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Envela Reports Second Quarter 2022 Financial Results – Stocks News Feed

Quarterly Net Income Up 78.7% Year-over-Year to $3.85 Million

DALLAS, TX / ACCESSWIRE / August 3, 2022 / Envela Corporation (NYSE American:ELA) (“Envela” or the “Company”), the North American re-commerce leader, today reported financial results for its second quarter ended June 30, 2022.

Management Commentary

“This quarter’s record performance is a testament to the hard work and relentless focus of our team despite formidable inflationary pressures and other significant global headwinds. The results also reflect the continued fruits of our disciplined financial approach and recent business initiatives designed to expand our customer base and grow sales,” said John Loftus, Chairman and CEO of Envela. “Our customers continued to shop this quarter­-despite the increased macroeconomic pressures on consumer spending-demonstrating the unique value that our authenticated re-commerce marketplace offers consumers.”

Second Quarter 2022 Financial Results

Total revenue for the second quarter of 2022 was $42.6 million compared to $33.7 million in the same year-ago period.

Revenue related to continuing operations of the Company’s DGSE subsidiary for the second quarter of 2022 was $30.3 million (71.2% of total revenue), compared to $23.0 million in the same year-ago period. DGSE’s resale revenue, including bullion, jewelry, watches, and rare coins, was $28.2 million (92.8% of DGSE total sales), compared to $20.9 million (90.8% of DGSE total sales) in the same year-ago period. DGSE’s recycled-material sales were $2.2 million (7.2% of DGSE total sales), compared to $2.1 million (9.2% of DGSE total sales) in the same year-ago period.

Revenue related to the Company’s ECHG subsidiary for the Second quarter of 2022 was $12.3 million (28.8% of total revenue), compared to $10.7 million in the same year-ago period. ECHG’s resale revenue was $9.1 million (74% of ECHG total sales), compared to $8.5 million (80% of ECHG total sales) in the same year-ago period. ECHG’s recycled-material sales were $3.2 million (26% of ECHG total sales), compared to $2.1 million (20% of ECHG total sales) in the same year-ago period.

Consolidated gross profit for the second quarter of 2022 was $11.5 million, compared to $7.1 million in the same year-ago period.

DGSE’s gross profit was $4.2 million, compared to $3.1 million in the same year-ago period.DGSE’s resale gross profit was $3.7 million, compared to $2.7 million in the same year-ago period.DGSE’s recycled-materials gross profit was $0.5 million, compared to $0.4 million in the same year-ago period.ECHG’s gross profit was $7.3 million, compared to $4.0 million in the same year-ago period.Resale gross profit was $5.6 million, compared to $3.0 million in the same year-ago period.Recycled-material gross profit was $1.7 million, compared to $1.0 million in the same year-ago period.

Net income for the second quarter of 2022 was $3.85 million, or $0.14 per basic and diluted share, compared to $2.15 million, or $0.08 per basic and diluted share, in the same year-ago period.

About Envela

Envela is the North American re-commerce leader, enabling a better world through the circular economy. It empowers buyers and sellers to extend the useful lives of specialty and durable goods, and to seizes retail, recycling, and reverse-logistics supply-chain opportunities. This financially benefits consumers and manufacturers alike. Envela operates primarily via two re-commerce business segments, DGSE and ECHG. DGSE (Envela’s B2C portfolio) operates retail stores and online sites offering luxury hard assets and precious metals, including gold, silver, and diamonds. ECHG (Envela’s B2B portfolio) re-commercializes consumer electronics and IT equipment, and also provides end-of-life recycling services for products in a variety of industries. Envela conducts its re-commerce operations at retail and wholesale levels, through distributors, resellers, dedicated stores, and online. Holdings in all of Envela’s business units have recognized multiple years of growth.

At Envela we Reuse, Recycle, and Reimagine. To learn more, visit Envela.com and follow us on Twitter, Instagram, Facebook and LinkedIn.

Forward-Looking Statements

This press release includes statements that may constitute “forward-looking” statements, including statements regarding acquisitions, and the potential future success of 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:

Investor Relations
1901 Gateway Drive | Irving, TX 75038
[email protected]

Envela Corporation
Condensed Consolidated Statements of Operations

Three Months Ended June 30, Six Months Ended June 30,

(Unaudited)

2022 2021 2022 2021

$42,639,718 $33,724,006 $90,054,816 $59,214,447

Cost of goods sold

31,161,718 26,596,116 68,865,782 45,782,293

Gross margin

11,478,000 7,127,890 21,189,034 13,432,154

Selling, General & Administrative Expenses

7,083,903 4,831,225 13,643,658 8,984,454

Depreciation and Amortization

279,516 216,219 571,463 421,131

Total operating expenses

7,363,419 5,047,444 14,215,121 9,405,585

Operating income

4,114,581 2,080,446 6,973,913 4,026,569

Other income (expense), net

(95,429) 283,055 (154,005) 554,996

Interest expense

121,042 177,704 244,281 356,726

Income before income taxes

3,898,110 2,185,797 6,575,627 4,224,839

Income tax expense

50,252 32,685 80,544 63,455

Net income

$3,847,858 $2,153,112 $6,495,083 $4,161,384

Basic earnings per share:
Net income

$0.14 $0.08 $0.24 $0.15

Diluted earnings per share:
Net income

$0.14 $0.08 $0.24 $0.15

Weighted average shares outstanding:

26,924,631 26,924,381 26,924,631 26,924,381

26,939,631 26,939,631 26,939,631 26,939,631

These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on August 3, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.

Envela Corporation
Condensed Consolidated Balance Sheets

June 30, December 31, 2022 2021

(unaudited)

Current assets:
Cash and cash equivalents

$13,935,476 $10,138,148

Trade receivables, net of allowances

5,688,882 7,166,533

Inventories

17,804,096 14,048,436

Current right-of-use assets from operating leases

1,649,034 1,604,736

Prepaid expenses

1,420,656 439,038

Other current assets

265,866 969,624

Total current assets

40,764,010 34,366,515

Property and equipment, net

9,662,401 9,806,188

6,357,453 6,140,465

Intangible assets, net

2,800,495 3,024,245

Operating lease right-of-use assets

5,039,806 5,692,141

Other assets

186,761 237,761

Total assets

$64,810,926 $59,267,315

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable-trade

$3,303,090 $2,488,396

Line of credit

1,700,000

Notes payable

1,241,480 1,065,794

Current operating lease liabilities

1,631,270 1,573,824

Accrued expenses

1,741,794 1,789,366

Customer deposits and other liabilities

2,198,587 1,179,224

Total current liabilities

10,116,221 9,796,604

Notes payable, less current portion

15,350,254 15,970,337

Long-term operating lease liabilities, less current portion

5,222,051 5,873,057

Total liabilities

30,688,526 31,639,998

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

(6,319,846) (12,814,929)

Total stockholders’ equity

34,122,400 27,627,317

Total liabilities and stockholders’ equity

$64,810,926 $59,267,315

These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on August 3, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.

Envela Corporation
Condensed Consolidated Statement of Cash Flows

For the Six Months Ended June 30,

2022 2021 (Unaudited) (Unaudited)

Operations
Net income

$6,495,083 $4,161,384

Adjustments to reconcile net income to net cash provided by operations:
Depreciation, amortization, and other

571,463 421,131

Bad debt expense

25,000 6,249

Changes in operating assets and liabilities:
Trade receivables

1,452,651 (3,365,999)

Inventories

(3,755,662) (2,579,991)

Prepaid expenses

(981,616) (169,373)

Other assets

754,759 (146,042)

Accounts payable and accrued expenses

767,122 1,574,520

Operating leases

14,478 20,493

Customer deposits and other liabilities

1,019,363 341,260

Net cash provided by operations

6,362,641 263,632

Investment in note receivable

(654,958)

(203,929) (484,594)

Acquisition of CExchange assets and liabilities, net of cash acquired

13,136

Adjustment to the purchase price of the Avail Transaction

(216,988)

Net cash used in investing

(420,917) (1,126,416)

Payments on notes payable, related party

(144,787)

Payments on notes payable

(444,396) (79,353)

Payments on line of credit

(1,700,000)

Net cash used in financing

(2,144,396) (224,140)

Net change in cash and cash equivalents

3,797,328 (1,086,924)

Cash and cash equivalents, beginning of period

10,138,148 9,218,036

Cash and cash equivalents, end of period

$13,935,476 $8,131,112

Supplemental Disclosures
Cash paid during the period for:

$252,431 $359,253

Income taxes

$98,000 $56,900

Non cash activites:
Acquisition of CExchange assets and liabilities

$ $1,555,892

These financials are to be viewed with Form 10-Q and accompanying notes filed with the Securities and Exchange Commission on August 3, 2022. The accompanying notes to Form 10-Q are an integral part of these consolidated financial statements.

SOURCE: Envela Corporation

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