EVANSVILLE, Ind., April 16, 2020 /PRNewswire/ -- Escalade,
Incorporated (NASDAQ: ESCA) - "Our first quarter results reflect
the benefits of the operational and organizational changes we made
during 2019 which enabled us to achieve operational leverage during
the quarter and helped drive significant operating income
improvement," said Dave Fetherman,
President and CEO of Escalade, Inc. "The 16.2% revenue growth was
driven by our outdoor categories – basketball, pickleball, and
Victory Tailgate. These categories, along with table tennis and
billiard accessories, helped to drive the margin improvement. We
made progress in reducing inventory and improving turns during the
quarter. These efforts resulted in a significant improvement in EPS
for our shareholders. We ended the quarter with a strong balance
sheet, with available cash and full availability under our
$50 million revolving facility with
our long-term banking partner, JPMorgan Chase. With the emerging
COVID-19 pandemic, we are focused on safeguarding and protecting
our employees. Due to shelter in place mandates issued across the
country, our e-commerce channel is experiencing increased demand
for our fitness and home recreation products. As I turn over the
reins to Scott Sincerbeaux, our
incoming President and CEO, I want to thank all the employees that
make up Escalade for your dedication, commitment and friendship
over the years."
Net sales for the first quarter of 2020 were $37.3 million compared to net sales of
$32.1 million for the same quarter in
2019, an increase of $5.2 million or
16.2%. The increase in sales was primarily driven by growth in our
outdoor categories, including basketball, pickleball and Victory
Tailgate.
Gross margin ratio for the first quarter of 2020 was 27.4%,
compared to 26.4% for the same period in the prior year. The
improvement in gross margin was primarily due to product mix and
operational improvements the Company has performed over the last
year. Gross profit for the first quarter of 2020 was $10.2 million compared to gross profit of
$8.5 million for the same quarter in
2019.
Selling, general and administrative expenses (SG&A) were
$7.5 million for the quarter compared
to $7.7 million for the same period
in the prior year, a decrease of $0.2
million or 3.7%. The reduction in SG&A was a result of
organizational changes and operating efficiencies put in place
during 2019. SG&A, as a percent of sales, for the first quarter
of 2020 decreased to 20.0% from 24.1% reported for the same period
prior year.
Operating income for the first quarter of 2020 was $2.4 million compared to operating income of
$0.4 million for the same period in
the prior year.
Net income for the first quarter of 2020 was $2.0 million, or $0.14 diluted earnings per share compared to net
income of 0.3 million, or $0.02
diluted earnings per share for the same quarter in 2019.
The Company announced a quarterly dividend of $0.125 per share to be paid to all shareholders
of record on June 1, 2020 and
disbursed on June 8, 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:
specific and overall impacts of the COVID-19 global pandemic on
Escalade's financial condition and results of operations;
Escalade's plans and expectations surrounding the transition to its
newly hired Chief Executive Officer and all potential related
effects and consequences; 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 business operations,
including without limitation disruptions or delays in our supply
chain, arising from political unrest, war, labor strikes, natural
disasters, public health crises such as the coronavirus pandemic,
and other events and circumstances beyond our control; 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. Additionally, many of these risks and
uncertainties are currently elevated by and may or will continue to
be elevated by the COVID-19 pandemic. It is not possible to predict
or identify all such risks, but may become material in the future.
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
|
All Amounts in
Thousands Except Per Share Data
|
|
|
|
|
March 21,
2020
|
|
March 23,
2019
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$37,289
|
|
$32,102
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
|
|
27,074
|
|
23,625
|
Selling,
administrative and general expenses
|
|
|
|
|
7,457
|
|
7,745
|
Amortization
|
|
|
|
|
334
|
|
338
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
2,424
|
|
394
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
(44)
|
|
(68)
|
Other
income
|
|
|
|
|
46
|
|
6
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
|
|
|
|
2,426
|
|
332
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
|
|
|
|
475
|
|
65
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
$ 1,951
|
|
$ 267
|
|
|
|
|
|
|
|
|
Earnings Per Share
Data:
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
|
|
$
0.14
|
|
$
0.02
|
Diluted earnings per
share
|
|
|
|
|
$
0.14
|
|
$
0.02
|
|
|
|
|
|
|
|
|
Dividends
declared
|
|
|
|
|
$
0.125
|
|
$
0.125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets (Unaudited, In Thousands)
|
|
All Amounts in
Thousands Except Share Information
|
March 21,
2020
|
December 28,
2019
|
March 23,
2019
|
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$ 6,167
|
$ 5,882
|
$
4,299
|
Receivables, less
allowance of $565; $483; and $548; respectively
|
32,594
|
35,450
|
31,951
|
Inventories
|
42,235
|
42,269
|
47,744
|
Prepaid
expenses
|
2,646
|
3,151
|
2,986
|
Prepaid income
tax
|
--
|
163
|
1,033
|
TOTAL CURRENT
ASSETS
|
83,642
|
86,915
|
88,013
|
|
|
|
|
Property, plant and
equipment, net
|
14,867
|
15,111
|
15,523
|
Operating lease
right-of-use assets
|
1,581
|
1,080
|
878
|
Intangible assets,
net
|
18,513
|
18,847
|
19,447
|
Goodwill
|
26,749
|
26,749
|
26,381
|
Other
assets
|
69
|
77
|
90
|
TOTAL
ASSETS
|
$145,421
|
$148,779
|
$150,332
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Note
payable
|
$ --
|
$ 135
|
$ --
|
Trade accounts
payable
|
6,387
|
7,765
|
7,756
|
Accrued
liabilities
|
8,029
|
9,689
|
6,512
|
Income tax
payable
|
315
|
--
|
--
|
Current operating
lease liabilities
|
730
|
621
|
595
|
TOTAL CURRENT
LIABILITIES
|
15,461
|
18,210
|
14,863
|
|
|
|
|
Other
Liabilities:
|
|
|
|
Long‑term
debt
|
--
|
--
|
3,662
|
Deferred income tax
liability
|
3,537
|
3,537
|
3,409
|
Operating lease
liabilities
|
867
|
475
|
288
|
Other
liabilities
|
387
|
387
|
1,094
|
TOTAL LIABILITIES
|
20,252
|
22,609
|
23,316
|
|
|
|
|
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 –
14,096,874; 14,214,777;
and 14,471,496; shares respectively
|
14,097
|
14,215
|
14,471
|
Retained
earnings
|
111,072
|
111,955
|
112,545
|
TOTAL STOCKHOLDERS'
EQUITY
|
125,169
|
126,170
|
127,016
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$145,421
|
$148,779
|
$150,332
|
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SOURCE Escalade, Incorporated