Escalade Reports Third Quarter 2018 Results

Escalade Reports Third Quarter 2018 Results

- Revenue up 3% on net sales of $44.0 million

- Gross margin increase of 150 bps to 28%

- Operating income up 24%

- Diluted EPS up 14% to $0.25 per share

PR Newswire

EVANSVILLE, Ind., Nov. 1, 2018 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) – "Revenue within the e-commerce channel increased 31.6% and offset declines tied to brick and mortar stores. Archery and Indoor Games categories had positive comps in the quarter, which helped to increase gross margins 150 bps to 28.0%. We continue to closely manage our SG&A, which helped operating income grow by $1.0 million," stated Dave Fetherman, President and Chief Executive Officer of Escalade, Inc. "Inventories are up to support our 2019 Archery product offering, which has been very well received in the market. Our strong balance sheet will continue to allow us to grow through acquisitions and internal development."

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

Net sales for the third quarter of 2018 were $44.0 million compared to net sales of $42.9 million for the same quarter in 2017.

Gross margin ratio for the third quarter of 2018 increased to 28.0%, compared to 26.5% for the same period in the prior year. Gross profit for the third quarter of 2018 was $12.3 million compared to gross profit of $11.4 million for the same quarter in 2017.

Selling, general and administrative expenses (SG&A) were flat for the quarter compared to the same period in the prior year at $6.9 million

Operating income for the third quarter of 2018 was $5.1 million compared to operating income of $4.1 million for the same period in the prior year.

Other income was down for the third quarter of 2018 compared to the same period in the prior year due to equity in earnings of Stiga. During the second quarter of 2018, the Company sold its 50% ownership in Stiga, recognizing a $13.0 million gain.

Net income for the third quarter of 2018 was $3.6 million, or $0.25 diluted earnings per share compared to net income of $3.1 million, or $0.22 diluted earnings per share for the same quarter in 2017.

The Company announced a quarterly dividend of $0.125 per share to be paid to all shareholders of record on December 10, 2018 and disbursed on December 17, 2018.

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 812/467-4449.

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 and Trophy Ridge® archery accessories; STIGA® and Ping-Pong® table tennis, Accudart® and Unicorn® darting, Onix® pickleball equipment; Triumph Sports™ indoor and outdoor games, Goalrilla™ and Goalsetter® residential in-ground basketball systems, Goaliath® and Silverback® residential in-ground and portable basketball goals; the STEP® fitness products, Lifeline® personal fitness, Woodplay® premium playsets, Vuly™ Trampolines and Cue&Case® 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


Nine Months Ended

All Amounts in Thousands Except Per Share Data

October 6,
2018


October 7,
2017


October 6,
2018


October 7,
2017









Net sales

$43,955


$42,861


$124,788


$128,648









Costs and Expenses








Cost of products sold

31,646


31,502


91,994


95,927

Selling, administrative and general expenses

6,856


6,866


22,927


22,053

Amortization

319


365


1,067


1,212









Operating Income

5,134


4,128


8,800


9,456









Other Income (Expense)








Interest expense

(35)


(200)


(390)


(601)

Equity in earnings of affiliates

--


615


121


639

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

--


--


13,020


--

Gain on bargain purchase

--


--


--


256

Other income (expense)

7


(6)


(92)


(49)









Income Before Income Taxes

5,106


4,537


21,459


9,701









Provision for Income Taxes

1,531


1,419


4,597


3,099









Net Income

$ 3,575


$ 3,118


$ 16,862


$ 6,602









Earnings Per Share Data:








Basic earnings per share

$  0.248


$  0.217


$  1.169


$  0.460

Diluted earnings per share

$  0.247


$  0.217


$  1.167


$  0.459









Dividends declared

$  0.125


$  0.115


$  0.375


$  0.345










 

 

Consolidated Condensed Balance Sheets

(Unaudited, In Thousands)


All Amounts in Thousands Except Share Information

October 6,

2018

December 30,

2017

October 7,

2017


(Unaudited)

(Audited)

(Unaudited)

ASSETS




Current Assets:




Cash and cash equivalents

$ 11,121

$  1,572

$   1,646

Receivables, less allowance of $516; $623; and $570; respectively

36,522

39,350

34,774

Inventories

45,660

35,160

42,392

Prepaid expenses

2,982

3,414

3,478

Prepaid income tax

--

764

520

Other current assets

12

--

--

TOTAL CURRENT ASSETS

96,297

80,260

82,810





Property, plant and equipment, net

13,367

14,286

14,215

Intangible assets, net

18,624

19,691

20,058

Goodwill

21,548

21,548

21,548

Investments

--

20,278

19,565

Other assets

--

42

51

TOTAL ASSETS

$149,836

$156,105

$158,247





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:




Current portion of long-term debt

$ --

$  1,250

$  1,300

Trade accounts payable

9,465

4,295

9,935

Accrued liabilities

9,859

13,997

10,777

Income tax payable

1,120

--

--

TOTAL CURRENT LIABILITIES

20,444

19,542

22,012





Other Liabilities:




Long‑term debt

--

21,871

24,738

Deferred income tax liability

2,469

2,469

5,375

Other liabilities

503

553

--

                TOTAL LIABILITIES

23,416

44,435

52,125





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 – 14,439,724; 14,371,586; and 14,370,586; shares respectively

 

14,440

 

14,372

 

14,371

Retained earnings

111,980

99,908

93,967

Accumulated other comprehensive loss

--

(2,610)

(2,216)

TOTAL STOCKHOLDERS' EQUITY

126,420

111,670

106,122

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$149,836

$156,105

$158,247

 

 

 

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SOURCE Escalade, Inc.

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