Escalade(ESCA) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended September 30, 2024, were $67,738,000, a decrease of 7$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$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$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$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].