Strong commodity markets, a booming device resale business and a couple of acquisitions drove profitability for a group of southwestern U.S. electronics processors last year.
Echo Consolidated Holding Group (ECHG) recently reported its financial results for 2021, noting higher revenues and profits in the resale and recycling businesses.
ECHG is made up of the following companies: e-scrap processor Echo Environmental, ITAD companies Avail Recovery Solutions and ITAD USA, device reseller Teladvance, and mobile phone trade-in firm CExchange. All are based in Carrollton, Texas, except for Avail Recovery Solutions, which is located in Chandler, Ariz.
ECHG reported total revenue of $44.2 million in 2021, up 56% from the year before. The company’s gross profit was $18.6 million, up 47% year over year. The profit margin was 42.1%, down from 44.9% in 2020.
However, it’s important to note that acquisitions also contributed to the higher 2021 figures. Envela, the parent company of ECHG, acquired Avail Recovery Solutions on Nov. 1, 2021, after acquiring CExchange earlier in the year, on June 9, 2021. Envela bought Avail for $4.5 million, purchased with an initial $2.5 million payment followed by 12 quarterly payments of nearly $167,000 each, according to the company’s annual report.
ECHG is one of two operating segments of publicly traded company Envela. The other is Dallas Gold and Silver Exchange (DGSE), which has companies involved with buying and selling jewelry, gems, precious metals and other luxury goods.
Reuse versus recycling returns
The company’s used electronics resale business saw faster growth than its commodities recovery business, which also saw growth.
ECHG’s resale revenues were $32.5 million in 2021, up 68% from 2020. The gross profit was $14.6 million, up 53%. The profit margin was 44.8%, down from 49% in 2020.
ECHG’s recycling revenues totaled $11.7 million in 2021, up 32% from the year before. The gross profit was $4.0 million, up 27% from the year before. The profit margin was 34.5%, down from 36% the year before.
The company started 2021 with a decrease in recycling profits, attributed to a drop in e-scrap collection volumes because of the pandemic, but the profits recovered later in the year.
Overall, parent company Envela reported total revenues of $141 million in 2021, up 24% from the year before. Envela’s gross profit was $31.2 million, up 35% from the year before. The company’s overall margin was 22.1%, up from 20.2% in 2020.
“We ended fiscal 2021 on an exceptionally strong note, with robust growth and a significant increase to bottom-line profitability,” John Loftus, Envela’s chairman and CEO, stated in a press release. “We continued to advance our strategic initiatives in 2021, investing in our capabilities to better serve our customers and grow profitably.”
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