PR Newswire | Feb 18, 2021 06:00AM EST

Revenue

02/18 05:00 CST

Escalade Crosses 2020 Finish Line with Four Consecutive Quarters of Record RevenueFourth-Quarter Highlights- Revenue increased 58.9% on net sales of $74.8 million- Gross margin improvement of 80 bps to 23.9%- Operating income of $6.9 million, an increase of 97.1%- Diluted EPS of $0.36 per share vs. $0.18 in the fourth quarter of 2019 EVANSVILLE, Ind., Feb. 18, 2021

EVANSVILLE, Ind., Feb. 18, 2021 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) - today announced its fourth quarter and full year financial results for its 2020 fiscal year, ended December 26, 2020. The Company posted quarterly revenue of $74.8 million, an increase of 58.9% over prior year, and a record for its fourth fiscal quarter. This represents the fourth consecutive quarter of record sales. Quarterly diluted earnings per share were $0.36, an increase of 99.1% from prior year.

"We completed our fiscal year with a record fourth quarter performance fueled by continued consumer demand for our innovative and dynamic portfolio of brands and product categories. Our fourth consecutive record quarterly performance demonstrates that we've built a sustainable business model, which drives profitable growth, invests in our team and key growth enablers, and delivers exceptional value and returns to our shareholders," said Scott Sincerbeaux, President and CEO of Escalade, Inc.

"We took important steps in fiscal 2020 to strengthen Escalade's competitive position over the long-term, including the acceleration of our product and asset creation pipeline and the acquisition of American Heritage Billiards and RAVE Sports, as well as key investments in our digital business and capabilities," continued Sincerbeaux. "I would like to share my heartfelt thanks to the entire Escalade family, who have demonstrated incredible resilience throughout unprecedented times. Their dedication to serving customers and consumers, while balancing the health and wellbeing of friends, family and our community, is inspiring. Our team is what makes Escalade a truly special organization."

"We had an excellent finish to the year, including record earnings on revenue growth," said Stephen Wawrin, Escalade's Chief Financial Officer. "For the full year, we delivered shareholder value through an increase in our dividend and the repurchase of 405,924 shares of stock at an average price of $16.60 per share. In addition, we enhanced our strong balance sheet and increased our financial flexibility for further strategic investments."

Fourth Quarter Results

Net sales for the fourth quarter of 2020 were $74.8 million compared to net sales of $47.0 million for the same quarter in 2019, an increase of $27.8 million, or 58.9%. The Company recognized increased sales across all product categories during the quarter due to increased product placement and continued high demand, most notably in our outdoor and fitness categories.

Gross margin ratio for the fourth quarter of 2020 was 23.9%, compared to 23.1% for the same period in the prior year. Gross profit for the fourth quarter of 2020 was $17.9 million compared to gross profit of $10.9 million for the same quarter in 2019, an increase of $7.0 million, or 64.0%.

Selling, general and administrative expenses (SG&A) were $10.5 million for the quarter compared to $7.0 million for the same period in the prior year, an increase of $3.5 million, or 50.0%. SG&A, as a percent of sales, for the fourth quarter of 2020 decreased to 14.1% from 15.0% reported for the same period in the prior year.

Operating income for the fourth quarter of 2020 was $6.9 million compared to operating income of $3.5 million for the same period in the prior year, an increase of $3.4 million, or 97.1%.

Net income for the fourth quarter of 2020 was $5.1 million, or $0.36 diluted earnings per share compared to net income of $2.6 million, or $0.18 diluted earnings per share for the same quarter in 2019.

Full Year Results

Full year net sales for 2020 were $273.6 million compared to $180.5 million in 2019, an increase of $93.1 million, or 51.6%.

Gross margin ratio for full year 2020 increased to 27.3% from 23.5%. Margins were favorably impacted by factory utilization, change in sales mix and supply chain improvements made throughout the year. Gross profit for 2020 was $74.8 million compared to gross profit of $42.4 million in 2019, an increase of $32.4 million, or 76.6%.

SG&A expenses for full year 2020 were $40.3 million compared to $31.6 million in 2019, an increase of $8.7 million, or 27.5%. As a percent of sales, SG&A decreased to 14.7% from 17.5% in 2019.

Operating income for full year 2020 was $33.0 million compared to $9.2 million in 2019, an increase of $23.8 million, or 256.1%. During 2019, the Company experienced challenges with the integration of two of the latest acquisitions. The Company implemented changes during the second half of 2019 which enhanced the profitability of these acquisitions during 2020.

Full year net income for 2020 was $25.9 million, or $1.82 diluted earnings per share compared to net income of $7.3 million, or $0.50 diluted earnings per share for 2019.

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(r) Archery, Bear X(tm), Trophy Ridge(r), Rocket(r), SIK(r) and Cajun Bowfishing(tm) archery equipment; STIGA(r) and Ping-Pong(r) table tennis; Accudart(r) and Unicorn(r) darting; RAVE Sports(r) water recreation products; Atomic(r), Victory Tailgate(r), Triumph(tm) Sports, Viva Sol(r), Zume Games(r) recreational games; DURA(r) and Onix(r) pickleball equipment; Goalrilla(tm), Goalsetter(r) residential in-ground basketball systems, Goaliath(r) and Silverback(r) residential in-ground and portable basketball goals; Lifeline(r) and the STEP(r) fitness products; Woodplay(r) premium playsets; American Heritage Billiards(r) - premium billiards and game room assortment; and Cue&Case(r) - 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

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: 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 new 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 develop and implement our own direct to consumer e-commerce distribution channel; 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. Escalade undertakes no obligation to release revisions to these forward-looking statements after the date of this report.

Escalade, Incorporated and Subsidiaries

Consolidated Statements of Operations

(Unaudited, In Thousands Except Per Share Data)



Three Months Ended Twelve Months Ended

All Amounts in Thousands Except Per Share DataDecember 26,December 28,December 26,December 28, 2020 2019 2020 2019



Net sales $74,767 $47,044 $273,649 $180,541



Costs and Expenses

Cost of products sold 56,911 36,159 198,822 138,181

Selling, administrative and general expenses 10,563 7,040 40,315 31,616

Amortization 372 334 1,480 1,469



Operating Income 6,921 3,511 33,032 9,275



Other Income (Expense)

Interest expense (102) (61) (250) (356)

Other income (expense) 32 3 140 15



Income Before Income Taxes 6,851 3,453 32,922 8,934



Provision for Income Taxes 1,764 878 6,988 1,676



Net Income $5,087 $ 2,575 $25,934 $ 7,258



Earnings Per Share Data:

Basic earnings per share $ 0.36 $ 0.18 $ 1.84 $ 0.50

Diluted earnings per share $ 0.36 $ 0.18 $ 1.82 $ 0.50



Dividends declared $ 0.14 $ 0.125 $ 0.53 $ 0.50



Consolidated Balance Sheets

(Unaudited, In Thousands)



December 26,December 28,All Amounts in Thousands Except Share Information 2020 2019



ASSETS

Current Assets:

Cash and cash equivalents $ 3,505 $ 5,882

Receivables, less allowances of $896 and $483; respectively 65,280 35,450

Inventories 72,488 42,269

Prepaid expenses 4,068 3,151

Prepaid income tax 57 163

TOTAL CURRENT ASSETS 145,398 86,915



Property, plant and equipment, net 18,232 15,111

Operating lease right-of-use assets 1,608 1,080

Intangible assets 22,645 18,847

Goodwill 32,695 26,749

Other assets 127 77

TOTAL ASSETS $220,705 $148,779



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Note payable $ - $ 135

Trade accounts payable 20,947 7,765

Accrued liabilities 24,271 9,689

Current operating lease liabilities 854 621

TOTAL CURRENT LIABILITIES 46,072 18,210



Long-term debt 30,073 -

Deferred income tax liability 4,193 3,537

Operating lease liabilities 763 475

Other liabilities 448 387

TOTAL LIABILITIES 81,549 22,609



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: 2020 -13,919,380 shares, 2019 -14,214,777 13,919 14,215 shares

Retained earnings 125,237 111,955

TOTAL STOCKHOLDERS' EQUITY 139,156 126,170

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $220,705 $148,779

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SOURCE Escalade, Incorporated