EDUCATIONAL DEVELOPMENT CORP Segments Disclosure

16. BUSINESS SEGMENTS

 

We have two reportable segments: PaperPie and Publishing. These reportable segments are business units that offer different methods of distribution to different types of customers. They are managed separately based on the fundamental differences in their operations. Our PaperPie segment markets its products through a network of independent Brand Partners using a combination of internet sales, direct sales, home shows, and book fairs. Our Publishing segment markets its products to retail accounts, which include book, school supply, toy and gift stores, museums, trade and specialty wholesalers, through commissioned sales representatives, and our internal tele-sales group. See Note 5 for the impact of our updated Usborne distribution agreement on the Publishing segment.

 

The accounting policies for the segments are the same as those for the rest of the Company. We evaluate segment performance based on earnings before income taxes of the segments, which is defined as segment net revenues reduced by cost of sales and direct expenses. Direct expenses are composed of payroll, commissions, general and administrative, and operating and selling expenses. Corporate expenses, depreciation, interest expense, other income, and income taxes are not allocated to the segments but are listed in the “Other” row below. Corporate expenses include the executive department, accounting department, information services department, general office management, warehouse operations and building facilities management. Our assets and liabilities are not allocated on a segment basis. Separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. For the Company, the Chief Executive Officer is the CODM.

 

Information by industry segment for the years ended February 28, 2026 and February 28, 2025 is set forth below:

 

NET REVENUES

 

		Year Ended February 28,
		2026				2025
Publishing		$	3,568,900			$	4,340,700
PaperPie			19,344,700				29,850,300
Total		$	22,913,600			$	34,191,000

EARNINGS (LOSS) BEFORE INCOME TAXES

 

		Year Ended February 28,
		2026				2025
Publishing		$	747,800			$	1,155,400
PaperPie			944,300				1,950,800
Other			3,654,700				(9,961,200	)
Total		$	5,346,800			$	(6,855,000	)

 

Publishing Operating Results

 

The following table summarizes the operating results of the Publishing segment for the twelve months ended February 28:

 

		Year Ended February 28,
		2026				2025
Net revenues		$	3,568,900			$	4,340,700
Cost of goods sold			1,546,200				1,757,300
Gross margin			2,022,700				2,583,400
Operating expenses
Operating and selling			281,300				424,300
Sales commissions			93,700				97,700
General and administrative			899,900				906,000
Total operating expenses			1,274,900				1,428,000
Operating income		$	747,800			$	1,155,400

 

PaperPie Operating Results

 

The following table summarizes the operating results of the PaperPie segment for the twelve months ended February 28:

 

		Year Ended February 28,
		2026				2025
Net revenues		$	19,344,700			$	29,850,300
Cost of goods sold			7,763,100				11,406,000
Gross margin			11,581,600				18,444,300
Operating expenses
Operating and selling			2,598,700				4,575,400
Sales commissions			6,305,500				9,998,800
General and administrative			1,733,100				1,919,300
Total operating expenses			10,637,300				16,493,500
Operating income		$	944,300			$	1,950,800

Information for the Other segment above for the years ended February 28, 2026 and February 28, 2025 is set forth below:

 

OTHER NON-SEGMENT EARNINGS (LOSS) BEFORE INCOME TAXES

 

		Year Ended February 28,
		2026				2025
Operating and selling:
Freight		$	447,000			$	668,500
Computer support			135,400				83,400
Operating and selling total			582,400				751,900
General and administrative:
Payroll			4,029,700				4,672,600
Depreciation			1,086,100				1,358,600
Building and warehouse rents			1,162,200				830,900
Outside services			394,600				458,000
Property taxes			210,700				370,300
Dues and subscriptions			256,000				260,200
Property insurance			255,800				242,200
Professional service fees			233,400				238,000
Other			666,600				699,100
General and administrative total			8,295,100				9,129,900
Interest expense			1,478,900				2,188,400
Gain from sale of assets - net			(12,190,900	)			-
Other income			(1,820,200	)			(2,109,000	)
Total other non-segment (earnings) loss before income taxes		$	(3,654,700	)		$	9,961,200