Escalade, Inc. reported earnings in the first quarter rose 24.1 percent on a 22.3 percent revenue gain.

First Quarter Highlights 

  • Net Sales increased 22.3 percent to $72.4 million;
  • Organic growth, excluding the contribution from acquisitions, was 12.2 percent;
  • Gross margin declined 165 basis points, while gross profit increased 15.4 percent;
  • Operating income increased 26.6 percent to $9.0 million;
  • Net income increased to $6.7 million, or $0.49 per diluted share, versus $0.39 per share for Q1 2021; and
  • It announced a $0.15 per share cash dividend to shareholders of record on May 31, 2022.

During the first quarter, Escalade completed its acquisition of Brunswick Billiards, the oldest provider of billiards tables, game tables, and game room furniture in the United States. The Escalade Board of Directors also approved a 7.1 percent increase in the quarterly dividend from $0.14 to $0.15.

First-quarter 2022 results benefited from in organic sales growth across the basketball, archery, pickleball, and indoor game categories, together with contributions from the company’s acquisition of Brunswick Billiards.

Gross margin declined 165 basis points due to continued challenges related to the global supply chain, raw materials cost inflation and labor constraints. Tight overhead cost control led to a 26.6 percent increase in operating income. A marginally higher tax rate and 2.7 percent smaller share base contributed to a 22.3 percent increase in net income and a 25.4 percent increase in diluted EPS.

“We are very pleased with the results in Q1,” said Walter P. Glazer, Jr., president and CEO of Escalade. “Nearly all categories performed very well, which validates the strength of our brand portfolio and consumer acceptance of our range of products. Our product teams continue to innovate and bring compelling sporting goods, games, and related items to market while our sourcing and logistics professionals navigate the challenging global supply chain. We continue to ‘onshore’ items we can produce in our domestic manufacturing facilities and remain focused on integrating the Brunswick acquisition, which we expect will be accretive to earnings beginning in the second half of 2022.”

“The first quarter was positively impacted by sales pulled forward from Q2 and favorable mix. In the near term, we anticipate continued supply chain pressures, including delays and excess logistics costs. We are also carefully monitoring point of sale data along with consumer behavior and sentiment, given rising interest rates, inflation, and geopolitical uncertainty,” continued Glazer. “We have seen a slowdown in demand for fitness products following unsustainable growth over the past two years. Longer-term, we believe consumers will continue to value the positive experiences and memories created with the fun, healthy activities they can enjoy with the Escalade lifestyle,” concluded Glazer.

Net sales for the first quarter of 2022 were $72.4 million compared to net sales of $59.2 million for the same quarter in 2021, an increase of $13.2 million or 22.3 percent.

Gross margin for the first quarter of 2022 was 27.8 percent, compared to 29.5 percent for the same period in the prior year. Gross profit for the first quarter of 2022 was $20.1 million compared to a gross profit of $17.4 million for the same quarter in 2021.

Selling, general and administrative expenses (SG&A) were $10.5 million for the quarter compared to $9.9 million for the same period in the prior year, an increase of $0.6 million or 6.6 percent. SG&A, as a percent of sales, for the first quarter of 2022 decreased to 14.5 percent from 16.7 percent reported for the same period the prior year.

Operating income for the first quarter of 2022 was $9.0 million compared to operating income of $7.1 million for the same period in the prior year.

Net income for the first quarter of 2022 was $6.7 million, or $0.49 diluted earnings per share, compared to net income of $5.4 million, or $0.39 diluted earnings per share for the same quarter in 2021.

The company announced a quarterly dividend of $0.15 per share to be paid to all shareholders of record on May 31, 2022 and disbursed on June 7, 2022.

Escalade’s brands include Brunswick Billiards, STIGA table tennis, Accudart, Rave Sports water recreation, Victory Tailgate custom games, Onix pickleball, Goalrilla basketball, Lifeline fitness, Woodplay playsets, and Bear Archery.

Photo courtesy Escalade/Brunswick Billiards