Escalade Inc. reported operating earnings rose 36.4 percent on improved margins and a 4.3 percent revenue gain.

Fourth-Quarter Highlights

  • Revenue up 4.3 percent on net sales of $48.7 million
  • Gross margin increase of 280 bps to 24.7 percent
  • Operating income up 36.4 percent
  • Diluted EPS up 114.6 percent to $0.52 per share
  • Increased quarterly dividend 8.7 percent to $0.125 per share

“We finished 2017 with a solid fourth quarter, with revenue up 4 percent, gross margins improved by 280 bps and operating income increased by 36 percent,” stated Dave Fetherman, president and chief executive officer of Escalade Inc. “I could not be more proud of the Escalade team, as we have shown the ability to stay ahead of the changing retail market, with the evolution from brick and mortar to e-commerce. Our focus on operational and sales initiatives will put us in position for continued growth in the future. The increased dividend demonstrates the strength of our balance sheet and the confidence we have in the future of the company.”

Fourth Quarter Results

Net sales for the fourth quarter of 2017 were $48.7 million compared to net sales of $46.7 million for the same quarter in 2016, an increase of $2.0 million or 4.3 percent.

Gross margin ratio for the fourth quarter of 2017 increased to 24.7 percent, compared to 21.9 percent for the same period in the prior year.

Selling, general and administrative expenses (SG&A) were $6.5 million for the quarter compared to $6.1 million for the same period in the prior year, an increase of $0.4 million or 6.5 percent. SG&A, as a percent of sales for the fourth quarter of 2017, increased to 13.3 percent from 13.1 percent reported for the same period prior year.

Operating income for the fourth quarter of 2017 was $5.1 million compared to operating income of $3.8 million for the same period in the prior year, an increase of $1.4 million, or 36.4 percent.

Other income for the fourth quarter of 2017 was relatively flat year-over-year.

Net income for the fourth quarter of 2017 was $7.5 million, or $0.52 diluted earnings per share, compared to net income of $3.5 million, or $0.24 diluted earnings per share, for the same quarter in 2016.

Full Year Results

Full year net sales for 2017 were $177.3 million compared to $171.7 million in 2016, an increase of $5.7 million.

Gross margin ratio for full year 2017 decreased slightly from 25.8 percent to 25.2 percent.

SG&A for full year 2017 were $28.5 million compared to $27.4 million in 2016, an increase of $1.1 million, or 4.4 percent. As a percent of sales, SG&A increased to 16.1 percent from 15.9 percent in 2016. In 2016, SG&A was favorably impacted by the recognition of a gain of approximately $1.9 million on the sale of the Wabash, IN land and building. One-time expenses of $0.4 million unfavorably impacted SG&A during 2016. As a result of the property sale and one-time expenses, SG&A was reduced by $1.5 million in 2016.

Operating income for full year 2017 was flat compared to the prior year at $14.6 million. Excluding the property sale and one-time expenses, operating income for 2016 would have been $13.1 million.

Other income for full year 2017 was $1.7 million compared to $1.8 million in 2016.

Full year net income for 2017 was $14.1 million, or $0.98 diluted earnings per share, compared to net income of $11.5 million, or $0.80 diluted earnings per share, for 2016. Net income for 2017 was favorably impacted by approximately $3.0 million of income tax benefit resulting from the Tax Cuts and Jobs Act of 2017 signed into law during the year.

The company announced a quarterly dividend of $0.125 per share would be paid to all shareholders of record on March 12, 2018 and disbursed on March 19, 2018.

Leaders in their respective categories, 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.

Photo courtesy Bear Archery