EVANSVILLE, IN--(Marketwire - April 15, 2010) - Escalade, Incorporated (
NASDAQ:
ESCA)
announced that revenues for the first quarter of 2010 were slightly higher
than the same quarter last year and that profitability was significantly
improved. Increased profitability is a direct result of improved cost
management and reduced facility capacity. Net income for the quarter is
$802 thousand or $0.06 per share compared to a net loss of $439 thousand or
$(0.03) per share for the same period last year.
Revenues from the Sporting Goods business were up 8.9% in the first quarter
compared to the same quarter last year. In reaction to reductions in
consumer spending, mass market retailers reduced inventory levels in 2009.
The effects of reduced consumer spending and retailer inventory reductions
slowed sales in 2009. Increases in consumer spending, new product
distribution and optimized inventory levels at retailers are contributing
to sales increases in the current period. Management believes sales in the
Sporting Goods segment will follow trends in overall consumer spending in
the U.S. and that sales will be equal to or slightly above levels achieved
in 2009.
Revenues from the Office Products business declined 12.5% in the first
quarter compared to the same period in 2009 due to slow market recovery in
this segment and poor economies in Spain and other southern European
countries and Russia. Excluding the effects of changes in currency
exchange rates, revenues declined 16%. Management anticipates continued
declines in sales to office product retailers, which are comprised
predominately of business and government consumers, as this market trails
the general consumer. However, the Company has widened its product
placement and offered new product launches to improve its opportunities.
The overall gross margin ratio increased to 34.0% in the first quarter of
2010 compared to 31.5% in the same period in 2009. The gross margin
improvement is largely attributed to the cost reductions and facility
consolidations initiated during 2009 which have contributed to more
favorable factory variances in the Sporting Goods segment. The gross
margin ratio for Sporting Goods improved to 31% from 22% in the prior year.
Office Products gross margin ratio dropped to 41% from 47% in the prior
year, mainly due to under absorbed factory variances resulting from
decreased sales. Management expects the overall gross margin ratio for
2010 to be slightly higher than that achieved in 2009.
Compared to the same period last year, consolidated selling, general and
administrative (SG&A) costs decreased 14.5% in the first quarter. SG&A
costs in the Sporting Goods business segment decreased as a percent of
sales by 1.5% due to decreased selling and marketing costs associated with
the specialty retailer and dealer channel, personnel reductions initiated
during 2008 and 2009, and the consolidation of table tennis manufacturing
in Mexico, which was completed in February 2009. The Office Products
segment also experienced a decrease in SG&A costs as a direct result of a
series of cost savings measures taken. SG&A costs in the Office Products
business decreased as a percent of sales by 0.4%.
"We are pleased to announce results for first quarter of 2010 which build
upon our progress achieved in 2009," said Robert J. Keller, President and
Chief Executive Officer of Escalade, Inc. "We are seeing improved
sell-through of our products in the marketplace and positive consumer
reception to our new product introductions. Expense management and lean
manufacturing initiatives are generating improved profitability. Our
management team remains intently focused on our strategy to accelerate the
pace of new product launches, intensify our brand-building initiatives,
streamline our operations, and increase free cash flow generation."
Escalade is a leading manufacturer and marketer of sporting goods and
office/graphic arts products sold worldwide. To obtain more information on
the Company and its products, visit our website at:
www.EscaladeInc.com or
contact Deborah Meinert, Vice President and CFO 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, Escalade's
ability to successfully integrate the operations of acquired assets and
businesses, new product development, the continuation and development of
key customer and supplier relationships, Escalade's ability to control
costs, general economic conditions, fluctuation in operating results,
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 Amounts)
3 Months Ended 12 Months Ended
------------------------ ------------------------
20 March 21 March 20 March 21 March
2010 2009 2010 2009
----------- ----------- ----------- -----------
NET SALES $ 25,169 $ 24,958 $ 116,210 $ 144,478
OPERATING EXPENSES
Cost of goods sold 16,616 17,096 81,770 108,491
Selling and
administrative 6,861 8,023 28,323 41,488
Amortization 283 467 2,081 2,193
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) 1,409 (628) 4,036 (7,694)
OTHER INCOME (EXPENSE)
Interest expense (360) (242) (1,784) (1,779)
Other income 258 184 2,345 (13)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAXES 1,307 (686) 4,598 (9,486)
PROVISION (BENEFIT) FOR
INCOME TAXES 505 (247) (1,699) 2,398
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 802 $ (439) $ 2,899 $ (7,088)
=========== =========== =========== ===========
PER SHARE DATA
Basic earnings
(loss) per share $ 0.06 $ (0.03) $ 0.23 $ (0.56)
=========== =========== =========== ===========
Diluted earnings
(loss) per share $ 0.06 $ (0.03) $ 0.23 $ (0.56)
=========== =========== =========== ===========
Average shares
outstanding 12,685 12,616 12,648 12,616
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
20 March 21 March 27 December
2010 2009 2009
------------ ------------ ------------
ASSETS
Current assets $ 50,423 $ 70,488 $ 52,936
Property, Plant & Equipment, net 20,584 20,409 21,493
Other assets 26,552 29,163 26,594
Goodwill 25,681 25,543 26,215
------------ ------------ ------------
Total $ 123,240 $ 145,603 $ 127,238
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 40,328 $ 19,387 $ 43,248
Other liabilities -- 47,447 1,226
Stockholders' equity 82,912 78,769 82,764
------------ ------------ ------------
Total $ 123,240 $ 145,603 $ 127,238
============ ============ ============
Contact Information: Contact
Deborah Meinert, Vice President and CFO
812/467-4449