Escalade(ESCA) - 2023 Q2 - Quarterly Report

Financial Performance - Net sales for the second quarter of 2023 were $67,771,000, a decrease of 28.1% compared to $94,337,000 in the second quarter of 2022[11] - Operating income for the second quarter of 2023 was $6,258,000, down 23.5% from $8,189,000 in the same period last year[11] - Net income for the second quarter of 2023 was $3,642,000, representing a decline of 35.8% from $5,673,000 in the second quarter of 2022[11] - Basic earnings per share for the second quarter of 2023 were $0.27, down from $0.42 in the second quarter of 2022[11] - For the two quarters ended June 30, 2023, total revenues were $124,702 thousand, down from $166,717 thousand in the same period of 2022, a decrease of about 25.3%[31] - Net income for the two quarters ended June 30, 2023, was $2.69 million, a decrease of 78% compared to $12.33 million for the same period in 2022[14] - Operating income for the two quarters ended June 30, 2023, was $6.41 million, down from $17.21 million for the same period in 2022, reflecting a decrease of 63%[31] Cash and Cash Equivalents - Total cash and cash equivalents at the end of the second quarter of 2023 were $577,000, a decrease from $6,195,000 at the end of the second quarter of 2022[14] - Cash and cash equivalents at the end of the period were $577 thousand, a significant decrease from $6.2 million at the end of the same period in 2022[14] Dividends - The company declared dividends of $0.15 per share for the second quarter of 2023, consistent with the same period in 2022[11] - The company paid a quarterly dividend of $0.15 per common share on June 19, 2023, totaling approximately $2.1 million[32] Inventory and Assets - The company’s total inventories as of June 30, 2023, were $111,676,000, down from $130,246,000 as of July 9, 2022[20] - The total assets as of June 30, 2023, were $281,085 thousand, compared to $316,852 thousand as of July 9, 2022, reflecting a decrease of about 11.3%[31] Stock and Compensation - The company awarded 21,200 restricted stock units to directors and 145,563 restricted stock units to employees during the two quarters ended June 30, 2023[28] - The company recognized stock-based compensation expense of $458 thousand for the second quarter of 2023, compared to $688 thousand for the same period in 2022, a decrease of approximately 33.4%[30] - The company recognized stock-based compensation expense of $917 thousand for the two quarters ended June 30, 2023, compared to $1.08 million for the same period in 2022[30] Debt and Lease Obligations - The outstanding principal amount of the term loan was $36,300,000, and the total amount drawn under the revolving credit facility was $47,700,000 as of June 30, 2023[52] - The total future minimum lease payments as of June 30, 2023, amounted to $11,430,000, with current operating lease liabilities at $1,002,000 and long-term operating lease liabilities at $8,222,000[46] - The company’s weighted average remaining lease term for operating leases decreased to 8.57 years as of June 30, 2023, from 9.47 years in the previous year[45] - The company adjusted the funded debt to EBITDA ratio financial covenant to 4:25 to 1:00 for the end of the second fiscal quarter of 2023[51] - The company’s EBITDA covenant was adjusted to a minimum of $22.5 million for the second and third fiscal quarters of 2023[51] Sales Performance - The company reported total gross sales of $74,931 thousand for the second quarter ended June 30, 2023, down from $102,433 thousand in the same period of 2022, a decline of approximately 26.9%[42] - Gross sales from mass merchants were $19.5 million in Q2 2023, down 32.7% from $28.9 million in Q2 2022[42] - E-commerce sales decreased by 29.5% to $27.1 million in Q2 2023 from $38.5 million in Q2 2022[42] - Total net sales for the second quarter ended June 30, 2023, were $67.8 million, a decrease of 28.2% compared to $94.3 million for the same period in 2022[42] Accounting Standards - The company adopted the new accounting standard ASU 2016-13 on January 1, 2023, which did not have a material impact on its financial statements[36]