Escalade Reports First Quarter 2020 Results
EVANSVILLE, Ind., April 16, 2020 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) - "Our first quarter results reflect the benefits of the operational and organizational changes we made during 2019 which enabled us to achieve operational leverage during the quarter and helped drive significant operating income improvement," said Dave Fetherman, President and CEO of Escalade, Inc. "The 16.2% revenue growth was driven by our outdoor categories – basketball, pickleball, and Victory Tailgate. These categories, along with table tennis and billiard accessories, helped to drive the margin improvement. We made progress in reducing inventory and improving turns during the quarter. These efforts resulted in a significant improvement in EPS for our shareholders. We ended the quarter with a strong balance sheet, with available cash and full availability under our $50 million revolving facility with our long-term banking partner, JPMorgan Chase. With the emerging COVID-19 pandemic, we are focused on safeguarding and protecting our employees. Due to shelter in place mandates issued across the country, our e-commerce channel is experiencing increased demand for our fitness and home recreation products. As I turn over the reins to Scott Sincerbeaux, our incoming President and CEO, I want to thank all the employees that make up Escalade for your dedication, commitment and friendship over the years."
Net sales for the first quarter of 2020 were $37.3 million compared to net sales of $32.1 million for the same quarter in 2019, an increase of $5.2 million or 16.2%. The increase in sales was primarily driven by growth in our outdoor categories, including basketball, pickleball and Victory Tailgate.
Gross margin ratio for the first quarter of 2020 was 27.4%, compared to 26.4% for the same period in the prior year. The improvement in gross margin was primarily due to product mix and operational improvements the Company has performed over the last year. Gross profit for the first quarter of 2020 was $10.2 million compared to gross profit of $8.5 million for the same quarter in 2019.
Selling, general and administrative expenses (SG&A) were $7.5 million for the quarter compared to $7.7 million for the same period in the prior year, a decrease of $0.2 million or 3.7%. The reduction in SG&A was a result of organizational changes and operating efficiencies put in place during 2019. SG&A, as a percent of sales, for the first quarter of 2020 decreased to 20.0% from 24.1% reported for the same period prior year.
Operating income for the first quarter of 2020 was $2.4 million compared to operating income of $0.4 million for the same period in the prior year.
Net income for the first quarter of 2020 was $2.0 million, or $0.14 diluted earnings per share compared to net income of 0.3 million, or $0.02 diluted earnings per share for the same quarter in 2019.
The Company announced a quarterly dividend of $0.125 per share to be paid to all shareholders of record on June 1, 2020 and disbursed on June 8, 2020.
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 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; 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.
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 newly hired 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; 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 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. Additionally, many of these risks and uncertainties are currently elevated by and may or will continue to be elevated by the COVID-19 pandemic. It is not possible to predict or identify all such risks, but may become material in the future. Escalade undertakes no obligation to release revisions to these forward-looking statements after the date of this report.
Escalade, Incorporated and Subsidiaries
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SOURCE Escalade, Incorporated