Envela Reports First Quarter 2022 Financial Results
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Envela Reports First Quarter 2022 Financial Results

Wednesday, May 11, 2022 4:00 PM
Envela Corporation
Topic:
Earnings

Quarterly Net Income Up 32% Year-over-Year to $2.65 Million

DALLAS, TX / ACCESSWIRE / May 11, 2022 / Envela Corporation (NYSE American:ELA) ("Envela" or the "Company"), the North American re-commerce leader, today reported financial results for its first quarter ended March 31, 2022.

Management Commentary

"The Company's robust first-quarter performance affirms our strategic decision to expand and diversify within the re-commerce space. The momentum we saw throughout 2021 continued to build in the first quarter of 2022, with both revenue and bottom line exceeding our expectations," said John Loftus, Chairman and CEO of Envela. "Against this backdrop, we plan to proceed with our proven approach-investing in our businesses and employees to build sustainable long-term value."

Envela Corporation, Wednesday, May 11, 2022, Press release picture

First Quarter 2021 Financial Results

Total revenue for the first quarter of 2022 was $47.4 million compared to $25.5 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 $35.8 million (75.5% of total revenue), compared to $18.9 million in the same year-ago period. DGSE's resale revenue, including bullion, jewelry, watches, and rare coins, was $33.7 million (94% of DGSE total sales), compared to $17.3 million (92% of DGSE total sales) in the same year-ago period. DGSE's recycled-material sales were $2.1 million (6% of DGSE total sales), compared to $1.6 million (8% 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 $11.6 million (24.5% of total revenue), compared to $6.6 million in the same year-ago period. ECHG's resale revenue was $9.6 million (82% of ECHG total sales), compared to $4.7 million (72% of ECHG total sales) in the same year-ago period. ECHG's recycled-material sales were $2.1 million (18% of ECHG total sales), compared to $1.9 million (28% of ECHG total sales) in the same year-ago period.

Consolidated gross profit for the first quarter of 2022 was $9.7 million, compared to $6.3 million in the same year-ago period.

  • DGSE's gross profit was $4.2 million, compared to $2.8 million in the same year-ago period.
    • DGSE's resale gross profit was $3.7 million, compared to $2.5 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 $5.5 million, compared to $3.5 million in the same year-ago period.
    • Resale gross profit was $4.6 million, compared to $2.6 million in the same year-ago period.
    • Recycled-material gross profit was $0.9 million, compared to $0.9 million in the same year-ago period.

Net income for the first quarter of 2022 was $2.65 million, or $0.10 per basic and diluted share, compared to $2.0 million, or $0.07 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.

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 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 75038
[email protected]

Envela Corporation
Condensed Consolidated Statements of Operations

(Unaudited) (Unaudited)
Three Months Ended March 31,
2022 2021
Revenue:
Sales
$47,415,098 $25,490,441
Cost of goods sold
37,704,064 19,186,177
Gross margin
9,711,034 6,304,264
Expenses:
Selling, General & Administrative Expenses
6,559,755 4,153,229
Depreciation and Amortization
291,947 204,912
Total operating expenses
6,851,702 4,358,141
Operating income
2,859,332 1,946,123
Other income (expense), net
(58,576) 271,941
Interest expense
123,239 179,022
Income before income taxes
2,677,517 2,039,042
Income tax expense
30,292 30,770
Net income
$2,647,225 $2,008,272
Basic earnings per share:
Net income
$0.10 $0.07
Diluted earnings per share:
Net income
$0.10 $0.07
Weighted average shares outstanding:
Basic
26,924,631 26,924,381
Diluted
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 May 11, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.

Envela Corporation
Condensed Consolidated Balance Sheets

March 31, December 31,
2022 2021
Assets
(unaudited)
Current assets:
Cash and cash equivalents
$11,497,259 $10,138,148
Trade receivables, net of allowances
5,357,137 7,166,533
Inventories
14,621,575 14,048,436
Current right-of-use assets from operating leases
1,609,077 1,604,736
Prepaid expenses
612,475 439,038
Other current assets
1,765,355 969,624
Total current assets
35,462,878 34,366,515
Property and equipment, net
9,719,499 9,806,188
Goodwill
6,140,465 6,140,465
Intangible assets, net
2,912,370 3,024,245
Operating lease right-of-use assets
5,286,770 5,692,141
Other assets
236,761 237,761
Total assets
$59,758,743 $59,267,315
Liabilities and stockholders' equity
Current liabilities:
Accounts payable-trade
$2,857,674 $2,488,396
Line of credit
- 1,700,000
Notes payable
1,003,592 1,065,794
Current operating lease liabilities
1,584,169 1,573,824
Accrued expenses
1,501,178 1,789,366
Customer deposits and other liabilities
1,244,193 1,179,224
Total current liabilities
8,190,806 9,796,604
Notes payable, less current portion
15,826,264 15,970,337
Long-term operating lease liabilities, less current portion
5,467,131 5,873,057
Total liabilities
29,484,201 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
(10,167,704) (12,814,929)
Total stockholders' equity
30,274,542 27,627,317
Total liabilities and stockholders' equity
$59,758,743 $59,267,315

These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on May 11, 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 Three Months Ended March 31,
2022 2021
(Unaudited) (Unaudited)
Operations
Net income
$2,647,225 $2,008,272
Adjustments to reconcile net income to net cash provided by (used in) operations:
Depreciation, amortization, and other
291,947 204,912
Bad debt expense
- 6,249
Changes in operating assets and liabilities:
Trade receivables
1,809,397 (344,103)
Inventories
(573,139) (1,623,485)
Prepaid expenses
(173,436) (576,578)
Other assets
(794,731) (100,000)
Accounts payable and accrued expenses
81,088 (240,410)
Operating leases
5,449 19,616
Customer deposits and other liabilities
64,969 260,615
Net cash provided by (used in) operations
3,358,769 (384,912)
Investing
Investment in note receivable
- (123,472)
Purchase of property and equipment
(93,384) (200,563)
Net cash used in investing
(93,384) (324,035)
Financing
Payments on notes payable, related party
- (71,853)
Payments on notes payable
(206,274) (40,239)
Payments on line of credit
(1,700,000) -
Net cash used in financing
(1,906,274) (112,092)
Net change in cash and cash equivalents
1,359,111 (821,039)
Cash and cash equivalents, beginning of period
10,138,148 9,218,036
Cash and cash equivalents, end of period
$11,497,259 $8,396,997
Supplemental Disclosures
Cash paid during the period for:
Interest
$129,989 $179,082
Income taxes
$- $-

These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on May 11, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.

SOURCE: Envela Corporation

Topic:
Earnings
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