Escalade Inc. reported net earnings slid 14.3 percent as sales inched up 0.6 percent. The company said a cold, early spring weather impacted some of the outdoor play categories.
“Driven by product mix and signs of stability within the Archery category, our first quarter resulted in continued margin improvement of 200 bps,” stated Dave Fetherman, president and chief executive officer of Escalade, Inc. “Despite an unseasonably cold start to the sprin,g which affected our outdoor categories of Basketball and Playground, as well as retailers managing their inventory to lower levels, revenue for the first quarter was up compared to prior year. We anticipate sales to increase in these categories during the second quarter as the weather warms across the country. Our SG&A increased over prior year due to expenses associated with our Q1 2017 acquisition of Lifeline Products, LLC, start-up costs from our new Vuly trampoline distribution agreement and our ongoing investment in the e-commerce channel. We expect SG&A to be higher during 2018 as we continue to invest in the e-commerce channel and operational systems. We continue to execute our operational and sales initiatives and remain optimistic for the balance of 2018.”
Net sales for the first quarter of 2018 were $32.1 million compared to net sales of $31.9 million for the same quarter in 2017, an increase of $0.3 million or 0.9 percent.
Gross margin ratio for the first quarter of 2018 increased to 28.0 percent, compared to 26.0 percent for the same period in the prior year. Gross profit for the first quarter of 2018 was $9.0 million compared to gross profit of $8.3 million for the same quarter in 2017, an increase of $0.7 million or 8.5 percent.
Selling, general and administrative expenses (SG&A) were $7.0 million for the quarter compared to $5.9 million for the same period in the prior year, an increase of $1.1 million or 17.2 percent. SG&A, as a percent of sales, for the first quarter of 2018 increased to 21.6 percent from 18.6 percent reported for the same period prior year.
Operating income for the first quarter of 2018 was $1.7 million compared to operating income of $2.0 million for the same period in the prior year, a decrease of $0.3 million or 14.1 percent.
Net income for the first quarter of 2018 was $1.2 million, or $0.084 diluted earnings per share compared to net income of $1.4 million, or $0.097 diluted earnings per share for the same quarter in 2017.
The company announced a quarterly dividend of $0.125 per share to be paid to all shareholders of record on June 7, 2018 and disbursed on June 14, 2018.
Escalade Sports’ brands include Bear Archery and Trophy Ridge archery accessories, STIGA and Ping-Pong table tennis, Accudart and Unicorn darting, Onix pickleball equipment, Triumph SportsTM indoor and outdoor games, GoalrillaTM and Goalsetter residential in-ground basketball systems, Goaliath and Silverback residential in-ground and portable basketball goals, the STEP fitness products, Lifeline personal fitness, Woodplay premium playsets and Cue&Case specialty billiard accessories.