Escalade, Inc. revenues for the second quarter of 2011 were up 14 percent over the same quarter last year and year-to-date revenues were up 13 percent over the same period last year. After additional investment in new product development and marketing, the company generated net income for the quarter of $1.5 million or 12 cents per share compared to net income of $1.9 million or 15 cents per share for the same period last year.
Revenues from the Sporting Goods business were up 16 percent for the quarter and 15 percent for the first half of 2011 compared with the same periods in the prior year. Sales increases are largely a result of new product distribution and increases in customer demand for the company’s products. Management believes improved sales in the Sporting Goods segment will continue through the remainder of the year.
Compared to last year, revenues from the Information Security and Print Finishing business were up 9.3 percent and 8.4 percent for the second quarter and first half of 2011, respectively. Excluding the effects of changes in the currency exchange rates, revenues were up 3.5 percent and 5.4 percent, for the second quarter and first half of 2011, respectively. A portion of the increase in the first quarter was the result of one-time shipments in North America which were not repeated in the second quarter. Economic pressures in parts of Europe and a slowing in the office channel in North America will continue to present challenges; however, the company anticipates improvement in sales over last year.
The overall gross margin for the second quarter was 31.4 percent, compared to 33.3 percent for same period last year. Management expects gross margins for the remainder of 2011 to be fairly flat with prior year.
Compared to the same period last year, consolidated selling, general and administrative (“SG&A”) costs increased 19.0 percent in the second quarter. The company continues to reinvest in product development and marketing efforts.
“Robust sales growth of 14 percent reflects the momentum we are building in the Sporting Goods and Information Security and Print Finishing business segments. Expanded product placement in key categories during the second quarter accelerated our baseline growth,” stated Robert J. Keller, President and Chief Executive Officer of Escalade, Inc. “We continue to make substantial investments in product innovation and brand marketing to enhance our platform for long term sales and earnings growth. To mitigate the challenges of an uncertain economy and rising input costs, we remain vigilant expense managers in all aspects of our business.”
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, In Thousands Except Per Share Amounts)
Twelve Months
Three Months Ended Six Months Ended Ended
------------------ ------------------ ------------------
09 July 10 July 09 July 10 July 09 July 10 July
2011 2010 2011 2010 2011 2010
-------- -------- -------- -------- -------- --------
NET SALES $ 40,850 $ 35,737 $ 68,848 $ 60,906 $128,598 $116,306
OPERATING
EXPENSES
Cost of goods
sold 28,043 23,828 45,916 40,444 88,946 81,020
Selling and
administrative 9,598 8,068 17,339 14,929 30,113 27,643
Amortization 492 391 809 674 1,423 1,532
-------- -------- -------- -------- -------- --------
OPERATING INCOME 2,717 3,450 4,784 4,859 8,116 6,111
OTHER INCOME
(EXPENSE)
Interest
expense (228) (422) (412) (782) (794) (1,546)
Other income 513 53 635 311 2,373 2,351
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INCOME BEFORE
INCOME TAXES 3,002 3,081 5,007 4,388 9,695 6,916
PROVISION FOR
INCOME TAXES 1,517 1,219 2,319 1,724 3,612 2,522
-------- -------- -------- -------- -------- --------
NET INCOME $ 1,485 $ 1,862 $ 2,688 $ 2,664 $ 6,083 $ 4,394
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PER SHARE DATA
Basic earnings
per share $ 0.12 $ 0.15 $ 0.21 $ 0.21 $ 0.48 $ 0.35
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Diluted
earnings per
share $ 0.11 $ 0.14 $ 0.20 $ 0.20 $ 0.45 $ 0.33
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