Educational Development Corporation Q1 FY2026 earnings call

• Concluded a successful incentive challenge and launched a new incentive trip.
• Launched guest checkout in IT, which has been well-received.
• Had a successful partnership with Ticket to Dream, placing books with foster kids.
• Held summits in various cities like Dallas, Atlanta, etc., with positive feedback.
• Started promotions to encourage leadership promotion and recruiting.
• Update on Hilti Complex sale: Amended agreement to extend due diligence period to July 28, with expectation to close sale before end of September, proceeds to pay back bank and reduce debt.

In the fiscal 2026 first quarter, net revenues were $7.1 million compared to $10 million in the prior year first quarter. The average active brand partners for the quarter totaled 7,700, down from 13,400 in the prior year first quarter. Loss before income taxes was a negative $1.4 million, improving from a negative $1.7 million in the prior year first quarter. Net loss was $1.1 million vs. $1.3 million prior year, and loss per share was $0.13 vs. $0.15 fully diluted.

• Expect to complete the sale of the Hilti Complex before the end of September.
• Proceeds from the sale are expected to fully pay back the bank, leaving no debt and limited borrowing needs moving forward.

• Potential fall through of the Hilti Complex sale and contingency plan B in place.
• Challenging sales environment with high inflation and reduced disposable income impacting brand partner levels and new consultant recruiting in the direct sales industry.

Q: What's the Board's contingency plan if the Hilti Complex sale falls through?

A: There is a viable plan B, including other offers from a real estate investor group that can close quickly.

Q: Has the Board considered implementing minimum ownership requirements for directors?

A: Board is working on governance improvements, started giving directors small amounts of stock to align incentives, with changes expected in 9-12 months Q: What's the target net revenue run rate and average brand partners?

A: It will be a slow, gradual build, with conservative low, medium, and high expectations, taking time to rebuild Q: Any discussion of acquisitions?

A: Received occasional non-serious offers, no serious unsolicited offers to buy the company Q: What's the banking relationship like?

A: Relationship has been good, bank has supported through amendments, with urgency to be paid back but involved in the process Q: When is the next earnings call?

A: Second quarter earnings call in October, around that time frame