Escalade Reports Third Quarter 2025 Results

Core Insights - Escalade, Inc. reported third quarter 2025 results with net sales of $67.8 million, net income of $5.6 million, and diluted earnings per share of $0.40, showing a slight increase in sales compared to the previous year [2][8]. Financial Performance - Total net sales increased by 0.1% year-over-year, driven by growth in archery, table tennis, billiards, and safety categories, while basketball sales declined due to softer market demand and strategic exits from certain categories [3][4]. - Gross margin improved to 28.1%, up 334 basis points from the prior year, attributed to lower fixed costs and reduced inventory storage and handling costs, despite facing $4.3 million in tariff-related costs [4][9]. - EBITDA decreased by $1.3 million to $8.6 million compared to $9.9 million in the prior year, influenced by a non-recurring gain on asset sales in the previous period [4][19]. Cash Flow and Debt Management - Operating activities generated a cash flow of ($0.1) million, a significant decline from $10.5 million in the same quarter of 2024, reflecting a seasonal buildup in working capital ahead of the holiday season [5]. - Total debt decreased by 31.4% to $20.2 million from $29.5 million year-over-year, with a net debt to trailing twelve-month EBITDA ratio of 0.7x [5][8]. Dividend and Shareholder Returns - The company declared a quarterly dividend of $0.15 per share, scheduled for payment on January 12, 2026, to shareholders of record on January 5, 2026 [6][8]. Management Commentary - Management expressed confidence in the results, highlighting strong demand in core categories and market share gains, particularly in safety and archery, despite a challenging macroeconomic environment [7][9]. - The company is focused on a balanced promotional strategy for the holiday season, aiming to maximize sell-through while maintaining improved gross margin performance [9]. Strategic Developments - Escalade completed the acquisition of Gold Tip, enhancing its archery product portfolio and positioning for further market share gains in the archery category [9].