EACO Corporation Reports Second Quarter Results, Seeks to Redeploy Cash.

NEPTUNE BEACH, Fla. -- EACO Corporation (OTCBB:EACO), today reported operating results for the second quarter and year to date periods ended June 29, 2005.

Net income for the second quarter was $2,542,900 ($0.62 per share) compared to a net loss of $571,400 ($0.15 per share) for the same period in 2004. For the six months ended June 29, 2005, net income was $2,801,100 ($0.70 per share) compared to a net loss of $902,100 ($0.24 per share) for the same period in 2004.

Loss from continuing operations for the second quarter was $36,300 ($0.01 per share) compared to $256,800 ($0.07 per share) in 2004. Loss from continuing operations for the six months ended June 29, 2005 was $285,300 ($0.08 per share) compared to $524,300 ($0.14 per share) in 2004.

Income from discontinued operations, net of income tax benefit was $2,579,200 ($0.63 per share) for the second quarter of 2005 compared to a loss of $314,600 ($0.08 per share) in 2004. Income from discontinued operations for the six months ended June 29, 2005 was $3,086,400 ($0.78 per share) compared to a loss of $377,800 ($0.10 per share) in 2004.

As previously announced, the Company sold all of its operating restaurants on June 30, 2005, the first day of the Company's third quarter. The operating results of these sold restaurants are reported as "Income or loss from discontinued operations." Results for the quarter and six months were impacted by income tax benefits totaling $3,061,800, including $213,200 from continuing operations and $2,848,600 from discontinued operations.

As a result of the sale of its restaurants, the Company has approximately $10 million in cash, and is seeking business opportunities for strategic investments of these funds. The Company intends to pursue and consider any acquisitions or investments that it believes will maximize shareholder value.

EACO Corporation
Consolidated Results of Operations
(Unaudited)
                    For The Quarters Ended   For The Six Months Ended
                   ---------------------------------------------------
                     June 29,     June 30,     June 29,     June 30,
                       2005         2004         2005         2004
                   ---------------------------------------------------
Revenues:
  Rental income        $32,800      $32,800      $65,600      $65,600
                   -----------  -----------  -----------  -----------
Total revenues          32,800       32,800       65,600       65,600
                   -----------  -----------  -----------  -----------
Cost and expenses:
  Payroll and
   benefits              6,400        4,600       13,400       11,600
  Depreciation and
   amortization         35,800       48,000       83,100       95,300
  Other operating
   expenses             45,800       50,100       84,300      103,900
  General and
   administrative
   expenses            190,200      180,400      365,200      354,100
                   -----------  -----------  -----------  -----------
Total costs and
 expenses              278,200      283,100      546,000      564,900
                   -----------  -----------  -----------  -----------
    Loss from
     continuing
     operations       (245,400)    (250,300)    (480,400)    (499,300)
Investment gain          2,100       10,800        2,100       10,800
Interest and other
 income                 28,600       19,300       49,500       37,800
Interest expense       (34,800)     (36,600)     (69,700)     (73,600)
                   -----------  -----------  -----------  -----------
    Loss from
     continuing
     operations,
     before income
     taxes            (249,500)    (256,800)    (498,500)    (524,300)
Income tax benefit     213,200           --      213,200           --
                   -----------  -----------  -----------  -----------
    Loss from
     continuing
     operations        (36,300)    (256,800)    (285,300)    (524,300)
Income (loss) on
 discontinued
 operations, net of
 income tax benefit  2,579,200     (314,600)   3,086,400     (377,800)
                   -----------  -----------  -----------  -----------
    Net income (loss)
     attributable
     to common
     shareholders    2,542,900     (571,400)   2,801,100     (902,100)
Cumulative
 preferred stock
 dividend              (19,100)          --      (38,300)          --
                   -----------  -----------  -----------  -----------
    Net income (loss)
     available for
     basic and
     diluted
     earnings (loss)
     per share      $2,523,800    ($571,400)  $2,762,800    ($902,100)
                   ===========  ===========  ===========  ===========
Basic income (loss)
 per share
  Continuing
   operations           ($0.01)      ($0.07)      ($0.08)      ($0.14)
  Discontinued
   operations             0.66        (0.08)        0.79        (0.10)
                   -----------  -----------  -----------  -----------
Net income (loss)        $0.65       ($0.15)       $0.71       ($0.24)
                   ===========  ===========  ===========  ===========
Basic weighted
 average common
 shares outstanding  3,881,900    3,771,000    3,881,900    3,744,000
                   ===========  ===========  ===========  ===========
Diluted income
 (loss) per share
  Continuing
   operations           ($0.01)      ($0.07)      ($0.08)      ($0.14)
  Discontinued
   operations             0.63        (0.08)        0.78        (0.10)
                   -----------  -----------  -----------  -----------
Net income (loss)        $0.62       ($0.15)       $0.70       ($0.24)
                   ===========  ===========  ===========  ===========
Diluted weighted
 average common
 shares outstanding  4,072,900    3,771,000    3,972,800    3,744,000
                   ===========  ===========  ===========  ===========