Escalade, Incorporated reported that net sales the first quarter of 2004 ended March 20 increased 21% to $32,250,000 and net income moved from a breakeven to a $598,000 profit or nine cents per share.
In his message to shareholders, C. W. Reed, President and CEO offered the following commentary on the first quarter results:
“Net sales of sporting goods increased 40% to $15,689,000 due primarily to the inclusion of the archery acquisition completed in the second quarter of 2003, increased demand of basketball products, and the return to more normal first quarter purchase levels from our customers as their 2003 year end inventories declined from the excesses held at 2002 year end. Net income at Sports moved from a loss in the first quarter of 2003 to a level that accounts for the entire gain in this year's consolidated first quarter results. The increased income is due equally to the increased sales and to a successful program to substantially reduce factory operating expenses. Escalade Sports was awarded a fifth consecutive Sears 'Partners in Progress' award for its 2003 performance. Our outlook for Sports remains optimistic, however, we are still in the process of finalizing product placement decisions with our customers and we are facing significant raw material increases that must be negotiated into our selling prices with our customers.
“During the quarter, we paid our first annual dividend of $.24 per share. We are continuing to evaluate acquisitions as well as other means of enhancing shareholder value.”
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited, In Thousands Except Per Share Amounts) 3 Months Ended 12 Months Ended 20 March 2004 22 March 2003 20 March 2004 22 March 2003 NET SALES $35,250 $29,103 $227,875 $167,053 OPERATING EXPENSES Cost of goods sold 24,518 18,659 159,223 117,489 Selling and administrative 9,240 9,932 46,675 31,279 OPERATING INCOME 1,492 512 21,977 18,285 OTHER INCOME (EXPENSE) Interest expense (365) (448) (2,200) (1,277) Other income (expense) (18) (53) 2,543 52 INCOME BEFORE INCOME TAXES 1,109 11 22,320 17,062 PROVISION (BENEFIT) FOR INCOME TAXES 511 4 6,880 5,847 NET INCOME $598 $7 $15,440 $11,213 PER SHARE DATA Basic earnings per share $0.09 $0.00 $2.39 $1.72 Diluted earnings per share $0.09 $0.00 $2.35 $1.68