EVANSVILLE, Ind., Feb. 20, 2019 /PRNewswire/ -- Escalade, Incorporated ESCA - "We finished fourth quarter 2018 with revenue growth of 4.7% and improved our gross profit by $230 thousand in a highly competitive consumer market," stated Dave Fetherman, President and Chief Executive Officer of Escalade, Inc. "Acquisition related expenses caused SG&A to be slightly higher and operating income to be relatively flat to prior year. We continue to focus on operational and sales initiatives that support our transformational shift of consumers to e-commerce platforms. With our strong balance sheet and business strategies in place, we are confident in the future direction of our company."
Fourth Quarter Results
Net sales for the fourth quarter of 2018 were $51.0 million compared to net sales of $48.7 million for the same quarter in 2017, an increase of $2.3 million or 4.7%.
Gross margin ratio for the fourth quarter of 2018 was 24.0%, compared to 24.7% for the same period in the prior year.
Selling, general and administrative expenses (SG&A) were $6.9 million for the quarter compared to $6.5 million for the same period in the prior year, an increase of $0.4 million or 5.9% due primarily to acquisition related activity. SG&A, as a percent of sales, for the fourth quarter of 2018 increased to 13.5% from 13.3% reported for the same period prior year.
Operating income for the fourth quarter of 2018 was $5.0 million compared to operating income of $5.1 million for the same period in the prior year, a decrease of $0.1 million or 2.5%.
Other income for the fourth quarter of 2018 was down compared to the same period in the prior year due to the sale of our 50% owned equity method investment, Stiga.
Net income for the fourth quarter of 2018 was $3.6 million, or $0.25 diluted earnings per share compared to net income of $7.5 million, or $0.52 diluted earnings per share for the same quarter in 2017. Net income for 2017 was favorably impacted by approximately $3.0 million of income tax benefit resulting from the Tax Cuts and Jobs Act of 2017.
Full Year Results
Full year net sales for 2018 were $175.8 million compared to $177.3 million in 2017, a decrease of $1.5 million.
Gross margin ratio for full year 2018 increased to 25.6% from 25.2%.
SG&A for full year 2018 were $29.8 million compared to $28.5 million in 2017, an increase of $1.3 million, or 4.4% due primarily to acquisition related activity and customer specific advertising. As a percent of sales, SG&A increased to 17.0% from 16.1% in 2017.
Operating income for full year 2018 was $13.8 million compared to $14.6 million in 2017, a decrease of $0.8 million.
Other income for full year 2018 was $13.1 million compared to $1.7 million 2017. During 2018, the Company recognized a $13.0 million gain in other income on the sale of our 50% owned equity method investment, Stiga, a Swedish entity.
Full year net income for 2018 was $20.4 million, or $1.41 diluted earnings per share compared to net income of $14.1 million, or $0.98 diluted earnings per share for 2017.
The Company announced a quarterly dividend of $0.125 per share would be paid to all shareholders of record on March 11, 2019 and disbursed on March 18, 2019.
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; Atomic®, Victory Tailgate™, Triumph Sports™, Viva Sol®, Zume® recreational games; 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; Vuly™ trampolines; 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, 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, the 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 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, 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 Condensed Statements of Operations | |||||||
(Unaudited, In Thousands Except Per Share Data) | |||||||
Three Months Ended | Twelve Months Ended | ||||||
All Amounts in Thousands Except Per Share Data | December | December | December | December | |||
Net sales | $50,992 | $48,685 | $175,780 | $177,333 | |||
Costs and Expenses | |||||||
Cost of products sold | 38,756 | 36,679 | 130,750 | 132,606 | |||
Selling, administrative and general expenses | 6,880 | 6,495 | 29,807 | 28,548 | |||
Amortization | 339 | 367 | 1,406 | 1,579 | |||
Operating Income | 5,017 | 5,144 | 13,817 | 14,600 | |||
Other Income (Expense) | |||||||
Interest expense | (37) | (203) | (427) | (804) | |||
Equity in earnings of affiliates | -- | 995 | 121 | 1,634 | |||
Gain on sale of equity method investment | -- | -- | 13,020 | -- | |||
Gain on bargain purchase | -- | -- | -- | 256 | |||
Other income (expense) | 3 | (120) | (89) | (169) | |||
Income Before Income Taxes | 4,983 | 5,816 | 26,442 | 15,517 | |||
Provision (Benefit) for Income Taxes | 1,403 | (1,643) | 6,000 | 1,456 | |||
Net Income | $ 3,580 | $ 7,459 | $ 20,442 | $ 14,061 | |||
Earnings Per Share Data: | |||||||
Basic earnings per share | $ 0.25 | $ 0.52 | $ 1.42 | $ 0.98 | |||
Diluted earnings per share | $ 0.25 | $ 0.52 | $ 1.41 | $ 0.98 | |||
Dividends declared | $ 0.125 | $ 0.115 | $ 0.50 | $ 0.46 | |||
Consolidated Condensed Balance Sheets | ||||
(Unaudited, In Thousands) | ||||
All Amounts in Thousands Except Share Information | December 29, 2018 | December 30, 2017 | ||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $ 2,824 | $ 1,572 | ||
Receivables, less allowances of $532 and $623 | 40,682 | 39,350 | ||
Inventories | 39,122 | 35,160 | ||
Prepaid expenses | 4,151 | 3,414 | ||
Prepaid income tax | 1,082 | 764 | ||
Other current assets | 2 | -- | ||
TOTAL CURRENT ASSETS | 87,863 | 80,260 | ||
Property, plant and equipment, net | 15,498 | 14,286 | ||
Intangible assets | 19,785 | 19,691 | ||
Goodwill | 26,381 | 21,548 | ||
Investments | -- | 20,278 | ||
Other assets | -- | 42 | ||
TOTAL ASSETS | $149,527 | $156,105 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Current portion of long-term debt | $ -- | $ 1,250 | ||
Trade accounts payable | 5,631 | 4,295 | ||
Accrued liabilities | 11,072 | 13,997 | ||
TOTAL CURRENT LIABILITIES | 16,703 | 19,542 | ||
Long-term debt | -- | 21,871 | ||
Deferred income tax liability | 3,409 | 2,469 | ||
Other liabilities | 1,094 | 553 | ||
TOTAL LIABILITIES | 21,206 | 44,435 | ||
Commitments and contingencies | -- | -- | ||
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: 2018 —14,438,824 shares, 2017 —14,371,586 shares | 14,439 | 14,372 | ||
Retained earnings | 113,882 | 99,908 | ||
Accumulated other comprehensive loss | -- | (2,610) | ||
TOTAL STOCKHOLDERS' EQUITY | 128,321 | 111,670 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $149,527 | $156,105 | ||
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SOURCE Escalade, Inc.
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