Escalade, Inc. (NASDAQ: ESCA, or the “Company”), a leading
manufacturer and distributor of sporting goods and indoor/outdoor
recreational equipment, today announced results for the first
quarter 2022.
FIRST QUARTER 2022
HIGHLIGHTS(As compared to the first quarter 2021)
- Net Sales
increased 22.3% to $72.4 million
- Organic growth,
excluding the contribution from acquisitions was 12.2%
- Gross margin
declined 165 basis points, while Gross Profit increased 15.4%
- Operating income
increased 26.6% to $9.0 million
- Net income
increased to $6.7 million, or $0.49 per diluted share vs. $0.39 per
share for Q1 2021
- Announced $0.15
per share cash dividend to shareholders of record on May 31,
2022
For the three months ended March 19, 2022,
Escalade posted net sales of $72.4 million, net income of $6.7
million and diluted earnings per share of $0.49.
During the first quarter Escalade completed its
acquisition of Brunswick Billiards®, the largest and oldest
provider of billiards tables, game tables, and game room furniture
in the United States. The Escalade Board of Directors also approved
a 7.1% increase in the quarterly dividend from $0.14 to $0.15.
First quarter 2022 results benefited from strong
organic sales growth across the basketball, archery, pickleball,
and indoor game categories, together with contributions from the
Company’s acquisition of Brunswick Billiards®.
Gross margin declined 165 basis points due to
continued challenges related to the global supply chain, raw
materials cost inflation and labor constraints. Tight overhead cost
control led to a 26.6% increase in operating income. A marginally
higher tax rate and 2.7% smaller share base contributed to a 22.3%
increase in net income and 25.4% increase in diluted EPS.
Three Year Quarterly Comparison
|
Three Months Ended |
All
Amounts in Thousands |
March 19, 2022 |
|
March 20, 2021 |
|
March 21, 2020 |
|
|
|
|
|
|
Net
sales |
$72,380 |
|
|
$59,191 |
|
|
$37,289 |
|
Cost of products sold |
|
52,261 |
|
|
|
41,757 |
|
|
|
27,074 |
|
Gross Profit |
|
20,119 |
|
|
|
17,434 |
|
|
|
10,215 |
|
|
|
27.8% |
|
|
|
29.5% |
|
|
|
27.4% |
|
|
|
|
|
|
|
Operating Income |
|
9,023 |
|
|
|
7,129 |
|
|
|
2,424 |
|
|
|
|
|
|
|
Net Income |
|
6,654 |
|
|
|
5,442 |
|
|
|
1,951 |
|
|
|
|
|
|
|
Diluted earnings per share |
$0.49 |
|
|
$0.39 |
|
|
$0.14 |
|
|
|
|
|
|
|
Average Shares Outstanding |
|
13,509 |
|
|
|
13,880 |
|
|
|
14,118 |
|
“We are very pleased with the results in Q1,”
stated Walter P. Glazer, Jr., President and CEO of Escalade.
“Nearly all categories performed very well which validates the
strength of our brand portfolio and consumer acceptance of our
range of products. Our product teams continue to innovate and bring
compelling sporting goods, games, and related items to market while
our sourcing and logistics professionals navigate the challenging
global supply chain. We continue to ‘onshore’ items we can produce
in our domestic manufacturing facilities and remain focused on the
integration of the Brunswick acquisition, which we expect will be
accretive to earnings beginning in the second half of 2022.”
“The first quarter was positively impacted by
sales pulled forward from Q2 and favorable mix. In the near term,
we anticipate continued supply chain pressures, including delays
and excess logistics costs. We are also carefully monitoring point
of sale data along with consumer behavior and sentiment, given
rising interest rates, inflation, and geopolitical uncertainty,”
continued Glazer. “We have seen a slowdown in demand for fitness
products following unsustainable growth over the past two years.
Longer term, we believe consumers will continue to value the
positive experiences and memories created with the fun, healthy
activities they can enjoy with the Escalade lifestyle,” concluded
Glazer.
Net sales for the first quarter of 2022 were $72.4 million
compared to net sales of $59.2 million for the same quarter in
2021, an increase of $13.2 million or 22.3%.
Gross margin for the first quarter of 2022 was 27.8%, compared
to 29.5% for the same period in the prior year. Gross profit for
the first quarter of 2022 was $20.1 million compared to gross
profit of $17.4 million for the same quarter in 2021.
Selling, general and administrative expenses (SG&A) were
$10.5 million for the quarter compared to $9.9 million for the same
period in the prior year, an increase of $0.6 million or 6.6%.
SG&A, as a percent of sales, for the first quarter of 2022
decreased to 14.5% from 16.7% reported for the same period prior
year.
Operating income for the first quarter of 2022 was $9.0 million
compared to operating income of $7.1 million for the same period in
the prior year.
Net income for the first quarter of 2022 was $6.7 million, or
$0.49 diluted earnings per share compared to net income of $5.4
million, or $0.39 diluted earnings per share for the same quarter
in 2021.
The Company announced a quarterly dividend of $0.15 per share to
be paid to all shareholders of record on May 31, 2022 and disbursed
on June 7, 2022.
CONFERENCE CALL
A conference call will be held Thursday, April
14, 2022, at 11:00 a.m. ET to review the Company’s financial
results, discuss recent events and conduct a question-and-answer
session.
A webcast of the conference call and
accompanying presentation materials will be available in the
Investor Relations section of Escalade’s website at
www.escaladeinc.com. To listen to a live broadcast, go to the site
at least 15 minutes prior to the scheduled start time in order to
register, download, and install any necessary audio software.
To participate in the live teleconference:
Domestic Live: |
877-407-0792 |
International Live: |
201-689-8263 |
To listen to a replay of the teleconference,
which subsequently will be available through April 28, 2022:
Domestic Replay: |
844-512-2921 |
International Replay: |
412-317-6671 |
Conference ID: |
13728194 |
ABOUT ESCALADE, INC
Founded in 1922, and headquartered in Evansville, Indiana,
Escalade designs, manufactures, and sells sporting goods, fitness,
and indoor/outdoor recreation equipment. Our mission is to
connect family and friends creating lasting memories. Leaders in
our respective categories, Escalade’s brands include Brunswick
Billiards®; STIGA® table tennis; Accudart®; RAVE Sports® water
recreation; Victory Tailgate® custom games; Onix® pickleball;
Goalrilla™ basketball; Lifeline® fitness; Woodplay® playsets; and
Bear® Archery. Escalade’s products are available online and at
leading retailers nationwide. For more information about Escalade’s
many brands, history, financials, and governance please visit
www.escaladeinc.com.
INVESTOR RELATIONS CONTACTPatrick GriffinVice
President - Corporate Development & Investor
Relations812-467-1358
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:
specific and overall impacts of the COVID-19 global pandemic on
Escalade’s financial condition and results of operations; 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; continued listing of the
Company’s common stock on the NASDAQ Global Market and/or inclusion
in market indices such as the Russell 2000; 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
SubsidiariesConsolidated Statements of
Operations(Unaudited, In Thousands Except Per Share
Data)
|
|
|
|
|
|
Three Months Ended |
All
Amounts in Thousands Except Per Share Data |
|
|
|
|
March 19, 2022 |
|
March 20, 2021 |
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
|
$72,380 |
|
|
$59,191 |
|
|
|
|
|
|
|
|
|
Costs and
Expenses |
|
|
|
|
|
|
|
Cost of products sold |
|
|
|
|
|
52,261 |
|
|
|
41,757 |
|
Selling, administrative and general expenses |
|
|
|
|
|
10,526 |
|
|
|
9,876 |
|
Amortization |
|
|
|
|
|
570 |
|
|
|
429 |
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
9,023 |
|
|
|
7,129 |
|
|
|
|
|
|
|
|
|
Other Income
(Expense) |
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
(560) |
|
|
|
(234) |
|
Other income |
|
|
|
|
|
43 |
|
|
|
35 |
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes |
|
|
|
|
|
8,506 |
|
|
|
6,930 |
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes |
|
|
|
|
|
1,852 |
|
|
|
1,488 |
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
$6,654 |
|
|
$5,442 |
|
|
|
|
|
|
|
|
|
Earnings Per Share
Data: |
|
|
|
|
|
|
|
Basic earnings per share |
|
|
|
|
$0.49 |
|
|
$0.39 |
|
Diluted earnings per share |
|
|
|
|
$0.49 |
|
|
$0.39 |
|
|
|
|
|
|
|
|
|
Dividends declared |
|
|
|
|
$0.15 |
|
|
$0.14 |
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheets(Unaudited, In Thousands)
All
Amounts in Thousands Except Share Information |
March 19, 2022 |
December 25, 2021 |
March 20, 2021 |
|
(Unaudited) |
(Audited) |
(Unaudited) |
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$6,392 |
$4,374 |
$5,879 |
Receivables, less allowance of $566; $457; and $954;
respectively |
|
67,301 |
|
65,991 |
|
54,475 |
Inventories |
|
114,605 |
|
92,382 |
|
91,425 |
Prepaid expenses |
|
12,716 |
|
7,569 |
|
4,044 |
Prepaid income tax |
|
-- |
|
739 |
|
-- |
TOTAL CURRENT ASSETS |
|
201,014 |
|
171,055 |
|
155,823 |
|
|
|
|
Property, plant and equipment,
net |
|
28,812 |
|
24,936 |
|
18,962 |
Operating lease right-of-use
assets |
|
1,896 |
|
2,210 |
|
2,147 |
Intangible assets, net |
|
36,208 |
|
20,778 |
|
22,216 |
Goodwill |
|
38,837 |
|
32,695 |
|
32,695 |
Other assets |
|
294 |
|
124 |
|
117 |
TOTAL ASSETS |
$307,061 |
$251,798 |
$231,960 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Current portion of long-term debt |
$7,143 |
$7,143 |
$ |
-- |
Trade accounts payable |
|
27,378 |
|
15,847 |
|
22,708 |
Accrued liabilities |
|
19,875 |
|
24,385 |
|
12,194 |
Income tax payable |
|
1,087 |
|
-- |
|
1,456 |
Current operating lease liabilities |
|
604 |
|
818 |
|
1,310 |
TOTAL CURRENT LIABILITIES |
|
56,087 |
|
48,193 |
|
37,668 |
|
|
|
|
Other Liabilities: |
|
|
|
Long-term debt |
|
92,850 |
|
50,396 |
|
46,907 |
Deferred income tax liability |
|
4,759 |
|
4,759 |
|
4,193 |
Operating lease liabilities |
|
1,298 |
|
1,387 |
|
844 |
Other liabilities |
|
448 |
|
448 |
|
448 |
TOTAL LIABILITIES |
|
155,442 |
|
105,183 |
|
90,060 |
|
|
|
|
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
– 13,585,096; 13,493,332; and 13,924,754; shares respectively |
|
13,585 |
|
13,493 |
|
13,925 |
Retained earnings |
|
138,034 |
|
133,122 |
|
127,975 |
TOTAL STOCKHOLDERS' EQUITY |
|
151,619 |
|
146,615 |
|
141,900 |
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$307,061 |
$251,798 |
$231,960 |
|
|
|
|
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