Educational book publisher distributor Educational Development Corp. (EDC) saw its rapid revenue growth continue in the second quarter of fiscal 2017, but had an earnings decline due to increased investment to meet demand for its product. Sales in the quarter jumped 105%, to $25.9 million, over the comparable period in fiscal 2016, while earnings fell to $318,00, from $644,400 a year ago.
EDC chairman Randall White attributed the decline in profit to $4.2 million in investments made in new software and distribution systems, which he expects will yield long-term costs savings.
The investment also allowed EDC to triple the number of daily shipments the company can process. EDC acknowledged that it recently had difficulty meeting demand, and that it was taking four to six weeks to fulfill orders. To reduce fulfillment time, EDC increased its workforce, which cut delivery time to seven to 10 days, but resulted in higher labor costs.
Despite the challenges tied to accommodating its growth, revenue in its home business division, Usborne Books & More, increased 163% over the same quarter last year. At the end of the quarter, UBAM had just under 26,000 sales associates, compared to 10,000 at the end of August 2015.
With sales continuing to run at record monthly levels—EDC said September 2016 sales of $10.2 million were $4.1 million higher than September 2015—it still expects to have revenue of $120 million to $140 million for the full year compared to sales of $63.6 million in fiscal 2016. Earnings per share are projected to be between $1.00 to $1.10.
