Financial Performance - Net sales for the three months ended September 30, 2024, were $67,738,000, a decrease of 7% compared to $73,358,000 for the same period in 2023[7]. - Operating income increased to $7,974,000 for the three months ended September 30, 2024, up 24% from $6,445,000 in the prior year[7]. - Net income for the nine months ended September 30, 2024, was $10,286,000, representing a 48% increase from $6,965,000 for the same period in 2023[12]. - Basic earnings per share for the three months ended September 30, 2024, were $0.41, compared to $0.31 for the same period in 2023, reflecting a 32% increase[7]. - Total net sales for the nine months ended September 30, 2024, were $187,568 thousand, down from $198,060 thousand for the same period in 2023, representing a decline of 5.5%[37]. - Total gross sales for the three months ended September 30, 2024, were $76,321 thousand, a decrease of 6.9% from $81,238 thousand for the same period in 2023[37]. Cash Flow and Dividends - Cash dividends declared for the nine months ended September 30, 2024, totaled $6,224,000, slightly up from $6,180,000 in the same period of 2023[12]. - The company reported a net cash provided by operating activities of $23,759,000 for the nine months ended September 30, 2024, compared to $27,706,000 in the prior year[12]. - The Company paid a quarterly dividend of $0.15 per common share on January 12, 2024, totaling approximately $2.1 million, charged against retained earnings[26]. Assets and Liabilities - Total assets as of September 30, 2024, were $170,070,000, an increase from $164,579,000 as of December 31, 2023[10]. - The total assets as of September 30, 2024, were $244,930 thousand, compared to $283,373 thousand as of September 30, 2023, indicating a decrease of approximately 13.5%[24][25]. - The company issued long-term debt amounting to $86,651,000 during the nine months ended September 30, 2024, compared to $76,062,000 in the same period of 2023[12]. - As of September 30, 2024, the accrued liability amount attributable to warranties was $604 thousand[35]. - Contract liabilities related to returns and customer allowances were $5,985 thousand as of September 30, 2024, compared to $5,325 thousand and $5,866 thousand as of December 31, 2023, and December 31, 2022, respectively[36]. Operating Expenses - The cost of products sold for the three months ended September 30, 2024, was $50,947,000, down from $55,222,000 in the same period of 2023, indicating an 8% reduction[7]. - The Company recognized stock-based compensation expense of $503 thousand for the three months ended September 30, 2024, compared to $546 thousand for the same period in 2023, a decrease of approximately 7.9%[23]. Tax and Financing - The effective tax rate for the three months ending September 30, 2024, was 23.9%, an increase from 16.6% for the same period last year[50]. - The outstanding principal amount of the term loan was $27.4 million as of September 30, 2024, with a total amount drawn under the Revolving Facility of $2.1 million[49]. - The maximum availability under the senior revolving credit facility was decreased from $75.0 million to $60.0 million as per the Fifth Amendment effective October 11, 2024[48]. Shareholder Information - The weighted average common shares outstanding for the three months ended September 30, 2024, were 13,877 thousand, compared to 13,737 thousand for the same period in 2023, an increase of approximately 1.0%[28]. - Total stockholders' equity as of September 30, 2023, was reported at $161,170 thousand, with corrections made to common stock and retained earnings due to an immaterial reporting error[16]. Lease Information - The weighted average remaining lease term for operating leases was 7.47 years as of September 30, 2024, compared to 8.29 years for the same period in 2023[41]. - Total future minimum lease payments under non-cancellable leases as of September 30, 2024, were $9,911 thousand, less imputed interest of $1,703 thousand, resulting in a total of $8,208 thousand[42]. - The Company has not entered into any lease arrangements classified as a finance lease as of September 30, 2024[36]. Other Information - The Company completed the sale of its Mexico facility for $6.6 million during the three months ended September 30, 2024, recognizing a gain of $3.9 million included in operating income[17]. - The Company reported a total of 12,900 restricted stock units awarded to directors and 130,800 to employees during the nine months ended September 30, 2024[21]. - The Company does not believe that existing litigation will have a material adverse effect on its business or financial condition[43].

Financial Performance - Net sales for Q3 2024 were $67.7 million, a decline of 7.7% compared to Q3 2023[2] - Operating income increased to $8.0 million in Q3 2024 from $6.4 million in Q3 2023[2] - Net income for Q3 2024 was $5.7 million, or $0.40 per diluted share, compared to $4.3 million, or $0.31 per diluted share in Q3 2023[2] - For the nine months ended September 30, 2024, net sales were $187.6 million, a decline of 5.3% year-over-year[3] - Net income for the three months ended September 2024 was $5,667,000, up 32.5% from $4,275,000 in the same period last year[11] - EBITDA for the nine months ended September 2024 increased to $20,195,000, representing a 17.3% growth compared to $17,103,000 for the same period in 2023[11] Cash Flow and Assets - The company generated $10.5 million in cash flow from operations in Q3 2024, down from $14.8 million in Q3 2023[4] - Cash and cash equivalents decreased significantly to $426,000 from $919,000 in September 2023, a drop of 53.7%[10] - Total current assets decreased to $144,664,000 from $146,831,000 in December 2023, a decline of 1%[10] - Total assets decreased to $244,930,000 from $253,005,000 in December 2023, a decline of 3.2%[10] Debt and Liabilities - Total debt at the end of Q3 2024 was $29.5 million, significantly reduced from $72.0 million at the end of Q3 2023[4] - Total liabilities decreased to $74,860,000 from $88,426,000 in December 2023, a reduction of 15.3%[10] - Current liabilities increased to $41,960,000 from $33,264,000 in December 2023, an increase of 26.2%[10] - Interest expense for the three months ended September 2024 was $530,000, down 60% from $1,325,000 in the same period last year[11] Inventory and Retained Earnings - Inventories decreased to $85,485,000 from $92,462,000 in December 2023, a decline of 7.5%[10] - Retained earnings increased to $164,161,000 from $160,099,000 in December 2023, a growth of 2.6%[10] Dividends and Other Announcements - Escalade announced a quarterly dividend of $0.15 per share, payable on January 13, 2025[5] - The company absorbed $2.7 million in non-recurring expenses related to ongoing asset and cost rationalization programs during the first nine months of 2024[6] - International sales grew by over 13% year-over-year, and owned e-commerce sales increased by 29%[6] Gross Margin - Gross margin for Q3 2024 was 24.8%, an increase of 10 basis points from the prior year[3]

Core Insights - Escalade, Inc. reported a decline in net sales for the third quarter of 2024, totaling $67.7 million, a decrease of 7.7% compared to the same period in 2023, attributed to soft consumer demand and inventory destocking [2][3] - Despite the decline in sales, the company achieved an operating income of $8.0 million, up from $6.4 million in the previous year, and net income increased to $5.7 million, or $0.40 per diluted share, compared to $4.3 million, or $0.31 per diluted share in 2023 [2][3] - For the nine months ended September 30, 2024, net sales were $187.6 million, down 5.3% year-over-year, but operating income rose to $15.5 million from $12.9 million in 2023 [3][4] Financial Performance - The gross margin for the third quarter was reported at 24.8%, an increase of 10 basis points year-over-year, driven by improved fixed cost absorption [3] - The company generated $10.5 million in cash flow from operations in the third quarter, down from $14.8 million in the same quarter of 2023 [4] - EBITDA for the third quarter increased by 26.0% to $9.9 million compared to $7.9 million in the prior-year period [4][14] Debt and Cash Management - Total debt at the end of the third quarter was $29.5 million, significantly reduced from $72.0 million a year earlier [4] - As of September 30, 2024, the company had total cash and equivalents of $73.3 million, with a net debt to trailing twelve-month EBITDA ratio of 1.1x [4][11] Strategic Initiatives - The company is undergoing a cost rationalization program, which includes the closure and sale of its Mexico operations, and expects these initiatives to lead to sustained margin improvement into 2025 [6] - Escalade announced a quarterly dividend of $0.15 per share, payable on January 13, 2025, to shareholders of record on January 6, 2025 [5] Market Outlook - Management indicated that consumer and retail partners remain cautious about spending on discretionary recreational goods, which may lead to a more promotional fourth quarter [6] - Despite the challenges, Escalade reported over 13% year-over-year growth in international sales and 29% growth in owned e-commerce sales during the third quarter [6]

Company Overview - Escalade, Inc. is a leading manufacturer and distributor of sporting goods and indoor/outdoor recreational equipment, founded in 1922 and headquartered in Evansville, Indiana [2] - The company's mission is to connect family and friends, creating lasting memories through its diverse range of products [2] - Escalade's brands include Brunswick Billiards®, STIGA®, Accudart®, RAVE Sports®, Victory Tailgate®, Onix®, Goalrilla™, Lifeline®, Woodplay®, and Bear® Archery, with products available online and at major retailers nationwide [2] Financial Results Announcement - Escalade will issue its third quarter 2024 results before the market opens on October 24, 2024 [1] - A conference call to review the financial results and discuss recent events will take place on the same day at 11:00 a.m. ET [1] - The conference call will be accessible via a live webcast on Escalade's Investor Relations website, with details provided for both domestic and international participants [1]

EVANSVILLE, Ind., Oct. 15, 2024 /PRNewswire/ -- Escalade, Incorporated (Nasdaq: ESCA) a leading manufacturer and distributor of sporting goods, recreation equipment, and fitness equipment, is proud to announce a new partnership for its US Weight subsidiary as the official U.S. distributor of adidas Fitness accessories. This exciting addition bolsters US Weight's growing portfolio of fitness brands, which already includes industry leaders Lifeline Fitness, US Weight, and The Step. adidas Fitness Accessories ...

Core Insights - Escalade, Incorporated celebrated its 51st anniversary of being listed on Nasdaq by ringing the Closing Bell on August 23, 2024, highlighting its longevity and success in the sporting goods industry [1][4] - The company was formed in 1973 through the reincorporation of Williams Manufacturing Company and has a rich history dating back to 1922 [3] - Escalade's President & CEO, Walter P. Glazer, emphasized the company's resilience and determination, attributing its success to the grit and dedication of its employees [4] Company Overview - Escalade designs, manufactures, and sells sporting goods and recreational equipment, with a mission to connect families and friends [5] - The company employs 446 individuals across the USA and China, contributing to its operations and success [4] - Escalade's product portfolio includes well-known brands such as Brunswick Billiards®, STIGA®, and Goalrilla™, available online and at major retailers [5] Historical Context - The company transitioned to Nasdaq in 1973, trading under the ticker symbol ESCA, and has maintained its presence for over 50 years, placing it in the top 1% for longevity on the exchange [3][4] - Escalade has navigated various challenges, including economic downturns and global events, showcasing its ability to adapt and thrive [4] Future Outlook - Glazer expressed a forward-looking vision for Escalade, emphasizing a commitment to innovation and continuous progression as the company aims for the next 50 years [4]

Core Insights - Walter P. Glazer, Jr. will retire as CEO and President of Escalade, Inc. at the end of 2024, with the Board of Directors initiating a comprehensive search for his successor [1][2] - Glazer has been a shareholder since 1991 and will remain on the Board after retirement, pending shareholder approval [2] - Under Glazer's leadership, Escalade experienced significant growth, including the acquisition of Brunswick Billiards and a focus on capital allocation and strategic asset optimization [2][3] Company Overview - Escalade, Inc. was founded in 1922 and is headquartered in Evansville, Indiana, specializing in sporting goods, fitness, and recreation equipment [4] - The company's mission is to connect family and friends and create memorable moments, with a portfolio of well-known brands including Bear® Archery, STIGA®, and RAVE Sports® [4]

Core Viewpoint - Escalade, Inc. has completed the sale of its facility in Rosarito, Mexico, consolidating operations into other North American facilities to optimize its operational footprint and improve efficiency [1][2]. Group 1: Company Actions - The sale of the Rosarito facility is part of Escalade's strategy to enhance asset utilization and drive organizational efficiency [2]. - Proceeds from the sale will be allocated to reduce the company's higher cost variable rate debt [2]. Group 2: Company Background - Escalade, Inc. was founded in 1922 and is headquartered in Evansville, Indiana, specializing in the design, manufacture, and sale of sporting goods and recreational equipment [3]. - The company’s product portfolio includes well-known brands such as Bear® Archery, STIGA®, and RAVE Sports®, available through online platforms and major retailers [3].

Financial Data and Key Metrics Changes - Net sales declined by 7.7% year-over-year, totaling $62.5 million for Q2 2024, while net income was reported at $2.8 million or $0.20 per diluted share [42][15] - Gross margin decreased slightly to 24.2% from 24.6% in the prior year period, reflecting ongoing operational efficiency efforts [42][15] - Cash flow from operations increased nearly 60% year-over-year to $13.3 million, primarily due to lower net working capital [9][16] Business Line Data and Key Metrics Changes - Selling, general, and administrative (SG&A) expenses rose by 40% year-over-year to $10.1 million, with SG&A as a percentage of net sales increasing to 16.1% from 14.4% [26][42] - The company continues to see strong consumer demand for brands like Stiga, Bear Archery, and Brunswick Billiards, indicating brand strength despite overall sales decline [18][15] Market Data and Key Metrics Changes - International sales increased by 15% in the quarter, with notable growth in basketball and pickleball markets in Europe, Australia, and New Zealand [40][39] - Owned DTC e-commerce volumes rose by 28% year-over-year, showcasing a shift towards direct consumer engagement [7] Company Strategy and Development Direction - The company is focusing on debt repayment, particularly high-interest variable rate debt, while also evaluating opportunities for internal investments and potential acquisitions [22][29] - Plans to divest the Rosarito property and facility are ongoing, with efforts to reduce operating costs and enhance profitability across the corporate footprint [17][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer discretionary spending, noting that while spending is softening, the company targets a higher-income consumer base that may maintain spending levels [20][22] - The company anticipates a seasonal cash flow pattern, expecting softer cash generation in Q3 but stronger performance in Q4 due to holiday demand [21][22] Other Important Information - As of June 30, 2024, total cash and equivalents stood at $362,000, with $71 million available on the senior secured revolving credit facility [27][44] - Net leverage was reported at 1.7 times trailing 12-month EBITDA, aligning with the company's long-term target range [5][44] Q&A Session Summary Question: Insights on capital deployment strategies - Management indicated a focus on debt repayment, internal investments, and potential share repurchases, with acquisitions being considered selectively [29][48] Question: Discussion on the pickleball market opportunity - Management highlighted their established brand in the pickleball space and indicated a focus on organic growth rather than acquisitions in this category [32][50] Question: Details on competitive promotions and inventory management - Management noted that inventory levels are in good shape heading into the holiday season, with cautious optimism regarding consumer behavior [38][37] Question: Performance of international sales - Management acknowledged the growth in international markets, particularly in basketball and pickleball, while emphasizing the focus on these areas for future growth [40][39]

Financial Performance - Net sales for the three months ended June 30, 2024, were $62,526 thousand, a decrease of 7.4% compared to $67,771 thousand for the same period in 2023[22] - Operating income for the three months ended June 30, 2024, was $4,457 thousand, down 28.7% from $6,258 thousand in the prior year[22] - Net income for the three months ended June 30, 2024, was $2,844 thousand, a decrease of 21.9% compared to $3,642 thousand for the same period in 2023[22] - Basic earnings per share for the three months ended June 30, 2024, were $0.21, compared to $0.27 for the same period in 2023, reflecting a decline of 22.2%[22] - Revenues from external customers for the three months ended June 30, 2024, were $67,771 thousand, an increase from $62,526 thousand for the same period last year, representing an increase of approximately 3.98%[36] - Operating income for the six months ended June 30, 2024, was $9,206 thousand, compared to $7,517 thousand for the same period last year, reflecting a growth of approximately 22.5%[58] - Net income for the three months ended June 30, 2024, was $3,817 thousand, up from $3,176 thousand in the same period last year, indicating an increase of about 20.2%[36] Assets and Liabilities - Total current assets as of June 30, 2024, were $139,052 thousand, down 5.8% from $146,831 thousand as of December 31, 2023[21] - Total liabilities decreased to $77,084 thousand as of June 30, 2024, from $88,426 thousand as of December 31, 2023, representing a reduction of 12.5%[21] - Long-term debt as of June 30, 2024, was $36,024 thousand, down 17.7% from $43,753 thousand as of December 31, 2023[21] - Total assets as of June 30, 2024, were $240,639 thousand, a decrease from $243,066 thousand as of December 31, 2023[58] - Total debt as of June 30, 2024, was $43.2 million, a decrease of $7.7 million from December 31, 2023, with total debt as a percentage of stockholders' equity at 26.0%[83] Dividends - The company declared dividends of $0.15 per share for the three months ended June 30, 2024, consistent with the same period in 2023[22] - The company paid a quarterly dividend of $0.15 per common share, totaling approximately $2.1 million on April 22, 2024[37] - The Company paid a quarterly dividend of $0.15 per common share on January 12, 2024, totaling approximately $2.1 million[60] Expenses - Selling, general and administrative expenses (SG&A) rose to $10.1 million in Q2 2024, an increase of 3.0% compared to $9.8 million in the same period last year, with SG&A as a percentage of sales increasing to 16.1%[81] - Selling, general, and administrative expenses (SG&A) for the first six months of 2024 were $20.8 million, an increase of 3.6% from $20.1 million in the prior year[108] Cash and Credit Facilities - Cash and cash equivalents decreased to $362 thousand as of June 30, 2024, from $577 thousand as of June 30, 2023[21] - The company has a senior revolving credit facility with a maximum availability of $65 million, increased from $50 million, with a maturity date extended to January 21, 2027[47] - The maximum availability under the senior revolving credit facility was increased from $65.0 million to $75.0 million as per the First Amendment to the Restated Credit Agreement[100][111] Operational Insights - The company’s revenues are generated from various sales channels, including mass merchants, specialty dealers, and e-commerce[44] - Total net sales decreased by 7.7% year-over-year in Q2 2024, attributed to softening consumer demand and inventory destocking, with international sales growing by 15% and owned e-commerce sales increasing by 28%[79] - The Company has focused on promoting new product innovation and strategic acquisitions to enhance growth opportunities in the Sporting Goods business[104][105] Taxation - The effective tax rate for the three months ending June 30, 2024, was 23.8%, compared to 22.3% for the same period last year[49] - The effective tax rate for the first six months of 2024 was 23.8%, up from 22.6% for the same period last year[109] Share Repurchase - The Company has repurchased 2,153,132 shares of its common stock for an aggregate price of $28.8 million under its stock repurchase program[122] - Total number of shares purchased under the current repurchase program is 2,153,132 at an average price of $13.38 per share[134] - The maximum number of shares that may yet be purchased under the plans or programs is valued at $4,153,252[134] - No share purchases were made in the second quarter from April to June 2024[134] Internal Controls - Management is actively engaged in remediation efforts to address material weaknesses in internal control over financial reporting[128]