Despite posting record revenues and a 35% increase in net earnings in the fiscal year ended February 28, Educational Development Corp. had a tough year. In a conference call with analysts, chairman and CEO Randal White acknowledged that his company faced numerous challenges. Although EDC had $106 million in revenue, marking a 68% increase over the same period a year ago, it did not meet estimates, or keep up with customer demand.

To accommodate its rapid growth, in mid 2016 EDC installed a number of new software systems aimed at keeping up with the higher order flow. But, as White told analysts, only three of the four upgrades worked. "That's not too bad, I guess. I wish the fourth had worked a little better."

The failure of the system upgrade led to long delays in shipping times which in turn drove hundreds of EDC's home sales reps, who sell EDC's titles through party planning and other initiatives,to quit. The shipping delays loss of reps was complicated by an inflated revenue prediction from White, who said he thought revenue in the year could reach $150 million.

Failure to reach the $150 million level, problems with the system upgrade, and concerns about EDC's ability to finance its expansion, prompted several analysts to issue negative reports on the company despite its rapid growth. The negative reports contributed to a steep drop in EDC's stock price. However, its shares rebounded May 31 after the company posted final results for fiscal 2017. EDC's shares rose from $7.05 per share May 30 to $9.85 May 31, and hit $10.05 June 1.

The rebound in the stock price nothwithstanding, White acknowledged that he made some mistakes last year and that the company continues to work on improving its operating systems and recruiting new sales reps. To help improve its internal controls, EDC hired Dan O'Keefe as its new CFO earlier this year.

White assured analysts that the company is back on track. Improvements made to its systems has eliminated all backlogs. Sales recruitment has also gone well, according to White; the company finished fiscal 2017 with 28,500 home sales reps and has recruited 4,200 more over the last 60 days.

While White declined to say how he thought EDC will perform in the current fiscal year, he expressed optimism. "This is our year guys," White told analysts, noting that many positive things are happening at the company,and added that "with Rick our controller and Dan our CFO we actually can report it correctly. And were very excited about the results we are having."