Escalade, Incorporated reports the company’s seasonally slow first quarter got the year off to a satisfactory start. Net sales increased 66% to $29,103,000 due primarily to the inclusion of sales of Schleicher International AG, the German manufacturer and distributor of paper shredders that we now have a 65% ownership interest in. Net income inched up to a breakeven reflecting higher operating income partially offset by higher interest costs.
Sporting goods sales increased 5% to $11,179,000 as sales from prior year acquisitions more than offset slower sales of products with high 2002 year end retail inventories. The second quarter may continue to be a bit slow as our customers continue to work off their inventories, then, our last half should show the improvements of our increased product placement. We are continuing to focus on product development for our new billiard brand names and on sporting goods acquisitions that provide first year accretive earnings. Escalade Sports was awarded a fourth consecutive Sears “Partners in Progress” award for its 2002 performance.
Sales of office and graphic arts products increased 160% to $17,924,000 due entirely to the inclusion of Schleicher sales. Schleicher’s net income improved somewhat to a breakeven level while Martin Yale’s net income declined due primarily to lower sales, a $210,000 loss on the slower than expected startup sales of the new photo frame and gift line, and increased interest expense for the Schleicher acquisition. The sluggishness in the office products segment continues. Martin Yale and Schleicher will continue their cooperative product development to counter this downward trend.
During the first quarter, we purchased 5,000 shares of our common stock. We continue to have authorization from our Board of Directors to purchase up to three million dollars of our stock in the open market or through privately negotiated transactions, including shares already purchased, as a means of enhancing shareholder value.
Three Months Ended Twelve Months Ended Mar. 22, Mar. 23, Mar. 22, Mar. 23, 2003 2002 2003 2002 Net Sales $29,103 $17,505 $167,053 $147,862 Cost of Goods Sold 18,659 12,334 117,489 106,546 Selling & Admin. Expense 9,932 4,982 31,279 22,771 Operating Income 512 189 18,285 18,545 Interest Expense (448) (121) (1,277) (1,163) Goodwill --- --- --- (635) Other Income (Expense) (51) (175) 54 (438) Income (Loss)Before Taxes and Minority Interest 13 (107) 17,062 16,309 Provision (Benefit) for Taxes 4 (39) 5,847 5,872 Minority Interest Holders Share 2 --- 2 --- Net Income (Loss) 7 (68) 11,213 10,437