Escalade, Inc. reported net income for the fourth quarter was $3.9 million, or 29 cents per share, nearly double the $2.1 million, or 16 cents, earned a year ago. Net revenues for the quarter of 2012 were 11 percent higher than the same quarter last year. Sales growth was driven by the Sporting Goods segment and was a direct result of continued product innovation and brand marketing. Net revenues for the full year 2012 were 10 percent higher than last year.
Full year results include losses of $13.8 million ($13.6 million, net of tax) recorded in the third quarter of 2012 related to goodwill and other intangible asset impairments and other than temporary impairments on an equity method investment. Net loss for the full year 2012 was $4.9 million, or $(0.37) basic and diluted loss per share compared to net income of $4.4 million, or $0.35 basic and $0.33 diluted earnings per share for full year 2011.
In 2012, the company recorded goodwill and intangible asset impairments related to the Information Security and Print finishing segment totaling $13.4 million along with an unrelated impairment for an equity method investment in the amount of $0.4 million ($0.2 million net of tax). In 2011, the Company recorded accelerated depreciation resulting from early replacement of its ERP system in the amount of $4.4 million ($2.8 million, net of tax).
Without the effect of the write-downs recorded in the third quarter, the Company’s net income for 2012 would have been $8.7 million or $0.66 basic earnings per share. Without the effect of accelerated depreciation in 2011, net income for 2011 would have been $7.2 million or $0.56 basis earnings per share.
In the Sporting Goods segment, net revenue increased 16.1 percent in 2012 compared to 2011 with growth coming from multiple sales channels. The Company continues to aggressively pursue opportunities to increase revenue through introduction of new products, expansion of product distribution, and increased investment in consumer marketing.
Net revenue in the Information Security and Print Finishing business decreased 6.1 percent in 2012 compared to 2011 due to significant declines in certain export and Asian countries. The Company is evaluating its product offerings and market penetration for this segment to better stabilize sales and increase profitability. Excluding the effect of changes in foreign exchange rates, 2012 sales were down 3.4 percent from 2011.
“We are pleased with achieving another year of double-digit top line growth resulting from our balanced strategy of product innovation and brand marketing,” stated Robert J. Keller , President and Chief Executive Officer of Escalade, Inc. “Our focus on profitable growth has yielded a 21 percent increase in net income, before the effect of goodwill and intangible asset impairments (2012) and accelerated depreciation (2011). We are passionate about making continued improvements in our company and building on the momentum we have created.”
