Escalade, Inc. reported total net sales for the fourth quarter declined 2.4 percent year-over-year, said to be primarily due to softer consumer demand across the majority of the company’s product categories, partially offset by improved demand in the archery, table tennis, and fitness categories.

Escalade reported fourth quarter gross margin of 24.9 percent of net sales, an increase of 61 basis points versus the prior-year quarter, reportedly driven by lower manufacturing and logistics costs, when compared to the prior-year period.

Net income amounted to $2.7 million, or 19 cents per diluted share, in the fourth quarter, compared to net income of $2.9 million, or 21 cents per diluted share for the fourth quarter in 2023.

The company generated $12.3 million of cash flow from operations in the fourth quarter of 2024, compared to $20.6 million in the prior-year period. Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 7.6 percent to $5.9 million in the fourth quarter 2024, versus $6.4 million in the prior-year period.

“During the fourth quarter, we maintained strong operational discipline across the organization through a combination of improved asset optimization, expense reduction, and operational efficiency culminating in margin expansion and strong free cash flow generation in the period,” stated Walt Glazer, president and CEO, Escalade, Inc. “Over the last two years as part of our cost rationalization program, we’ve removed significant costs from the business through the third quarter sale of our Mexico facility, operational improvements across our organization, and workforce reductions. As planned, we completed the wind-down of our Orlando, Florida operations and terminated the facility lease in the fourth quarter. I should point out that we absorbed substantial one-time costs associated with these actions during 2023 and 2024 that will not recur in 2025.”

Glazer continued, “These initiatives enabled us to reduce our owned and leased square footage by nearly 20 percent in 2024. Furthermore, we have reduced total headcount by 23 percent over the past two years. We believe these actions to right-size our business position us to realize improved operating leverage and results during the current period of soft consumer demand. As we continue to invest in innovation and new product development, we plan to drive growth by gaining market share and fully participating in the next expansionary period in the economic cycle.”

Full Year Results
(As compared to full year 2023)

  • Net sales decreased 4.6 percent to $251.5 million.
  • Gross margin improved 130 basis points, to 24.7 percent.
  • Operating income increased 12.3 percent to $20.0 million.
  • EBITDA totaled $26.1 million, an increase of 11.1 percent.
  • Net income of $13.0 million, or $0.93 per diluted share vs. $9.8 million, or $0.71 per diluted share for 2023.
  • Cash provided by operations of $36.0 million vs. $48.3 million in 2023.

Balance Sheet and Cash Management Summary
“We remain highly focused on disciplined capital efficiency, which includes a continued focus on inventory rationalization,” stated Glazer. “We reduced total inventories by 18 percent over the last year and anticipate further improvement as we move through 2025. During 2024, we generated more than $36 million of operating cash flow, $25 million of which we used to reduce our outstanding debt, including paying off our higher cost variable rate debt, resulting in a net leverage ratio of 0.8x at year-end 2024, the lowest level in four years.”

As of December 31, 2024, the company had $52.3 million of availability on its senior secured revolving credit facility maturing in 2027. During the fourth quarter of 2024, the company utilized its strong cash flow from operations to reduce its debt by $3.9 million, resulting in a ratio of net debt to trailing twelve month EBITDA of 0.8x at December 31, 2024, down from 2.2x at the end of 2023.

“Escalade remains committed to a balanced return of capital program,” continued Glazer. “During the fourth quarter, we repurchased $2.2 million of Escalade shares, paid $2.1 million in cash dividends, reduced debt by $3.9 million and built up $3.8 million of cash reserves. We will continue to pursue our disciplined approach to capital allocation including remaining selective acquirors of high quality, complementary brands consistent with our strategies to build long-term shareholder value.”

The Board of Directors has authorized the current share repurchase program be reset and has authorized up to $20.0 million in future stock repurchases. The repurchase authorization does not have an expiration date and does not oblige the company to acquire any particular amount of the company’s common stock.

Escalade’s Board of Directors has declared a quarterly dividend of $0.15 per share of common stock. The dividend is payable on April 14, 2025 to all shareholders of record at the close of business on April 7, 2025.

Image courtesy Escalade, Inc.