Escalade Inc. reported profits were flat in the quarter ended Dec. 31 on lower sales of sporting goods to mass-market retailers. The Evansville, IL, company earned $2.6 million, or 20 cents a share – virtually the same as during the fourth quarter of 2006.


 


For the year, net income increased 9% to $9.3 million, or 72 cents a share, from $8.5 million,  or 65 cents,  a year ago. Sales slid 3% to $185.6 million from $191.5 million.


 


Sporting Goods revenues for the quarter and year ended December 2007 declined 12% and 5%, respectively, compared to the same periods last year due to lower sales to mass market retail customers. Industry-wide erosion in consumer demand for soccer and hockey game tables is the primary reason for the decline and this trend is expected to continue into next year. Partially offsetting this decline is an increase in sales to sporting goods specialty retailers and dealers. Sales to these channels increased 14% during fiscal 2007 compared to the prior year and represent the core of the Company's strategy to diversify both product offerings and distribution channels. Sales to the specialty/dealer channel now make up 38% of total sporting goods sales compared to 31% last year. Management anticipates this trend to continue with growth from the specialty/dealer channel offsetting the decline expected in the mass market retail channel.





 


Office Products revenues for the quarter and year ended December 2007 increased 5% and 2%, respectively, compared to the same periods last year primarily due to increased sales of shredder equipment in Europe and changes in the foreign exchange rate. Excluding the impact of foreign currency fluctuations, revenues for fiscal 2007 were unchanged from the prior year. While sales to traditional office products retailers declined due to economic factors, growth was realized in specialty, industrial and government high security shredders. New product introductions led to growth in the printing and graphic arts markets. The slowdown in the U.S. office products market is being offset by higher demand for professional and heavy duty paper shredders in Europe. Management anticipates growth will come from office machine specialty dealers and the government high security/industrial shredder markets.

 

Robert Keller, President and CEO of Escalade, Inc. stated that “This past year marked an important transition to a 'consumer innovation' centered future for Escalade. We experienced short-term challenges in the mass retail and office products channels, and yet we achieved steady gains in the dealer and specialty channels consistent with our strategy. Several important acquisitions, including Trophy Ridge and Carolina Archery, were successfully integrated. Brand building and product innovation are now taking center stage in our passion to 'fulfill the pursuit of life, work, and play.' The introduction of our new Intimus line of premium shredders demonstrated our ability to meet the emerging needs of our consumers supported through a global dealer network. We also began a multi-year transition to a new, integrated management information system to ensure that our infrastructure can support future growth. These changes will take time, but we believe our consumer-focused strategy, organization and businesses processes will position Escalade for long term growth and increased shareholder value.”