Escalade Inc. posted quarterly revenue of $78.1 million, an increase of 70.6 percent over prior year, and a record for its third fiscal quarter. This represents the third consecutive quarter of record top-line results.
Quarterly diluted earnings per share were 71 cents per share, up 306.7 percent from prior year.
“Amidst the backdrop of a global pandemic and a highly dynamic environment, our third quarter growth rate continued to accelerate compared to the previous quarter, while gross margin expanded 820 basis points to 30.1 percent. These key growth factors resulted in the record quarterly net income of $10.2 million compared to $2.5 million in 2019,” said Scott Sincerbeaux, President and CEO of Escalade, Inc.
“We are thrilled to report continued record quarterly revenue, fueled by key investments in product innovation, demand creation, and the emphasis and acceleration of factory orders and inventory flow to support customer and consumer demand. The record results of our third quarter demonstrate the strong execution of our strategy to deepen relationships with customers and consumers. Despite the unprecedented challenges brought on by the COVID-19 pandemic, all our associates across the company have worked tirelessly to help our customers fulfill consumer demand. I thank them for their extraordinary efforts on behalf of our customers. The Escalade Global Supply Chain is working diligently to partner with our global factory and logistics partners to ensure demand is met now and into the future. Our product categories and brands continue to resonate at retail, and we are uniquely positioned to grow. In the third quarter, we continued to invest in key talent, facilities and capabilities which will strengthen our position to be the product portfolio of choice for our customers and consumers. As the COVID-19 pandemic continues to evolve, we believe we have the right strategies and strong leadership in place to strengthen our customer connectivity, deepen our strategic relationships with our vendors, navigate the challenges ahead and deliver sustained growth,” Sincerbeaux continued.
“Our results, cash position and untapped debt facility allows us to return value to our shareholders while making key strategic investments to sustain growth. We are also actively looking to make key acquisitions to strengthen our portfolio of brands, add key channels of distribution and drive deeper connections to our customers and consumers.”
“The company achieved record growth in its top and bottom-line results,” said Stephen Wawrin, Escalade’s VP finance and chief financial officer. “This reflects our ability to leverage our business platform, including our nimble supply chain and balanced global and domestic manufacturing. We continue to invest in key inventory and new product innovation to fulfill marketplace demand. Importantly, our ongoing disciplined expense management enabled us to better align our variable expenses with growth acceleration, while continuing to invest in our people and operations. While we are aware of certain headwinds, including higher logistics costs due to overwhelming demand across all manufacturing points, we have taken steps to ensure our product pipeline is delivered to meet anticipated demand and continue to optimize and invest in our distribution capabilities to unlock immediate and future growth.”
Net sales for the third quarter of 2020 were $78.1 million compared to net sales of $45.8 million for the same quarter in 2019, an increase of $32.3 million or 70.6 percent. The increase in sales was attributable to growth in nearly all of our product categories, but most notably in our archery, outdoor and fitness categories, including basketball, Lifeline Fitness and Victory Tailgate.
Gross margin ratio for the third quarter of 2020 was 30.1 percent, compared to 21.9 percent for the same period in the prior year. The improvement in gross margin was primarily due to factory absorption and changes in product mix. Gross profit for the third quarter of 2020 was $23.5 million compared to $10.0 million for the same quarter in 2019.
Selling, general and administrative expenses (SG&A) were $10.4 million for the quarter compared to $6.8 million for the same period in the prior year, an increase of $3.6 million or 52.7 percent. SG&A, as a percent of sales, for the third quarter of 2020 decreased to 13.3 percent from 14.8 percent reported for the same period prior year.
Operating income for the third quarter of 2020 was $12.8 million compared to operating income of $2.9 million for the same period in the prior year.
Net income for the third quarter of 2020 was $10.2 million, or 71 cents diluted earnings per share, compared to net income of 2.5 million, or 18 cents diluted earnings per share, for the same quarter in 2019.
Escalade Sports’ brands include Bear Archery, Bear X, Trophy Ridge, Rocket, SIK and Cajun Bowfishing archery equipment; STIGA and Ping-Pong table tennis; Accudart and Unicorn darting; Atomic, Victory Tailgate, Triumph Sports, Viva Sol, Zume Games recreational games; DURA and Onix pickleball equipment; Goalrilla, Goalsetter residential in-ground basketball systems, Goaliath and Silverback residential in-ground and portable basketball goals; Lifeline and the STEP fitness products; Woodplay premium playsets; and Cue&Case – a leader in specialty billiard accessories.
