EVANSVILLE, IN--(Marketwire - May 4, 2009) - Escalade, Incorporated (
NASDAQ:
ESCA)
announced that revenues for the first quarter of 2009 were 14% lower than
the same quarter last year. The reduction in sales was partially offset by
improvement in Gross Margin to 31% in the first quarter from 29% in the
same quarter last year, resulting in a net loss for the quarter of $0.4
million compared to a net loss of $0.8 million for the same quarter last
year. Loss per share for the first quarter was $0.03 compared to $0.07 for
the same quarter last year.
Revenues from the Sporting Goods business were down 11% in the first
quarter compared to the same quarter last year due to several factors.
Dealers are reducing inventory in light of the economy to conserve cash in
light of the economy. Within many sporting goods categories, consumers are
buying lower-priced models rather than high-end systems. Management
believes that total sales to its mass-market retail customers in 2009 will
be slightly lower than levels achieved in 2008.
Revenues from the Office Products business, excluding the effects of
changes in currency exchange rates, declined 14% in the first quarter
compared to the same period in 2008 primarily due to lower sales to office
supply mass-retailers in the U.S. which are being negatively impacted by
the worsening economy and a slowdown in European sales due to the slowing
economy in Germany, France and Spain. Management anticipates further
declines in sales to office product retailers as the global economy
continues to decline. However, new product launches and an expanding
presence in machine dealers is expected to lessen the impact of these
declines.
Selling and administrative spending was reduced by 11% in the first quarter
compared to last year, a direct result of a series of cost savings measures
taken. These previously announced actions include the reduction of
headcount by over 20% and the consolidation of table tennis manufacturing
in Mexico.
On April 30, 2009 the Company signed a loan agreement with JP Morgan Chase
Bank, N.A. (Chase) for a senior secured revolving credit facility in the
maximum amount up to $50,000,000 and through Chase London Branch, a senior
secured revolving credit facility in the maximum amount of 3,000,000 Euro
depending upon certain terms and conditions. The credit facility has a
maturity date of May 31, 2010. The agreement includes the waiver of the
Company's covenant violations under the prior credit facility with Chase.
Robert J. Keller, President and Chief Executive Officer of Escalade, Inc.
stated that, "We anticipate our customers will continue to be cautious in
their buying trends as seen in the first quarter. We are pleased with the
progress we have made to improve our gross margins and reduce our selling
and administrative expenses, allowing us to better manage our performance
in this challenging economic environment. Cost savings measures will
continue to be implemented while we introduce innovative, new products and
develop new distribution channels, all a part of our strategy to improve
our future business results. We are also pleased with completion of our
new loan agreement with Chase, which we believe will provide the credit
needed to execute our strategy."
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 Deborah Meinert, Vice President and CFO at 812/467-4449.
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, fluctuation in operating results,
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 STATEMENTS OF OPERATIONS
(Unaudited, In Thousands Except Per Share Amounts)
3 Months Ended 12 Months Ended
-------------------- --------------------
21 March 22 March 21 March 22 March
2009 2008 2009 2008
--------- --------- --------- ---------
NET SALES $ 24,958 $ 29,166 $ 144,478 $ 181,275
OPERATING EXPENSES
Cost of goods sold 17,096 20,743 108,491 129,677
Selling and administrative 8,023 9,042 41,488 38,879
Amortization 467 437 2,193 2,526
--------- --------- --------- ---------
OPERATING INCOME (LOSS) (628) (1,056) (7,694) 10,193
OTHER INCOME (EXPENSE)
Interest expense (242) (487) (1,779) (2,807)
Other income 184 162 (13) 4,089
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME
TAXES (686) (1,381) (9,486) 11,475
PROVISION FOR INCOME TAX
BENEFIT (EXPENSE) 247 533 2,398 (4,165)
--------- --------- --------- ---------
NET INCOME (LOSS) $ (439) $ (848) $ (7,088) $ 7,310
========= ========= ========= =========
PER SHARE DATA
Basic earnings (loss) per
share $ (0.03) $ (0.07) $ (0.56) $ 0.57
========= ========= ========= =========
Diluted earnings (loss) per
share $ (0.03) $ (0.07) $ (0.56) $ 0.57
========= ========= ========= =========
Average shares outstanding 12,616 12,683 12,616 12,683
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
21 March 22 March 27 December
2009 2008 2008
--------- --------- ---------
ASSETS
Current assets $ 70,488 $ 71,704 $ 72,576
Property, Plant & Equipment - net 20,409 22,200 20,209
Other assets 29,163 34,589 29,105
Goodwill 25,543 26,281 25,811
--------- --------- ---------
Total $ 145,603 $ 154,774 $ 147,701
========= ========= =========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities $ 19,387 $ 35,231 $ 67,734
Other liabilities 47,447 30,835 1,177
Stockholders equity 78,769 88,708 78,790
--------- --------- ---------
Total $ 145,603 $ 154,774 $ 147,701
========= ========= =========
Contact Information: Contact:
Deborah Meinert
Vice President and CFO
812/467-4449
www.EscaladeInc.com