Escalade, Inc. posted a 4.6% increase in third quarter net income, though revenues declined 7.5%. The company reported earnings per share for the third quarter of 24 cents per share compared to 23 cents per share for the same period last year.
Revenues from the Sporting Goods business segment declined 8.8% in the third quarter of 2007 to $47.4 million compared to $52.0 million for the same period last year, principally due to “continued industry-wide erosion in consumer demand for soccer and hockey game tables sold through the mass retail channel.” Sales for the nine months ended October 6, 2007 were down 2.9% compared to the same period last year. Sales to mass-market retail customers were down 11.2% and 11.6% for the quarter and nine months ended October 6, 2007, respectively. Declining demand for game tables is expected to continue, resulting in lower sales to the company's mass retail customers. The company continues to execute its strategy of diversifying product offerings and expanding its presence in sporting goods specialty retailers and dealers. Sales to the specialty/dealer channel increased 10.2% and 20.7% for the quarter and nine months ended October 6, 2007, respectively, compared to last year. As of October 6, 2007, sales to the specialty/dealer channel comprise 38.2% of year-to-date sales compared to 31.2% for the same period last year. Increased sales to the specialty/dealer channel is the primary factor for increased profitability in the Sporting Goods business segment. Net income for the division increased 66.2% to $3.4 million from $2.1 million in the year-ago quarter. Management expects the Sporting Goods business to have flat revenues with increased profitability for fiscal 2007 compared to last year.
Robert J. Keller, president and CEO of Escalade, Inc. stated: “With a stable of strong brands, including Stiga, Goalrilla, Bear Archery, and Intimus, we have the opportunity to invest in marketing and innovation to sustain profitable growth. In the future we will increase our investments in market research, along with training and development of people, to capitalize on the emerging needs of our consumers. We will also continue to consider acquisitions which complement our consumer brand strategy. While these changes will not happen overnight, we believe we have taken the right initial steps to shape the strategy, organization, and business processes required for long-term success.”
