Escalade(US:ESCA)2024-07-25 10:02Financial Performance - Escalade reported Q2 2024 net income of $2.8 million, or $0.20 per diluted share, down from $3.6 million, or $0.26 per diluted share in Q2 2023, reflecting a 22.2% decrease in net income year-over-year [3]. - Total net sales for Q2 2024 were $62.5 million, a decline of 7.7% compared to $67.8 million in Q2 2023, primarily due to softening consumer demand and inventory destocking [3][9]. - For the first half of 2024, net income increased to $4.6 million, or $0.33 per diluted share, compared to $2.7 million, or $0.20 per diluted share in the first half of 2023, marking a 70.4% increase in net income [4][9]. - Net income (GAAP) for Q2 2024 was $2,844,000, down from $3,642,000 in Q2 2023, representing a decrease of about 21.9% [23]. - EBITDA (Non-GAAP) for Q2 2024 was $5,838,000, compared to $7,667,000 in Q2 2023, reflecting a decline of approximately 24% [23]. Cash Flow and Debt Management - Cash flow from operations in Q2 2024 was $13.3 million, a significant increase of 58.3% from $8.4 million in Q2 2023 [6][10]. - Total debt decreased to $43.2 million at the end of Q2 2024, down from $84.0 million at the end of Q2 2023, indicating improved financial health [7]. - Escalade repaid nearly $10.4 million of debt during Q2 2024, resulting in a net debt to trailing twelve-month EBITDA ratio of 1.7x, within the long-term target of 1.5x to 2.5x [10]. - Interest expense for Q2 2024 was $730,000, down from $1,580,000 in Q2 2023, a decrease of about 53.8% [23]. Asset and Liability Management - Total current assets decreased to $139,052,000 in June 2024 from $146,831,000 in December 2023, a decline of approximately 5.5% [21]. - Total liabilities decreased to $77,084,000 in June 2024 from $88,426,000 in December 2023, a reduction of about 12.7% [21]. - Total assets decreased to $243,066,000 in June 2024 from $253,005,000 in December 2023, a decline of approximately 3.9% [21]. - The company reported a decrease in inventories to $86,571,000 in June 2024 from $92,462,000 in December 2023, a reduction of about 6.3% [21]. - Current portion of long-term debt remained stable at $7,143,000 across the reporting periods [21]. - Trade accounts payable increased to $12,798,000 in June 2024 from $9,797,000 in December 2023, an increase of approximately 30.5% [21]. Margins and Cost Management - Escalade's gross margin for Q2 2024 was 24.2%, a decrease of 40 basis points from the prior year, attributed to lower fixed cost absorption and increased customer program spending [5]. - Escalade is focusing on cost rationalization programs to reduce fixed overhead expenses and align its operating footprint with current demand, aiming for margin improvement in 2024 compared to 2023 [10]. Sales and Dividends - International sales grew by 15% and owned e-commerce sales increased by 28% during the second quarter, indicating strong demand in these channels [10]. - The company announced a quarterly dividend of $0.15 per share, payable on October 14, 2024, to shareholders of record on October 7, 2024 [8].