Escalade Reports Second Quarter 2021 Results

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, 2021				July 11, 2020				July 10, 2021				July 11, 2020
Net 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, 2021				December 26, 2020				July 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 respectively		13,779				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