EVANSVILLE, Ind., Oct. 29, 2020 /PRNewswire/ -- Escalade,
Incorporated (NASDAQ: ESCA) today announced financial results for
its fiscal 2020 third quarter ended October
3, 2020. The Company posted quarterly revenue of
$78.1 million, an increase of 70.6%
over prior year, and a record for its third fiscal quarter. This
represents the third consecutive quarter of record top line
results. Quarterly diluted earnings per share were $0.71, up 306.7% from prior year.
"Amidst the backdrop of a global pandemic and a highly dynamic
environment, our third quarter growth rate continued to accelerate
compared to the previous quarter, while gross margin expanded 820
basis points to 30.1%. These key growth factors resulted in the
record quarterly net income of $10.2
million compared to $2.5
million in 2019," said Scott
Sincerbeaux, President and CEO of Escalade, Inc.
"We are thrilled to report continued record quarterly revenue,
fueled by key investments in product innovation, demand creation,
and the emphasis and acceleration of factory orders and inventory
flow to support customer and consumer demand. The record results of
our third quarter demonstrate the strong execution of our strategy
to deepen relationships with customers and consumers. Despite the
unprecedented challenges brought on by the COVID-19 pandemic, all
our associates across the Company have worked tirelessly to help
our customers fulfill consumer demand. I thank them for their
extraordinary efforts on behalf of our customers. The Escalade
Global Supply Chain is working diligently to partner with our
global factory and logistics partners to ensure demand is met now
and into the future. Our product categories and brands continue to
resonate at retail, and we are uniquely positioned to grow. In the
third quarter, we continued to invest in key talent, facilities and
capabilities which will strengthen our position to be the product
portfolio of choice for our customers and consumers. As the
COVID-19 pandemic continues to evolve, we believe we have the right
strategies and strong leadership in place to strengthen our
customer connectivity, deepen our strategic relationships with our
vendors, navigate the challenges ahead and deliver sustained
growth," Sincerbeaux continued.
"Our results, cash position and untapped debt facility allows us
to return value to our shareholders while making key strategic
investments to sustain growth. We are also actively looking to make
key acquisitions to strengthen our portfolio of brands, add key
channels of distribution and drive deeper connections to our
customers and consumers."
"The Company achieved record growth in its top and bottom-line
results," said Stephen Wawrin,
Escalade's VP Finance and Chief Financial Officer. "This reflects
our ability to leverage our business platform, including our nimble
supply chain and balanced global and domestic manufacturing. We
continue to invest in key inventory and new product innovation to
fulfill marketplace demand. Importantly, our ongoing disciplined
expense management enabled us to better align our variable expenses
with growth acceleration, while continuing to invest in our people
and operations. While we are aware of certain headwinds, including
higher logistics costs due to overwhelming demand across all
manufacturing points, we have taken steps to ensure our product
pipeline is delivered to meet anticipated demand and continue to
optimize and invest in our distribution capabilities to unlock
immediate and future growth."
Net sales for the third quarter of 2020 were $78.1 million compared to net sales of
$45.8 million for the same quarter in
2019, an increase of $32.3 million or
70.6%. The increase in sales was attributable to growth in nearly
all of our product categories, but most notably in our archery,
outdoor and fitness categories, including basketball, Lifeline
Fitness and Victory Tailgate.
Gross margin ratio for the third quarter of 2020 was 30.1%,
compared to 21.9% for the same period in the prior year. The
improvement in gross margin was primarily due to factory absorption
and changes in product mix. Gross profit for the third quarter of
2020 was $23.5 million compared to
$10.0 million for the same quarter in
2019.
Selling, general and administrative expenses (SG&A) were
$10.4 million for the quarter
compared to $6.8 million for the same
period in the prior year, an increase of $3.6 million or 52.7%. SG&A, as a percent of
sales, for the third quarter of 2020 decreased to 13.3% from 14.8%
reported for the same period prior year.
Operating income for the third quarter of 2020 was $12.8 million compared to operating income of
$2.9 million for the same period in
the prior year.
Net income for the third quarter of 2020 was $10.2 million, or $0.71 diluted earnings per share compared to net
income of 2.5 million, or $0.18
diluted earnings per share for the same quarter in 2019.
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; 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
new 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. 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
|
|
Nine Months
Ended
|
All Amounts in
Thousands Except Per Share Data
|
October 3,
2020
|
|
October 5,
2019
|
|
October 3,
2020
|
|
October 5,
2019
|
|
|
|
|
|
|
|
|
Net sales
|
$78,069
|
|
$45,756
|
|
$198,882
|
|
$133,497
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
54,548
|
|
35,717
|
|
141,911
|
|
102,022
|
Selling,
administrative and general expenses
|
10,374
|
|
6,793
|
|
29,752
|
|
24,576
|
Amortization
|
332
|
|
347
|
|
1,108
|
|
1,135
|
|
|
|
|
|
|
|
|
Operating
Income
|
12,815
|
|
2,899
|
|
26,111
|
|
5,764
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
Interest
expense
|
(44)
|
|
(96)
|
|
(148)
|
|
(295)
|
Other
income
|
40
|
|
3
|
|
108
|
|
12
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
12,811
|
|
2,806
|
|
26,071
|
|
5,481
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
2,625
|
|
266
|
|
5,224
|
|
798
|
|
|
|
|
|
|
|
|
Net Income
|
$10,186
|
|
$ 2,540
|
|
$20,847
|
|
$ 4,683
|
|
|
|
|
|
|
|
|
Earnings Per Share
Data:
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
0.72
|
|
$
0.18
|
|
$
1.48
|
|
$
0.32
|
Diluted earnings per
share
|
$
0.71
|
|
$
0.18
|
|
$
1.47
|
|
$
0.32
|
|
|
|
|
|
|
|
|
Dividends
declared
|
$
0.140
|
|
$
0.125
|
|
$
0.390
|
|
$
0.375
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets (Unaudited, In Thousands)
|
|
All Amounts in
Thousands Except Share Information
|
October 3,
2020
|
December 28,
2019
|
October 5,
2019
|
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$ 6,811
|
$ 5,882
|
$ 5,226
|
Receivables, less
allowance of $798; $483; and $519; respectively
|
63,750
|
35,450
|
35,592
|
Inventories
|
63,738
|
42,269
|
48,424
|
Prepaid
expenses
|
2,580
|
3,151
|
2,696
|
Prepaid income
tax
|
--
|
163
|
1,613
|
TOTAL CURRENT
ASSETS
|
136,879
|
86,915
|
93,551
|
|
|
|
|
Property, plant and
equipment, net
|
16,029
|
15,111
|
15,207
|
Operating lease
right-of-use assets
|
1,271
|
1,080
|
1,242
|
Intangible assets,
net
|
17,739
|
18,847
|
19,181
|
Goodwill
|
26,749
|
26,749
|
26,749
|
Other
assets
|
49
|
77
|
86
|
TOTAL
ASSETS
|
$198,716
|
$148,779
|
$156,016
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Note
payable
|
$ --
|
$ 135
|
$ 135
|
Trade accounts
payable
|
32,102
|
7,765
|
9,947
|
Accrued
liabilities
|
18,702
|
9,689
|
8,819
|
Income tax
payable
|
1,675
|
--
|
--
|
Current operating
lease liabilities
|
693
|
621
|
689
|
TOTAL CURRENT
LIABILITIES
|
53,172
|
18,210
|
19,590
|
|
|
|
|
Other
Liabilities:
|
|
|
|
Long–term
debt
|
--
|
--
|
5,221
|
Deferred income tax
liability
|
3,537
|
3,537
|
3,409
|
Operating lease
liabilities
|
591
|
475
|
575
|
Other
liabilities
|
387
|
387
|
1,094
|
TOTAL LIABILITIES
|
57,687
|
22,609
|
29,889
|
|
|
|
|
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 – 14,169,404;
14,214,777; and 14,291,347; shares respectively
|
14,169
|
14,215
|
14,291
|
Retained
earnings
|
126,860
|
111,955
|
111,836
|
TOTAL STOCKHOLDERS'
EQUITY
|
141,029
|
126,170
|
126,127
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$198,716
|
$148,779
|
$156,016
|
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SOURCE Escalade, Incorporated