EACO Corporation Reports Third Quarter Results, Gain on Sale of Restaurants.

NEPTUNE BEACH, Fla. -- EACO Corporation (OTCBB:EACO), today reported operating results for the third quarter and year to date periods ended September 28, 2005.

Net income for the third quarter was $7,367,500 ($1.68 per share) compared to a net loss of $539,600 ($0.14 per share) for the same period in 2004. For the nine months ended September 28, 2005, net income was $10,168,600 ($2.44 per share) compared to a net loss of $1,441,700 ($0.38 per share) for the same period in 2004.

Loss from continuing operations (net of income tax) for the third quarter was $48,700 ($0.01 per share) compared to $450,400 ($0.12 per share) in 2004. Loss from continuing operations for the nine months ended September 28, 2005 was $357,000 ($0.08 per share) compared to $976,100 ($0.26 per share) in 2004.

Income from discontinued operations, net of income tax was $7,416,200 ($1.69 per share) for the third quarter of 2005 compared to a loss of $89,200 ($0.02 per share) in 2004. Income from discontinued operations for the nine months ended September 28, 2005 was $10,525,600 ($2.52 per share) compared to a loss of $465,600 ($0.12 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 Company recognized a gain on the sale of the restaurants (net of income tax) of $7,567,700 in the quarter ended September 28, 2005. For the nine months ended September 28, 2005, the total gain on this sale was $10,393,300 (net of income tax). The Company had previously recognized approximately $3 million in income tax benefit related to the sale in the second quarter of 2005.

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

EACO Corporation
Consolidated Results of Operations
(Unaudited)

                           For The Quarters      For The Nine Months
                                Ended                  Ended
                      ------------------------------------------------
                         Sept. 28,  Sept. 29,   Sept. 28,   Sept. 29,
                           2005       2004        2005         2004
                      ------------ ---------- ----------- ------------
Revenues:
  Rental income          $46,800    $32,800     $112,300      $98,300
                      ----------- ---------- ------------ ------------
Total revenues            46,800     32,800      112,300       98,300
                      ----------- ---------- ------------ ------------
Cost and expenses:
  Depreciation and
   amortization           61,900    102,900      145,100      198,200
  General and
   administrative
   expenses              310,000    369,500      769,000      840,400
                      ----------- ---------- ------------ ------------
Total costs and
 expenses                371,900    472,400      914,100    1,038,600
                      ----------- ---------- ------------ ------------
      Loss from
       operations       (325,100)  (439,600)    (801,800)    (940,300)
Investment gain           56,000      1,600       58,100       12,400
Interest and other
 income                  225,900     24,300      275,500       62,100
Interest expense         (34,900)   (36,700)    (104,500)    (110,300)
                      ----------- ---------- ------------ ------------
      Loss from
       continuing
       operations
       before income
       taxes             (78,100)  (450,400)    (572,700)    (976,100)
Income tax benefit        29,400        ---      215,700          ---
                      ----------- ---------- ------------ ------------
      Loss from
       continuing
       operations        (48,700)  (450,400)    (357,000)    (976,100)
                      ----------- ---------- ------------ ------------
Discontinued
 operations:
  Income (loss) on
   discontinued
   operations,
   net of income tax    (151,500)   (89,200)     132,300     (465,600)
  Gain on sale of
   discontinued
   operations,
   net of income tax   7,567,700        ---   10,393,300          ---
                      ----------- ---------- ------------ ------------
  Income (loss)from
   discontinued
   operations          7,416,200    (89,200)  10,525,600     (465,600)
                      ----------- ---------- ------------ ------------
     Net income
      (loss)           7,367,500   (539,600)  10,168,600   (1,441,700)
Cumulative preferred
 stock dividend          (19,100)    (6,300)     (57,400)      (6,300)
                      ----------- ---------- ------------ ------------
  Net income (loss)
   available
   (attributable)
   to common
   shareholders       $7,348,400   ($545,900) $10,111,200 ($1,448,000)
                      =========== ========== ============ ============
Basic income (loss)
 per share:
  Continuing
   operations             ($0.01)    ($0.12)      ($0.09)      ($0.26)
  Discontinued
   operations               1.90      (0.02)        2.71        (0.12)
                      ----------- ---------- ------------ ------------
Net income (loss)          $1.89     ($0.14)       $2.62       ($0.38)
                      =========== ========== ============ ============
Basic weighted
 average common
 shares
 outstanding           3,889,000  3,881,500    3,884,300    3,790,000
                      =========== ========== ============ ============
Diluted income (loss)
 per share:
  Continuing
   operations             ($0.01)    ($0.12)      ($0.08)      ($0.26)
  Discontinued
   operations               1.69      (0.02)        2.52        (0.12)
                      ----------- ---------- ------------ ------------
Net income (loss)          $1.68     ($0.14)       $2.44       ($0.38)
                      =========== ========== ============ ============
Diluted weighted
 average common
 shares
 outstanding           4,379,900  3,881,500    4,172,800    3,790,000
                      =========== ========== ============ ============