Sales, Earnings Jump at Educational Development

Total revenues at Educational Development Corp. rose 16.5%, to $20.5 million, and net income was up 40.4%, to $1.5 million, for the fiscal year ended February 28. The sales and earnings gains were driven by the company's home business division, which had a 29.4% sales increase, to $13.2 million, and pretax earnings rose 27.3%, to $2.8 million. Revenues in the publishing division inched up 0.1%, to $7.4 million, and pretax earnings were flat at $2.6 million.

The sales increase in the home division was attributed mainly to a 28% increase in the number of "consultants" that sell EDC's Usborne children's products in their homes and at book fairs. EDC had 5,600 consultants at the end of the fiscal year in all 50 states. The slight increase in sales in the publishing division was due to a 4.5% increase in sales to the major chains, which accounted for 29% of publishing division revenues last year. A minor increase in sales to independent stores made by EDC's field sales force was offset by a small decline in sales through its telesales force. The company also opened fewer new accounts, 547 last year compared to 679 in fiscal 2001.

To help support its growth, EDC added five new employees during the year, bringing its full-time staff up to 65. In January, the company bought its headquarters and warehouse facilities for $1.8 million.

For fiscal 2003, EDC is "strongly committed" to increasing its business with the chains and plans aggressive programs in co-op advertising and joint promotions, as well as increased advertising in trade publications. EDC also expects to continue to grow the number of consultants in its home business division and is projecting sales in the division to grow close to the 29% rate achieved last year.

The company is off to a solid start in fiscal '03, with March sales up 13.7% over March 2001, to $2 million, and April sales jumping 31.6%, to $2 million. The home business division has done especially well, with sales up 32% in March and 42% in April. Publishing division sales were up 1.8% for the first two months.