Escalade Studies Second Quarter and Yr to Date 2022 Outcomes

EVANSVILLE, Ind., Aug. 4, 2022 /PRNewswire/ — Escalade, Inc. (NASDAQ: ESCA, or the “Firm”), a number one producer and distributor of sporting items and indoor/out of doors leisure gear, at this time introduced second quarter and yr to this point outcomes for 2022.

Escalade, Inc. (PRNewsfoto/ESCALADE, INC.)(PRNewswire)

SECOND QUARTER 2022
(As in comparison with the second quarter 2021)

  • Web Gross sales decreased 5.4% to $94.3 million
  • Natural gross sales, excluding acquisition contributions, declined 13.0%
  • Gross margin was flat at 25.2% and gross revenue decreased 5.4%
  • Working revenue decreased 23.4% to $8.2 million
  • Web revenue of $5.7 million, or $0.42 per diluted share vs. $8.1 million, or $0.58 per share for Q2 2021
  • EBITDA decreased 15.7% to $10.3 million
  • Introduced $0.15 per share money dividend to shareholders of report on September 6, 2022

SIX MONTHS ENDED JULY 9, 2022
(As in comparison with the primary half 2021)

  • Web Gross sales elevated 4.9% to $166.7 million
  • Natural gross sales, excluding acquisition contributions, declined 3.6%
  • Gross margin declined 46 foundation factors, to 26.3%
  • Working revenue decreased 3.4% to $17.2 million
  • Web revenue of $12.3 million, or $0.91 per diluted share vs. $13.6 million, or $0.97 per diluted share for 2021
  • EBITDA elevated 1.5% to $20.9 million

For the three months ended July 9, 2022, Escalade reported web revenue of $5.7 million, or $0.42 per diluted share, on web gross sales of $94.3 million. The Firm reported gross margin of 25.2%, per the prior-year interval, regardless of continued challenges associated to the worldwide provide chain, uncooked supplies value inflation, and labor constraints.

Promoting, basic, and administrative expense as share of web gross sales elevated to fifteen.6% within the second quarter 2022, versus 13.9% within the prior-year interval, attributable to decrease gross sales quantity and bills associated to the acquisition and integration of Brunswick Billiards. SG&A bills for the legacy enterprise items had been down yr over yr on an absolute foundation.

Earnings earlier than curiosity, taxes, depreciation, and amortization (“EBITDA”) declined 15.7% to $10.3 million within the second quarter 2022, versus $12.3 million within the prior-year interval. For the six months year-to-date EBITDA elevated 1.5% to $20.9 million vs $20.6 million in 2021.

As of July 9, 2022, the Firm had whole money and equivalents of $6.2 million, along with $7.3 million of availability on its senior secured revolving credit score facility maturing in 2027. On the finish of the second quarter 2022, web debt (whole debt much less money) was 2.55x trailing twelve-month EBITDA.

In the course of the second quarter sturdy natural demand for indoor video games and pickleball, along with contribution from the Brunswick Billiards® acquisition accomplished January 21, 2022, had been greater than offset by the timing of shipments throughout the basketball class, together with decrease demand throughout the health and out of doors classes, together with archery and water sports activities.

Escalade introduced a quarterly dividend of $0.15 per share to be paid to all shareholders of report on September 6, 2022 and disbursed on September 13, 2022.

MANAGEMENT COMMENTARY

“In the course of the second quarter, we continued to construct main positions throughout our area of interest sports activities, video games, and out of doors classes, whereas leveraging the advantages afforded by our hybrid manufacturing and sourcing capabilities, decentralized construction and lean working mannequin,” acknowledged Walter P. Glazer, Jr., President and CEO of Escalade.

“Though rising rates of interest, inflationary headwinds and geopolitical uncertainty have dampened broader shopper sentiment and demand at the moment, our numerous portfolio of premium manufacturers and base of customers who worth high quality, efficiency, and an energetic life-style, ought to help our development plans over the long term,” continued Glazer.

“Second quarter gross sales declined on a year-over-year foundation attributable to softness in choose out of doors classes, along with the beforehand introduced pull-forward of basketball income from the second to the primary quarter of 2022,” continued Glazer. “Importantly, gross revenue margin held per the prior-year interval, as we efficiently navigated rising materials, delivery and labor prices.”

“The combination of our not too long ago accomplished acquisition of Brunswick Billiards® has progressed forward of plan and, as beforehand disclosed, is anticipated to be accretive to earnings within the second half of 2022,” continued Glazer. “We imagine this acquisition will enable for significant cross-selling synergies throughout our billiards and indoor recreation markets, classes that proceed to outperform within the present market atmosphere.”

“Subsequent to the quarter finish, we exercised a portion of our accordion availability, increasing our senior revolving credit score facility by $10 million,” continued Glazer. “We’ve an extra $15 million that we may train sooner or later, additional growing our credit score line.”

“We have demonstrated a dedication to efficient capital allocation and disciplined stability sheet administration, an strategy that contributes to long-term worth creation,” continued Glazer. “Trying forward, our near-term capital allocation priorities embrace a focused discount in web leverage, investments in natural development initiatives, and the constant cost of a quarterly money dividend,” concluded Glazer.

CONFERENCE CALL

A convention name might be held Thursday, August 4, 2022, at 11:00 a.m. ET to evaluate the Firm’s monetary outcomes, focus on current occasions and conduct a question-and-answer session.

A webcast of the convention name and accompanying presentation supplies might be accessible within the Investor Relations part of Escalade’s web site at www.escaladeinc.com.  To hearken to a dwell broadcast, go to the positioning at the least quarter-hour previous to the scheduled begin time with a view to register, obtain, and set up any needed audio software program.

To take part within the dwell teleconference:

Home Reside:

877-300-8521

Worldwide Reside:

412-317-6026

To hearken to a replay of the teleconference, which subsequently might be accessible by way of August 18, 2022:

Home Replay:

844-512-2921

Worldwide Replay:

412-317-6671

Convention ID:

10169236

USE OF NON-GAAP FINANCIAL MEASURES

Along with disclosing monetary statements in accordance with U.S. usually accepted accounting ideas (“GAAP”), this launch comprises the non-GAAP monetary measure often called “EBITDA.” A reconciliation of this non-GAAP monetary measure is contained on the finish of this press launch. EBITDA is a non-GAAP monetary measure that Escalade makes use of to facilitate comparisons of working efficiency throughout intervals. Escalade believes the disclosure of EBITDA gives helpful data to buyers concerning its monetary situation and outcomes of operations. Non-GAAP measures ought to be seen as a complement to and never an alternative to the Firm’s U.S. GAAP measures of efficiency and the monetary outcomes calculated in accordance with U.S. GAAP and reconciliations from these outcomes ought to be fastidiously evaluated. Non-GAAP measures have limitations as an analytical instrument and shouldn’t be thought-about in isolation or in lieu of an evaluation of the Firm’s outcomes as reported beneath U.S. GAAP and ought to be evaluated solely on a supplementary foundation.

ABOUT ESCALADE, INC

Based in 1922, and headquartered in Evansville, Indiana, Escalade designs, manufactures, and sells sporting items, health, and indoor/out of doors recreation gear.  Our mission is to attach household and buddies creating lasting reminiscences. Leaders in our respective classes, Escalade’s manufacturers embrace Brunswick Billiards®; STIGA® desk tennis; Accudart®; RAVE Sports activities® water recreation; Victory Tailgate® customized video games; Onix® pickleball; Goalrilla™ basketball; Lifeline® health; Woodplay® playsets; and Bear® Archery. Escalade’s merchandise can be found on-line and at main retailers nationwide. For extra details about Escalade’s many manufacturers, historical past, financials, and governance please go to www.escaladeinc.com.

INVESTOR RELATIONS CONTACT

Patrick Griffin
Vice President – Company Improvement & Investor Relations
812-467-1358

FORWARD-LOOKING STATEMENTS 

This report comprises forward-looking statements regarding current or future developments or components which might be topic to dangers and uncertainties. These dangers embrace, however usually are not restricted to: particular and total impacts of the COVID-19 international pandemic on Escalade’s monetary situation and outcomes of operations; the affect of aggressive merchandise and pricing; product demand and market acceptance; new product improvement; Escalade’s skill to attain its enterprise goals, particularly with respect to its Sporting Items enterprise on which it has chosen to focus; Escalade’s skill to efficiently obtain the anticipated outcomes of strategic transactions, together with the combination of the operations of acquired belongings and companies and of divestitures or discontinuances of sure operations, belongings, manufacturers, and merchandise; the continuation and improvement of key buyer, provider, licensing and different enterprise relationships; Escalade’s skill to develop and implement our personal direct to shopper e-commerce distribution channel; Escalade’s skill to efficiently negotiate the shifting retail atmosphere and modifications in shopper shopping for habits; the monetary well being of our clients; disruptions or delays in our enterprise operations, together with with out limitation disruptions or delays in our provide chain, arising from political unrest, warfare, labor strikes, pure disasters, public well being crises such because the coronavirus pandemic, and different occasions and circumstances past our management; Escalade’s skill to manage prices; Escalade’s skill to efficiently implement actions to minimize the potential impacts of tariffs and different commerce restrictions relevant to our merchandise and uncooked supplies, together with impacts on the prices of manufacturing our items, importing merchandise and supplies into our markets on the market, and on the pricing of our merchandise; basic financial situations; fluctuation in working outcomes; modifications in international forex alternate charges; modifications within the securities markets; continued itemizing of the Firm’s frequent inventory on the NASDAQ International Market; the Firm’s inclusion or exclusion from sure market indices; Escalade’s skill to acquire financing and to take care of compliance with the phrases of such financing; the supply, integration and efficient operation of knowledge techniques and different expertise, the potential affect of precise or perceived defects in, or security of, our merchandise, together with any affect of product recollects or authorized or regulatory claims, proceedings or investigations involving our merchandise; and the potential interruption of such techniques or expertise; dangers associated to information safety of privateness breaches; and different dangers detailed every so often in Escalade’s filings with the Securities and Alternate Fee. Escalade’s future monetary efficiency may differ materially from the expectations of administration contained herein. Escalade undertakes no obligation to launch revisions to those forward-looking statements after the date of this report.

Escalade, Included and Subsidiaries
Consolidated Statements of Operations
(Unaudited, In Hundreds Besides Per Share Knowledge)

Three Months Ended

Six Months Ended

All Quantities in Hundreds Besides Per Share Knowledge

July 9,
2022

July 10,
2021

July 9,
2022

July 10,
2021

Web gross sales

$94,337

$99,679

$166,717

$158,870

Prices and Bills

Value of merchandise offered

70,613

74,606

122,874

116,363

Promoting, administrative and basic bills

14,680

13,810

25,206

23,686

Amortization

855

577

1,425

1,006

Working Revenue

8,189

10,686

17,212

17,815

Different Revenue (Expense)

Curiosity expense

(948)

(387)

(1,508)

(621)

Different revenue

29

21

72

56

Revenue Earlier than Revenue Taxes

7,270

10,320

15,776

17,250

Provision for Revenue Taxes

1,597

2,194

3,449

3,682

Web Revenue

$ 5,673

$8,126

$12,327

$13,568

Earnings Per Share Knowledge:

Primary earnings per share

$  0.42

$  0.59

$  0.91

$  0.98

Diluted earnings per share

$  0.42

$  0.58

$  0.91

$  0.97

Dividends declared

$  0.15

$  0.14

$  0.30

$  0.28

Consolidated Stability Sheets
(Unaudited, In Hundreds)

All Quantities in Hundreds Besides Share Data

July 9,
2022

December 25,
2021

July 10,
2021

(Unaudited)

(Audited)

(Unaudited)

ASSETS

Present Belongings:

Money and money equivalents

$ 6,195

$ 4,374

$10,641

Receivables, much less allowance of $726; $457; and $717; respectively

60,011

65,991

52,248

Inventories

130,246

92,382

86,612

Pay as you go bills

7,263

7,569

4,775

Pay as you go revenue tax

621

739

TOTAL CURRENT ASSETS

204,336

171,055

154,276

Property, plant and gear, web

28,344

24,936

20,792

Working lease right-of-use belongings

9,318

2,210

2,079

Intangible belongings, web

35,353

20,778

21,638

Goodwill

39,226

32,695

32,695

Different belongings

275

124

137

TOTAL ASSETS

$316,852

$251,798

$231,617

LIABILITIES AND STOCKHOLDERS’ EQUITY

Present Liabilities:

Present portion of long-term debt

$ 7,143

$ 7,143

$ 7,143

Commerce accounts payable

24,650

15,847

14,705

Accrued liabilities

20,483

24,385

14,875

Revenue tax payable

180

Present working lease liabilities

676

818

1,526

TOTAL CURRENT LIABILITIES

52,952

48,193

38,429

Different Liabilities:

Lengthy‑time period debt

94,040

50,396

42,857

Deferred revenue tax legal responsibility

4,759

4,759

4,193

Working lease liabilities

8,660

1,387

557

Different liabilities

448

448

448

                TOTAL LIABILITIES

160,859

105,183

86,484

Stockholders’ Fairness:

Most popular inventory:

Licensed 1,000,000 shares; no par worth, none issued

Widespread inventory:

Licensed 30,000,000 shares; no par worth, issued and excellent –
     13,590,407; 13,493,332; and 13,779,489; shares respectively

 

13,590

 

13,493

 

13,779

Retained earnings

142,403

133,122

131,354

TOTAL STOCKHOLDERS’ EQUITY

155,993

146,615

145,133

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$316,852

$251,798

$231,617

Reconciliation of GAAP Web Revenue to Non-GAAP EBITDA
(Unaudited, In Hundreds)

Three Months Ended

Six Months Ended

All Quantities in Hundreds

July 9,
2022

July 10,
2021

July 9,
2022

July 10,
2021

Web Revenue (GAAP)

$ 5,673

$8,126

$12,327

$13,568

Curiosity expense

948

387

1,508

621

Revenue tax expense

1,597

2,194

3,449

3,682

Depreciation and amortization

2,130

1,575

3,603

2,709

EBITDA (Non-GAAP)

$10,348

$12,282

$20,887

$20,580

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SOURCE Escalade, Included