Escalade Inc. reported sales for the third quarter of 2017 were $41.9 million compared to net sales of $38.8 million for the same quarter in 2016, an increase of $3.1 million or 8 percent.
Gross margin ratio for the third quarter of 2017 increased to 27.1 percent, compared to 26.5 percent for the same period in the prior year.
Selling, general and administrative expenses (SG&A) were $6.9 million for the quarter compared to $4.6 million for the same period in the prior year, an increase of $2.3 million or 49.8 percent. SG&A as a percent of sales for the third quarter of 2017 increased to 16.4 percent from 11.8 percent reported for the same period prior year. In the third quarter of 2016, SG&A was favorably impacted by the recognition of a gain of approximately $1.9 million on the sale of the company’s Wabash, IN land and building. One-time expenses of $0.4 million unfavorably impacted SG&A during the third quarter of 2016. As a result of the property sale and one-time expenses, SG&A was reduced by $1.5 million in the third quarter of 2016.
Operating income for the third quarter of 2017 was $4.1 million compared to operating income of $5.3 million for the same period in the prior year, a decrease of $1.2 million or 22.5 percent. Excluding the property sale and one-time expenses, operating income in the prior year would have been $3.8 million.
Other income for the third quarter of 2017 was relatively flat year over year.
Net income for the third quarter of 2017 was $3.1 million, or 22 cents diluted earnings per share compared to net income of $4.2 million, or 30 cents diluted earnings per share for the same quarter in 2016, before adjusting for the property sale and one-time expenses.
“We are encouraged by the growth in sales and income achieved in the third quarter under continued challenging conditions,” stated Dave Fetherman, president and CEO of Escalade Inc. “The entire Escalade team has worked very hard this year to overcome the industry-wide downturn in the archery category, a reduction in contribution from our joint venture, Stiga Sports, AB, and the bankruptcies that have plagued the retail industry. We believe these conditions have masked the improvements in our other existing and acquired businesses. Our balance sheet remains strong, as inventory levels and receivables are down for the quarter and long-term debt has been reduced by 31.3 percent over the last year.”
The company announced a quarterly dividend of 11.5 cents per share would be paid to all shareholders of record on December 11, 2017 and disbursed on December 18, 2017.
Escalade Sports’ brands include Bear Archery and Trophy Ridge archery accessories; STIGA and Ping-Pong table tennis, Accudart and Unicorn darting, Onix pickleball equipment; Triumph Sports indoor and outdoor games, Goalrilla and Goalsetter residential in-ground basketball systems, Goaliath and Silverback residential in-ground and portable basketball goals; the STEP fitness products, Lifeline personal fitness, Woodplay premium playsets, and Cue and Case specialty billiard accessories.