v3.26.1
BUSINESS SEGMENTS
 3 Months Ended
May 31, 2026
Segment Reporting [Abstract]  
Segment Reporting [Text Block]

Note 10 – 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 7 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-month periods ended May 31, 2026 and 2025, are as follows:

 

NET REVENUES

 

   Three Months Ended
May 31,		 
   2026   2025 
PaperPie  $4,174,900   $6,060,300 
Publishing   580,900    1,046,100 
Total  $4,755,800   $7,106,400 

LOSS BEFORE INCOME TAXES

 

   Three Months Ended
May 31,		 
   2026   2025 
PaperPie  $378,600   $461,700 
Publishing   91,000    207,800 
Other   (1,848,700)   (2,118,800)
Total  $(1,379,100)  $(1,449,300)

  

PUBLISHING OPERATING RESULTS

 

The following table summarizes the operating results of the Publishing segment for the three months ended May 31, 2026 and 2025:

 

   Three Months Ended
May 31,		 
   2026   2025 
Net revenues  $580,900   $1,046,100 
           
Cost of goods sold   251,800    500,000 
Gross margin   329,100    546,100 
           
Operating expenses:          
Operating and selling   58,800    82,300 
Sales commissions   11,900    30,500 
General and administrative   167,400    225,500 
Total operating expenses   238,100    338,300 
           
Operating income  $91,000   $207,800 

 

PAPERPIE OPERATING RESULTS

 

The following table summarizes the operating results of the PaperPie segment for the three months ended May 31, 2026 and 2025:

 

   Three Months Ended
May 31,		 
   2026   2025 
Net revenues  $4,174,900   $6,060,300 
           
Cost of goods sold   1,682,700    2,469,300 
Gross margin   2,492,200    3,591,000 
           
Operating expenses          
Operating and selling   502,900    739,600 
Sales commissions   1,336,800    1,981,500 
General and administrative   273,900    408,200 
Total operating expenses   2,113,600    3,129,300 
           
Operating income  $378,600   $461,700 

Information for the Other segment above for the three months ended May 31, 2026 and 2025 is set forth below:

 

OTHER NON-SEGMENT LOSS BEFORE INCOME TAXES

 

   Three Months Ended
May 31,		 
   2026   2025 
Operating and selling:        
Freight  $85,900   $149,700 
Computer support   29,400    23,000 
Total operating and selling expenses   115,300    172,700 
           
General and administrative:          
Payroll   750,200    963,200 
Depreciation   256,200    276,700 
Building and warehouse rents   390,600    237,700 
Outside services   49,300    151,600 
Property insurance   57,900    74,800 
Professional service fees   56,400    59,700 
Dues and subscriptions   73,600    53,500 
Other   (5,100)   244,100 
Total general and administrative expenses   1,629,100    2,061,300 
           
Interest expense   600    504,300 

Other (income) loss

   103,700    (619,500)
Total other non-segment loss before income taxes  $1,848,700   $2,118,800