Escalade, Inc. reported revenues from the Sporting Goods
business were down 11% in the first quarter. The Evansville, IN-based company
said dealers are reducing inventory in light of the economy to conserve cash. Within many sporting goods categories, consumers are
buying lower-priced models rather than high-end systems. Management believes
that total sales to its mass-market retail customers in 2009 will be slightly
lower than levels achieved in 2008.
Overall, sales were down to $25 million from $29.2 million.
The reduction in sales was partially offset by improvement in gross margin to
31% in the first quarter from 29% in the same quarter last year, resulting in a
net loss for the quarter of $439,000, or 3 cents a share, versus a loss of $848,000,
or 7 cents, a year ago.
Revenues from the Office Products business, excluding the
effects of changes in currency exchange rates, declined 14% in the first
quarter compared to the same period in 2008 primarily due to lower sales to
office supply mass-retailers in the U.S. which are being negatively impacted by
the worsening economy and a slowdown in European sales due to the slowing
economy in Germany, France and Spain. Management anticipates further declines
in sales to office product retailers as the global economy continues to
decline. However, new product launches and an expanding presence in machine
dealers is expected to lessen the impact of these declines.
Selling and administrative spending was reduced by 11% in
the first quarter compared to last year, a direct result of a series of cost
savings measures taken. These previously announced actions include the
reduction of headcount by over 20% and the consolidation of table tennis
manufacturing in
On April 30, the company signed a loan agreement with JP
Morgan Chase Bank, N.A. (Chase) for a senior secured revolving credit facility
in the maximum amount up to $50,000,000 and through Chase London Branch, a
senior secured revolving credit facility in the maximum amount of 3,000,000
Euro depending upon certain terms and conditions. The credit facility has a
maturity date of May 31, 2010. The agreement includes the waiver of the company's
covenant violations under the prior credit facility with Chase.
Robert J. Keller, President and Chief Executive Officer of
Escalade, Inc. stated that, “We anticipate our customers will continue to
be cautious in their buying trends as seen in the first quarter. We are pleased
with the progress we have made to improve our gross margins and reduce our
selling and administrative expenses, allowing us to better manage our
performance in this challenging economic environment. Cost savings measures
will continue to be implemented while we introduce innovative, new products and
develop new distribution channels, all a part of our strategy to improve our
future business results. We are also pleased with completion of our new loan
agreement with Chase, which we believe will provide the credit needed to
execute our strategy.”
Escalade makes pool tables, table tennis tables, game tables,
basketball systems and wood playsets, Its sports brands include:
Goalrilla, Goaliath, Silverback, Stiga, Mizerak, Murrey Billiards,
Mosconi Billiards, The Black Widow, ChildLife Harvard Game, Murrey
Game, Accudart, Bear Archery, Fred Bear, Jennings Archery, The Step and
US Weight. It also owns a home furnishings business.
