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Escalade Reports Second Quarter 2019 Results

- Revenue growth of 14.3% on net sales of $55.6 million

- Gross profit of $13.0 million, up 12.7% over prior year

- Operating income of $2.5 million, up 26.7% over prior year

EVANSVILLE, Ind., Aug. 7, 2019 /PRNewswire/ -- Escalade, Incorporated (ESCA) - "Expanded distribution within major customers and a return to normal weather patterns resulted in revenue growth of 14.3%. Sales increases in our Outdoor categories more than offset underperformance in other categories. Our Basketball brands Goalrilla™, Goalsetter®, Goaliath® and Silverback®, along with Outdoor Games brands Victory Tailgate® and Triumph™, led to the increased revenue," stated Dave Fetherman, President and CEO. "We continue to execute on our transformational strategy to support the continuing shift in consumer buying trends as our E-Commerce revenue grew 91% in the quarter and made up 39% of our overall revenue compared to 24% in prior year.  While our recently acquired Victory Tailgate business contributed to the increase, I'm pleased that we are seeing excellent growth across all E-commerce platforms." 

Escalade, Inc. (PRNewsFoto/Escalade, Inc.)

Net sales for the second quarter of 2019 were $55.6 million compared to net sales of $48.7 million for the same quarter in 2018.

Gross margin ratio for the second quarter of 2019 was 23.3%, compared to 23.6% for the same period in the prior year. Gross profit for the second quarter of 2019 was $13.0 million compared to gross profit of $11.5 million for the same quarter in 2018. The slight decline in gross margin ratio was due to increased customer allowances and product mix.

Selling, general and administrative expenses (SG&A) were $10.0 million for the quarter compared to $9.1 million for the same period in the prior year, an increase of $0.9 million or 10.1%.  The increase in SG&A was due to operating costs associated with Victory Tailgate, which was acquired during the fourth quarter of 2018. SG&A, as a percent of sales, for the second quarter of 2019 decreased to 18.0% from 18.7% reported for the same period prior year.

Operating income for the second quarter of 2019 was $2.5 million compared to operating income of $2.0 million for the same period in the prior year.

The Company recognized a $13.0 million gain in other income during the second quarter of 2018 on the sale of our 50% owned equity method investment, Stiga, a Swedish entity.

Net income for the second quarter of 2019 was $1.9 million, or $0.13 diluted earnings per share compared to net income of $12.1 million, or $0.84 diluted earnings per share for the same quarter in 2018. Excluding the one-time gain recognized on the sale of our 50% investment in Stiga, net income for the second quarter of 2018 was $1.4 million, or $0.10 diluted earnings per share.

The Company announced a quarterly dividend of $0.125 per share to be paid to all shareholders of record on September 9, 2019 and disbursed on September 16, 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; 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, Escalade's ability to control costs, general economic conditions, fluctuation in operating results, changes in foreign currency exchange rates, changes in the securities market, 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 Condensed Statements of Operations
(Unaudited, In Thousands Except Per Share Data)



Three Months Ended


Six Months Ended

All Amounts in Thousands Except Per Share Data

July 13,
2019


July 14,
2018


July 13,
2019


July 14,
2018









Net sales

$55,639


$48,684


$87,741


$80,833









Costs and Expenses








Cost of products sold

42,680


37,187


66,305


60,348

Selling, administrative and general expenses

10,038


9,121


17,783


16,071

Amortization

450


425


788


748









Operating Income

2,471


1,951


2,865


3,666









Other Income (Expense)








Interest expense

(131)


(166)


(199)


(355)

Equity in earnings of affiliates

--


133


--


121

Gain on sale of equity method investment (includes 
     ($3,729) of accumulated other comprehensive 
     loss reclassification from foreign currency 
     translation adjustment)

--


13,020


--


13,020

Other income (expense)

3


(76)


9


(99)









Income Before Income Taxes

2,343


14,862


2,675


16,353









Provision for Income Taxes

467


2,791


532


3,066









Net Income

$ 1,876


$12,071


$ 2,143


$13,287









Earnings Per Share Data:








Basic earnings per share

$  0.13


$  0.84


$  0.15


$  0.92

Diluted earnings per share

$  0.13


$  0.84


$  0.15


$  0.92









Dividends declared

$  0.125


$  0.125


$  0.25


$  0.25









 

Consolidated Condensed Balance Sheets
(Unaudited, In Thousands)


All Amounts in Thousands Except Share Information

July 13,

2019

December 29,

2018

July 14,

2018


(Unaudited)

(Audited)

(Unaudited)

ASSETS




Current Assets:




Cash and cash equivalents

$ 4,598

$  2,824

$ 15,572

Receivables, less allowance of $533; $532; and $534; respectively

35,229

40,682

30,758

Inventories

47,984

39,122

41,454

Prepaid expenses

2,958

4,151

2,834

Prepaid income tax

1,687

1,082

--

Other current assets

--

2

21

TOTAL CURRENT ASSETS

92,456

87,863

90,639





Property, plant and equipment, net

15,387

15,498

12,990

Operating lease right-of-use assets

1,288

--

--

Intangible assets, net

19,529

19,785

18,943

Goodwill

26,749

26,381

21,548

Other assets

94

--

--

TOTAL ASSETS

$155,503

$149,527

$144,120





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:




Note payable

$ 135

$ --

$ --

Trade accounts payable

7,187

5,631

6,874

Accrued liabilities

7,732

11,072

9,242

Income tax payable

--

--

480

Current operating lease liabilities

694

--

--

TOTAL CURRENT LIABILITIES

15,748

16,703

16,596





Other Liabilities:




Long‑term debt

7,393

--

--

Deferred income tax liability

3,409

3,409

2,469

Operating lease liabilities

616

--

--

Other liabilities

1,094

1,094

503

                TOTAL LIABILITIES

28,260

21,206

19,568





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 – 
     14,467,634; 14,438,824; and 14,439,724; shares respectively

14,468

14,439

14,440

Retained earnings

112,775

113,882

110,112

TOTAL STOCKHOLDERS' EQUITY

127,243

128,321

124,552

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$155,503

$149,527

$144,120

 

Cision

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