chairman and CEO of Envela. "In parallel to our organic growth strategy, we also plan to expand through our active M&A approach, especially within ECHG, as we intend to acquire accretive businesses that are additive to our value proposition. Moreover, we are focused on further enhancing our broader ESG initiatives across all fronts of our business and are committed to being an organization that gives investors the opportunity to invest in a sustainable and socially responsible company. As we enter into the final few months of the year, we are confident that our current growth strategies for both segments of the business will materialize into encouraging financial results for Envela."

Second Quarter 2021 Financial Results
Total revenue for the second quarter of 2021 was $33.7 million compared to $20.5 million in the same year-ago period.

Revenue related to continuing operations of the Company's DGSE subsidiary for the second quarter of 2021 was $23.0 million (68% of total revenue), compared to $14.3 million (70% of total revenue) in the same year-ago period. DGSE's resale revenue, including bullion, jewelry, watches, and rare coins, was $20.9 million (91% of DGSE total sales), compared to $13.4 million (94% of DGSE total sales) in the same year-ago period. DGSE's recycled-material sales were $2.1 million (9% of DGSE total sales), compared to $927,000 (6% of DGSE total sales) in the same year-ago period.

Revenue related to the Company's ECHG subsidiary for the second quarter of 2021 was $10.7 million (32% of total revenue), compared to $6.2 million (30% of total revenue) in the same year-ago period. ECHG's resale revenue was $8.6 million (80% of ECHG total sales), compared to $4.3 million (69% of ECHG total sales) in the same year-ago period. ECHG's recycled-material sales were $2.1 million (20% of ECHG total sales), compared to $1.9 million (31% of ECHG total sales) in the same year-ago period.

Consolidated gross profit for the second quarter of 2021 was $7.1 million, compared to $4.5 million in the same year-ago period.

  • DGSE's gross profit was $3.1 million, compared to $1.6 million in the same year-ago period.
    • DGSE's resale gross profit was $2.7 million, compared to $1.4 million in the same year-ago period.
    • DGSE's recycled-materials gross profit was $418,000, compared to $170,000 in the same year-ago period.
  • ECHG's gross profit was $4.0 million, compared to $2.9 million in the same year-ago period.
    • Resale gross profit was $3.0 million, compared to $2.0 million in the same year-ago period.
    • Recycled-material gross profit was $1.0 million, compared to $834,000 in the same year-ago period.

Net income for the second quarter of 2021 was $2.2 million, or $0.08 per basic and diluted share, compared to $566,000, or $0.02 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


 
 Three Months Ended June 30,  Six Months Ended June 30, 
(Unaudited)
 2021  2020  2021  2020 
Revenue:                
Sales
 $33,724,006  $20,545,607  $59,214,447  $46,374,750 
Cost of goods sold
  26,596,116   16,074,349   45,782,293   36,602,212 
Gross margin
  7,127,890   4,471,258   13,432,154   9,772,538 
 
                
Expenses:
                
Selling, General & Administrative Expenses
  4,831,225   3,616,670   8,984,454   7,441,870 
Depreciation and Amortization
  216,219   179,706   421,131   359,435 
 
                
Total operating expenses
  5,047,444   3,796,376   9,405,585   7,801,305 
 
                
Operating income
  2,080,446   674,882   4,026,569   1,971,233 
Other income, net
  283,055   51,866   554,996   93,556 
Interest expense
  177,704   144,297   356,726   289,612 
 
                
Income before income taxes
  2,185,797   582,451   4,224,839   1,775,177 
Income tax expense
  32,685   16,277   63,455   34,854 
 
                
Net income
 $2,153,112  $566,174  $4,161,384  $1,740,323 
                 
Basic earnings per share:
                
Net income
 $0.08  $0.02  $0.15  $0.06 
Diluted earnings per share:
                
Net income
 $0.08  $0.02  $0.15  $0.06 
                 
Weighted average shares outstanding:
                
Basic
  26,924,631   26,924,381   26,924,631   26,924,381 
Diluted
  26,939,631   26,924,381   26,939,631   26,924,381 
 
                

ENVELA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

  June 30,  December 31, 
  2021  2020 
  (unaudited)    
Assets        
Current assets:        
Cash and cash equivalents
 $8,131,112  $9,218,036 
Trade receivables, net of allowances
  6,244,445   2,846,619 
Notes receivable
  1,254,958   - 
Inventories
  12,586,889   10,006,897 
Current right-of-use assets from operating leases
  962,907   1,157,077 
Prepaid expenses
  453,688   281,719 
 
        
Total current assets
  29,633,999   23,510,348 
Notes receivable, less current portion
  -   2,100,000 
Property and equipment, net
  7,183,559   6,888,601 
Goodwill
  3,258,586   1,367,109 
Intangible assets, net
  2,791,673   2,992,473 
Operating lease right-of-use assets
  3,124,608   3,522,923 
Other long-term assets
  343,680   197,638 
 
        
Total assets
 $46,336,105  $40,579,092 
 
        
Liabilities and stockholders' equity
        
Current liabilities:
        
Accounts payable-Trade
 $3,612,320  $1,510,697 
Notes payable, related party
  315,672   307,032 
Notes payable
  1,832,646   1,813,425 
Current operating lease liabilities
  961,873   1,148,309 
Accrued expenses
  793,202   844,324 
Customer deposits and other liabilities
  770,236   428,976 
 
        
Total current liabilities
  8,285,949   6,052,763 
Notes payable, related party, less current portion
  8,899,383   9,052,810 
Notes payable, less current portion
  4,142,084   4,240,658 
Long-term operating lease liabilities, less current portion
  3,268,863   3,654,419 
 
        
Total liabilities
  24,596,279   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
  (18,702,420)  (22,863,804)
 
        
Total stockholders' equity
  21,739,826   17,578,442 
 
        
Total liabilities and stockholders' equity
 $46,336,105  $40,579,092 
 
        

ENVELA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,
2021  2020 
 (Unaudited)  (Unaudited) 
Operations       
Net income
4,161,384  1,740,323 
Adjustments to reconcile net income to net cash provided by operations:
       
Depreciation, amortization, and other
 421,131   359,435 
Bad debt expense
 6,249   - 
Changes in operating assets and liabilities:
       
Trade receivables
 (3,365,999)  140,228 
Inventories
 (2,579,991)  145,381 
Prepaid expenses
 (169,373)  (1,269,517)
Other assets
 (146,042)  (95,695)
Accounts payable and accrued expenses
 1,574,520   (831,398)
Operating leases
 20,493   (16,782)
Customer deposits and other liabilities
 341,260   369,511 
 
       
Net cash provided by operations
 263,632   541,486 
 
       
 
       
Investing
       
Investment in note receivable
 (654,958)  (1,500,000)
Purchase of property and equipment
 (484,594)  (29,046)
Acquisition of CExchange assets and liabilities, net of cash acquired
 13,136   - 
 
       
Net cash used in investing
 (1,126,416)  (1,529,046)
 
       
Financing
       
Payments on notes payable, related party
 (144,787)  (138,683)
Payments on notes payable
 (79,353)  - 
Proceeds from Paycheck Protection Program Note
 -   1,668,200 
 
       
Net cash provided by (used in) financing
 (224,140)  1,529,517 
        
Net change in cash and cash equivalents
 (1,086,924)  541,957 
Cash and cash equivalents, beginning of period
 9,218,036   4,510,660 
 
       
Cash and cash equivalents, end of period
8,131,112  5,052,617 
        
Supplemental Disclosures
       
Cash paid during the period for:
       
Interest
359,253  291,845 
Income taxes
56,900  - 
        
Non cash activities:
       
Acquisition of CExchange assets and liabilities
1,555,892  - 
        

SOURCE: Envela Corporation

Envela Corporation
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