Escalade Reports First Quarter 2016 Results
EVANSVILLE, Ind., April 15, 2016 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) announced that net sales for the first quarter of 2016 were $34.6 million, or 3% higher compared to net sales of $33.4 million for the same quarter in 2015. Net income for the first quarter of 2016 was $1.7 million, or $0.12 diluted earnings per share compared to net income of $3.5 million or $0.25 diluted earnings per share for the same quarter in 2015. During the first quarter, one of the Company's larger customers, The Sports Authority, filed for bankruptcy. At the time of the bankruptcy filing, accounts receivable due from The Sports Authority were $2.2 million.
Gross margin ratio for the first quarter of 2016 remained flat at 32% compared to the same quarter in 2015. Selling, general and administrative expenses (SG&A) were $7.8 million for the first quarter of 2016 compared to $5.9 million for the same period in 2015, an increase of $1.9 million, which is primarily due to one-time costs associated with bad debt expenses incurred related to Sports Authority's bankruptcy filing and increased marketing efforts and selling expenses for new portable basketball systems introduced in the first quarter of 2016 that will benefit future periods.
Other income for the first quarter of 2016 was adversely impacted from the operating results of the Company's 50% ownership in STIGA, a Swedish entity.
"The first quarter results were impacted by the additional expenses incurred for bad debt related to Sports Authority's bankruptcy filing announced in early March," stated Dave Fetherman, President and Chief Executive Officer of Escalade, Inc. "We continue to experience a decline in operating income due to the soft Archery category, but anticipate offsetting this decline with the introduction of our BearX crossbows, which began shipping in the second quarter. We have successfully introduced a new line of portable basketball systems, building on our strong Goalrilla, Goalsetter and Silverback brands and lead position within the in-ground basketball category. We expect these systems to be fully launched in the market by the end of the third quarter. Both of these new product categories are expected to have a positive impact on the second half of 2016. Our growth strategy of strategic acquisitions and internally developed product remains a focus for the Company, and we will continue executing on that strategy."
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.
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 of non-core assets and businesses, the continuation and development of key customer and supplier relationships, 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 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 | Twelve Months Ended | ||||||
March 19, | March 21, | March 19, 2016 | March 21, 2015 | ||||
Net sales | $ 34,568 | $ 33,419 | $ 156,691 | $ 143,673 | |||
Costs and Expenses | |||||||
Cost of products sold | 23,539 | 22,585 | 113,022 | 100,785 | |||
Selling, administrative and general expenses | 7,763 | 5,914 | 29,624 | 23,737 | |||
Amortization | 788 | 633 | 3,036 | 2,683 | |||
Operating Income | 2,478 | 4,287 | 11,009 | 16,468 | |||
Other Income (Expense) | |||||||
Interest expense | (164) | (101) | (533) | (461) | |||
Equity in earnings of affiliates | 49 | 667 | 2,375 | 4,402 | |||
Other income | 59 | 66 | 326 | 869 | |||
Income Before Income Taxes from Continuing Operations | 2,422 | 4,919 | 13,177 | 21,278 | |||
Provision for Income Taxes from Continuing Operations | 725 | 1,422 | 3,371 | 6,700 | |||
Net Income from Continuing Operations | 1,697 | 3,497 | 9,806 | 14,578 | |||
Discontinued Operations | |||||||
Loss from operations | -- | -- | -- | (754) | |||
Loss on classification as held for sale | -- | -- | -- | (12,945) | |||
Gain on disposal (includes $2,565 of accumulated other comprehensive income reclassification from foreign currency translation adjustment) | -- | -- | -- | 5,929 | |||
Benefit for Income Taxes | -- | -- | -- | (6,256) | |||
Net Loss from Discontinued Operations | -- | -- | -- | (1,514) | |||
Net Income | $ 1,697 | $ 3,497 | $ 9,806 | $ 13,064 | |||
Basic Earnings Per Share Data: | |||||||
Income from continuing operations | $ 0.12 | $ 0.25 | $ 0.69 | $ 1.05 | |||
Loss from discontinued operations | 0.00 | 0.00 | 0.00 | (0.11) | |||
Net Income | $ 0.12 | $ 0.25 | $ 0.69 | $ 0.94 | |||
Diluted Earnings Per Share Data: | |||||||
Income from continuing operations | $ 0.12 | $ 0.25 | $ 0.69 | $ 1.03 | |||
Loss from discontinued operations | 0.00 | 0.00 | 0.00 | (0.11) | |||
Net Income | $ 0.12 | $ 0.25 | $ 0.69 | $ 0.92 | |||
Average shares outstanding | 14,200 | 14,015 | 14,131 | 13,929 | |||
Consolidated Condensed Balance Sheets | |||
All Amounts in Thousands Except Share Information | March 19, 2016 | December 26, 2015 | March 21, 2015 |
(Unaudited) | (Audited) | (Unaudited) | |
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $ 3,260 | $ 1,982 | $ 1,522 |
Time deposits | -- | -- | 1,450 |
Receivables, less allowance of $1,888; $1,086; and $864; respectively |
32,469 |
38,984 |
28,419 |
Inventories | 37,377 | 25,862 | 29,981 |
Prepaid expenses | 2,082 | 2,534 | 1,712 |
Deferred income tax benefit | 1,598 | 1,543 | 1,126 |
Prepaid income tax | 1,238 | 1,910 | 3,610 |
TOTAL CURRENT ASSETS | 78,024 | 72,815 | 67,820 |
Property, plant and equipment, net | 14,073 | 14,363 | 11,592 |
Intangible assets, net | 22,396 | 16,868 | 12,831 |
Goodwill | 21,456 | 20,047 | 14,875 |
Investments | 19,315 | 19,644 | 17,727 |
Other assets | -- | -- | 21 |
TOTAL ASSETS | $155,264 | $143,737 | $124,866 |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities: | |||
Notes payable | $ 25,888 | $ 19,776 | $ 13,742 |
Current portion of long-term debt | 1,910 | 1,810 | 1,592 |
Trade accounts payable | 6,470 | 2,547 | 4,816 |
Accrued liabilities | 9,796 | 14,174 | 8,544 |
TOTAL CURRENT LIABILITIES | 44,064 | 38,307 | 28,694 |
Other Liabilities: | |||
Long‑term debt | 6,250 | 1,750 | 2,960 |
Deferred income tax liability | 7,200 | 7,200 | 2,997 |
TOTAL LIABILITIES | 57,514 | 47,257 | 34,651 |
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 – 14,254,972; 14,179,844; and 14,025,184; shares respectively |
14,255 |
14,180 |
14,025 |
Retained earnings | 85,992 | 85,478 | 80,042 |
Accumulated other comprehensive loss | (2,497) | (3,178) | (3,852) |
TOTAL STOCKHOLDERS' EQUITY | 97,750 | 96,480 | 90,215 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $155,264 | $143,737 | $124,866 |
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SOURCE Escalade, Incorporated
