Escalade Inc. reported a strong increase in profits in the second quarter on revenue growth of 14.3 percent. Outdoor categories fueled the sales gains.
“Expanded distribution within major customers and a return to normal weather patterns resulted in revenue growth of 14.3 percent. Sales increases in our Outdoor categories more than offset underperformance in other categories. Our Basketball brands Goalrilla, Goalsetter, Goaliath and Silverback, along with Outdoor Games brands Victory Tailgate and Triumph, led to the increased revenue,” stated Dave Fetherman, president and CEO. “We continue to execute on our transformational strategy to support the continuing shift in consumer buying trends as our E-Commerce revenue grew 91 percent in the quarter and made up 39 percent of our overall revenue compared to 24 percent in prior year. While our recently acquired Victory Tailgate business contributed to the increase, I’m pleased that we are seeing excellent growth across all E-commerce platforms.”
Net sales for the second quarter of 2019 were $55.6 million compared to net sales of $48.7 million for the same quarter in 2018.
Gross margin ratio for the second quarter of 2019 was 23.3 percent, compared to 23.6 percent for the same period in the prior year. Gross profit for the second quarter of 2019 was $13.0 million compared to gross profit of $11.5 million for the same quarter in 2018. The slight decline in gross margin ratio was due to increased customer allowances and product mix.
Selling, general and administrative expenses (SG&A) were $10.0 million for the quarter compared to $9.1 million for the same period in the prior year, an increase of $0.9 million or 10.1 percent. The increase in SG&A was due to operating costs associated with Victory Tailgate, which was acquired during the fourth quarter of 2018. SG&A, as a percent of sales, for the second quarter of 2019 decreased to 18.0 percent from 18.7 percent reported for the same period prior year.
Operating income for the second quarter of 2019 was $2.5 million compared to operating income of $2.0 million for the same period in the prior year.
The company recognized a $13.0 million gain in other income during the second quarter of 2018 on the sale of our 50 percent owned equity method investment, Stiga, a Swedish entity.
Net income for the second quarter of 2019 was $1.9 million, or 13 cents per share, compared to net income of $12.1 million, or 84 cents, for the same quarter in 2018. Excluding the one-time gain recognized on the sale of its 50 percent investment in Stiga, net income for the second quarter of 2018 was $1.4 million, or 10 cents diluted earnings per share.
The company announced a quarterly dividend of $0.125 per share to be paid to all shareholders of record on September 9, 2019 and disbursed on September 16, 2019.
Headquartered in Evansville, IN, Escalade Sports’ brands include Bear Archery, Bear X, Trophy Ridge, Rocket, SIK and Cajun Bowfishing archery equipment; STIGA and Ping-Pong table tennis; Accudart and Unicorn darting; Atomic, Victory Tailgate, Triumph Sports, Viva Sol, Zume recreational games; Onix pickleball equipment; Goalrilla, Goalsetter residential in-ground basketball systems, Goaliath and Silverback residential in-ground and portable basketball goals; Lifeline and the STEP fitness products; Woodplay premium playsets; Vuly trampolines; and Cue&Case – a leader in specialty billiard accessories.
