Escalade Inc. reported net sales for the second quarter of 2016 of $48.5 million, or 10.7 percent higher compared to net sales of $43.8 million for the same quarter in 2015.
The increase in sales is primarily related to new product offerings introduced into the market during 2016, as well as recently completed acquisitions. These increases were partially offset by the continued softness within the archery category.
Gross margin ratio for the second quarter of 2016 decreased to 26.2 percent compared to 30.1 percent for the same period in 2015. The reduction in gross margin is a combination of decreased sales in the archery category, as well as an unfavorable change in product mix.
Selling, general and administrative expenses (SG&A) were $8.9 million for the quarter compared to $8.2 million for the same period in 2015, an increase of $0.7 million. The increase in SG&A is largely due to increased selling expenses and marketing efforts related to new product offerings introduced in 2016. As a percentage of sales, SG&A for the second quarter of 2016 decreased to 18.4 percent from 18.7 percent reported for the same period in 2015.
Other income for the second quarter of 2016 was adversely impacted from the operating results of the company’s 50 percent ownership in Stiga, a Swedish entity.
Net income for the second quarter of 2016 was $2.1 million or 15 cents diluted earnings per share, compared to $3.2 million or 23 cents diluted earnings per share for the same quarter in 2015.
The company stated that a quarterly dividend of 11 cents per share would be paid to all shareholders of record on September 12, 2016 and disbursed on September 19, 2016.
“Despite ongoing sporting goods retailer liquidations and a soft archery market, we achieved revenue growth of 10.7 percent,” said Dave Fetherman, president and CEO of Escalade, Inc. “This was driven by our new product launch of BearX crossbows and Gotek portable basketball systems, along with revenue from recently acquired businesses, most notably Triumph Sports. Operating income was down as we continue to invest in advertising and in-store marketing to support the new product introductions. We also incurred costs related to consolidation of our operating systems related to acquisitions and re-establishing our bad debt reserve that was depleted with the Sports Authority and Sports Chalet bankruptcies. Our growth strategy of strategic acquisitions and internally developed product remains a focus for the company, and we will continue executing on that strategy.”
Photo courtesy Bear Archery
