Escalade Reports Fourth Quarter and Full Year 2015 Results

Feb 23, 2016, 08:00 ET from Escalade, Incorporated

EVANSVILLE, Ind., Feb. 23, 2016 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) announced that revenues for the fourth quarter of 2015 were up 8% over the same quarter in the prior year. Year to date revenues have increased 13% over the same period in the prior year due to organic growth and acquisitions. The Company reported net income from continuing operations for the fourth quarter of 2015 of $2.9 million, or $0.20 diluted earnings per share compared to net income from continuing operations of $4.5 million, or $0.32 diluted earnings per share for the same quarter in 2014. Full year 2015 net income from continuing operations was $11.6 million compared to prior year's net income from continuing operation of $13.3 million

Gross margin ratio for full year 2015 fell from 30% to 28% due to decreased sales and margins in archery. We expect the archery market to remain challenging through at least the first half of 2016. Selling, general and administrative expenses (SG&A) were $27.8 million for full year 2015 compared to $22.9 million for the same period in 2014, an increase of $4.8 million or 21%. The increase in SG&A is primarily due to continued marketing efforts in new categories acquired, investments in new products to be introduced in 2016 and severance related charges. We expect additional marketing and selling expenses in the first half of 2016 as we introduce new products, including BearX crossbows and GoTek portable basketball goals, which should be in full market distribution mid-year 2016.

Net income for the full year 2015 was $11.6 million or 2% lower than the prior year.  Diluted earnings per share in 2015 were $0.82 compared to $0.84 diluted earnings per share in the prior year.  Net income for 2015 was adversely impacted by foreign currency exchange rates associated with our 50% ownership of Stiga, headquartered in Sweden.

"Our fourth quarter and full year 2015 results continued to show revenue growth," stated Dave Fetherman, President and Chief Executive Officer of Escalade, Inc. "Operating income in 2015 declined as a function of a soft Archery category, costs associated with two acquisitions and our continued investments in product development. We anticipate the acquisitions made in the second half of 2015, the Goalsetter premium brand basketball goals and Onix pickleball equipment and accessories, to be accretive in 2016.  In January 2016, we entered into new categories with our line of BearX crossbows and GoTek portable basketball goals, both should have a positive impact on the second half of 2016. We also acquired Triumph Sports USA, Inc., a brand known for its innovative indoor and outdoor games, which we also expect to be accretive in 2016."

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.

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 of non-core assets and businesses, the continuation and development of key customer and supplier relationships, 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 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 Statement of Operations

(Unaudited, In Thousands Except Per Share Data)






Three Months Ended


Twelve Months Ended


December  26,

2015


December  27,

2014


December 26,

2015


December 27,

2014









Net Sales

$ 43,744


$ 40,643


$ 155,542


$ 137,975









Costs and Expenses








Cost of products sold

33,732


29,810


112,068


96,912

Selling, administrative and general expenses

6,757


6,073


27,775


22,938

Amortization

754


727


2,881


2,621









Operating Income

2,501


4,033


12,818


15,504









Other Income (Expense)








Interest expense

(130)


(123)


(470)


(447)

Equity in earnings of affiliates

913


1,754


2,993


3,923

Other income                          

57


657


333


803









Income Before Income Taxes from Continuing Operations

3,341


6,321


15,674


19,783









Provision for Income Taxes from Continuing Operations

482


1,844


4,068


6,438









Net Income from Continuing Operations

2,859


4,477


11,606


13,345









Discontinued Operations








Loss from operations

--


(216)


--


(611)

Loss on classification as held for sale

--


--


--


(12,945)

Gain (loss) on disposal (includes $2,565 of accumulated other comprehensive income reclassification from foreign currency translation adjustment)

--


(209)


--


5,929

Provision (benefit) for Income Taxes

--


22


--


(6,099)

Net Loss from Discontinued Operations

--


(447)


--


(1,528)









Net Income

$ 2,859


$ 4,030


$ 11,606


$ 11,817









Basic Earnings Per Share Data:








Income from continuing operations

$  0.20


$  0.32


$  0.82


$  0.96

Loss from discontinued operations

--


(0.03)


--


(0.11)

Net Income

$  0.20


$  0.29


$  0.82


$  0.85









Diluted Earnings Per Share Data:








Income from continuing operations

$  0.20


$  0.32


$  0.82


$  0.95

Loss from discontinued operations

--


(0.03)


--


(0.11)

Net Income

$  0.20


$  0.29


$  0.82


$  0.84









Average shares outstanding

14,151


13,958


14,088


13,853

 

 

Consolidated Condensed Balance Sheets
(Unaudited, In Thousands)


All Amounts in Thousands Except Share Information


December 26,

2015


December 27,

2014






ASSETS





Current Assets:





        Cash and cash equivalents


$   1,982


$    3,232

        Time deposits


--


1,450

        Receivables, less allowances of $1,086 and $900


38,984


32,150

        Inventories


25,862


23,775

        Prepaid expenses


2,534


1,622

        Deferred income tax benefit


1,543


925

        Prepaid income tax


1,910


5,697

TOTAL CURRENT ASSETS


72,815


68,851






Property, plant and equipment, net


14,363


11,596

Intangible assets


16,868


13,465

Goodwill


20,047


14,875

Investments


19,644


18,949

Other assets


--


145

TOTAL ASSETS


$143,737


$127,881






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





        Notes payable


$  19,776


$  16,200

        Current portion of long-term debt


1,810


1,586

        Trade accounts payable


2,547


1,853

        Accrued liabilities


14,174


12,107

TOTAL CURRENT LIABILITIES


38,307


31,746






Long-term debt


1,750


3,360

Deferred income tax liability


7,200


2,996

TOTAL LIABILITIES


47,257


38,102






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: 2015 —14,179,844 shares, 2014 —13,998,090 shares


14,180


13,998

        Retained earnings


85,478


77,745

        Accumulated other comprehensive loss


(3,178)


(1,964)

TOTAL STOCKHOLDERS' EQUITY


96,480


89,779

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$143,737


$127,881

 

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SOURCE Escalade, Incorporated



RELATED LINKS

http://www.escaladeinc.com