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Envela Reports First Quarter 2021 Financial Results

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Quarterly Net Income Up 71% Year-over-Year to $2.0 Million

DALLAS, TX / ACCESSWIRE / May 5, 2021 / Envela Corporation(NYSE American:ELA) ("Envela" or the "Company"), today reported financial results for its first quarter ended March 31, 2021.

Management Commentary

"Envela delivered another period of solid profits in the first quarter of 2021 despite a historic Texas winter freeze and associated power outages that temporarily impacted our operations," said John Loftus, Chairman and CEO of Envela. "Our ability to address these issues expeditiously reflects the Company's operational acumen and business resiliency. Envela's business continues to benefit from several growth drivers, including accelerated sustainability trends and an increasing supply of used electronics. Overall, we remain confident in our ability to drive profitable growth through 2021 and beyond."

First Quarter 2021 Financial Results

Total revenue for the first quarter of 2021 was $25.5 million compared to $25.8 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 $18.9 million (74% of total revenue), compared to $20.4 million in the same year-ago period. DGSE's resale revenue, including bullion, jewelry, watches, and rare coins, was $17.3 million (92% of DGSE total sales), compared to $18.5 million (91% of DGSE total sales) in the same year-ago period. DGSE's recycled-material sales were $1.6 million (8% of DGSE total sales), compared to $1.8 million (9% 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 $6.6 million (26% of total revenue), compared to $5.5 million in the same year-ago period. ECHG's resale revenue was $4.7 million (72% of ECHG total sales), compared to $3.5 million (65% of ECHG total sales) in the same year-ago period. ECHG's recycled-material sales were $1.8 million (28% of ECHG total sales), compared to $1.9 million (35% of ECHG total sales) in the same year-ago period.

Consolidated gross profit for the first quarter of 2021 was $6.3 million, compared to $5.3 million in the same year-ago period.

  • DGSE's gross profit was $2.8 million, compared to $2.4 million in the same year-ago period.

    • DGSE's resale gross profit was $2.5 million, compared to $2.0 million in the same year-ago period.

    • DGSE's recycled-materials gross profit was $0.4 million, compared to $0.3 million in the same year-ago period.

  • ECHG's gross profit was $3.5 million, compared to $2.9 million in the same year-ago period.

    • Resale gross profit was $2.6 million, compared to $1.4 million in the same year-ago period.

    • Recycled-material gross profit was $0.9 million, compared to $1.5 million in the same year-ago period.

Net income for the first quarter of 2021 was $2.0 million, or $0.07 per basic and diluted share, compared to $1.2 million, or $0.04 per basic and diluted share, in the same year-ago period.

About Envela

Envela and its subsidiaries engage in diverse business activities within the recommerce sector. These include recommercializing luxury hard assets, consumer electronics and IT equipment; and end-of-life recycling solutions. Envela assesses its inventory of recommerce purchases for their potential to be refurbished and resold as whole goods, or to be recycled for component parts or precious-metal value. Envela also offers comprehensive recycling solutions for a variety of other companies seeking responsibly to dispose of end-of-life products. Envela operates primarily via two recommerce business segments. Through DGSE, LLC the Company recommercializes luxury hard assets via Dallas Gold and Silver Exchange, Charleston Gold & Diamond Exchange, and Bullion Express brands (collectively, "DGSE"). Through ECHG, LLC, the Company operates Echo Environmental Holdings, ITAD USA Holdings, and Teladvance (collectively, "ECHG"), which recommercialize primarily consumer electronics and IT equipment, and provide end-of-life recycling services for various companies across many industries. Envela conducts its recommerce operations at retail and wholesale levels, through distributors, resellers, dedicated stores and online. The Company also owns and operates other businesses and brands engaged in a variety of activities, as identified herein. Envela is a Nevada corporation, headquartered in Dallas, Texas.

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 the potential future success of the Company, its 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:

Matt Glover and John Yi
Gateway Investor Relations

1-949-574-3860

ELA@gatewayir.com

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Unaudited)

Three Months Ended March 31,

2021

2020

Revenue:

Sales

$

25,490,441

$

25,829,143

Cost of goods sold

19,186,177

20,527,863

Gross margin

6,304,264

5,301,280

Expenses:

Selling, General & Administrative Expenses

4,153,229

3,825,200

Depreciation and Amortization

204,912

179,729

Total operating expenses

4,358,141

4,004,929

Operating income

1,946,123

1,296,351

Other income, net

271,941

41,690

Interest expense

179,022

145,315

Income before income taxes

2,039,042

1,192,726

Income tax expense

30,770

18,577

Net income

$

2,008,272

$

1,174,149

Basic earnings per share:

Net income

$

0.07

$

0.04

Diluted earnings per share:

Net income

$

0.07

$

0.04

Weighted average shares outstanding:

Basic

26,924,631

26,924,381

Diluted

26,939,631

26,939,631

The accompanying notes to the 10-Q filed with the SEC on May 5, 2021, are an integral part of these condensed consolidated financial statements.

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2021

2020

Assets

(unaudited)

Current assets:

Cash and cash equivalents

$

8,396,997

$

9,218,036

Trade receivables, net of allowances

3,184,473

2,846,619

Notes receivable

123,472

-

Inventories

11,630,383

10,006,897

Current right-of-use assets from operating leases

1,057,511

1,157,077

Prepaid expenses

858,299

281,719

Total current assets

25,251,135

23,510,348

Notes receivable, less current portion

2,100,000

2,100,000

Property and equipment, net

6,984,653

6,888,601

Goodwill

1,367,109

1,367,109

Intangible assets, net

2,892,073

2,992,473

Operating lease right-of-use assets

3,344,732

3,522,923

Other long-term assets

297,638

197,638

Total assets

$

42,237,340

$

40,579,092

Liabilities and stockholders' equity

Current liabilities:

Accounts payable-Trade

$

1,192,454

$

1,510,697

Notes payable, related party

311,067

307,032

Notes payable

1,825,487

1,813,425

Current operating lease liabilities

1,054,599

1,148,309

Accrued expenses

922,159

844,324

Customer deposits and other liabilities

689,592

428,976

Total current liabilities

5,995,358

6,052,763

Notes payable, related party, less current portion

8,976,922

9,052,810

Notes payable, less current portion

4,188,357

4,240,658

Long-term operating lease liabilities, less current portion

3,489,989

3,654,419

Total liabilities

22,650,626

23,000,650

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

(20,855,532

)

(22,863,804

)

Total stockholders' equity

19,586,714

17,578,442

Total liabilities and stockholders' equity

$

42,237,340

$

40,579,092

The accompanying notes to the 10-Q filed with the SEC on May 5, 2021, are an integral part of these condensed consolidated financial statements.

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

2021

2020

(Unaudited)

(Unaudited)

Operations

Net income

$

2,008,272

$

1,174,149

Depreciation, amortization, and other

204,912

179,729

Bad debt expense

6,249

-

Changes in operating assets and liabilities:

Trade receivables

(344,103

)

525,519

Inventories

(1,623,485

)

111,931

Prepaid expenses

(576,578

)

(163,312

)

Other assets

(100,000

)

5,120

Accounts payable and accrued expenses

(240,410

)

(647,804

)

Operating leases

19,616

(34,907

)

Customer deposits and other liabilities

260,615

(118,710

)

Net cash provided by (used in) operations

(384,912

)

1,031,715

Investing

Investment in note receivable

(123,472

)

(1,500,000

)

Purchase of property and equipment

(200,563

)

(29,046

)

Net cash used in investing

(324,035

)

(1,529,046

)

Financing

Payments on notes payable, related party

(71,853

)

(69,404

)

Payments on notes payable

(40,239

)

-

Net cash used in financing

(112,092

)

(69,404

)

Net change in cash and cash equivalents

(821,039

)

(566,735

)

Cash and cash equivalents, beginning of period

9,218,036

4,510,660

Cash and cash equivalents, end of period

$

8,396,997

$

3,943,925

Supplemental Disclosures

Cash paid during the period for:

Interest

$

179,082

$

121,718

Income taxes

$

-

$

-

The accompanying notes to the 10-Q filed with the SEC on May 5, 2021, are an integral part of these condensed consolidated financial statements.

SOURCE: Envela Corporation



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