Escalade Inc. reported sales in the second were slightly down to to unseasonal spring weather but profits benefited from the sale of Stiga AB.
“Revenue was down as the unseasonably cold spring weather carried well into the second quarter affecting our Outdoor product categories. The product mix pushed margins down and inventories higher. SG&A came in slightly below prior year even with additional costs related to the sale of our interest in Stiga AB,” stated Dave Fetherman, president and chief executive officer of Escalade, Inc. “The timing of the Stiga AB sale was tax efficient and contributed 73 cents to our second quarter financial results, driving our EPS to $0.84 per share. The company continues to evaluate various uses of our strong balance sheet, which includes acquisitions, internal development, repurchase of shares and cash dividends.”
Net sales for the second quarter of 2018 were $48.7 million compared to net sales of $53.9 million for the same quarter in 2017.
Gross margin ratio for the second quarter of 2018 decreased to 23.6 percent compared to 24.3 percent for the same period in the prior year. Gross profit for the second quarter of 2018 was $11.5 million compared to gross profit of $13.1 million for the same quarter in 2017.
Selling, general and administrative expenses (SG&A) were $9.1 million for the quarter compared to $9.3 million for the same period in the prior year.
Operating income for the second quarter of 2018 was $2.0 million compared to operating income of $3.3 million for the same period in the prior year.
The company recognized a $13.0 million gain in other income during the second quarter of 2018 on the sale of its 50 percent owned equity method investment, Stiga, a Swedish entity. As reported in May, the business was sold to a Swedish private investor. In connection with the sale, Escalade Sports, its wholly owned subsidiary and global leader in sports and outdoor recreational equipment, entered into a long-term licensing agreement for the Stiga brand on table tennis tables and accessories in North America.
Net income for the second quarter of 2018 was $12.1 million, or $0.835 diluted earnings per share, compared to net income of $2.1 million, or $0.146 diluted earnings per share, for the same quarter in 2017.
The company announced a quarterly dividend of $0.125 per share to be paid to all shareholders of record on September 10, 2018 and disbursed on September 17, 2018.
Escalade Sports’ brands include Bear Archery and Trophy Ridge archery accessories, STIGA and Ping-Pong table tennis, Accudart and Unicorn darting, Onix pickleball equipment, Triumph Sports indoor and outdoor games, Goalrilla and Goalsetter residential in-ground basketball systems, Goaliath and Silverback residential in-ground and portable basketball goals, the STEP fitness products, Lifeline personal fitness, Woodplay premium playsets and Cue&Case specialty billiard accessories.