v3.25.4
BUSINESS SEGMENTS
 9 Months Ended
Nov. 30, 2025
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 12 – 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 8 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 reporting segment for the three and nine month periods ended November 30, 2025 and 2024, are as follows:

 

NET REVENUES

 

   Three Months Ended
November 30,		   Nine Months Ended
November 30,		 
   2025   2024   2025   2024 
PaperPie  $6,236,100   $9,776,700   $16,027,600   $24,117,300 
Publishing   771,700    1,275,400    2,707,700    3,437,400 
Total  $7,007,800   $11,052,100   $18,735,300   $27,554,700 

 

EARNINGS (LOSS) BEFORE INCOME TAXES

 

   Three Months Ended
November 30,		   Nine Months Ended
November 30,		 
   2025   2024   2025   2024 
PaperPie  $521,800   $1,017,000   $968,800   $1,317,400 
Publishing   133,000    422,500    546,500    909,300 
Other   9,987,900    (2,551,400)   5,927,900    (7,551,700)
Total  $10,642,700   $(1,111,900)  $7,443,200   $(5,325,000)

 

PAPERPIE OPERATING RESULTS

 

The following table summarizes the operating results of the PaperPie segment for the three and nine months ended November 30, 2025 and 2024:

 

   Three Months Ended
November 30,		   Nine Months Ended
November 30,		 
   2025   2024   2025   2024 
Net revenues  $6,236,100   $9,776,700   $16,027,600   $24,117,300 
                     
Cost of goods sold   2,361,900    3,623,800    6,400,600    9,150,300 
Gross margin   3,874,200    6,152,900    9,627,000    14,967,000 
                     
Operating expenses                    
Operating and selling   963,500    1,334,800    2,257,600    4,007,700 
Sales commissions   2,008,700    3,260,300    5,235,500    8,121,200 
General and administrative   380,200    540,800    1,165,100    1,520,700 
Total operating expenses   3,352,400    5,135,900    8,658,200    13,649,600 
                     
Operating income  $521,800   $1,017,000   $968,800   $1,317,400 

PUBLISHING OPERATING RESULTS

 

The following table summarizes the operating results of the Publishing segment for the three and nine months ended November 30, 2025 and 2024:

 

   Three Months Ended
November 30,		   Nine Months Ended
November 30,		 
   2025   2024   2025   2024 
Net revenues  $771,700   $1,275,400   $2,707,700   $3,437,400 
                     
Cost of goods sold   336,200    524,400    1,199,800    1,394,400 
Gross margin   435,500    751,000    1,507,900    2,043,000 
                     
Operating expenses:                    
Operating and selling   68,100    88,300    220,300    358,300 
Sales commissions   21,800    23,300    76,000    72,200 
General and administrative   212,600    216,900    665,100    703,200 
Total operating expenses   302,500    328,500    961,400    1,133,700 
                     
Operating income  $133,000   $422,500   $546,500   $909,300 

 

Information for the Other segment above for the three and nine months ended November 30, 2025 and 2024 is set forth below:

 

OTHER NON-SEGMENT LOSS (EARNINGS) BEFORE INCOME TAXES

 

   Three Months Ended
November 30,		   Nine Months Ended
November 30,		 
   2025   2024   2025   2024 
Operating and selling:  $    $    $    $  
Freight   123,400    297,400    347,200    583,500 
Computer support   29,700    23,500    93,700    60,400 
Total operating and selling expenses   153,100    320,900    440,900    643,900 
                     
General and administrative:                    
Payroll   956,500    1,186,900    2,869,600    3,568,500 
Depreciation   271,700    292,700    823,100    1,078,700 
Building and warehouse rents   289,700    249,400    743,600    592,000 
Outside services   82,400    115,200    334,200    336,700 
Property taxes   25,400    92,700    180,700    278,100 
Property insurance   75,500    57,000    184,900    177,500 
Professional service fees   60,300    59,700    176,700    178,300 
Dues and subscriptions   79,000    77,900    187,100    207,300 
Other   165,000    185,700    466,300    538,800 
Total general and administrative expenses   2,005,500    2,317,200    5,966,200    6,955,900 
                     
Interest expense   369,800    575,400    1,477,300    1,697,800 
Other income:                    
Gain from sale of assets   (12,243,700)   -    (12,186,700)   - 
Other, net   (272,600)   (662,100)   -    (1,745,900)
Total other income   (12,516,300)   (662,100)   (13,812,300)   (1,745,900)
Total other non-segment loss (earnings) before income taxes  $(9,987,900)  $2,551,400   $(5,927,900)  $7,551,700