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Edited Transcript of EDUC earnings conference call or presentation 15-Jan-19 9:00pm GMT

Q3 2019 Educational Development Corp Earnings Call

Tulsa Jan 19, 2019 (Thomson StreetEvents) -- Edited Transcript of Educational Development Corp earnings conference call or presentation Tuesday, January 15, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Craig M. White

Educational Development Corporation - COO

* Dan E. O’Keefe

Educational Development Corporation - Corporate Secretary & CFO

* Heather N. Cobb

Educational Development Corporation - Chief Sales and Marketing Officer

* Randall W. White

Educational Development Corporation - Chairman, President, Treasurer & CEO

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Conference Call Participants

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* Denis James Amato

Ancora Advisors, LLC - MD of Microcap Equities and Portfolio Manager

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Educational Development Corporation Third Quarter 2019 Results Call. (Operator Instructions) As a reminder, today's call is being recorded.

I would now like to turn the call over to Randall White. Sir, you may begin.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [2]

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Thanks, Sidney. Welcome to our earnings call, guys. We have in the room with us today to assist, if we need any further information, we've got Heather Cobb, who's our Chief Sales and Marketing Officer; Craig White, Chief Operating Officer; and Dan O'Keefe, which is our Chief Financial Officer. So I think as usual, we'll start off with Dan, giving a little overview of the earnings results.

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [3]

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Great. Thank you, Randall. For the earnings results for the quarter, net revenues grew $1,572,700 or 4% from $38,909,900 reported in the third quarter of fiscal 2018 to $40,482,600 reported in the third quarter of fiscal 2019.

Earnings before income taxes grew approximately 10.8% from $3,432,800 in the third quarter of fiscal 2018 to $3,804,200 in the third quarter of fiscal 2019.

Earnings after taxes grew approximately $687,200 or 32.3% from $2,128,400 to $2,815,600 over the common third quarter periods.

Earnings per share on a fully diluted basis increased $0.08 a share or 30% from $0.26 a share reported in the third quarter of fiscal year 2018 to $0.34 per share reported in the third quarter of fiscal 2019. This concludes the earnings results reported for the quarter, and so I'll turn the call back over to Randall.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [4]

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Dan, thanks. Well, revenue growth of 4% certainly didn't meet our expectations, but it is still the largest quarter in our history. And for those who've been around a while, that was more than our entire revenue in 2015, which is couple of years ago. But again, didn't meet our internal expectations, we thought we would go more than that. Our consultant count had a little decrease from quarter 3 of last year and did not grow as we had expected and planned. I guess there's a good side, if there is, that, even though the headcount's down, the revenue's up, so this reflects that active consultants sold more, made more in commissions and were more successful. So along with other change in the organization, it makes us continue to believe that our consultant count will return to growth in the future. We certainly think that's going to be the case.

Also, we're having an uptick in the Publishing Division. I think I told you on the last call that we've got a change in management there and the first trip we've made to a major retail account, we booked sales in that one meeting more than we had in the entire year last year and that's continues. So we're going to see a very nice increase during the year in the retail section of the business. So -- but that's small. That's right around $10 million. So if we grew at 20%, it's just a couple of million, so our growth -- we really want to grow from the UBAM division, and that's what we're expecting.

We also -- again, we made improvements in our bottom line and that's always good. Our pretax profits are going to grow faster than revenue, maybe. We've got some good ideas coming up in the future months. We've had some issues on growth and some challenges that we've identified, and we think that we can address these and help real estate grow. And we also have a pretty nice new program that will be developed here in the next few months that should have growth continue.

So if you'd like, I could take questions now. I can go into more of what you think that will boost our growth. So why don't you ask me something, if you want to know, instead of me just rambling on here?

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [5]

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So Sidney, we'll open the earnings call up to some questions from the participants, if we can.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of [Sam Degreen.]

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Unidentified Analyst, [2]

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So last summer, largest external shareholder of the company submitted a books and record request, what is the status of that?

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [3]

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Well, there is not an ongoing status for that request. So...

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Unidentified Analyst, [4]

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Okay. So that has been taken care of?

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [5]

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Yes, it's not an open issue at this time.

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Unidentified Analyst, [6]

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Okay. Can you fill us in a little bit more? Is that something you'd be able to do?

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [7]

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Well, certainly we can -- and by the way this is Dan, so I'm answering this question for Randall. But books and record request becomes a discussion of legal and what is -- should we properly disclose and what we should not disclose as a company, and so we followed our guidance from our attorneys and responded accordingly, and we've not really heard any additional request for additional information at this time.

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Unidentified Analyst, [8]

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Okay. Now that the growth -- that the company's growth has stalled, Mr. White, you're getting close to 80 years old, about -- when will the board retain an investment bank and pursue all strategic alternatives for the company, if it hasn't already?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [9]

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Haven't really thought about that. Yes, I'm becoming an old guy, been around a long time, know a lot about the business and have a really strong team here now, strongest we've ever had. I feel better about the organization than I ever had. Literally, a few years ago, I felt like I had this place on my back and had to do everything and that's not the case anymore. We've made significant improvement in all areas, we've -- not the growth of the business and just recently, but stalled is a temporary basis. I think, I like -- you can use word stall and say it stopped, because it hasn't stopped. It stalled, but not looking from an investment bank to come in and do the evaluation. We are -- we'll have an orderly change of leadership at some point in time. We're addressing that internally, so not interested right now in having investment bank come in. We're not a company that is in trouble in any way, we have record profits. We're in the best position ever in cash. So I don't know why I would -- why we would bring in an investment bank. But if you have another question about that, I'll be happy to try to answer it, but never thought about that.

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Unidentified Analyst, [10]

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Sure. Well I'd -- last question, what initiatives have been put in place to re-accelerate UBAM consultant growth? And when do you expect this to be reflected in your active consultant count?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [11]

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Well, we recently had -- well, recent, last weekend, we had 118 of our top people across the nation come to a holiday seminar, 3-day seminar in Dallas. And we -- at that point, we had really good discussions with our field sales force and the leaders and it reinforced what we were doing. We -- there's things that impacted our sales that we know about and have not much to do with us, but we're addressing those. Things this -- small things happen to you in the industry. In the past year, Facebook has been a little bit -- squirrelly is not a very professional sounding word, but they change their rules a lot. And what that does is cause our field sales force to adjust what they're doing. We have a lot of growth that's coming through internet, Facebook parties, and we may change the rules. The girls have to -- women have to -- excuse me, women have to find a way to adjust their business to meet Facebook's format, and we're doing that. So it's kind of technical thing, and -- but we feel like that's happening. I actually was talking to them and said, I kind of feel bad that I feel like we were responsible for the sales growth to stall a bit because of our shipping 2 years ago, issues. I know a guy who says get over that, that wasn't the case. There's other factors that are involved, and so that was reassuring. But there's things like this is considered by some people to be part-time. Now we have people who make over $200,000 and make over $100,000, that doesn't sound part-time to me, but a lot of people look at this as part-time income. And one of the things you face is, we have the lowest unemployment since 1950. We now have people who -- by the way, selling isn't for everybody, we think we have the easiest sale in the industry because it's most value-priced product in the industry. But we're also facing competition from Uber drivers. You can log on and make $20, you can go back home, if you want to. And so some people who do not think they're salesman, there's just other competition for people who join our organization. So these are the things that -- some of the things that we're addressing and why we think that sales has stalled a bit. But again, the ladies this weekend reassured us that the plans we have going forward are what are going to get us back on the growth mode. I could tell you a couple of them. We've -- I've asked them the last time, but it takes a long time for it to go into effect. And one of them is, we had on planning about 200 titles in Spanish that are being added to our product line. Now we don't expect that to be big in retail market.

The big retailers like Barnes & Noble, Books-A-Million and what have you, they don't think that's a major market. What will impact us is, we go into schools, they want Spanish titles. So by having these additional titles, we think it will allow us to get book more book fairs in schools, which will, of course, increase revenue. Another thing is, we've changed out the leadership in the school and library, and it's been revamped to meet new requirements that are in schools. You just can't walk in the school anymore, so we've had to revamp that. And now to become a school rep, to represent us in a school, you have to go through a training program, including background check and it costs $150. So they have to invest in the business, just to be able to go into schools. But that's today's market. You can't, obviously, you just can't go into a school. So we think that is now in place. And this coming year, with the Spanish titles that we can see a significant increase. The -- our lady that we hired in that division's very interesting, she's been a store manager for Barnes & Noble and knows the market because she had been a consumer...

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [12]

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Community Business Development Manager.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [13]

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Yes, Community Business Development Manager, which means she went out in the community, and she gave us a little startling statistic that Barnes & Noble in Oklahoma last year did $1 million in book fairs. Now what's remarkable about that is, they got the worst book fair program in the world. The school gets 5% and all you do is, you go in and buy a book in Barnes & Noble, they keep track of it and give the school 5%. Oh my gosh, I don't know how they ever book a book fair, but they do, and that was shocking. So that gives you an idea of what we think that market can be. Because we give schoolbooks with us, if they buy -- if parents buy $2,000 a year, they get $1,000 free, so it's a 50% match. So we think a new direction there will really help. And again, there's low hanging fruit in the Publishing Division. We're seeing nice growth from our largest customer in that area. So that's where we think that the things that we're doing that will benefit us in the future months will be in this -- some in the next quarter, and then on the quarters going ahead.

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Operator [14]

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Our following question comes from Denis Amato.

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Denis James Amato, Ancora Advisors, LLC - MD of Microcap Equities and Portfolio Manager [15]

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Just a follow-up on the consultant count. I know in the past, a lot of direct-selling companies have indicated that a strong economy can be a headwind in acquiring people, because they find either other jobs or full-time when they were working part-time, et cetera. What portion of your headwind do you see, maybe, being attributable to the strong employment economy at the moment?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [16]

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Well, Denis, I'll tell you. I've been here a long time, as somebody mentioned there a while ago. But here's an interesting thing about that, a bad economy can work for you because more people need part-time income. A good economy can work for you because more people have spendable income. And the product we have, which is early childhood literacy, we just think it's a strong market. So it is a headwind, and we think, because of the low unemployment that people have a lot of alternatives now. So it's a headwind, it's not going to keep us, it's not anything we can't overcome. We're pretty upbeat on where we're headed in the next few months, but that's an excellent question. But -- and again, I've been here through several trends, and we see one helps us and -- but it can be helped in another way, too. But that's a good questions. Thanks.

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Unidentified Analyst, [17]

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The part that helps you, shouldn't that show up in better productivity per consultant? If there -- if it's an easier selling environment?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [18]

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Well, that's what happened in the third quarter. We had less people selling more and making more. And the more they make, the more people they tell about it. And this is unusual business, it's the only business in the world where somebody comes up and asks you how much you make? I doubt you've had anybody ask you that lately. But they say, well, how much money you make? And then the more they make. And again, we had 12 people, I think, last year earned over $100,000 working around their family schedule from home, that's pretty enticing business. But most people never think they can do that. So we have a meeting, like this weekend, and we show them how. And the ladies -- well, I could never be her. I said, well, listen, Susie, you don't have to be her, you have to be yourself. But she's already gone ahead and shown you the way, and what you had to do is listen to her and follow her footprints in the snow. It's already -- the program is already successful, you just have to follow. And it's building confidence among the sales force, often times many have never been in a sales position before, don't think they are now, they're just sharing books with their friends who have children. So I -- yes, I think that we're going to do very well in the environment we're in.

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Operator [19]

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(Operator Instructions) And our next question comes from [Andrew Barkley,] he's a private investor.

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Unidentified Participant, [20]

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It sounds like there's some excitement around the Spanish language titles. I wonder if there's a similar interest, and focusing on building out a Spanish-speaking consulting force?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [21]

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Well, there is and that takes a little investment in materials to publish them in Spanish. But yes, we think that there's some market there. There's a market there that people who want them, so we're trying to look ahead. We have people on staff that can translate into Spanish, so that's a project. By the way, it's not our #1, we have other projects that are very important right now, but that's one that we'll get around to, and I think there's a market to recruit Spanish-speaking people as consultants.

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Unidentified Participant, [22]

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Great. And you've got hires in place to do that?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [23]

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Hires in place, is that what you said?

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Unidentified Participant, [24]

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Do you have the people on board with the training to build a Spanish-speaking sales group? Or are you planning to hire people with that background?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [25]

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Well, we have Spanish-speaking people and the program's already in place, so I think the answer to that's, yes, but have we done it, rolled it out, no. But yes, we're capable of doing it in-house in the upcoming months. But we do have requests for it, by the way. We have people of all kinds. There was a woman at the leadership conference, and when I tell you, there was a 118 people, that's the top of out of 30,000. There was a lady who is crippled. She's only had to use -- if you see her hands, she only had a couple of fingers. But the fact that she can do everything online, she was in that leadership group in Texas with severe disabilities. Very proud of that, actually, that there's no exact model of who's successful in the business, so we think some Spanish people can. We have people of other color and that are successful. So we think this program has ability to fit to about anybody who will apply themselves.

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Unidentified Participant, [26]

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Got it. I ask because, there's -- it doesn't seem like there's a -- currently a Spanish version of the consultant hub online, and it seems like that would be low-hanging fruit for bringing in more Spanish people to the team [besides you’re coming up online].

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [27]

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Yes, we don't have, and you're right, that would be one of the first steps. You're right.

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Unidentified Participant, [28]

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Is that the first step that's planned?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [29]

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We don't have a plan. I can tell you, it's going to happen in the next quarter.

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [30]

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I think to further Randall's earlier point, the number one -- so the feedback that we're getting, we've got all of our consultants in the field, 30,000-plus consultants in the field are giving us a feedback. And the number one thing that they're asking -- and several of them, well, not several, just like a demographic of the population, significant percentage of them are bilingual and speak Spanish. And the number one thing that we've heard from them is bring titles to us, so that we can offer these titles. And because they are, sometimes, being turned down from book fairs and being turned down by schools, because we don't offer products in both languages. And so we -- our number one benefit, we see or target that we're going to after is to be able to offer Spanish books to book fair opportunities that will open schools that will bring our consultants in front of additional parents, which create new recruiting opportunities. So increase sales and increase recruiting opportunities through book fairs is the initial target. But where it goes from there, as Randall was saying, is it will -- that initial target will not be the final destination. We will then take that further with bilingual consultant materials. And I don't know if we've necessarily heard the request, and Craig's in here as well, heard a request from many consultants for just a Spanish website by itself. I'm not sure that's been anything that we've heard, Craig?

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Craig M. White, Educational Development Corporation - COO [31]

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Yes, there hasn't been a request at this point, but like Randall [White] said they're selling products, [and we] can take it from there.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [32]

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I think Dan made a point, I'm not sure he meant to, but we have a lot of bilingual people and again, their request is to get Spanish books, and we can address the market that way. I certainly agree that we had more Spanish-only speaking, that would increase it. But we think we can increase the market with the bilingual people in our organization already. So we'll see how that goes.

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Operator [33]

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Our following question comes from [Paul Dwyer].

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Unidentified Analyst, [34]

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I guess, first question I wanted to dig into was on the -- on UBAM's discount in allowances. Can you talk about what's going on with the mix that discounts in allowances is up 100%, where sales is only up about 20%?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [35]

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I'll tell you, it's a product mix. And as the example on a internet home show -- Facebook home show, you have not much discounting because it's at retail. But when you do a book fair, if the school, if the patrons of the school buy $10,000, they get $5,000 of books free. And so all these fit in to discount in allowances and a source of variable. It's -- we just come through a pretty good book fair market, so the mix can change, and it doesn't really matter, because each program is designed to yield the same amount of profit. So example, on a book fair, the commission paid is 17% and the overwrite is 1/2, because the school gets 50% free books. So the consultant at a book fair gets 17%, but an internet home show, gets 25%. So the -- each program is weighed somewhat to yield the same amount of profit. So we don't have to investigate necessarily what kind of sale it was. Doesn't matter there. You can turn it however you want to. It makes it a little bit hard to analyze sometimes, because it's not always the exact program that they're -- that they turning (inaudible) as they may have a boost at a -- some type of event, and they turn it in as a book fair, because they get the 50% free books. Well, they make less money in commission, but they -- then they get the books and sell those and make more. So discount in allowances can vary. I hope I'm telling you, it doesn't matter. The bottom line, they all yield about the same amount of profit.

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Unidentified Analyst, [36]

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Okay. And then -- so I guess where I'm still struggling a bit is, what changed specifically in the quarter that's thrown you offguard about the consultant count? On the last call, you talked a lot about, you expected a strong recovery this quarter, Uber drivers, that's not necessarily a new phenomenon in the summer. So what's really going on in terms of -- what changed from when we talked last?

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [37]

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Well, I'll tell you one thing is that we were comparing against a pretty strong quarter in the previous year. The previous quarter was up 35% over that previous quarter. So we were -- while we were up, it was a pretty tough quarter for comparison. But other than that, there are some things, like I said, the thing I heard a lot in Dallas last weekend was Facebook and how they are changing the rules almost weekly and which is causing the ladies to juggle and find a way to still make their business work. And for anybody who knows about it, one thing, you couldn't -- they changed where -- there's programs out there now, this internet phenomena is really amazing, and somebody could probably explain a lot better than me. But what -- one of the things that Facebook's changed last year, these ladies can put together an entire party and not even have to be there. They start off in the introduction, they talk about the best sellers. They do this, they do this, they do this, and it's all posted, and then they post automatically. Well, Facebook says, no, you can't do that because that's a -- it's like a fraud or something. And so now you can do the same thing, but each individual post, you have to post it, rather than it's been a -- there's computer programs, one's called bizzly that did this whole thing for you. And you put in the words, and then it would post it. And they could have 3 of them going on at one time, and they're just standing there watching them. It was really automated. So what happened, one of the things that happened -- and by the way, I'm just talking about information that we heard last weekend that I thought was very interesting and that is, well, then it's a little harder to do it. It's, oh, I have to post it manually. Yes, I guess so. So that's been an adjustment for them, and we've lost consultants who, like I said, you can run 3 at one time, and it gets right down to the -- to how much you sell, because they spend the same amount of time, that's just one of the things that we've heard.

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [38]

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Well yes, I mean that the -- I will also say that, as to Randall's point, Paul, we kind of mentioned that we didn't have the growth that we were hoping for and expecting for, we don't publish guidance. But internally, we were hoping to have some growth in our headcount. However, the -- when you look at the number of being down 900 consultants on a 30,000 active consultant count is -- can be a pretty small difference. So from a macro perspective, we look at it is, why aren't we growing the count? It's relatively flat. Why is it -- what do we need to do to get back on that growth pattern of going from 30 to 35 to 40? And as Randall mentioned before that the number one driver in consultant growth is successful consultants. If they're selling more, they're making more commissions. And the more commissions they make, the more successful they are, the better they're going to be at recruiting. And so Randall's mentioning some of the challenges that we've had over the last 3 months and 6 months with Facebook changing some of the dynamics of hosting parties on that platform. But we're really focusing now on -- and some of these changes that he's mentioned before about Spanish and the book fair market, on how to make our consultants that we have right now more successful.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [39]

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One of the things that came out -- what?

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Heather N. Cobb, Educational Development Corporation - Chief Sales and Marketing Officer [40]

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I was just…

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [41]

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Go ahead, Sidney?

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Heather N. Cobb, Educational Development Corporation - Chief Sales and Marketing Officer [42]

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I was just going to jump in and say Paul, that you'll very rarely ever hear anyone that is responsible for sales or supposed to be driving sales say that lower numbers are okay. But I think if we only look at that number in a vacuum or through a microscope, we would see that, that number is down. While it's down just 900 consultants, it's still down. But the overall numbers of sales attributed to those consultants is up. And so that's the number that we're focusing on how to make more successful consultants.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [43]

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To add to that, Heather, thank you, this past weekend, we heard things like, go this is a training, what you have is, you got your top leaders they will have a 20-, 30-minute speech to the group, and they'll tell you what's working for them. And I heard one of our very top people who said, you know what, we've been trying to do this, do that, make it fancy and improve those deals, we're going to go back to basics, because that's what's working. And we may have made it a little complicated. It's not too complicated for them, it's too complicated to people that are trying to teach and recruit and start from the bottom. So it's a constant searching for what works the best. And when you've got to hit stone at you by Facebook, that makes it even a little more difficult. But again, we're optimistic. Very enthusiastic about where we're headed, and that we came out of that meeting, again with our top people with renewed enthusiasm that we are -- have in place things that will impact us in future quarters.

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Operator [44]

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I'm not showing any further questions at this time, I would now like to turn the call back to your speakers for any further remarks.

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Randall W. White, Educational Development Corporation - Chairman, President, Treasurer & CEO [45]

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Okay. Let me just give you a little recap. It's not all gloom and doom here. If you look at our operations, for example, our cash position is significantly improved, even though our inventory's up $6.5 million, and we reinstate the dividend this year, our cash position is still about almost $2 million better than it was the same quarter last year. And also, guys, from 2 years ago, in November, when we had 127,000 orders prepaid to ship and then, at that time, we could ship about 8,000 a day. Well, from that, we -- and $3 million investment, by the way, we are now pretty much close to state-of-the-art, we were just written up in Modern Materials Handling magazine with the cover, we had a cover and 9-page article about how we are now one of the most efficient operations in the industry. So in the 2-year span, we've gone from the outhouse to the throne, so to speak. So I think, it's not all gloom and doom here and also, Publishers Weekly, which is a magazine of our industry, recognized our company as a notable company in the industry for what the innovations we've done. And the growth that we've had has allowed us to improve our product line, because now when we go to Bologna for our -- the select books from other publishers, we're getting top-of-the-line. And so everything's in place. We're in place to move forward and resume growth. I'm not certainly going to predict 100% or 50%, but we're not stalled out. We've had a little lull, but we now have the operations. We can handle the business, and ladies got that message. One just -- it's just the little things, but a year ago, we gave them guidance about when is the last day that they can put an order in to get it before Christmas. Well there's 5 zones in UPS, and we started in Oklahoma, right in the middle. And zone 1 is the ones next to us and it goes out to zone 5, the time to get to California and New York. So we tell time by zones. Well, a year ago, they added another week, because they didn't believe this, and so the sales stopped. This year, we gave them guidance, and they didn't move it back a week, and so we actually got another week's business, and we've seen ourself we're are getting there. Things are good or happening. We're reinstating confidence in our shipping. And the fact that we ended up in 2 magazines in December was pretty significant for us, so we're still optimistic. We're a growth company and solid cash. Inventory's the right amount, and so we're looking for 2019 to be an excellent year.

Thank you, guys, for joining us, and we're on track here, we're on target. Thanks for joining us.

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Dan E. O’Keefe, Educational Development Corporation - Corporate Secretary & CFO [46]

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Thank you, everyone.

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Operator [47]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.