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Envela Reports Second Quarter 2021 Financial Results

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Quarterly Net Income Up 280% Year-over-Year to $2.2 Million

DALLAS, TX / ACCESSWIRE / August 4, 2021 / Envela Corporation(NYSE American:ELA) ("Envela" or the "Company"), today reported financial results for its second quarter ended June 30, 2021.

Management Commentary
"We concluded the second quarter with solid top-line and bottom-line results across both the ECHG and DGSE segments of our business thanks to our team's ability to execute," said John Loftus, Chairman and CEO of Envela. "In parallel to our organic growth strategy, we also plan to expand through our active M&A approach, especially within ECHG, as we intend to acquire accretive businesses that are additive to our value proposition. Moreover, we are focused on further enhancing our broader ESG initiatives across all fronts of our business and are committed to being an organization that gives investors the opportunity to invest in a sustainable and socially responsible company. As we enter into the final few months of the year, we are confident that our current growth strategies for both segments of the business will materialize into encouraging financial results for Envela."

Second Quarter 2021 Financial Results
Total revenue for the second quarter of 2021 was $33.7 million compared to $20.5 million in the same year-ago period.

Revenue related to continuing operations of the Company's DGSE subsidiary for the second quarter of 2021 was $23.0 million (68% of total revenue), compared to $14.3 million (70% of total revenue) in the same year-ago period. DGSE's resale revenue, including bullion, jewelry, watches, and rare coins, was $20.9 million (91% of DGSE total sales), compared to $13.4 million (94% of DGSE total sales) in the same year-ago period. DGSE's recycled-material sales were $2.1 million (9% of DGSE total sales), compared to $927,000 (6% of DGSE total sales) in the same year-ago period.

Revenue related to the Company's ECHG subsidiary for the second quarter of 2021 was $10.7 million (32% of total revenue), compared to $6.2 million (30% of total revenue) in the same year-ago period. ECHG's resale revenue was $8.6 million (80% of ECHG total sales), compared to $4.3 million (69% of ECHG total sales) in the same year-ago period. ECHG's recycled-material sales were $2.1 million (20% of ECHG total sales), compared to $1.9 million (31% of ECHG total sales) in the same year-ago period.

Consolidated gross profit for the second quarter of 2021 was $7.1 million, compared to $4.5 million in the same year-ago period.

  • DGSE's gross profit was $3.1 million, compared to $1.6 million in the same year-ago period.

    • DGSE's resale gross profit was $2.7 million, compared to $1.4 million in the same year-ago period.

    • DGSE's recycled-materials gross profit was $418,000, compared to $170,000 in the same year-ago period.

  • ECHG's gross profit was $4.0 million, compared to $2.9 million in the same year-ago period.

    • Resale gross profit was $3.0 million, compared to $2.0 million in the same year-ago period.

    • Recycled-material gross profit was $1.0 million, compared to $834,000 in the same year-ago period.

Net income for the second quarter of 2021 was $2.2 million, or $0.08 per basic and diluted share, compared to $566,000, or $0.02 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


Three Months Ended June 30,

Six Months Ended June 30,

(Unaudited)

2021

2020

2021

2020

Revenue:

Sales

$

33,724,006

$

20,545,607

$

59,214,447

$

46,374,750

Cost of goods sold

26,596,116

16,074,349

45,782,293

36,602,212

Gross margin

7,127,890

4,471,258

13,432,154

9,772,538

Expenses:

Selling, General & Administrative Expenses

4,831,225

3,616,670

8,984,454

7,441,870

Depreciation and Amortization

216,219

179,706

421,131

359,435

Total operating expenses

5,047,444

3,796,376

9,405,585

7,801,305

Operating income

2,080,446

674,882

4,026,569

1,971,233

Other income, net

283,055

51,866

554,996

93,556

Interest expense

177,704

144,297

356,726

289,612

Income before income taxes

2,185,797

582,451

4,224,839

1,775,177

Income tax expense

32,685

16,277

63,455

34,854

Net income

$

2,153,112

$

566,174

$

4,161,384

$

1,740,323

Basic earnings per share:

Net income

$

0.08

$

0.02

$

0.15

$

0.06

Diluted earnings per share:

Net income

$

0.08

$

0.02

$

0.15

$

0.06

Weighted average shares outstanding:

Basic

26,924,631

26,924,381

26,924,631

26,924,381

Diluted

26,939,631

26,924,381

26,939,631

26,924,381

ENVELA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2021

2020

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

8,131,112

$

9,218,036

Trade receivables, net of allowances

6,244,445

2,846,619

Notes receivable

1,254,958

-

Inventories

12,586,889

10,006,897

Current right-of-use assets from operating leases

962,907

1,157,077

Prepaid expenses

453,688

281,719

Total current assets

29,633,999

23,510,348

Notes receivable, less current portion

-

2,100,000

Property and equipment, net

7,183,559

6,888,601

Goodwill

3,258,586

1,367,109

Intangible assets, net

2,791,673

2,992,473

Operating lease right-of-use assets

3,124,608

3,522,923

Other long-term assets

343,680

197,638

Total assets

$

46,336,105

$

40,579,092

Liabilities and stockholders' equity

Current liabilities:

Accounts payable-Trade

$

3,612,320

$

1,510,697

Notes payable, related party

315,672

307,032

Notes payable

1,832,646

1,813,425

Current operating lease liabilities

961,873

1,148,309

Accrued expenses

793,202

844,324

Customer deposits and other liabilities

770,236

428,976

Total current liabilities

8,285,949

6,052,763

Notes payable, related party, less current portion

8,899,383

9,052,810

Notes payable, less current portion

4,142,084

4,240,658

Long-term operating lease liabilities, less current portion

3,268,863

3,654,419

Total liabilities

24,596,279

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

(18,702,420

)

(22,863,804

)

Total stockholders' equity

21,739,826

17,578,442

Total liabilities and stockholders' equity

$

46,336,105

$

40,579,092

ENVELA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

2021

2020

(Unaudited)

(Unaudited)

Operations

Net income

$

4,161,384

$

1,740,323

Adjustments to reconcile net income to net cash provided by operations:

Depreciation, amortization, and other

421,131

359,435

Bad debt expense

6,249

-

Changes in operating assets and liabilities:

Trade receivables

(3,365,999

)

140,228

Inventories

(2,579,991

)

145,381

Prepaid expenses

(169,373

)

(1,269,517

)

Other assets

(146,042

)

(95,695

)

Accounts payable and accrued expenses

1,574,520

(831,398

)

Operating leases

20,493

(16,782

)

Customer deposits and other liabilities

341,260

369,511

Net cash provided by operations

263,632

541,486

Investing

Investment in note receivable

(654,958

)

(1,500,000

)

Purchase of property and equipment

(484,594

)

(29,046

)

Acquisition of CExchange assets and liabilities, net of cash acquired

13,136

-

Net cash used in investing

(1,126,416

)

(1,529,046

)

Financing

Payments on notes payable, related party

(144,787

)

(138,683

)

Payments on notes payable

(79,353

)

-

Proceeds from Paycheck Protection Program Note

-

1,668,200

Net cash provided by (used in) financing

(224,140

)

1,529,517

Net change in cash and cash equivalents

(1,086,924

)

541,957

Cash and cash equivalents, beginning of period

9,218,036

4,510,660

Cash and cash equivalents, end of period

$

8,131,112

$

5,052,617

Supplemental Disclosures

Cash paid during the period for:

Interest

$

359,253

$

291,845

Income taxes

$

56,900

$

-

Non cash activities:

Acquisition of CExchange assets and liabilities

$

1,555,892

$

-

SOURCE: Envela Corporation



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https://www.accesswire.com/658274/Envela-Reports-Second-Quarter-2021-Financial-Results