##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended February 28, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to.
 Commission file number: 0-4957
 EDUCATIONAL DEVELOPMENT CORPORATION
  Delaware
(State or other jurisdiction of
incorporation or organization)
    
    73-0750007
(I.R.S. Employer
Identification No.)10302 East 55th Place, Tulsa, Oklahoma
(Address of principal executive offices)
    
    74146-6515
(Zip Code)
    
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
 o þ




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##### Table of Contents



FACTORS AFFECTING FORWARD LOOKING STATEMENTS
    
    
    3PART IItem 1.
    
    Business
    
    
    3Item 1A
    
    Risk Factors
    
    
    7Item 1B
    
    Unresolved Staff Comments
    
    
    8Item 2.
    
    Properties
    
    
    8Item 3.
    
    Legal Proceedings
    
    
    9Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    9PART IIItem 5.
    
    Market For Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    9Item 6.
    
    Selected Financial Data
    
    
    10Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 8.
    
    Financial Statements and Supplementary Data
    
    
    23Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    24Item 9A.
    
    Controls and Procedures
    
    
    24Item 9B.
    
    Other Information
    
    
    24PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    24Item 11.
    
    Executive Compensation
    
    
    25Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    25Item 13.
    
    Certain Relationships and Related Transactions
    
    
    25Item 14.
    
    Principal Accounting Fees and Services
    
    
    25PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    26Consent of Current Independent Registered Public Accounting FirmConsent of Prior Independent Registered Public Accounting FirmCertification of Chief Executive OfficerCertification of Principal Financial and Accounting OfficerCertification Pursuant to Section 906
 2




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##### Table of Contents



FACTORS AFFECTING FORWARD LOOKING STATEMENTS
   
 PART 1
 
 Item 1.
    
    BUSINESS
 General Development of Business
    3




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Financial Information about Industry Segments
  Narrative Description of Business
 General
     Industry Segments
     Marketing
   4




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Competition
     Seasonality
     5




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Executive Officers
  OfficeName
    
    Office
    
    Held Since
    
    AgeRandall W. White
    
    Chairman of the Board, President and Treasurer
    
    1986
    
    64W. Curtis Fossett
    
    Controller and Corporate Secretary (Principal Financial and Accounting Officer)
    
    1989
    
    60Craig M. White*
    
    Vice President  Information Systems
    
    2001
    
    37Ronald T. McDaniel*
    
    Vice President  Publishing Division
    
    2002
    
    68
 
    Employees
  Company Reports
 www.edcpub.com
 6




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##### Table of Contents



Item 1A.
    
    RISK FACTORS
  Our operations may be adversely affected by general economic conditions.
  Our growth is dependent upon attracting and retaining sales consultants
  Our business faces a great deal of competitive pressure .
   Seasonality of sales.
  7




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##### Table of Contents



Our operations are dependent on a single distribution facility
  The Company has a sole source supplier for its products
  All our products are imported from overseas locations.
  The Companys common stock is thinly traded
  Personnel changes.
  Other factors may negatively affect our business.
  
 Item 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 Item 2.
    
    PROPERTIES
  8




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Item 3.
    
    LEGAL PROCEEDINGS
  
 Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 Item 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  2006
    
    2005Period
    
    High
    
    Low
    
    High
    
    Low1st Qtr
    
    
    10.98
    
    
    
    10.06
    
    
    
    10.98
    
    
    
    10.002nd Qtr
    
    
    10.61
    
    
    
    10.05
    
    
    
    11.56
    
    
    
    10.803rd Qtr
    
    
    10.13
    
    
    
    7.95
    
    
    
    13.49
    
    
    
    10.004th Qtr
    
    
    8.57
    
    
    
    7.65
    
    
    
    10.83
    
    
    
    10.06
   9




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##### Table of Contents



ISSUER PURCHASES OF EQUITY SECURITIES
 (d) Maximum(c) Total Number
    
    Number (orof Shares (or
    
    ApproximateUnits) Purchased
    
    Dollar Value)as Part of
    
    of Shares (orPublicly
    
    Units) that May(a) Total Number
    
    (b) Average
    
    Announced
    
    Yet Be Purchasedof Shares (or
    
    Price Paid per
    
    Plans
    
    Under thePeriod
    
    Units Purchased
    
    Share (or Unit)
    
    or Programs (1)
    
    Plans or ProgramsDecember 1, 2005 
December 31, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171,564January 1, 2006 
January 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171,564February 1, 2006 
February 28, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171,564Total
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    In July 1998, the Board of Directors authorized the Company to purchase up to
1,000,000 shares of the Companys common stock pursuant to a plan that was announced
publicly on October 14, 1998. In May 1999, the Board of Directors authorized the Company
to purchase up to an additional 1,000,000 shares of its common stock under this plan,
which was announced publicly on May 19, 1999. In April 2004 the Board of Directors
authorized the Company to purchase up to an additional 500,000 shares of its common stock
under this plan. Pursuant to the plan, the Company may purchase such 2,500,000 shares of
the Companys common stock until 2,500,000 shares have been repurchased. There is no
expiration date for the repurchase plan.
 
 Item 6.
    
    SELECTED FINANCIAL DATA
 YEARS ENDED FEBRUARY 28 (29)2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Net Revenues
    
    $
    31,788,890
    
    
    $
    31,650,779
    
    
    $
    31,127,268
    
    
    $
    26,869,681
    
    
    $
    22,065,957Earnings From Continuing
Operations
    
    $
    2,398,410
    
    
    $
    2,406,074
    
    
    $
    2,373,450
    
    
    $
    1,996,615
    
    
    $
    1,531,274Earnings From Continuing
Operations
Per Common ShareBasic
    
    $
    .64
    
    
    $
    .62
    
    
    $
    .60
    
    
    $
    .52
    
    
    
    .40Diluted
    
    $
    .62
    
    
    $
    .59
    
    
    $
    .55
    
    
    $
    .48
    
    
    $
    .38Total Assets
    
    $
    18,643,966
    
    
    $
    17,980,506
    
    
    $
    19,112,694
    
    
    $
    17,587,725
    
    
    $
    14,156,798Cash Dividends Paid
Per Common Share
    
    $
    .15
    
    
    $
    .12
    
    
    $
    .10
    
    
    $
    .06
    
    
    $
    .04
 10




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##### Table of Contents



Item 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
  Publishing Division
   
 2005
    
    2004
    
    2003Sales  Total Industry
    
    $
    25,067.7
    
    
    $
    22,810.9
    
    
    $
    23,115.2Sales  Total Trade
    
    $
    7,828.1
    
    
    $
    6,267.2
    
    
    $
    6,534.8Sales  Juvenile Paperback
    
    $
    850.6
    
    
    $
    769.4
    
    
    $
    741.3Publishing Divisions Sales (2)
    
    $
    8.4
    
    
    $
    7.3
    
    
    $
    7.4Publishing Divisions Market Share
of Total Book Industry
    
    
    0.03
    %
    
    
    0.03
    %
    
    
    0.03
    %Publishing Divisions Market Share
of Total Trade Market
    
    
    0.11
    %
    
    
    0.12
    %
    
    
    0.11
    %Publishing Divisions Market Share
of Juvenile Paperback Market
    
    
    1.0.
    %
    
    
    0.9
    %
    
    
    1.0
    %
 
    11




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FY 2006
    
    
    FY 2005
    
    
    FY 2004National chain stores
    
    
    42
    %
    
    
    36
    %
    
    
    32
    %All other
    
    
    58
    %
    
    
    64
    %
    
    
    68
    %Total net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
     Usborne Books at Home (UBAH) Division
   12




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FY 2006
    
    FY 2005
    
    FY 2004New Sales Representatives
    
    
    5,347
    
    
    
    5,646
    
    
    
    6,964Active Sales Representatives End of Fiscal Year
    
    
    8,074
    
    
    
    8,273
    
    
    
    8,800
   FY 2006
    
    
    FY 2005
    
    
    FY 2004Home Shows
    
    
    46
    %
    
    
    51
    %
    
    
    54
    %Direct Sales
    
    
    3
    %
    
    
    3
    %
    
    
    4
    %Book Fair
    
    
    27
    %
    
    
    24
    %
    
    
    21
    %School & Library
    
    
    9
    %
    
    
    9
    %
    
    
    8
    %Internet
    
    
    5
    %
    
    
    3
    %
    
    
    3
    %Transportation Revenue
    
    
    10
    %
    
    
    10
    %
    
    
    10
    %Totals
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  FY 2006
    
    FY 2005Compared With
    
    Compared WithFY 2005
    
    FY 2004Home Shows
    
    
    (13
    %)
    
    
    (2
    %)Direct Sales
    
    
    (11
    %)
    
    
    (8
    %)Book Fair
    
    
    12
    %
    
    
    16
    %School & Library
    
    
    2
    %
    
    
    7
    %Internet
    
    
    59
    %
    
    
    32
    %Transportation Revenue
    
    
    (2
    %)
    
    
    0
    %
   13




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The UBAH Marketing Programs
   Reach For The Stars
    14




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FY 2006
    
    
    FY 2005
    
    
    FY 2004Home Shows
    
    
    37,008
    
    
    
    41,237
    
    
    
    41,763Direct Sales
    
    
    8,999
    
    
    
    10,140
    
    
    
    10,928Book Fair
    
    
    8,040
    
    
    
    7,243
    
    
    
    6,503School & Library
    
    
    4,090
    
    
    
    4,251
    
    
    
    4,842Internet
    
    
    27,358
    
    
    
    17,609
    
    
    
    13,53285,495
    
    
    
    80,480
    
    
    
    77,568
   Results of Operations
  FY 2006
    
    
    FY 2005
    
    
    FY 2004Net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    36.6
    %
    
    
    35.8
    %
    
    
    36.3
    %Gross margin
    
    
    63.4
    %
    
    
    64.2
    %
    
    
    63.7
    %Operating expenses:Operating & selling
    
    
    22.3
    %
    
    
    21.7
    %
    
    
    21.6
    %Sales commissions
    
    
    23.7
    %
    
    
    24.9
    %
    
    
    24.8
    %General & administrative
    
    
    5.4
    %
    
    
    5.4
    %
    
    
    5.3
    %Interest
    
    
    0.3
    %
    
    
    0.2
    %
    
    
    0.0
    %Total operating expenses
    
    
    51.7
    %
    
    
    52.2
    %
    
    
    51.7
    %Other income
    
    
    0.3
    %
    
    
    0.3
    %
    
    
    0.3
    %Earnings before income taxes
    
    
    12.0
    %
    
    
    12.3
    %
    
    
    12.3
    %Income taxes
    
    
    4.5
    %
    
    
    4.7
    %
    
    
    4.7
    %Net earnings
    
    
    7.5
    %
    
    
    7.6
    %
    
    
    7.6
    %
 15




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Fiscal Year 2006 Compared with Fiscal Year 2005
 Operating Results
  Revenues
 $ Increase/FY 2006
    
    
    FY 2005
    
    
    (decrease)Gross sales
    
    $
    42,567,648
    
    
    $
    41,361,612
    
    
    $
    1,206,036Less discounts & allowances
    
    
    (12,367,775
    )
    
    
    (11,324,165
    )
    
    
    (1,043,610
    )Transportation revenue
    
    
    1,589,017
    
    
    
    1,613,332
    
    
    
    (24,315
    )Net revenues
    
    $
    31,788,890
    
    
    $
    31,650,779
    
    
    $
    138,111
     Expenses
 $ Increase/FY 2006
    
    
    FY 2005
    
    
    (decrease)Cost of sales
    
    $
    11,651,182
    
    
    $
    11,338,039
    
    
    $
    313,143Operating & selling
    
    
    7,094,963
    
    
    
    6,860,540
    
    
    
    234,423Sales commissions
    
    
    7,526,184
    
    
    
    7,875,891
    
    
    
    (349,707
    )General & administrative
    
    
    1,712,469
    
    
    
    1,719,240
    
    
    
    (6,771
    )Interest
    
    
    83,054
    
    
    
    67,620
    
    
    
    15,434Total
    
    $
    28,067,852
    
    
    $
    27,861,330
    
    
    $
    206,522
 16




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17




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Fiscal Year 2005 Compared with Fiscal Year 2004
 Operating Results
  Revenues
 FY 2005
    
    
    FY 2004
    
    
    $ IncreaseGross sales
    
    $
    41,361,612
    
    
    $
    40,940,822
    
    
    $
    420,790Less discounts & allowances
    
    
    (11,324,165
    )
    
    
    (11,424,127
    )
    
    
    99,962Transportation revenue
    
    
    1,613,332
    
    
    
    1,610,573
    
    
    
    2,759Net revenues
    
    $
    31,650,779
    
    
    $
    31,127,268
    
    
    $
    523,511
     Expenses
 FY 2005
    
    
    FY 2004
    
    
    $ IncreaseCost of sales
    
    $
    11,338,039
    
    
    $
    11,295,738
    
    
    $
    42,301Operating & selling
    
    
    6,860,540
    
    
    
    6,730,548
    
    
    
    129,992Sales commissions
    
    
    7,875,891
    
    
    
    7,712,408
    
    
    
    163,483General & administrative
    
    
    1,719,240
    
    
    
    1,639,141
    
    
    
    80,099Interest
    
    
    67,620
    
    
    
    9,762
    
    
    
    57,858Total
    
    $
    27,861,330
    
    
    $
    27,387,597
    
    
    $
    473,733
 18




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19




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Liquidity and Capital Resources
         20




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Contractual Obligations
  Payments due by periodLess
    
    
    
    
    
    Morethan
    
    
    
    
    
    thenContractual
    
    
    
    1
    
    1-3
    
    3-5
    
    5obligations
    
    Total
    
    year
    
    years
    
    years
    
    yearsLong-Term Debt
Obligations
    
    
    
    
    
    
    
    
    
    Capital Lease
Obligations
    
    
    
    
    
    
    
    
    
    Operating Lease
Obligations
    
    
    
    
    
    
    
    
    
    Purchase
Obligations
    
    $3,163,900
    
    $3,163,900
    
    
    
    
    
    Other Long-
Term Liabilities
Reflected on the
Registrants
Balance Sheet
under GAAP
    
    
    
    
    
    
    
    
    
    Total
    
    $3,163,900
    
    $3,163,900
    
    
    
    
    
    
 Bank Credit Agreement
 Wall Street Journal
 21




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Critical Accounting Policies
  Stock-Based Compensation
  Revenue Recognition
  Allowance for Doubtful Accounts
  22




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Inventory
 1 2
   Deferred Tax Assets
  Long-lived Assets
  
 Item 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  23




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Item 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
   
 Item 9.A
    
    CONTROLS AND PROCEDURES
  
 Item 9.B
    
    OTHER INFORMATION
  
 PART III
 
 Item 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Identification of Directors
  Identification of Executive Officers
  24




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Compliance With Section 16 (a) of the Exchange Act
  
 Item 11.
    
    EXECUTIVE COMPENSATION
  
 Item 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 Item 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 Item 14.
    
    PRINCIPAL ACCOUNTANTS FEES AND SERVICES
  25




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##### Table of Contents



PART IV
 
 Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
   PageReport of Current Independent Registered Public
Accounting Firm
    
    30Report of Prior Independent Registered Public
Accounting Firm
    
    31Balance Sheets  February 28, 2006 and 2005
    
    32Statements of Earnings  Years ended
February 28, 2006, February 28, 2005
and February 29, 2004
    
    33Statements of Shareholders Equity -
Years ended February 28, 2006,
February 28, 2005 and February 29, 2004
    
    34Statements of Cash Flows -
Years ended February 28, 2006,
February 28, 2005 and February 29, 2004
    
    35Notes to Financial Statements
    
    36-43
 
  3.1
    
    Restated Certificate of Incorporation of the Company dated
April 26, 1968, and Certificate of Amendment thereto dated
June 21, 1968 are incorporated herein by reference to Exhibit 1
to Registration Statement on Form 10 (File No. 0-4957).3.2
    
    Certificate of Amendment of Restated Certificate of Incorporation
of the Company dated August 27, 1977 are incorporated herein by
reference to Exhibit 20.1 to Form 10-K for fiscal year ended
February 28, 1981 (File No. 0-4957).3.3
    
    By-Laws of the Company as amended are incorporated herein
by reference to Exhibit 20.2 to Form 10-K for fiscal year ended
February 28, 1981 (File No. 0-4957).3.4
    
    Certificate of Amendment of Restated Certificate of
Incorporation of the Company dated November 17, 1986,
is incorporated herein by reference to Exhibit 3.3 to Form
10-K for fiscal year ended February 28, 1987 (File No. 0-4957).
 26




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##### Table of Contents



3.5
    
    Certificate of Amendment of Restated Certificate of
Incorporation of the Company dated March 22, 1996.
is incorporated herein by reference to Exhibit 3.4 to Form
10-K for fiscal year ended February 28, 1997 (File No. 0-4957).3.6
    
    Certificate of Amendment of Restated Certificate of Incorporation
of the Company dated July 15, 2002 is incorporated herein by reference to
Exhibit 10.30 to Form 10-K dated February 28, 2003 (File No. 0-4957)4.1
    
    Specimens of Common Stock Certificates are incorporated
herein by reference to Exhibits 3.1 and 3.2 to Registration
Statement on Form 10-K (File No. 0-4957) filed June 29, 1970.10.1
    
    Usborne Agreement-Contractual agreement by and between
the Company and Usborne Publishing Limited dated
November 25, 1988, is incorporated herein by reference to
Exhibit 10.12 to Form 10-K dated February 28, 1989
(File No. 0-4957).10.2
    
    Party Plan-Contractual agreement by and between the
Company and Usborne Publishing Limited dated March 14,
1989, is incorporated herein by reference to Exhibit 10.13 to
Form 10-K dated February 28, 1989 (File No. 0-4957).10.3
    
    Amendment dated January 1, 1992 to Usborne Agreement -
Contractual agreement by and between the Company and
Usborne Publishing Limited is incorporated herein by reference to
Exhibit 10.13 to Form 10-K dated February 29, 1992 (File No.
0-4957).10.4
    
    Educational Development Corporation 1992 Incentive Stock
Option Plan is incorporated herein by reference to Exhibit 4(c)
to Registration Statement on Form S-8 (File No. 33-60188)10.5
    
    Restated Loan Agreement dated June 30, 1999 between the Company
and State Bank & Trust, N.A., Tulsa, OK, is incorporated
herein by reference to Exhibit 10.24 to Form 10-K dated
February 29, 2000 (File No. 0-4957).10.6
    
    Educational Development Corporation 2002 Incentive Stock
Option Plan is incorporated herein by reference to Exhibit A
to definitive proxy statement of the Company on Schedule 14A
dated May 23, 2002 (File No. 0-4957)10.7
    
    Amendment dated November 12, 2002 to Usborne Agreement 
Contractual agreement by and between the Company and
Usborne Publishing Limited is incorporated herein by reference to
Exhibit 10.24 to Form 10-K dated February 28, 2003 (File No. 0-4957).10.8
    
    Employment Agreement between Randall W. White and the Company
dated February 28, 2004.
 27




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##### Table of Contents



10.9
    
    Fifth Amendment dated June 30, 2004 to Restated Loan Agreement
between the Company and Arvest Bank, Tulsa, OK10.10
    
    Sixth Amendment dated June 30, 2005 to Restated Loan Agreement
between the Company and Arvest Bank, Tulsa, OK10.11
    
    Seventh Amendment dated September 2, 2005 to Restated Loan Agreement
between the Company and Arvest Bank, Tulsa, OK*23.1
    
    Consent of current Independent Registered Public Accounting Firm*23.2
    
    Consent of prior Independent Registered Public Accounting Firm*31.1
    
    Certification of the Chief Executive Officer of Educational Development
Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of the Controller and Corporate Secretary (Principal Financial
and Accounting Officer) of Educational Development Corporation pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
 *Filed Herewith 28




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##### Table of Contents



SIGNATURES
  EDUCATIONAL DEVELOPMENT CORPORATIONDate:
    
    May 25, 2006
    
    By
    
    
    
    /s/ W. Curtis FossettW. Curtis FossettController and Corporate Secretary(Principal Financial and Accounting Officer)
  Date:
    
    May 25, 2006
    
    
    
    
    
    /s/ Randall W. WhiteRandall W. WhiteChairman of the BoardPresident, Treasurer andDirectorMay 25, 2006
    
    
    
    
    
    /s/ John A. ClericoJohn A. Clerico, DirectorMay 25, 2006
    
    
    
    
    
    /s/ Dean CosgroveG. Dean Cosgrove, DirectorMay 25, 2006
    
    
    
    
    
    /s/ James F. LewisJames F. Lewis, DirectorMay 25, 2006
    
    
    
    
    
    /s/ W. Curtis FossettW. Curtis FossettController and Corporate Secretary(Principal Financial and Accounting Officer)
 29




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
      
 30




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 31




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##### Table of Contents



EDUCATIONAL DEVELOPMENT CORPORATION
 BALANCE SHEETS
FEBRUARY 28, 2006 AND 2005
 2006
    
    
    2005ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    321,537
    
    
    $
    364,024Accounts receivable, less allowance for doubtful accounts and
sales returns $185,209 (2006) and $140,391 (2005)
    
    
    2,946,462
    
    
    
    2,442,436InventoriesNet
    
    
    12,159,360
    
    
    
    11,749,238Prepaid expenses and other assets
    
    
    119,508
    
    
    
    103,346Income taxes receivable
    
    
    
    
    
    
    53,805Deferred income taxes
    
    
    141,700
    
    
    
    44,800Total current assets
    
    
    15,688,567
    
    
    
    14,757,649INVENTORIESNet
    
    
    379,570
    
    
    
    723,290PROPERTY, PLANT AND EQUIPMENTNet
    
    
    2,493,929
    
    
    
    2,402,767DEFERRED INCOME TAXES
    
    
    81,900
    
    
    
    96,800TOTAL
    
    $
    18,643,966
    
    
    $
    17,980,506LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Note payable to bank
    
    $
    676,000
    
    
    $
    1,428,000Accounts payable
    
    
    3,042,937
    
    
    
    3,612,877Accrued salaries and commissions
    
    
    566,379
    
    
    
    544,423Income taxes payable
    
    
    71,749
    
    
    
    Dividends payable
    
    
    750,785
    
    
    
    Other current liabilities
    
    
    197,486
    
    
    
    263,060Total current liabilities
    
    
    5,305,336
    
    
    
    5,848,360COMMITMENTS (Note 7)SHAREHOLDERS EQUITY:Common stock, $0.20 par value; Authorized 8,000,000 shares;
Issued 5,771,840 (2006) and 5,762,340 (2005) shares;
Outstanding 3,753,923 (2006) and 3,735,513 (2005) shares
    
    
    1,154,368
    
    
    
    1,152,468Capital in excess of par value
    
    
    7,577,495
    
    
    
    7,469,486Retained earnings
    
    
    15,300,999
    
    
    
    14,214,09324,032,862
    
    
    
    22,836,047Less treasury stock, at cost
    
    
    (10,694,232
    )
    
    
    (10,703,901
    )13,338,630
    
    
    
    12,132,146TOTAL
    
    $
    18,643,966
    
    
    $
    17,980,506
  32




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##### Table of Contents



EDUCATIONAL DEVELOPMENT CORPORATION
 STATEMENTS OF EARNINGS
YEARS ENDED FEBRUARY 28, 2006, FEBRUARY 28, 2005 AND FEBRUARY 29, 2004
 2006
    
    
    2005
    
    
    2004GROSS SALES
    
    $
    42,567,648
    
    
    $
    41,361,612
    
    
    $
    40,940,822Less discounts and allowances
    
    
    (12,367,775
    )
    
    
    (11,324,165
    )
    
    
    (11,424,127
    )Transportation revenue
    
    
    1,589,017
    
    
    
    1,613,332
    
    
    
    1,610,573NET REVENUES
    
    
    31,788,890
    
    
    
    31,650,779
    
    
    
    31,127,268COST OF SALES
    
    
    11,651,182
    
    
    
    11,338,039
    
    
    
    11,295,738Gross margin
    
    
    20,137,708
    
    
    
    20,312,740
    
    
    
    19,831,530OPERATING EXPENSES:Operating and selling
    
    
    7,094,963
    
    
    
    6,860,540
    
    
    
    6,730,548Sales commissions
    
    
    7,526,184
    
    
    
    7,875,891
    
    
    
    7,712,408General and administrative
    
    
    1,712,469
    
    
    
    1,719,240
    
    
    
    1,639,141Interest
    
    
    83,054
    
    
    
    67,620
    
    
    
    9,76216,416,670
    
    
    
    16,523,291
    
    
    
    16,091,859OTHER INCOME
    
    
    93,372
    
    
    
    95,625
    
    
    
    92,779EARNINGS BEFORE INCOME TAXES
    
    
    3,814,410
    
    
    
    3,885,074
    
    
    
    3,832,450INCOME TAXES
    
    
    1,416,000
    
    
    
    1,479,000
    
    
    
    1,459,000NET EARNINGS
    
    $
    2,398,410
    
    
    $
    2,406,074
    
    
    $
    2,373,450BASIC AND
DILUTED EARNINGS PER SHARE:Basic
    
    $
    0.64
    
    
    $
    0.62
    
    
    $
    0.60Diluted
    
    $
    0.62
    
    
    $
    0.59
    
    
    $
    0.55WEIGHTED AVERAGE NUMBER OF
COMMON AND EQUIVALENT SHARES
OUTSTANDING:Basic
    
    
    3,747,759
    
    
    
    3,902,075
    
    
    
    3,948,193Diluted
    
    
    3,898,737
    
    
    
    4,088,130
    
    
    
    4,293,802
  33




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##### Table of Contents



EDUCATIONAL DEVELOPMENT CORPORATION
 STATEMENTS OF SHAREHOLDERS EQUITY
YEARS ENDED FEBRUARY 28, 2006, FEBRUARY 28, 2005 AND FEBRUARY 29, 2004
 Common Stock(par value $0.20 per share)Number of
    
    
    
    
    
    
    Capital in
    
    
    
    
    
    
    Treasury StockShares
    
    
    
    
    
    
    Excess of
    
    
    Retained
    
    
    Number of
    
    
    
    
    
    
    ShareholdersIssued
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    Shares
    
    
    Amount
    
    
    EquityBALANCEMarch 1, 2003
    
    
    5,441,640
    
    
    $
    1,088,328
    
    
    $
    5,788,204
    
    
    $
    10,312,564
    
    
    
    1,614,020
    
    
    $
    (5,446,791
    )
    
    $
    11,742,305Purchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,304
    
    
    
    (575,820
    )
    
    
    (575,820
    )Sales of treasury stock
    
    
    
    
    
    
    
    
    
    
    301,525
    
    
    
    
    
    
    
    (97,757
    )
    
    
    336,165
    
    
    
    637,690Exercise of options ($1.375$4.00/share)
    
    
    154,700
    
    
    
    30,940
    
    
    
    341,040
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    371,980Tax benefit-stock options
    
    
    
    
    
    
    
    
    
    
    87,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87,900Dividends paid ($0.10/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (393,948
    )
    
    
    
    
    
    
    
    
    
    
    (393,948
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,373,450
    
    
    
    
    
    
    
    
    
    
    
    2,373,450BALANCEFebruary 29, 2004
    
    
    5,596,340
    
    
    
    1,119,268
    
    
    
    6,518,669
    
    
    
    12,292,066
    
    
    
    1,570,567
    
    
    
    (5,686,446
    )
    
    
    14,243,557Purchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    479,360
    
    
    
    (5,103,255
    )
    
    
    (5,103,255
    )Sales of treasury stock
    
    
    
    
    
    
    
    
    
    
    36,700
    
    
    
    
    
    
    
    (23,100
    )
    
    
    85,800
    
    
    
    122,500Exercise of options ($2.1875$6.00/share)
    
    
    166,000
    
    
    
    33,200
    
    
    
    510,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    543,500Tax benefit-stock options
    
    
    
    
    
    
    
    
    
    
    399,178
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    399,178Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    4,639
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,639Dividends paid ($0.12/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (484,047
    )
    
    
    
    
    
    
    
    
    
    
    (484,047
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,406,074
    
    
    
    
    
    
    
    
    
    
    
    2,406,074BALANCEFebruary 28, 2005
    
    
    5,762,340
    
    
    
    1,152,468
    
    
    
    7,469,486
    
    
    
    14,214,093
    
    
    
    2,026,827
    
    
    
    (10,703,901
    )
    
    
    12,132,146Purchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    (77,250
    )
    
    
    (77,250
    )Sales of treasury stock
    
    
    
    
    
    
    
    
    
    
    48,294
    
    
    
    
    
    
    
    (16,410
    )
    
    
    86,919
    
    
    
    135,213Exercise of options ($2.1875$6.00/share)
    
    
    9,500
    
    
    
    1,900
    
    
    
    47,475
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,375Tax benefit-stock options
    
    
    
    
    
    
    
    
    
    
    12,240
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,240Dividends paid ($0.15/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (560,719
    )
    
    
    
    
    
    
    
    
    
    
    (560,719
    )Dividends declared ($0.20/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750,785
    )
    
    
    
    
    
    
    
    
    
    
    (750,785
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,398,410
    
    
    
    
    
    
    
    
    
    
    
    2,398,410BALANCEFebruary 28, 2006
    
    
    5,771,840
    
    
    $
    1,154,368
    
    
    $
    7,577,495
    
    
    $
    15,300,999
    
    
    
    2,017,917
    
    
    $
    (10,694,232
    )
    
    $
    13,338,630
  34




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EDUCATIONAL DEVELOPMENT CORPORATION
 STATEMENTS OF CASH FLOWS
YEARS ENDED FEBRUARY 28, 2006, FEBRUARY 28, 2005 AND FEBRUARY 29, 2004
 2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net earnings
    
    $
    2,398,410
    
    
    $
    2,406,074
    
    
    $
    2,373,450Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    138,023
    
    
    
    125,570
    
    
    
    167,500Stock-based compensation
    
    
    
    
    
    
    4,639
    
    
    
    Deferred income taxes
    
    
    (82,000
    )
    
    
    (28,900
    )
    
    
    44,800Provision for doubtful accounts and sales returns
    
    
    1,323,472
    
    
    
    1,210,272
    
    
    
    1,009,645Loss on disposal of property, plant and equipment
    
    
    
    
    
    
    1,163
    
    
    
    Changes in assets and liabilities:Accounts and income tax receivable
    
    
    (1,773,693
    )
    
    
    (1,526,421
    )
    
    
    (1,052,325
    )Inventories
    
    
    (66,402
    )
    
    
    1,893,703
    
    
    
    (2,610,636
    )Prepaid expenses and other assets
    
    
    (16,162
    )
    
    
    43,678
    
    
    
    (20,868
    )Accounts payable, accrued salaries and commissions,
and other current liabilities
    
    
    (613,558
    )
    
    
    (54,777
    )
    
    
    (1,209,688
    )Income tax payable
    
    
    71,749
    
    
    
    
    
    
    
    (160,303
    )Total adjustments
    
    
    (1,018,571
    )
    
    
    1,668,927
    
    
    
    (3,831,875
    )Net cash provided by (used in) operating activities
    
    
    1,379,839
    
    
    
    4,075,001
    
    
    
    (1,458,425
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchases of property and equipment
    
    
    (229,185
    )
    
    
    (483,358
    )
    
    
    (235,854
    )Net cash used in investing activities
    
    
    (229,185
    )
    
    
    (483,358
    )
    
    
    (235,854
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings on revolving credit agreement
    
    
    14,239,000
    
    
    
    13,235,000
    
    
    
    8,192,000Payments on revolving credit agreement
    
    
    (14,991,000
    )
    
    
    (12,201,000
    )
    
    
    (7,798,000
    )Cash received from exercise of stock options
    
    
    49,375
    
    
    
    543,500
    
    
    
    371,980Tax benefit of stock options exercised
    
    
    12,240
    
    
    
    399,178
    
    
    
    87,900Cash received from sale of treasury stock
    
    
    135,213
    
    
    
    122,500
    
    
    
    637,690Cash paid to acquire treasury stock
    
    
    (77,250
    )
    
    
    (5,103,255
    )
    
    
    (575,820
    )Dividends paid
    
    
    (560,719
    )
    
    
    (484,047
    )
    
    
    (393,948
    )Net cash provided by (used in) financing activities
    
    
    (1,193,141
    )
    
    
    (3,488,124
    )
    
    
    521,802NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (42,487
    )
    
    
    103,519
    
    
    
    (1,172,477
    )CASH AND CASH EQUIVALENTSBEGINNING OF YEAR
    
    
    364,024
    
    
    
    260,505
    
    
    
    1,432,982CASH AND CASH EQUIVALENTSEND OF YEAR
    
    $
    321,537
    
    
    $
    364,024
    
    
    $
    260,505SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:Cash paid for interest
    
    $
    85,933
    
    
    $
    62,533
    
    
    $
    8,102Cash paid for income taxes
    
    $
    1,381,106
    
    
    $
    1,117,672
    
    
    $
    1,531,458SUPPLEMENTAL DISCLOSURE NON CASH
INVESTING AND FINANCING ACTIVITIES:Dividend declared
    
    $
    750,785
    
    
    
    
    
    
    
    
  35




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##### Table of Contents



EDUCATIONAL DEVELOPMENT CORPORATION
 NOTES TO FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2006, FEBRUARY 28, 2005 AND FEBRUARY 29, 2004
 1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Business 
 Estimates 
 Business Concentration 
 Cash and Cash Equivalents 
 Accounts Receivable 
 36




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##### Table of Contents



Inventories  1 2
  Property, Plant and Equipment 
 Building
    
    30 yearsMachinery & equipment
    
    3 - 10 yearsFurniture & fixtures
    
    3 years
 Income Taxes 
 Revenue Recognition 
 Advertising Costs 
 Shipping and Handling Costs 
 Earnings Per Share 
 37




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##### Table of Contents



Year Ended
    
    
    Year Ended
    
    
    Year EndedFebruary 28,
    
    
    February 28,
    
    
    February 29,2006
    
    
    2005
    
    
    2004Diluted Earnings Per Share:Net earnings applicable to
common shareholders
    
    $
    2,398,310
    
    
    $
    2,406,074
    
    
    $
    2,373,450Shares:Weighted average shares
outstanding-basic
    
    
    3,747,759
    
    
    
    3,902,075
    
    
    
    3,948,193Assumed exercise of options
    
    
    150,978
    
    
    
    186,055
    
    
    
    345,609Weighted average shares
outstanding-diluted
    
    
    3,898,737
    
    
    
    4,088,130
    
    
    
    4,293,802Diluted Earnings Per Share
    
    $
    0.62
    
    
    $
    0.59
    
    
    $
    0.55
  Fair Value of Financial Instruments 
 Long-Lived Asset Impairment 
 Stock-Based Compensation 
  Reclassifications 
 2.       INVENTORIES
  February 28,
    
    
    February 28,2006
    
    
    2005Current:Book inventory
    
    $
    12,186,820
    
    
    $
    11,785,698Inventory valuation allowance
    
    
    (27,460
    )
    
    
    (36,460
    )Inventories net-current
    
    $
    12,159,360
    
    
    $
    11,749,238Noncurrent:Book inventory
    
    $
    657,000
    
    
    $
    1,111,700Inventory valuation allowance
    
    
    (277,430
    )
    
    
    (388,410
    )Inventories net-noncurrent
    
    $
    379,570
    
    
    $
    723,290
 
 38




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##### Table of Contents



3.
    
    PROPERTY, PLANT AND EQUIPMENT
  February 28,
    
    
    February 28,2006
    
    
    2005Land
    
    $
    250,000
    
    
    $
    250,000Building
    
    
    2,124,712
    
    
    
    2,124,712Machinery and equipment
    
    
    1,957,224
    
    
    
    1,765,552Furniture and fixtures
    
    
    66,927
    
    
    
    65,8074,398,863
    
    
    
    4,206,071Less accumulated depreciation and amortization
    
    
    (1,904,934
    )
    
    
    (1,803,304
    )$
    2,493,929
    
    
    $
    2,402,767
 4.
    
    INCOME TAXES
  2006
    
    
    2005Current:Deferred tax assets:Allowance for doubtful accounts
    
    $
    42,700
    
    
    $
    29,400Allowance for slow moving inventory
    
    
    10,400
    
    
    
    13,900Allowance for sales returns
    
    
    27,700
    
    
    
    Accruals
    
    
    59,400
    
    
    
    Stock-based compensation
    
    
    1,500
    
    
    
    1,500Deferred tax assets
    
    
    141,700
    
    
    
    44,800Deferred tax asset-Net
    
    $
    141,700
    
    
    $
    44,800Noncurrent:Deferred tax assets:Allowance for slow moving inventory
    
    $
    138,700
    
    
    $
    154,500Stock-based compensation
    
    
    4,200
    
    
    
    4,200Deferred tax assets
    
    
    142,900
    
    
    
    158,700Deferred tax liabilities:Property and equipment
    
    
    (61,000
    )
    
    
    (61,900
    )Deferred tax liabilities
    
    
    (61,000
    )
    
    
    (61,900
    )Deferred tax asset-Net
    
    $
    81,900
    
    
    $
    96,800
  39




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##### Table of Contents



February 28
    
    
    February 28
    
    
    February 292006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    1,273,200
    
    
    $
    1,300,000
    
    
    $
    1,202,200State
    
    
    224,800
    
    
    
    229,400
    
    
    
    212,0001,498,000
    
    
    
    1,529,400
    
    
    
    1,414,200Deferred:Federal
    
    
    (69,700
    )
    
    
    (43,100
    )
    
    
    37,800State
    
    
    (12,300
    )
    
    
    (7,300
    )
    
    
    7,000(82,000
    )
    
    
    (50,400
    )
    
    
    44,800Total income tax expense
    
    $
    1,416,000
    
    
    $
    1,479,000
    
    
    $
    1,459,000
  February 28,
    
    
    February 28,
    
    
    February 29,2006
    
    
    2005
    
    
    2004Tax expense at federal statutory rate
    
    $
    1,297,000
    
    
    $
    1,321,000
    
    
    $
    1,303,000State income tax-net of federal tax benefit
    
    
    151,000
    
    
    
    156,000
    
    
    
    153,000Other
    
    
    (32,000
    )
    
    
    2,000
    
    
    
    3,000Total income tax expense
    
    $
    1,416,000
    
    
    $
    1,479,000
    
    
    $
    1,459,000
 5.
    
    EMPLOYEE BENEFIT PLAN
  6.
    
    NOTE PAYABLE TO BANK
   7.
    
    COMMITMENTS
  40




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##### Table of Contents



8.
    
    CAPITAL STOCK, STOCK OPTIONS AND WARRANTS
    2006
    
    
    2005
    
    
    2004Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at
Beginning of Year
    
    
    259,700
    
    
    $
    3.79
    
    
    
    424,700
    
    
    $
    3.57
    
    
    
    579,400
    
    
    $
    3.26Granted
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    10.00
    
    
    
    
    
    
    
    Exercised/canceled
    
    
    (9,500
    )
    
    
    (5.20
    )
    
    
    (166,000
    )
    
    
    (3.27
    )
    
    
    (154,700
    )
    
    
    (2.40
    )Outstanding at End
of Year
    
    
    250,200
    
    
    $
    3.74
    
    
    
    259,700
    
    
    $
    3.79
    
    
    
    424,700
    
    
    $
    3.57
  Number
    
    Weighted AverageRange of
    
    Outstanding
    
    RemainingExercise
    
    at February 28,
    
    Contractual
    
    Weighted AveragePrices
    
    2006
    
    Life (Years)
    
    Exercise Price$2.19  $2.50
    
    
    89,000
    
    
    
    4
    
    
    $
    2.26$3.81
    
    
    5,000
    
    
    
    2
    
    
    $
    3.81$4.00
    
    
    20,000
    
    
    
    2
    
    
    $
    4.00$4.63
    
    
    135,200
    
    
    
    2
    
    
    $
    4.63$10.00
    
    
    1,000
    
    
    
    8
    
    
    $
    10.00250,200
   41




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9.
    
    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
  Basic
    
    
    DilutedNet
    
    
    
    
    
    
    
    
    
    
    Earnings
    
    
    EarningsRevenues
    
    
    Gross Margin
    
    
    Net Earnings
    
    
    Per Share
    
    
    Per Share2006First quarter
    
    $
    8,226,700
    
    
    $
    5,221,900
    
    
    $
    745,200
    
    
    $
    0.20
    
    
    $
    0.19Second quarter
    
    
    6,794,100
    
    
    
    4,054,900
    
    
    
    394,800
    
    
    
    0.11
    
    
    
    0.10Third quarter
    
    
    9,683,000
    
    
    
    6,292,800
    
    
    
    739,100
    
    
    
    0.20
    
    
    
    0.19Fourth quarter
    
    
    7,085,090
    
    
    
    4,568,108
    
    
    
    519,310
    
    
    
    0.14
    
    
    
    0.13Total year
    
    $
    31,788,890
    
    
    $
    20,137,708
    
    
    $
    2,398,410
    
    
    $
    0.64
    
    
    $
    0.622005First quarter
    
    $
    8,553,300
    
    
    $
    5,549,400
    
    
    $
    824,400
    
    
    $
    0.21
    
    
    $
    0.19Second quarter
    
    
    6,992,200
    
    
    
    4,373,100
    
    
    
    452,400
    
    
    
    0.11
    
    
    
    0.11Third quarter
    
    
    9,331,100
    
    
    
    6,110,600
    
    
    
    809,400
    
    
    
    0.21
    
    
    
    0.20Fourth quarter
    
    
    6,774,179
    
    
    
    4,279,640
    
    
    
    319,874
    
    
    
    0.09
    
    
    
    0.09Total year
    
    $
    31,650,779
    
    
    $
    20,312,740
    
    
    $
    2,406,074
    
    
    $
    0.62
    
    
    $
    0.592004First quarter
    
    $
    7,384,200
    
    
    $
    4,701,900
    
    
    $
    585,900
    
    
    $
    0.15
    
    
    $
    0.14Second quarter
    
    
    7,142,100
    
    
    
    4,341,600
    
    
    
    534,400
    
    
    
    0.14
    
    
    
    0.12Third quarter
    
    
    10,168,900
    
    
    
    6,653,700
    
    
    
    871,100
    
    
    
    0.22
    
    
    
    0.20Fourth quarter
    
    
    6,432,068
    
    
    
    4,134,330
    
    
    
    382,050
    
    
    
    0.09
    
    
    
    0.09Total year
    
    $
    31,127,268
    
    
    $
    19,831,530
    
    
    $
    2,373,450
    
    
    $
    0.60
    
    
    $
    0.55
 10.
    
    BUSINESS SEGMENTS
   42




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##### Table of Contents



Publishing
    
    UBAH
    
    Other
    
    Total2006Net revenues
    
    $
    8,403,720
    
    
    $
    23,385,170
    
    
    $
    
    
    
    $
    31,788,890Earnings (loss)
before income taxes
    
    
    2,833,289
    
    
    
    4,743,015
    
    
    
    (3,761,894
    )
    
    $
    3,814,4102005Net revenues
    
    $
    7,362,717
    
    
    $
    24,288,062
    
    
    $
    
    
    
    $
    31,650,779Earnings (loss)
before income taxes
    
    
    2,447,035
    
    
    
    5,172,271
    
    
    
    (3,734,232
    )
    
    
    3,885,0742004Net revenues
    
    $
    7,465,762
    
    
    $
    23,661,506
    
    
    $
    
    
    
    $
    31,127,268Earnings (loss)
before income taxes
    
    
    2,454,742
    
    
    
    4,757,742
    
    
    
    (3,380,034
    )
    
    
    3,832,450
 11.
    
    STOCK REPURCHASE PLAN
   43