Escalade Reports Second Quarter 2025 Results

, /PRNewswire/ -- Escalade, Inc. (NASDAQ: ESCA, or the "Company"), a leading manufacturer and distributor of sporting goods and indoor/outdoor recreational equipment, today announced second quarter of 2025 results. SECOND QUARTER 2025 HIGHLIGHTS(As compared to the second quarter 2024) Net sales were $54.3 million compared to $62.5 million Gross margin of 24.7% of net sales compared to 24.2% Operating income was $2.6 million compared to $4.5 million Net income of $1.8 million, or $0.13 earnings per diluted share, compared to $2.8 million, or $0.20 earnings per diluted share EBITDA totaled $3.9 million compared to $5.8 million Ratio of net debt to trailing twelve-months EBITDA of 0.5x as of June 30, 2025 compared to 1.7x as of June 30, 2024 For the second quarter ended June 30, 2025, Escalade reported net sales of $54.3 million, net income of $1.8 million and diluted earnings per share of $0.13. Total net sales decreased 13.1% on a year-over-year basis in the second quarter, primarily due to softer market demand across most categories including delayed customer shipments due to tariff volatility, partially offset by market share gains within the safety category. Escalade reported a second quarter gross margin of 24.7%, an increase of 56 basis points versus the prior-year period, primarily driven by lower fixed costs and decreased inventory storage and handling costs, partially offset by tariff-related costs and unfavorable product mix. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") decreased $1.9 million to $3.9 million in the second quarter 2025, versus $5.8 million in the prior-year period. The decrease in EBITDA compared to the second quarter of last year reflects lower net sales, $0.4 million in non-recurring executive transition expenses, partially offset by improved gross margins. During the second quarter of 2025, the Company generated $13.3 million in cash flow from operations, compared to $13.3 million for the same quarter in 2024. Operating cash flows during the second quarter of 2025 reflect reduced profitability compared to the prior year period, offset by cash generated from working capital resulting from ongoing inventory rationalization initiatives. Total debt at the end of the quarter was $22.0 million, down 49.0% from $43.2 million at the end of the second quarter last year. As of June 30, 2025, the Company had total cash and equivalents of $10.4 million, together with $48.5 million of availability on its senior secured revolving credit facility maturing in 2027. At the end of the second quarter 2025, net debt (total debt less cash) was 0.5x trailing twelve-month EBITDA. Escalade announced a quarterly dividend of $0.15 per share to be paid to all shareholders of record on October 6, 2025 and payable on October 13, 2025. MANAGEMENT COMMENTARY "Our second quarter results reflect the strong operating leverage our team has worked diligently to build over the past several years with our leaner cost structure and efficiency improvements," said Armin Boehm, Escalade's Chief Executive Officer and President. "Despite continued softness in our sporting goods and recreation equipment markets, we delivered year-over-year gross margin improvement, even after incurring $1.6 million in tariff-related costs." Boehm continued. "Our second quarter sales performance reflects an increasingly cautious consumer demand environment, changing customer buying patterns, and the strategic exit of select product categories. Additionally, unfavorable weather contributed to a slower start to summer demand within our outdoor categories. These headwinds were partially offset by continued market share gains in our safety category." "Looking ahead to the second half, we remain focused on executing our playbook and controlling the variables within our control as we navigate a dynamic trade landscape," added Boehm. "We are collaborating with our retail and supply partners to enhance our supply chain efficiency while implementing targeted price increases where appropriate. These and other initiatives will mitigate the impact of ongoing tariff-related headwinds." "We remain disciplined in our capital allocation," Boehm concluded. "In the second quarter, we repurchased approximately $0.8 million of shares under our existing authorization. We strengthened our balance sheet by reducing our total debt by 49.0% versus the prior-year period while building our cash position and taking advantage of favorable interest rate arbitrage relative to our low-cost, fixed-rate debt. We continue to prioritize returning capital to our shareholders through our quarterly dividend while investing in new product innovation and domestic manufacturing capabilities. We also remain open to acquisition opportunities that build scale within our core categories. Our continued focus is squarely on creating long-term value for both our customers and shareholders." CONFERENCE CALL A conference call will be held Friday, August 1, 2025, at 11:00 a.m. ET to review the Company's financial results, discuss recent events and conduct a question-and-answer session. A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of Escalade's website at www.escaladeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software. To participate in the live teleconference: Domestic Live: 1-833-890-3250 International Live: 1-412-206-6441 To listen to a replay of the teleconference, which subsequently will be available through August 15, 2025: Domestic Replay: 1-844-512-2921 International Replay: 1-412-317-6671 Conference ID: 10201064 USE OF NON-GAAP FINANCIAL MEASURES In addition to disclosing financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"), this release contains the non-GAAP financial measure known as "EBITDA." A reconciliation of this non-GAAP financial measure is contained at the end of this press release. EBITDA is a non-GAAP financial measure that Escalade uses to facilitate comparisons of operating performance across periods. Escalade believes the disclosure of EBITDA provides useful information to investors regarding its financial condition and results of operations. Non-GAAP measures should be viewed as a supplement to and not a substitute for the Company's U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated. Non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or in lieu of an analysis of the Company's results as reported under U.S. GAAP and should be evaluated only on a supplementary basis. ABOUT ESCALADE Founded in 1922, and headquartered in Evansville, Indiana, Escalade designs, manufactures, and sells sporting goods, fitness, and indoor/outdoor recreation equipment. Our mission is to connect family and friends, create lasting memories, and play life to the fullest. Leaders in our respective categories, Escalade's distinct and acclaimed brands include Goalrilla™ in-ground basketball hoops; STIGA® tennis tables and accessories; Bear® Archery and archery equipment; Brunswick Billiards® tables and accessories; Accudart® darting; ONIX® pickleball; Lifeline® fitness products; and RAVE Sports® water recreation products. Escalade's products are available online and through leading retailers nationwide. For more information about Escalade's diverse and prominent brand portfolio, history, financials, and governance, please visit www.escaladeinc.com. INVESTOR RELATIONS CONTACT Patrick GriffinVice President - Corporate Development & Investor Relations812-467-1358 FORWARD-LOOKING STATEMENTS This report contains statements that we believe are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. All statements, other than statements of historical fact, are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as "will likely result," "may," "are expected to," "is anticipated," "potential," "estimate," "forecast," "projected," "intends to," or may include other similar words or phrases such as "believes," "plans," "trend," "objective," "continue," "remain," or similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. These risks include, but are not limited to: Escalade's ability to achieve its business objectives; Escalade's plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences; Escalade's ability to successfully implement actions to lessen the potential impacts of tariffs, a potential trade war with China and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; our international operations, including any related to political uncertainty and geopolitical tensions; Escalade's ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade's ability to protect its intellectual property; Escalade's ability to develop and implement our own direct to consumer e-commerce distribution channel; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade's ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, terrorist attacks, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; the evaluation and implementation of remediation efforts designed and implemented to enhance the Company's control environment; the potential identification of one or more additional material weaknesses in the Company's internal control of which the Company is not currently aware or that have not yet been detected; Escalade's ability to control costs, including managing inventory levels; general economic conditions, including inflationary pressures; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company's common stock on the NASDAQ Global Market; the Company's inclusion or exclusion from certain market indices; Escalade's ability to obtain financing, to maintain compliance with the terms of such financing and to manage debt levels; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; risks related to data security of privacy breaches; the potential impact of regulatory claims, proceedings or investigations involving our products; Escalade's use of estimates in its financial reporting as well as in its forward looking statements; and other risks detailed from time to time in Escalade's filings with the Securities and Exchange Commission. Escalade's future financial performance could differ materially from the expectations of management contained herein. Escalade undertakes no obligation to release revisions to these forward-looking statements after the date of this report. Escalade, Incorporated and Subsidiaries Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended All Amounts in Thousands Except Per Share Data June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Net sales $54,333 $62,526 $109,812 $119,830 Costs and Expenses Cost of products sold 40,896 47,415 81,585 90,365 Selling, administrative and general expenses 10,249 10,063 20,820 20,764 Amortization 567 591 1,134 1,184 Operating Income 2,621 4,457 6,273 7,517 Other Income (Expense) Interest expense (213) (730) (457) (1,465) Other income 51 3 82 6 Income Before Income Taxes 2,459 3,730 5,898 6,058 Provision for Income Taxes 634 886 1,454 1,439 Net Income $1,825 $2,844 $4,444 $4,619 Earnings Per Share Data: Basic earnings per share $ 0.13 $ 0.21 $ 0.32 $ 0.33 Diluted earnings per share $ 0.13 $ 0.20 $ 0.32 $ 0.33 Dividends declared $ 0.15 $ 0.15 $ 0.30 $ 0.30 Consolidated Balance Sheets (Unaudited) All Amounts in Thousands Except Share Information June 30, 2025 December 31, 2024 June 30, 2024 (Unaudited) (Audited) (Unaudited) ASSETS Current Assets: Cash and cash equivalents $10,422 $ 4,194 $ 362 Receivables, less allowance of $595; $694; and $489; respectively 41,926 48,768 47,829 Inventories 72,672 76,025 86,571 Prepaid expenses 2,449 4,372 2,461 Prepaid income tax 402 465 1,829 TOTAL CURRENT ASSETS 127,871 133,824 139,052 Property, plant and equipment, net 21,827 22,221 23,441 Assets held for sale -- -- 2,459 Operating lease right-of-use assets 1,428 1,186 7,905 Intangible assets, net 24,703 25,838 27,456 Goodwill 42,326 42,326 42,326 Other assets 184 935 427 TOTAL ASSETS $218,339 $226,330 $243,066 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 7,143 $ 7,143 $ 7,143 Trade accounts payable 14,120 11,858 12,798 Accrued liabilities 9,086 15,050 9,222 Current operating lease liabilities 496 444 1,077 TOTAL CURRENT LIABILITIES 30,845 34,495 30,240 Other Liabilities: Long‑term debt 14,881 18,452 36,024 Deferred income tax liability 3,302 3,302 3,125 Operating lease liabilities 973 787 7,398 Other liabilities -- 297 297 TOTAL LIABILITIES 50,001 57,333 77,084 Stockholders' Equity: Preferred stock: Authorized 1,000,000 shares; no par value, none issued -- -- -- Common stock: Authorized 30,000,000 shares; no par value, issued and outstanding – 13,803,745; 13,732,719; and 13,877,302; shares respectively 3,251 4,218 5,406 Retained earnings 165,087 164,779 160,576 TOTAL STOCKHOLDERS' EQUITY 168,338 168,997 165,982 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $218,339 $226,330 $243,066 Consolidated Statements of Cash Flows (Unaudited) Six Months Ended All Amounts in Thousands June 30, 2025 June 30, 2024 Operating Activities: Net income $4,444 $4,619 Depreciation and amortization 2,501 2,751 Allowance for credit losses 225 325 Stock-based compensation 962 926 Loss on disposal of assets 3 54 Common stock issued in lieu of bonus to officers 124 -- Director stock compensation 118 -- Changes in assets and liabilities 8,706 4,624 Net cash provided by operating activities 17,083 13,299 Investing Activities: Purchase of property and equipment (976) (1,174) Proceeds from sale of property and equipment -- 92 Net cash used in investing activities (976) (1,082) Financing Activities: Proceeds from issuance of long-term debt 9,046 67,161 Payments on long-term debt (12,618) (74,890) Cash dividends paid (4,136) (4,142) Purchase of stock (2,171) -- Net cash used in financing activities (9,879) (11,871) Net increase in cash and cash equivalents 6,228 346 Cash and cash equivalents, beginning of period 4,194 16 Cash and cash equivalents, end of period $10,422 $ 362 Supplemental Cash Flows Information Interest paid $428 $1,429 Income taxes paid, net $1,689 $3,270 Reconciliation of GAAP Net Income to Non-GAAP EBITDA (Unaudited) Three Months Ended Six Months Ended All Amounts in Thousands June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Net Income (GAAP) $1,825 $2,844 $4,444 $4,619 Interest expense 213 730 457 1,465 Income tax expense 634 886 1,454 1,439 Depreciation and amortization 1,262 1,378 2,501 2,751 EBITDA (Non-GAAP) $3,934 $5,838 $8,856 $10,274 SOURCE Escalade, Incorporated WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Escalade Reports Second Quarter 2025 Results

FAQ

Why Bearish?

How important is it?

Why Short Term?

Related Companies

Related News