Escalade Reports Second Quarter 2021 Results

Published

Second-Quarter Highlights

  • Revenue increased 19.3% on net sales of $99.7 million
  • Gross margin declined 267 basis points to 25.2%
  • Operating income of $10.7 million vs. $10.9 million in the second quarter of 2020
  • Diluted EPS of $0.58 per share

EVANSVILLE, Ind., Aug. 05, 2021 (GLOBE NEWSWIRE) -- Escalade, Incorporated (NASDAQ: ESCA) – today announced its second quarter results for 2021, ended July 10, 2021. The Company posted quarterly revenue of $99.7 million, an increase of 19.3% over prior year, posting another record for its second fiscal quarter. Quarterly diluted earnings per share were $0.58.

“Second quarter results reflect strong demand for our products, offset by sharply higher raw material costs, increased wage pressure, and inventory handling costs. Global supply chain issues persist as our logistics team works to keep goods flowing to our customers. While gross margin declined in the quarter, price increases are beginning to work through the system and tight expense control allowed us to generate EBITDA above last year’s record second quarter,” said Walter P. Glazer, Jr., Interim President and CEO of Escalade, Inc.

“Year to date sales are up 31.5% and net income has increased 27.3%,” continued Glazer. “We enter the back half of the year with ample inventory to serve our retail partners and meet consumer demand. While we expect cost pressures to remain in the near term, we continue to invest in our businesses to bring exciting and innovative products to market that offer superior performance and compelling value to our customers.”

Net sales for the second quarter of 2021 were $99.7 million compared to net sales of $83.5 million for the same quarter in 2020, an increase of $16.2 million or 19.3%.

Gross margin ratio for the second quarter of 2021 was 25.2%, compared to 27.8% for the same period in the prior year. Gross profit for the second quarter of 2021 was $25.1 million compared to gross profit of $23.2 million for the same quarter in 2020.

Selling, general and administrative expenses (SG&A) were $13.8 million for the quarter compared to $11.9 million for the same period in the prior year, an increase of $1.9 million or 15.8%. SG&A, as a percent of sales, for the second quarter of 2021 decreased to 13.9% from 14.3% reported for the same period prior year.

Operating income for the second quarter of 2021 was $10.7 million compared to operating income of $10.9 million for the same period in the prior year.

Net income for the second quarter of 2021 was $8.1 million, or $0.58 diluted earnings per share compared to net income of $8.7 million, or $0.61 diluted earnings per share for the same quarter in 2020.

The Company announced a quarterly dividend of $0.14 per share to be paid to all shareholders of record on September 7, 2021 and disbursed on September 14, 2021.

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; RAVE Sports® water recreation products; 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; American Heritage Billiards® - premium billiards and game room assortment; 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 Interim 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; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; Escalade’s 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 SubsidiariesConsolidated Statements of Operations(Unaudited, In Thousands Except Per Share Data)

 Three Months Ended Six Months Ended
All Amounts in Thousands Except Per Share DataJuly 10, 2021 July 11, 2020 July 10, 2021 July 11, 2020
        
Net sales$99,679  $83,524  $158,870  $120,813 
        
Costs and Expenses       
Cost of products sold 74,606   60,289   116,363   87,363 
Selling, administrative and general expenses 13,810   11,921   23,686   19,378 
Amortization 577   442   1,006   776 
        
Operating Income 10,686   10,872   17,815   13,296 
        
Other Income (Expense)       
Interest expense (387)  (60)  (621)  (104)
Other income 21   22   56   68 
        
Income Before Income Taxes 10,320   10,834   17,250   13,260 
        
Provision for Income Taxes 2,194   2,124   3,682   2,599 
        
Net Income$8,126  $8,710  $13,568  $10,661 
        
Earnings Per Share Data:       
Basic earnings per share$0.59  $0.62  $0.98  $0.76 
Diluted earnings per share$0.58  $0.61  $0.97  $0.75 
        
Dividends declared$0.14  $0.125  $0.28  $0.25 
        

Consolidated Balance Sheets(Unaudited, In Thousands)

All Amounts in Thousands Except Share InformationJuly 10, 2021December 26, 2020July 11, 2020
 (Unaudited)(Audited)(Unaudited)
ASSETS   
Current Assets:   
Cash and cash equivalents$10,641  $3,505  $16,669 
Receivables, less allowance of $717; $896; and $728; respectively 52,248   65,280   49,516 
Inventories 86,612   72,488   41,653 
Prepaid expenses 4,775   4,068   2,085 
Prepaid income tax --   57   -- 
TOTAL CURRENT ASSETS 154,276   145,398   109,923 
    
Property, plant and equipment, net 20,792   18,232   14,713 
Operating lease right-of-use assets 2,079   1,608   1,395 
Intangible assets, net 21,638   22,645   18,071 
Goodwill 32,695   32,695   26,749 
Other assets 137   127   57 
TOTAL ASSETS$231,617  $220,705  $170,908 
          
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current Liabilities:   
Current portion of long-term debt$7,143  $--  $-- 
Trade accounts payable 14,705   20,947   18,109 
Accrued liabilities 14,875   24,271   13,196 
Income tax payable 180   --   1,705 
Current operating lease liabilities 1,526   854   711 
TOTAL CURRENT LIABILITIES 38,429   46,072   33,721 
    
Other Liabilities:   
Long-term debt 42,857   30,073   -- 
Deferred income tax liability 4,193   4,193   3,537 
Operating lease liabilities 557   763   699 
Other liabilities 448   448   387 
TOTAL LIABILITIES 86,484   81,549   38,344 
    
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 – 13,779,489; 13,919,380; and 14,153,579; shares respectively 13,779   13,919   14,154 
Retained earnings 131,354   125,237   118,410 
TOTAL STOCKHOLDERS' EQUITY 145,133   139,156   132,564 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$231,617  $220,705  $170,908 
            

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