Escalade Reports Third Quarter 2024 and Year to Date 2024 Results

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]