EVANSVILLE, IN--(Marketwire - November 5, 2009) - Escalade, Incorporated (
NASDAQ:
ESCA)
announced that net income for the third quarter of 2009 increased to $618
thousand or $0.05 per share compared to a net loss of $1,365 thousand or
$0.11 loss per share for the same quarter last year. Net income for the
period includes a one-time benefit from the sale of equity investments
which resulted in a gain of $432 thousand. The gain is a partial recovery
of an asset impairment recorded in the prior year. Without this one-time
benefit, net income would be $186 thousand or $0.01 per share. Net revenue
for the third quarter and nine months ended October 3, 2009 declined 35.4%
and 24.9%, respectively, compared to same periods last year; however, the
Company has improved gross margins year to date to 30.7%, compared with
26.1% for the prior year. In addition, the Company has reduced selling,
administrative and general expenses by 22.5%, mainly due to facility
consolidation in the Sporting Goods segment and Company-wide cost cutting
measures implemented over the past year, which resulted in improved Company
profitability.
The Company's operating income for the third quarter and nine months ended
October 3, 2009 was $612 thousand and $1,358 thousand, respectively,
compared to operating income (loss) of $82 thousand and $(1,763) thousand
for the same periods last year.
Sporting Goods net revenues this quarter were down significantly compared
with same quarter last year, which included sales of Gameroom products to
Sears Holdings not repeated in 2009.
Office Products experienced a further softening in net revenue for the
quarter from 26.3% decline in the prior quarter to 28.8% decline in the
current quarter. Compared to last year, Office Products net revenue
declined 28.8% and 25.0% for the three and nine months ended October 3,
2009, respectively. Net revenue declined 25.9% in the United States and
24.2% in Europe for the first nine months of 2009. Excluding the effect of
changes in foreign currency rates, year to date net revenue in Europe
declined 21.5% compared with prior year.
Based on the year to date results and product placement information, the
Company expects full year net revenue will be approximately 25% below prior
year. The Company is continuing to identify and implement cost saving
initiatives and product design enhancements to expand market share and
improve Company profits.
"Our entire organization has worked hard to implement many cost savings
initiatives, resulting in improved gross margins and lower operating
expense," said Robert J. Keller, President and Chief Executive Office of
Escalade, Inc. "These savings, combined with our focus on inventory
reduction, has generated improved cash flow throughout 2009. We are
committed to making continued progress in lowering our cost of operation
going forward. Most importantly, we have brought significant innovation to
our latest product introductions to offer increased levels of value and
performance. Given the current economic environment, we believe our brands
and product offerings are positioned to capture the increased consumer need
for greater value and performance."
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.
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)
Three Nine Twelve
Months Ended Months Ended Months Ended
---------------- ----------------- ------------------
03 04 03 04 03 04
October October October October October October
2009 2008 2009 2008 2009 2008
------- ------- ------- -------- -------- --------
NET SALES $26,358 $40,797 $86,957 $115,759 $119,884 $156,651
OPERATING EXPENSES
Cost of goods
sold 18,558 31,576 60,233 85,594 86,778 115,986
Selling and
administrative 6,571 8,520 23,342 30,140 33,086 38,555
Long-lived asset
impairment -- -- -- -- 2,623 --
Amortization 617 619 2,024 1,788 2,399 2,186
------- ------- ------- -------- -------- --------
OPERATING INCOME
(LOSS) 612 82 1,358 (1,763) (5,002) (76)
OTHER INCOME
(EXPENSE)
Interest expense (630) (552) (1,530) (1,699) (1,856) (2,354)
Other income
(expense) 966 (61) 1,197 144 1,019 2,349
------- ------- ------- -------- -------- --------
INCOME (LOSS)
BEFORE INCOME
TAXES 948 (531) 1,025 (3,318) (5,839) (81)
PROVISION FOR
INCOME TAXES 330 834 480 (401) (1,805) 244
------- ------- ------- -------- -------- --------
NET INCOME (LOSS) $ 618 $(1,365) $ 545 $ (2,917) $ (4,034) $ (325)
======= ======= ======= ======== ======== ========
PER SHARE DATA
Basic earnings
(loss) per
share $ 0.05 $ (0.11) $ 0.04 $ (0.23) $ (0.32) $ (0.03)
======= ======= ======= ======== ======== ========
Diluted earnings
(loss) per
share $ 0.05 $ (0.11) $ 0.04 $ (0.23) $ (0.32) $ (0.03)
======= ======= ======= ======== ======== ========
Average shares
outstanding 12,624 12,616 12,620 12,644 12,620 12,650
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
03 October 04 October 27 December
2009 2008 2008
----------- ----------- -----------
ASSETS
Current assets $ 64,551 $ 80,608 $ 72,576
Property, Plant & Equipment - net 19,094 24,453 20,209
Other assets 28,201 31,220 29,105
Goodwill 26,325 25,527 25,811
----------- ----------- -----------
Total $ 138,171 $ 161,808 $ 147,701
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 54,506 $ 72,606 $ 67,734
Other liabilities 1,262 5,704 1,177
Stockholders' equity 82,403 83,498 78,790
----------- ----------- -----------
Total $ 138,171 $ 161,808 $ 147,701
=========== =========== ===========
Contact Information: Contact:
Deborah J. Meinert
Vice President and CFO
812/467-4449