EVANSVILLE, IN--(Marketwire - October 24, 2008) - Escalade, Incorporated (
NASDAQ:
ESCA)
announced that revenue for the third quarter of 2008 dropped 32.8% to $40.8
million, compared to $60.7 million in the prior year. A net loss of $1.4
million, or $0.11 per share, was recorded for the third quarter, compared
to net income of $3.1 million, or $0.24 per share in the prior year. For
the first nine months of 2008, revenue dropped 20.0% to $115.8 million,
compared to $144.7 million in the prior year. A net loss of $2.9 million,
or $0.23 per share, was recorded for the first nine months of 2008,
compared to net income of $6.7 million, or $0.51 per share in the prior
year.
Sporting Goods segment revenue declined 39.8% in the third quarter and
26.2% in the first nine months of 2008 compared to the prior year. Sales
to mass retail customers declined 47% for the third quarter. These
customers have reduced inventories and consequently bought less of the
Company's products in response to the weakened U.S. economy and lower sell
through on game room products. Sales to Sears Holdings were down 71% in
the first nine months of 2008 and are expected to decline further in the
fourth quarter of 2008. The Company has ceased to supply table tennis and
billiard tables to Sears Holdings. Sales to specialty retailers and
dealers were down 19.4% in the third quarter and were down 8.5 % in the
first nine months of 2008. On a full year basis, the Company expects
Sporting Goods revenue for 2008 to be approximately 25% lower in 2008
compared to the prior year.
Office Products segment revenue decreased 7.8% in the third quarter and
5.2% for the first nine months of 2008 when compared to the prior year.
Excluding the benefit of foreign currency exchange rates, Office Products
revenue declined 8.8% in the third quarter and 9.2% for the first nine
months of 2008 when compared to the prior year. Approximately two-thirds
of this decline is due to lower sales to U.S. office supply mass retailers
which are negatively impacted by the economy. The remainder of the decline
is due to the slowing European economy, including Germany, France, and
Spain. Year-to-date, sales to the U.S. specialty/machine dealer and
government channels were relatively unchanged. Going into the fourth
quarter, the backlog of future orders to these customers exceeds the
backlog from last year for the same period. On a full year basis, the
Company expects Office Products revenue for 2008 to be slightly lower
compared to the prior year.
"The entire Company is focused on building innovative, high value brands,
while aggressively lowering our cost of operations. Our decision to close
the production facility in Evansville and consolidate manufacturing in
Mexico will result in substantial savings in 2009," said Robert J. Keller,
President and Chief Executive Officer of Escalade, Inc. "We anticipate
that the weak retail market will continue to impact global sales next year.
However, we are confident that the measures we are taking to introduce new
products, expand retail distribution, and reduce our cost structure will
bolster operating results in the future."
Escalade is a leading manufacturer and marketer of sporting goods and
office/graphic arts products sold worldwide. To obtain more information on
the Company and its products, visit our website at:
www.EscaladeInc.com or
contact Terry Frandsen, Vice President and CFO at 812/467-1334.
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, Escalade's
ability to successfully integrate the operations of acquired assets and
businesses, new product development, the continuation and development of
key customer and supplier relationships, Escalade's ability to control
costs, general economic conditions, fluctuations in operating results,
changes in the securities markets 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 update these forward-looking statements after the date of
this report.
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited, In Thousands Except Per Share Amounts)
Three Months Nine Months
Ended Ended Twelve Months Ended
---------------- ---------------- --------------------
04 06 04 06 04 06
October October October October October October
2008 2007 2008 2007 2008 2007
------- ------- ------- ------- --------- ---------
NET SALES $40,797 $60,687 $115,759 $144,684 $156,651 $188,817
OPERATING
EXPENSES
Cost of goods
sold 31,576 45,086 85,594 100,997 115,986 134,135
Selling and
administrative 9,139 9,789 31,928 32,248 40,799 38,531
------- ------- ------- ------- --------- ---------
OPERATING INCOME 82 5,812 (1,763) 11,439 (134) 16,151
OTHER INCOME
(EXPENSE)
Interest expense (552) (714) (1,699) (2,183) (2,353) (2,893)
Other income
(expense) (61) 875 144 1,729 2,406 465
------- ------- ------- ------- --------- ---------
INCOME BEFORE
INCOME TAXES (531) 5,973 (3,318) 10,985 (81) 13,723
PROVISION FOR
INCOME TAXES (834) (2,842) 401 (4,322) (244) (4,469)
------- ------- ------- ------- --------- ---------
NET INCOME $(1,365) $ 3,131 $(2,917) $ 6,663 $ (325) $ 9,254
======= ======= ======= ======= ========= =========
PER SHARE DATA
Basic earnings
per share $ (0.11) $ 0.24 $ (0.23) $ 0.51 $ (0.03) $ 0.71
======= ======= ======= ======= ========= =========
Diluted
earnings per
share $ (0.11) $ 0.24 $(0.23) $ 0.51 $ (0.03) $ 0.71
======= ======= ======= ======= ========= =========
Average shares
outstanding 12,616 12,889 12,644 12,938 12,650 12,983
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
04 October 06 October 29 December
2008 2007 2007
------------ ------------ ------------
ASSETS
Current assets $ 80,608 $ 99,195 $ 70,798
Property, Plant & Equipment - net 24,453 20,206 20,391
Other assets 31,220 32,408 35,024
Goodwill 25,527 25,485 25,803
------------ ------------ ------------
Total $ 161,808 $ 177,294 $ 152,016
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 72,606 $ 60,459 $ 39,356
Other liabilities 5,704 28,919 20,918
Stockholders' equity 83,498 87,916 91,742
------------ ------------ ------------
Total $ 161,808 $ 177,294 $ 152,016
============ ============ ============
Contact Information: Terry Frandsen
Vice President and CFO
812/467-1334
www.EscaladeInc.com