Escalade Reports First Quarter 2021 Results

EVANSVILLE, Ind., April 15, 2021 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) – today announced its first quarter for 2021, ended March 20, 2021. The Company posted quarterly revenue of $59.2 million, an increase of 58.7% over prior year, and a record for its first fiscal quarter. This represents the fifth consecutive quarter of record sales. Quarterly diluted earnings per share were $0.39, an increase of 178.6% from prior year.

Escalade, Inc. (PRNewsfoto/ESCALADE, INC.)

"First quarter results were quite good, reflecting continued strong demand for our categories, market share gains, margin improvement due to increased factory utilization, and SG&A leverage. Through extraordinary efforts by our teams, we were able to mitigate some of the negative impact from supply chain and logistics issues, sharply higher raw material costs, and negative currency exchange rates. While these cost headwinds are continuing, they are not unique to Escalade and we are taking every measure to protect the profit margins which allow us to reinvest in the business, to support our retail partners, and serve our consumers with innovative products that bring families and friends together," said Walter P. Glazer, Jr., Interim President and CEO of Escalade, Inc.

"Late last year, we made a significant inventory commitment to ensure supply for our retail partners," continued Glazer. "While we are carrying much higher than normal inventory, current supply chain issues and delays may work in our favor over the coming months." 

Net sales for the first quarter of 2021 were $59.2 million compared to net sales of $37.3 million for the same quarter in 2020, an increase of $21.9 million or 58.7%. The increase in sales was driven by growth in nearly all our product lines, led by our archery and outdoor categories.

Gross margin ratio for the first quarter of 2021 was 29.5%, compared to 27.4% for the same period in the prior year. The improvement in gross margin was primarily due to product mix and operating efficiencies. Gross profit for the first quarter of 2021 was $17.4 million compared to gross profit of $10.2 million for the same quarter in 2020.

Selling, general and administrative expenses (SG&A) were $9.9 million for the quarter compared to $7.5 million for the same period in the prior year, an increase of $2.4 million or 32.4%. SG&A, as a percent of sales, for the first quarter of 2021 decreased to 16.7% from 20.0% reported for the same period prior year.

Operating income for the first quarter of 2021 was $7.1 million compared to operating income of $2.4 million for the same period in the prior year.

Net income for the first quarter of 2021 was $5.4 million, or $0.39 diluted earnings per share compared to net income of $2.0 million, or $0.14 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 June 1, 2021 and disbursed on June 8, 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

All Amounts in Thousands Except Per Share Data


March 20,
2021


March 21,
2020






Net sales


$59,191


$37,289






Costs and Expenses





Cost of products sold


41,757


27,074

Selling, administrative and general expenses


9,876


7,457

Amortization


429


334






Operating Income


7,129


2,424






Other Income (Expense)





Interest expense


(234)


(44)

Other income


35


46






Income Before Income Taxes


6,930


2,426






Provision for Income Taxes


1,488


475






Net Income


$5,442


$ 1,951






Earnings Per Share Data:





Basic earnings per share


$  0.39


$  0.14

Diluted earnings per share


$  0.39


$  0.14






Dividends declared


$  0.14


$  0.125


 

Consolidated Balance Sheets

(Unaudited, In Thousands)


All Amounts in Thousands Except Share Information

March 20,
2021

December 26,
2020

March 21,
2020


(Unaudited)

(Audited)

(Unaudited)

ASSETS




Current Assets:




Cash and cash equivalents

$ 5,879

$  3,505

$ 6,167

Receivables, less allowance of $954; $896; and $565; respectively

54,475

65,280

32,594

Inventories

91,425

72,488

42,235

Prepaid expenses

4,044

4,068

2,646

Prepaid income tax

--

57

--

TOTAL CURRENT ASSETS

155,823

145,398

83,642





Property, plant and equipment, net

18,962

18,232

14,867

Operating lease right-of-use assets

2,147

1,608

1,581

Intangible assets, net

22,216

22,645

18,513

Goodwill

32,695

32,695

26,749

Other assets

117

127

69

TOTAL ASSETS

$231,960

$220,705

$145,421





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:




Trade accounts payable

$ 22,708

$ 20,947

$  6,387

Accrued liabilities

12,194

24,271

8,029

Income tax payable

1,456

--

315

Current operating lease liabilities

1,310

854

730

TOTAL CURRENT LIABILITIES

37,668

46,072

15,461





Other Liabilities:




Long–term debt

46,907

30,073

--

Deferred income tax liability

4,193

4,193

3,537

Operating lease liabilities

844

763

867

Other liabilities

448

448

387

                TOTAL LIABILITIES

90,060

81,549

20,252





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 – 13,924,754; 13,919,380; and 14,096,874; shares respectively

 

13,925

 

13,919

 

14,097

Retained earnings

127,975

125,237

111,072

TOTAL STOCKHOLDERS' EQUITY

141,900

139,156

125,169

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$231,960

$220,705

$145,421

 

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SOURCE Escalade, Incorporated

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