Escalade Inc. reported that its Sporting Goods net sales declined 19.8% and 16.6% in the second quarter and first half of fiscal 2009 respectively. The company expects Sporting Goods sales to be approximately 20% lower in 2009 compared to 2008 and said it is continuing to identify and implement cost saving initiatives and product design enhancements to expand market share and improve the division’s profits.
Escalade sporting goods division 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.
Overall, Escalade reported net income reached $366,000, or 3 cents a share, in the second quarter, compared to a net loss of $704,000, or 6 cents, a year ago. Net sales for the second quarter and first half of fiscal 2009 declined 22.2% and 19.2%, respectively, compared to same periods last year. For the first half of 2009, the company said it has improved gross margins by 330 basis points and reduced selling, administrative and general expenses by 22%, mainly due to facility consolidation in the Sporting Goods segment and company-wide cost cutting measures implemented last year, resulting in improved Company profitability.
Compared to last year, Office Products sales declined 26.3% and 23.4% for the second quarter and first half of fiscal 2009, respectively. Sales declined 21.8% in the United States and 24.8% in Europe for the first half of 2009. The company expects sales declines for the remainder of 2009 to be relatively unchanged from the decline experienced in the first half of fiscal 2009.
"Although we continue to experience challenging conditions in the retail market, we are pleased to deliver improved earnings and cash flow during the second quarter," said Robert J. Keller, President and Chief Executive Office of Escalade, Inc. "Our aggressive cost savings initiatives, including facility consolidation and operational streamlining, have resulted in improved gross margins and lower SG&A expenses. Our focus on working capital management has generated significant improvements in cash flow through the first half of 2009. In addition to streamlining our operation and reducing inventory levels, we are diligently focused on building our core brands through strategic marketing investments, innovative new products, and increased product distribution."
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, In Thousands Except Per Share Amounts)
Three Months Ended Six Months Ended Twelve Months Ended
—————— —————— ——————
11 July 12 July 11 July 12 July 11 July 12 July
2009 2008 2009 2008 2009 2008
——– ——– ——– ——– ——– ——–
NET SALES $ 35,641 $ 45,796 $ 60,599 $ 74,962 $134,323 $176,541
OPERATING
EXPENSES
Cost of goods
sold 24,579 33,275 41,675 54,018 99,795 129,496
Selling and
administrative 8,748 12,578 16,771 21,620 35,034 39,069
Long-lived
asset
impairment – – – – 2,623
——– ——– ——– ——–
Amortization 940 732 1,407 1,169 2,174 2,380
——– ——– ——– ——– ——– ——–
OPERATING
INCOME (LOSS) 1,374 (789) 746 (1,845) (5,303) 5,596
OTHER INCOME
(EXPENSE)
Interest
expense (658) (660) (900) (1,147) (1,778) (2,515)
Other income
(expense) 47 43 231 205 (235) 3,342
——– ——– ——– ——– ——– ——–
INCOME (LOSS)
BEFORE INCOME
TAXES 763 (1,406) 77 (2,787) (7,316) 6,423
PROVISION FOR
INCOME TAXES 397 702 150 1,235 (1,299) (2,252)
——– ——– ——– ——– ——– ——–
NET INCOME
(LOSS) $ 366 $ (704) $ (73) $ (1,552) $ (6,017) $ 4,171
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PER SHARE DATA
Basic
earnings
(loss) per
share $ 0.03 $ (0.06) $ (0.01) $ (0.12) $ (0.48) $ 0.33
======== ======== ======== ======== ======== ========
Diluted
earnings
(loss) per
share $ 0.03 $ (0.06) $ (0.01) $ (0.12) $ (0.46) $ 0.33
======== ======== ======== ======== ======== ========
Average
shares
outstanding 12,624 12,635 12,620 12,656 12,618 12,713