v3.26.1
BUSINESS SEGMENTS
 12 Months Ended
Feb. 28, 2026
Segment Reporting [Abstract]  
Segment Reporting [Text Block]

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