Exhibit 99.1
Escalade Reports Second Quarter 2016 Results
-- Second quarter sales of $48.5 million, up 10.7% from prior year
-- Diluted earnings per share of $0.15 compared to $0.23 reported for second quarter 2015
-- Company declared a quarterly dividend of $0.11 per share
EVANSVILLE, Ind., Aug. 4, 2016 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) announced that net sales for the second quarter of 2016 were $48.5 million, or 10.7% higher compared to net sales of $43.8 million for the same quarter in 2015. The increase in sales is primarily related to new product offerings introduced into the market during 2016 as well as recently completed acquisitions. These increases were partially offset by the continued softness within the archery category.
Gross margin ratio for the second quarter of 2016 decreased to 26.2% compared to gross margin ratio of 30.1% for the same period in 2015. The reduction in gross margin is a combination of decreased sales in the archery category as well as an unfavorable change in product mix.
Selling, general and administrative expenses (SG&A) were $8.9 million for the quarter compared to $8.2 million for the same period in 2015, an increase of $0.7 million. The increase in SG&A is largely due to increased selling expenses and marketing efforts related to new product offerings introduced in 2016. As a percentage of sales, SG&A for the second quarter of 2016 have decreased to 18.4% from 18.7% reported for the same period in 2015.
Other income for the second quarter of 2016 was adversely impacted from the operating results of the Company's 50% ownership in STIGA, a Swedish entity.
Net income for the second quarter of 2016 was $2.1 million, or $0.15 diluted earnings per share compared to net income of $3.2 million or $0.23 diluted earnings per share for the same quarter in 2015.
The Company announced a quarterly dividend of $0.11 per share would be paid to all shareholders of record on September 12, 2016 and disbursed on September 19, 2016.
"Despite ongoing sporting goods retailer liquidations and a soft archery market, we achieved revenue growth of 10.7%," stated Dave Fetherman, President and Chief Executive Officer of Escalade, Inc. "This was driven by our new product launch of BearX crossbows and GoTek portable basketball systems, along with revenue from recently acquired businesses, most notably Triumph Sports. Operating income was down as we continue to invest in advertising and in store marketing to support the new product introductions. We also incurred costs related to consolidation of our operating systems related to acquisitions and re-establishing our bad debt reserve that was depleted with the Sports Authority and Sports Chalet bankruptcies. 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 812/467-1358.
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) | |||||||
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| Three Months Ended |
| Six Months Ended | ||||
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| July 9, 2016 |
| July 11, 2015 |
| July 9, 2016 |
| July 11, 2015 |
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Net sales | $48,463 |
| $43,795 |
| $83,031 |
| $77,214 |
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Costs and Expenses |
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Cost of products sold | 35,749 |
| 30,595 |
| 59,288 |
| 53,180 |
Selling, administrative and general expenses | 8,910 |
| 8,199 |
| 16,673 |
| 14,113 |
Amortization | 799 |
| 844 |
| 1,587 |
| 1,477 |
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Operating Income | 3,005 |
| 4,157 |
| 5,483 |
| 8,444 |
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Other Income (Expense) |
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Interest expense | (256) |
| (131) |
| (420) |
| (232) |
Equity in earnings of affiliates | 127 |
| 344 |
| 176 |
| 1,011 |
Other income | 74 |
| 171 |
| 133 |
| 237 |
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Income Before Income Taxes | 2,950 |
| 4,541 |
| 5,372 |
| 9,460 |
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Provision for Income Taxes | 860 |
| 1,319 |
| 1,585 |
| 2,741 |
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Net Income | $ 2,090 |
| $ 3,222 |
| $ 3,787 |
| $ 6,719 |
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Earnings Per Share Data: |
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Basic earnings per share | $ 0.15 |
| $ 0.23 |
| $ 0.27 |
| $ 0.48 |
Diluted earnings per share | $ 0.15 |
| $ 0.23 |
| $ 0.26 |
| $ 0.47 |
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Average shares outstanding | 14,265 |
| 14,072 |
| 14,237 |
| 14,047 |
Consolidated Condensed Balance Sheets | |||
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All Amounts in Thousands Except Share Information | July 9, 2016 | December 26, 2015 | July 11, 2015 |
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| (Unaudited) | (Audited) | (Unaudited) |
ASSETS |
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Current Assets: |
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Cash and cash equivalents | $ 3,263 | $ 1,982 | $ 2,268 |
Time deposits | -- | -- | 750 |
Receivables, less allowance of $453; $1,086; and $744; respectively |
33,385 |
38,984 |
27,366 |
Inventories | 37,520 | 25,862 | 31,601 |
Prepaid expenses | 2,194 | 2,534 | 2,264 |
Deferred income tax benefit | 1,700 | 1,543 | 1,154 |
Prepaid income tax | 1,139 | 1,910 | 2,317 |
TOTAL CURRENT ASSETS | 79,201 | 72,815 | 67,720 |
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Property, plant and equipment, net | 14,256 | 14,363 | 12,856 |
Intangible assets, net | 21,597 | 16,868 | 11,987 |
Goodwill | 21,456 | 20,047 | 14,875 |
Investments | 18,691 | 19,644 | 17,562 |
TOTAL ASSETS | $155,201 | $143,737 | $125,000 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities: |
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Notes payable | $ 26,806 | $ 19,776 | $ 9,193 |
Current portion of long-term debt | 1,605 | 1,810 | 1,604 |
Trade accounts payable | 5,846 | 2,547 | 4,362 |
Accrued liabilities | 10,312 | 14,174 | 11,622 |
TOTAL CURRENT LIABILITIES | 44,569 | 38,307 | 26,781 |
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Other Liabilities: |
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Long term debt | 5,625 | 1,750 | 2,155 |
Deferred income tax liability | 7,200 | 7,200 | 2,997 |
TOTAL LIABILITIES | 57,394 | 47,257 | 31,933 |
Stockholders' Equity: |
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Preferred stock: |
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Authorized 1,000,000 shares; no par value, none issued |
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Common stock: |
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Authorized 30,000,000 shares; no par value, issued and outstanding – 14,271,209; 14,179,844; and 14,115,061; shares respectively |
14,271 |
14,180 |
14,115 |
Retained earnings | 86,783 | 85,478 | 82,386 |
Accumulated other comprehensive loss | (3,247) | (3,178) | (3,434) |
TOTAL STOCKHOLDERS' EQUITY | 97,807 | 96,480 | 93,067 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $155,201 | $143,737 | $125,000 |