EVANSVILLE, Ind., Feb. 21, 2020 /PRNewswire/ -- Escalade,
Incorporated (NASDAQ: ESCA) - "Revenue declined 7.7% in the quarter
due to softness in the archery and fitness categories. These
shortfalls were partially offset by positive growth in Outdoor
Games, Pickleball and Basketball categories," stated Dave Fetherman, President and CEO. "Gross
margins were down 90 basis points in the quarter, impacted by
tariffs and sales mix. We anticipate the facility consolidations
completed during 2019 and actions taken to reduce operating costs
will lead to improved operating profits in 2020. The Company
repurchased 80,570 shares of stock during the quarter and 271,774
shares for 2019. The Company announced a quarterly dividend of
$0.125 per share."
Fourth Quarter Results
Net sales for the fourth quarter of 2019 were $47.0 million compared to net sales of
$51.0 million for the same quarter in
2018, a decrease of $4.0 million or
7.7%.
Gross margin ratio for the fourth quarter of 2019 was 23.1%,
compared to 24.0% for the same period in the prior year. Gross
profit for the fourth quarter of 2019 was $10.9 million compared to gross profit of
$12.2 million for the same quarter in
2018. Margins were negatively impacted by tariffs and sales
mix.
Selling, general and administrative expenses (SG&A) were
$7.0 million for the quarter compared
to $6.9 million for the same period
in the prior year, an increase of $0.1
million or 2.3%. SG&A, as a percent of sales, for the
fourth quarter of 2019 increased to 15.0% from 13.5% reported for
the same period prior year.
Operating income for the fourth quarter of 2019 was $3.5 million compared to operating income of
$5.0 million for the same period in
the prior year.
Net income for the fourth quarter of 2019 was $2.6 million, or $0.18 diluted earnings per share compared to net
income of $3.6 million, or
$0.25 diluted earnings per share for
the same quarter in 2018.
Full Year Results
Full year net sales for 2019 were $180.5
million compared to $175.8
million in 2018, an increase of $4.8
million, or 2.7%.
Gross margin ratio for full year 2019 decreased to 23.5% from
25.6%. Margins were negatively impacted by customer allowances,
lower factory utilization, tariffs and sales mix.
SG&A for full year 2019 were $31.6
million compared to $29.8
million in 2018, an increase of $1.8
million, or 6.1% due primarily to operating costs associated
with Victory Tailgate, which was acquired during the fourth quarter
of 2018 and an investment in basketball displayers. As a percent of
sales, SG&A increased to 17.5% from 17.0% in 2018.
Operating income for full year 2019 was $9.3 million compared to $13.8 million in 2018, a decrease of $4.5 million. During 2019, the Company
experienced challenges with the integration with two of the latest
acquisitions. The Company implemented changes during the second
half of 2019 that will enhance the profitability of these
acquisitions in 2020.
During 2018, the Company recognized a $13.0 million gain in other income on the sale of
our 50% owned equity method investment, Stiga, a Swedish
entity.
Full year net income for 2019 was $7.3
million, or $0.50 diluted
earnings per share compared to net income of $20.4 million, or $1.41 diluted earnings per share for 2018.
The Company announced a quarterly dividend of $0.125 per share to be paid to all shareholders
of record on March 9, 2020 and
disbursed on March 16, 2020.
Escalade is a leading manufacturer and marketer of sporting
goods products sold worldwide. To obtain more information on the
Company and its products, visit our website at:
www.EscaladeInc.com or contact Patrick
Griffin, Vice President of Corporate Development &
Investor Relations at 812/467-1358.
ABOUT ESCALADE SPORTS
Headquartered in Evansville,
IN, Escalade Sports is a global manufacturer and distributor
of sports and outdoor recreational equipment. Leaders in
their respective categories, Escalade Sports' brands include Bear®
Archery, Bear X™, Trophy Ridge®, Rocket®, SIK® and Cajun
Bowfishing™ archery equipment; STIGA® and Ping-Pong® table
tennis; Accudart® and Unicorn® darting; Atomic®, Victory
Tailgate®, Triumph™ Sports, Viva Sol®, Zume Games®
recreational games; DURA™ and Onix® pickleball equipment;
Goalrilla™, Goalsetter® residential in-ground basketball systems,
Goaliath® and Silverback® residential in-ground and portable
basketball goals; Lifeline® and the STEP® fitness products;
Woodplay® premium playsets; Vuly™ trampolines; and
Cue&Case® - a leader in specialty billiard accessories.
Escalade Sports' products are available at sporting goods dealers
and independent retailers nationwide. For more information on
Escalade Sports, its brands, instruction manuals, retailers,
warranty, replacement parts or customer service, please call
1-888-784-4288 or visit www.escaladesports.com.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements relating to
present or future trends or factors that are subject to risks and
uncertainties. These risks include, but are not limited to: the
impact of competitive products and pricing; product demand and
market acceptance; new product development; Escalade's ability to
achieve its business objectives, especially with respect to its
Sporting Goods business on which it has chosen to focus; Escalade's
ability to successfully achieve the anticipated results of
strategic transactions, including the integration of the operations
of acquired assets and businesses and of divestitures or
discontinuances of certain operations, assets, brands, and
products; the continuation and development of key customer,
supplier, licensing and other business relationships; the ability
to successfully negotiate the shifting retail environment and
changes in consumer buying habits; the financial health of our
customers; disruptions or delays in our supply chain, including
potential disruptions or delays arising from political unrest, war,
labor strikes, natural disasters, and public health crises such as
the coronavirus pandemic; Escalade's ability to control costs;
Escalade's ability to successfully implement actions to lessen the
potential impacts of tariffs and other trade restrictions
applicable to our products and raw materials, including impacts on
the costs of producing our goods, importing products and materials
into our markets for sale, and on the pricing of our products;
general economic conditions; fluctuation in operating results;
changes in foreign currency exchange rates; changes in the
securities markets; Escalade's ability to obtain financing and to
maintain compliance with the terms of such financing; the
availability, integration and effective operation of information
systems and other technology, and the potential interruption of
such systems or technology; risks related to data security of
privacy breaches; and other risks detailed from time to time in
Escalade's filings with the Securities and Exchange Commission.
Escalade's future financial performance could differ materially
from the expectations of management contained herein. Escalade
undertakes no obligation to release revisions to these
forward-looking statements after the date of this report.
Escalade,
Incorporated and Subsidiaries
Consolidated Statements of Operations
(Unaudited, In Thousands Except Per Share Data)
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
All Amounts in
Thousands Except Per Share Data
|
December
28, 2019
|
|
December
29, 2018
|
|
December
28, 2019
|
|
December
29, 2018
|
|
|
|
|
|
|
|
|
Net sales
|
$47,044
|
|
$50,992
|
|
$180,541
|
|
$175,780
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
36,159
|
|
38,756
|
|
138,181
|
|
130,750
|
Selling,
administrative and general expenses
|
7,040
|
|
6,880
|
|
31,616
|
|
29,807
|
Amortization
|
334
|
|
339
|
|
1,469
|
|
1,406
|
|
|
|
|
|
|
|
|
Operating
Income
|
3,511
|
|
5,017
|
|
9,275
|
|
13,817
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
Interest
expense
|
(61)
|
|
(37)
|
|
(356)
|
|
(427)
|
Equity in earnings of
affiliates
|
--
|
|
--
|
|
--
|
|
121
|
Gain on sale of equity
method investment (includes
($3,729) of accumulated other comprehensive
loss reclassification from foreign currency
translation adjustment)
|
--
|
|
--
|
|
--
|
|
13,020
|
Other income
(expense)
|
3
|
|
3
|
|
15
|
|
(89)
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
3,453
|
|
4,983
|
|
8,934
|
|
26,442
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
878
|
|
1,403
|
|
1,676
|
|
6,000
|
|
|
|
|
|
|
|
|
Net Income
|
$ 2,575
|
|
$ 3,580
|
|
$ 7,258
|
|
$ 20,442
|
|
|
|
|
|
|
|
|
Earnings Per Share
Data:
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
0.18
|
|
$
0.25
|
|
$
0.50
|
|
$
1.42
|
Diluted earnings per
share
|
$
0.18
|
|
$
0.25
|
|
$
0.50
|
|
$
1.41
|
|
|
|
|
|
|
|
|
Dividends
declared
|
$
0.125
|
|
$
0.125
|
|
$
0.50
|
|
$
0.50
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets (Unaudited, In Thousands)
|
|
|
All Amounts in
Thousands Except Share Information
|
December
28,
2019
|
December
29,
2018
|
|
|
|
ASSETS
|
|
|
Current
Assets:
|
|
|
Cash and cash
equivalents
|
$
5,882
|
$
2,824
|
Receivables, less
allowance of $483; and $532; respectively
|
35,450
|
40,682
|
Inventories
|
42,269
|
39,122
|
Prepaid
expenses
|
3,151
|
4,151
|
Prepaid income
tax
|
163
|
1,082
|
Other current
assets
|
-
|
2
|
TOTAL CURRENT
ASSETS
|
86,915
|
87,863
|
|
|
|
Property, plant and
equipment, net
|
15,111
|
15,498
|
Operating lease
right-of-use assets
|
1,080
|
--
|
Intangible assets,
net
|
18,847
|
19,785
|
Goodwill
|
26,749
|
26,381
|
Other
assets
|
77
|
--
|
TOTAL
ASSETS
|
$148,779
|
$149,527
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
Liabilities:
|
|
|
Note
payable
|
$ 135
|
$ --
|
Trade accounts
payable
|
7,765
|
5,631
|
Accrued
liabilities
|
9,689
|
11,072
|
Current operating
lease liabilities
|
621
|
--
|
TOTAL CURRENT
LIABILITIES
|
18,210
|
16,703
|
|
|
|
Other
Liabilities:
|
|
|
Long‑term
debt
|
--
|
--
|
Deferred income tax
liability
|
3,537
|
3,409
|
Operating lease
liabilities
|
475
|
--
|
Other
liabilities
|
387
|
1,094
|
TOTAL LIABILITIES
|
22,609
|
21,206
|
|
|
|
Stockholders'
Equity:
|
|
|
Preferred
stock:
|
|
|
Authorized 1,000,000
shares; no par value, none issued
|
|
|
Common
stock:
|
|
|
Authorized 30,000,000
shares; no par value, issued and outstanding
– 14,214,777; and
14,438,824; shares respectively
|
14,215
|
14,439
|
Retained
earnings
|
111,955
|
113,882
|
TOTAL STOCKHOLDERS'
EQUITY
|
126,170
|
128,321
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$148,779
|
$149,527
|
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SOURCE Escalade, Incorporated