Escalade Inc. reported sales for the third quarter of 2019 rose 4.1 percent to $45.8 million compared to net sales of $44.0 million for the same quarter in 2018. Continued growth in the Games category offset a continuing decline in archery vertical bow sales.
Gross margin ratio for the third quarter of 2019 was 21.9 percent, compared to 28.0 percent for the same period in the prior year. Gross profit for the third quarter of 2019 was $10.0 million compared to gross profit of $12.3 million for the same quarter in 2018. Margins were negatively impacted by customer allowances, lower factory utilization and sales mix.
Selling, general and administrative expenses (SG&A) were $6.8 million for the quarter compared to $6.9 million for the same period in the prior year, a decrease of $0.1 million or 0.9 percent. SG&A, as a percent of sales, for the third quarter of 2019 decreased to 14.8 percent from 15.6 percent reported for the same period prior year.
Operating income for the third quarter of 2019 was $2.9 million compared to operating income of $5.1 million for the same period in the prior year.
Net income for the third quarter of 2019 was $2.5 million, or $0.18 diluted earnings per share compared to net income of $3.6 million, or $0.25 diluted earnings per share for the same quarter in 2018.
“We saw revenue growth of 4.1 percent in the quarter as we continue to grow sales in the Games category. This growth was partially offset by a continuing decline in archery vertical bow sales. Overall, consumer preferences continue to shift toward E-commerce,” stated Dave Fetherman, president and CEO. “With the continuing shift to E-commerce, we are evaluating opportunities to optimize our organization and business processes. As we continue to focus on streamlining operations, we consolidated our Lifeline Fitness Chicago office into the Olney, Illinois facility and absorbed these consolidation costs during the third quarter. We are working with vendors and retailers to reduce the impact of tariffs and customer allowances. As a result of these initiatives, we anticipate gross margin to improve in 2020. The company repurchased 176,287 shares of stock during the quarter and announced a quarterly dividend of $0.125 per share.”
The $0.125 per share dividend to be paid to all shareholders of record on December 9, 2019 and disbursed on December 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.
