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Escalade Reports Second Quarter 2021 Results
Source: Nasdaq GlobeNewswire / 05 Aug 2021 06:00:01 America/New_York
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 Subsidiaries
Consolidated 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 10,
2021July 11,
2020July 10,
2021July 11,
2020Net 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 Information July 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 respectively13,779 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 