Escalade Inc. reported first-quarter profits slid 17.6 percent to $1.4 million, or 10 cents per share, compared to net income of $1.7 million, 12 cents, or 12 cents, for the same quarter in 2016.
Net sales for the first quarter of 2017 were $30.8 million compared to net sales of $34.6 million for the same quarter in 2016.
Gross margin ratio decreased to 27 percent for the first three months of 2017, compared to 32 percent for the same period in the prior year.
Selling, general and administrative expenses (SG&A) were $5.9 million for the first three months in 2017 compared to $7.8 million for the same period in the prior year, a decrease of $1.8 million or 24 percent. SG&A as a percent of sales is 19 percent for the first three months in 2017 compared with 23 percent for the same period in the prior year. The decrease in SG&A is primarily due to one-time costs associated with bad debt expenses incurred related to The Sports Authority’s bankruptcy filing in 2016 and increased marketing and selling expenses related to new products introduced in 2016.
Other income for the first quarter of 2017 increased due to the recognition of a gain on bargain purchase from an acquisition completed during the quarter. This increase was partially offset due to an adverse impact from the operating results of the Company’s 50 percent ownership in STIGA, a Swedish entity.
“With the first quarter of 2017 completed, the retail atmosphere continues to evolve,” stated Dave Fetherman, president and chief executive officer of Escalade, Inc. “Consumer buying preferences continue to shift to on-line purchasing. Our focus on this consumer shift over the last few years puts us in great position to support our e-commerce and brick-and-mortar retail partners. Revenue was down in the first quarter, compared to prior year, due to retail bankruptcy liquidations, as well as going up against portable basketball pipeline fills from a year ago. Gross margins were impacted as material prices rose as well as a shift within our product mix. We will continue to invest in internally developed product and strategic acquisitions for growth, while remaining focused on controlling operating expenses to maximize shareholder value.”
The company announced a quarterly dividend of $0.115 per share would be paid to all shareholders of record on June 8, 2017 and disbursed on June 15, 2017.
Escalade’s brands include Bear Archery, Trophy Ridge, Whisker Biscuit and Cajun Bowfishing in its archery segment; Stiga, Ping-Pong and Prince in table tennis; Goalrilla, Goaliath and Silverback in basketball goals; Woodplay and ChildLife in Play Systems; The Step and USWeight in fitness; Atomic, American Legend and Redline in game tables (hockey and soccer); Mizerak, Minnesota Fats, Lucasi, Purex, Rage and Players in billiards accessories; Unicorn, Accudart, Arachnid, Nodor and Winmau in darting and Zume Games and Pickleball Now in outdoor games.
Photo courtesy Escalade