Eaco Corporation Reports Improved Second Quarter Results

ANAHEIM, Calif.--(Business Wire)--
Eaco Corporation (OTCBB:EACO), today reported revenues and
operating results for the quarter ended July 2, 2008.

The net loss for the quarter ended July 2, 2008 was $434,800
($0.11 per share) down from a net loss of $998,200 ($0.26 per share)
for the quarter ended June 27, 2007.

The net loss for the six months ended July 2, 2008 was $1,493,100
($0.37 per share) down from a net loss of $1,625,700 ($0.43 per share)
for the six months ended June 27, 2007.

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EACO Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Quarters Ended Six Months Ended
------------------------- ---------------------------
July 2, June 27, July 2, June 27,
2008 2007 2008 2007
----------- ------------- ------------- -------------
Revenues:
Rental revenue $ 349,400 $ 194,000 $ 648,400 $ 428,100
----------- ------------- ------------- -------------
Total revenues 349,400 194,000 648,400 428,100
----------- ------------- ------------- -------------

Cost and
expenses:
Depreciation
and
amortization 153,700 123,000 356,800 212,200
General and
administrative
expenses 460,000 519,100 959,900 844,300
Loss on
disposition
and impairment
of property
and equipment -- -- -- 226,100
----------- ------------- ------------- -------------
Total costs and
expenses 613,700 642,100 1,316,700 1,282,600
----------- ------------- ------------- -------------
Loss from
operations (264,300) (448,100) (668,300) (854,500)

Investment gain
(loss) -- (98,600) 95,700 (203,300)
Interest and
other income 85,600 16,300 148,400 45,900
Interest expense (256,100) (107,800) (472,700) (190,600)
----------- ------------- ------------- -------------
Loss before
income taxes (434,800) (638,200) (896,900) (1,202,500)
Benefit for
income taxes - - - -
----------- ------------- ------------- -------------
Loss from
continuing
operations (434,800) (638,200) (896,900) (1,202,500)

Discontinued
operations:

Loss from
discontinued
operations -- (360,000) (596,200) (423,200)
----------- ------------- ------------- -------------
Net loss (434,800) (998,200) (1,493,100) (1,625,700)

Undeclared
cumulative
preferred stock
dividend (19,100) (19,100) (19,100) (38,200)
----------- ------------- ------------- -------------
Net loss
attributable to
common
shareholders ($453,900) ($1,017,300) ($1,512,200) ($1,663,900)
=========== ============= ============= =============

Basic loss per
Share from:
Continuing
Operations (0.11) (0.17) (0.22) ($0.32)
Discontinued
operations (0.00) (0.09) (0.15) (0.11)
----------- ------------- ------------- -------------
Net loss (0.11) ($0.26) (0.37) ($0.43)
=========== ============= ============= =============
Basic weighted
average common
shares
outstanding 3,910,264 3,906,800 3,910,264 3,906,800
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EACO CORPORATION
Unaudited Condensed Balance Sheets
Jul 2, Jan 2,
2008 2008
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 7,200 $ 1,030,600
Restricted cash - short-term -- 1,186,500
Receivables 112,600 6,500
Prepaid and other current assets 155,000 145,500
------------- -------------
Total current assets 274,800 2,369,100

Investments, trading -- 290,700
Certificate of deposit 1,158,400 1,148,500

Property and equipment:
Land 5,682,800 5,682,800
Building and improvements 7,896,600 7,896,600
Equipment 2,398,900 2,398,900
------------- -------------
15,978,300 15,978,300
Accumulated depreciation (2,980,300) (2,672,700)
------------- -------------
Net property and equipment 12,998,000 13,305,600

Other assets, principally deferred
charges, net of accumulated amortization 978,300 884,400
------------- -------------
$ 15,409,500 $ 17,998,300
============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable $ 266,300 $ 341,200
Accrued expenses 188,600 2,425,600
Securities sold, not yet purchased -- 786,500
Due to related parties 939,300 --
Current portion of workers compensation
benefit liability 265,600 132,100
Current portion of long-term debt 216,400 173,500
Current portion of obligation under
capital lease 4,600 700
Current portion loss on sublease
contract 186,500 81,100
------------- -------------
Total current liabilities 2,067,300 3,940,700

Deferred rent 72,100 120,000
Deposit liability 179,400 156,900
Workers compensation benefit liability 3,404,600 3,669,900
Obligations under capital lease 2,873,800 2,877,900
Long-term debt 7,546,600 6,473,100
Accrued loss on sublease contract 657,900 639,800
------------- -------------
Total liabilities 16,801,700 17,878,300

Stockholders' equity (deficit):
Preferred stock of $.01 par;
authorized 10,000,000 shares;
outstanding 36,000 shares at July
2, 2008 and January 2, 2008
(liquidation value $900,000) 400 400
Common stock of $.01 par; authorized
8,000,000 shares; outstanding
3,910,264 shares at July 2, 2008
and January 2, 2008 39,000 39,000
Additional paid-in capital 10,932,600 10,932,300
Accumulated deficit (12,364,200) (10,851,700)
------------- -------------

Total shareholders' equity
(deficit) (1,392,200) 120,000
------------- -------------
$ 15,409,500 $ 17,998,300
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Any statements that are not based on historical fact are
forward-looking statements. Although such statements are based on
management's current estimates and expectations, and currently
available competitive, financial, and economic data, forward-looking
statements are inherently uncertain. We, therefore, caution the reader
that there are a variety of factors that could cause business
conditions and results to differ materially from what is contained in
our forward-looking statements. For a description of some of the
factors which may occur that could cause actual results to differ from
our forward-looking statements please refer to our 2007 Form 10-K.

Eaco Corporation
Marta Araujo, 714-876-2490

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