Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 21, 2020 | Apr. 09, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 21, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | ESCALADE INC | |
Entity Central Index Key | 0000033488 | |
Current Fiscal Year End Date | --12-28 | |
Trading Symbol | ESCA | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,096,874 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 21, 2020 | Dec. 28, 2019 | Mar. 23, 2019 |
Current Assets: | |||
Cash and cash equivalents | $ 6,167 | $ 5,882 | $ 4,299 |
Receivables, less allowance of $565; $483; and $548; respectively | 32,594 | 35,450 | 31,951 |
Inventories | 42,235 | 42,269 | 47,744 |
Prepaid expenses | 2,646 | 3,151 | 2,986 |
Prepaid income tax | 0 | 163 | 1,033 |
TOTAL CURRENT ASSETS | 83,642 | 86,915 | 88,013 |
Property, plant and equipment, net | 14,867 | 15,111 | 15,523 |
Operating lease right-of-use assets | 1,581 | 1,080 | 878 |
Intangible assets, net | 18,513 | 18,847 | 19,447 |
Goodwill | 26,749 | 26,749 | 26,381 |
Other assets | 69 | 77 | 90 |
TOTAL ASSETS | 145,421 | 148,779 | 150,332 |
Current Liabilities: | |||
Note payable | 0 | 135 | 0 |
Trade accounts payable | 6,387 | 7,765 | 7,756 |
Accrued liabilities | 8,029 | 9,689 | 6,512 |
Income tax payable | 315 | 0 | 0 |
Current operating lease liabilities | 730 | 621 | 595 |
TOTAL CURRENT LIABILITIES | 15,461 | 18,210 | 14,863 |
Other Liabilities: | |||
Long-term debt | 0 | 0 | 3,662 |
Deferred income tax liability | 3,537 | 3,537 | 3,409 |
Operating lease liabilities | 867 | 475 | 288 |
Other liabilities | 387 | 387 | 1,094 |
TOTAL LIABILITIES | 20,252 | 22,609 | 23,316 |
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 - 14,096,874; 14,214,777; and 14,471,496; shares respectively | 14,097 | 14,215 | 14,471 |
Retained earnings | 111,072 | 111,955 | 112,545 |
TOTAL STOCKHOLDERS' EQUITY | 125,169 | 126,170 | 127,016 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 145,421 | $ 148,779 | $ 150,332 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 21, 2020 | Dec. 28, 2019 | Mar. 23, 2019 |
CONSOLIDATED CONDENSED BALANCE SHEETS | |||
Receivables allowance (in dollars) | $ 565 | $ 483 | $ 548 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred Stock, Par Value | $ 0 | $ 0 | $ 0 |
Common stock, Par value | $ 0 | $ 0 | $ 0 |
Common stock, shares authorized | 30,000,000 | 30,000,000 | 30,000,000 |
Common stock, shares issued | 14,096,874 | 14,214,777 | 14,471,496 |
Common stock, shares outstanding | 14,096,874 | 14,214,777 | 14,471,496 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||
Net Sales | $ 37,289 | $ 32,102 |
Costs and Expenses | ||
Cost of products sold | 27,074 | 23,625 |
Selling, administrative and general expenses | 7,457 | 7,745 |
Amortization | 334 | 338 |
Operating Income | 2,424 | 394 |
Other Income (Expense) | ||
Interest expense | (44) | (68) |
Other income | 46 | 6 |
Income Before Income Taxes | 2,426 | 332 |
Provision for Income Taxes | 475 | 65 |
Net Income | $ 1,951 | $ 267 |
Earnings Per Share Data: | ||
Basic earnings per share | $ 0.14 | $ 0.02 |
Diluted earnings per share | 0.14 | 0.02 |
Dividends declared | $ 0.125 | $ 0.125 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Retained Earnings | Total |
Balance at Dec. 29, 2018 | $ 14,439 | $ 113,882 | $ 128,321 |
Balance (in shares) at Dec. 29, 2018 | 14,439 | ||
Net income | 267 | 267 | |
Expense of stock options and restricted stock units | 144 | 144 | |
Exercise of stock options | $ 10 | 108 | 118 |
Exercise of stock options (in shares) | 10 | ||
Settlement of restricted stock units | $ 25 | (25) | 0 |
Settlement of restricted stock units (in shares) | 25 | ||
Dividends declared | (1,809) | (1,809) | |
Purchase of stock | $ (3) | (22) | (25) |
Purchase of stock (in shares) | (3) | ||
Balance at Mar. 23, 2019 | $ 14,471 | 112,545 | 127,016 |
Balance (in shares) at Mar. 23, 2019 | 14,471 | ||
Balance at Dec. 28, 2019 | $ 14,215 | 111,955 | 126,170 |
Balance (in shares) at Dec. 28, 2019 | 14,215 | ||
Net income | 1,951 | 1,951 | |
Expense of stock options and restricted stock units | 136 | 136 | |
Settlement of restricted stock units | $ 24 | (24) | 0 |
Settlement of restricted stock units (in shares) | 24 | ||
Dividends declared | (1,762) | (1,762) | |
Purchase of stock | $ (142) | (1,184) | (1,326) |
Purchase of stock (in shares) | (142) | ||
Balance at Mar. 21, 2020 | $ 14,097 | $ 111,072 | $ 125,169 |
Balance (in shares) at Mar. 21, 2020 | 14,097 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
Operating Activities: | ||
Net income | $ 1,951 | $ 267 |
Reconciling adjustments: | ||
Depreciation and amortization | 928 | 936 |
Provision for doubtful accounts | 77 | 212 |
Stock-based compensation | 136 | 144 |
Adjustments necessary to reconcile net income to net cash provided by operating activities | 767 | (1,311) |
Changes in | ||
Net cash provided by operating activities | 3,859 | 248 |
Investing Activities: | ||
Purchase of property and equipment | (351) | (623) |
Payment on note payable related to an acquisition | (135) | 0 |
Net cash used by investing activities | (486) | (623) |
Financing Activities: | ||
Proceeds from issuance of long-term debt | 679 | 14,200 |
Payments on long-term debt | (679) | (10,538) |
Proceeds from exercise of stock options | 118 | |
Deferred financing fees | (96) | |
Purchase of stock | (1,326) | (25) |
Cash dividends paid | (1,762) | (1,809) |
Net cash provided (used) by financing activities | (3,088) | 1,850 |
Net increase in cash and cash equivalents | 285 | 1,475 |
Cash and Cash Equivalents, beginning of period | 5,882 | 2,824 |
Cash and Cash Equivalents, end of period | $ 6,167 | $ 4,299 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 21, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note A – Summary of Significant Accounting Policies Presentation of Consolidated Condensed Financial Statements – The significant accounting policies followed by the Company and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for its annual financial reporting. All adjustments that are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated condensed financial statements. The consolidated condensed balance sheet of the Company as of December 28, 2019 has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10‑K annual report for 2019 filed with the Securities and Exchange Commission. Reclassifications - Certain reclassifications have been made to prior year financial statements to conform to the current year financial statement presentation. These reclassifications had no effect on net earnings. |
Seasonal Aspects
Seasonal Aspects | 3 Months Ended |
Mar. 21, 2020 | |
Seasonal Aspects | |
Seasonal Aspects | Note B – Seasonal Aspects The results of operations for the three months ended March 21, 2020 and March 23, 2019 are not necessarily indicative of the results to be expected for the full year. |
Inventories
Inventories | 3 Months Ended |
Mar. 21, 2020 | |
Inventories | |
Inventories | Note C – Inventories March 21, December 28, March 23, In thousands 2020 2019 2019 Raw materials $ 4,452 $ 3,186 $ 4,052 Work in progress 2,329 2,177 2,891 Finished goods 35,454 36,906 40,801 $ 42,235 $ 42,269 $ 47,744 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 21, 2020 | |
Income Taxes | |
Income Taxes | Note D – Income Taxes The provision for income taxes was computed based on financial statement income. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 3 Months Ended |
Mar. 21, 2020 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note E – Fair Values of Financial Instruments The following methods were used to estimate the fair value of all financial instruments recognized in the accompanying balance sheets at amounts other than fair values. Cash and Cash Equivalents Fair values of cash and cash equivalents approximate cost due to the short period of time to maturity. Long-term Debt Fair values of long-term debt is estimated based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and determined through the use of a discounted cash flow model. The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at March 21, 2020, December 28, 2019 and March 23, 2019. Fair Value Measurements Using Quoted Prices in Significant Active Markets Significant Other Unobservable March 21, 2020 Carrying for Identical Observable Inputs Inputs In thousands Amount Assets (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 6,167 $ 6,167 $ — $ — Fair Value Measurements Using Quoted Prices in Significant Active Markets Significant Other Unobservable December 28, 2019 Carrying for Identical Observable Inputs Inputs In thousands Amount Assets (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 5,882 $ 5,882 $ — $ — Fair Value Measurements Using Quoted Prices in Significant Active Markets Significant Other Unobservable March 23, 2019 Carrying for Identical Observable Inputs Inputs In thousands Amount Assets (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 4,299 $ 4,299 $ — $ — Financial liabilities Long-term debt $ 3,662 $ — $ 3,662 $ — |
Stock Compensation
Stock Compensation | 3 Months Ended |
Mar. 21, 2020 | |
Stock Compensation | |
Stock Compensation | Note F – Stock Compensation The fair value of stock-based compensation is recognized in accordance with the provisions of FASB ASC 718, Stock Compensation . During the three months ended March 21, 2020, the Company awarded 20,000 restricted stock units to directors and 68,000 restricted stock units to employees. The restricted stock units awarded to directors time vest over two years (one-half one year from grant date and one-half two years from grant date) provided that the director is still a director of the Company at the vest date. Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company. The 2020 restricted stock units awarded to employees time vest over three years (one-third one year from grant, one-third two years from grant and one-third three years from grant) provided that the employee is still employed by the Company on the vesting date. For the three months ended March 21, 2020 and March 23, 2019, the Company recognized stock based compensation expense of $136 thousand and $144 thousand, respectively. At March 21, 2020 and March 23, 2019, respectively, there was $1.2 million and $1.2 million in unrecognized stock-based compensation expense related to non-vested stock awards. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 21, 2020 | |
Segment Information | |
Segment Information | Note G – Segment Information As of and for the Three Months Ended March 21, 2020 In thousands Sporting Goods Corp. Total Revenues from external customers $ 37,289 $ — $ 37,289 Operating income (loss) 2,823 (399) 2,424 Net income (loss) 2,049 (98) 1,951 Total assets $ 137,010 $ 8,411 $ 145,421 As of and for the Three Months Ended March 23, 2019 In thousands Sporting Goods Corp. Total Revenues from external customers $ 32,102 $ — $ 32,102 Operating income (loss) 761 (367) 394 Net income (loss) 507 (240) 267 Total assets $ 144,006 $ 6,326 $ 150,332 |
Dividend Payment
Dividend Payment | 3 Months Ended |
Mar. 21, 2020 | |
Dividend Payment | |
Dividend Payment | Note H – Dividend Payment On March 16, 2020, the Company paid a quarterly dividend of $0.125 per common share to all shareholders of record on March 9, 2020. The total amount of the dividend was approximately $1.8 million and was charged against retained earnings. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 21, 2020 | |
Earnings Per Share | |
Earnings Per Share | Note I – Earnings Per Share The shares used in computation of the Company’s basic and diluted earnings per common share are as follows: Three Months Ended March 21, March 23, In thousands 2020 2019 Weighted average common shares outstanding 14,118 14,447 Dilutive effect of stock options and restricted stock units 56 28 Weighted average common shares outstanding, assuming dilution 14,174 14,475 Stock options that are anti-dilutive as to earnings per share and unvested restricted stock units which have a market condition for vesting that has not been achieved are ignored in the computation of dilutive earnings per share. The number of stock options and restricted stock units that were excluded in 2020 and 2019 were 79,700 and 89,431, respectively. |
New Accounting Standards and Ch
New Accounting Standards and Changes in Accounting Principles | 3 Months Ended |
Mar. 21, 2020 | |
New Accounting Standards and Changes in Accounting Principles | |
New Accounting Standards and Changes in Accounting Principles | Note J – New Accounting Standards and Changes in Accounting Principles With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 21, 2020, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 28, 2019, that are of significance, or potential significance to the Company. In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The Company adopted this standard on December 29, 2019. The adoption of this standard did not have an impact to the financial statements of the Company. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 21, 2020 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note K – Revenue from Contracts with Customers Revenue Recognition – Effective December 31, 2017, we adopted ASC 606. The adoption of this standard did not impact the timing of revenue recognition for customer sales. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue. Gross-to-net sales adjustments – We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statement of operations. These adjustments are referred to as gross-to-net sales adjustments and primarily fall into one of three categories; returns, warranties and customer allowances. Returns – The Company records an accrued liability and reduction in sales for estimated product returns based upon historical experience. An accrued liability and reduction in sales is also recorded for approved return authorizations that have been communicated by the customer. Warranties – Limited warranties are provided on certain products for varying periods. We record an accrued liability and reduction in sales for estimated future warranty claims based upon historical experience and management’s estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the accrued liability and sales in the current year. Customer Allowances – Customer allowances are common practice in the industries in which the Company operates. These agreements are typically in the form of advertising subsidies, volume rebates and catalog allowances and are accounted for as a reduction to gross sales. The Company reviews such allowances on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available. Disaggregation of Revenue – We generate revenue from the sale of widely recognized sporting goods brands in basketball goals, archery, indoor and outdoor game recreation and fitness products. These products are sold through multiple sales channels that include; mass merchants, specialty dealers, key on-line retailers (“E-commerce”) and international. The following table depicts the disaggregation of revenue according to sales channel: Three Months Ended March 21, March 23, All Amounts in Thousands 2020 2019 Gross Sales by Channel: Mass Merchants $ 13,468 $ 11,430 Specialty Dealers 13,067 13,601 E-commerce 13,581 9,934 International 1,556 1,174 Other 476 702 Total Gross Sales 42,148 36,841 Less: Gross-to-Net Sales Adjustments Returns 1,079 1,175 Warranties 405 373 Customer Allowances 3,375 3,191 Total Gross-to-Net Sales Adjustments 4,859 4,739 Total Net Sales $ 37,289 $ 32,102 |
Leases
Leases | 3 Months Ended |
Mar. 21, 2020 | |
Leases | |
Leases | Note L – Leases We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. As of March 21, 2020, the Company has not entered into any lease arrangements classified as a finance lease. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases. ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information as follows: Three Months Ended March 21, March 23, All Amounts in Thousands 2020 2019 Lease Expense Operating Lease Cost $ 207 $ 191 Short-term Lease Cost 23 90 Variable Lease Cost 36 55 Total Operating Lease Cost $ 266 $ 336 Operating Lease - Operating Cash Flows $ 187 $ 175 New ROU Assets - Operating Leases $ 688 $ 73 Weighted Average Remaining Lease Term - Operating Leases 2.61 years 1.65 years Weighted Average Discount Rate - Operating Leases Future minimum lease payments under non-cancellable leases as of March 21, 2020 were as follows: All Amounts in Thousands Year 1 $ 790 Year 2 502 Year 3 291 Year 4 86 Year 5 30 Thereafter 2 Total future minimum lease payments 1,701 Less imputed interest (104) Total $ 1,597 Reported as of March 21, 2020 Current operating lease liabilities 730 Long-term operating lease liabilities 867 Total $ 1,597 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 21, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note M – Commitments and Contingencies The Company is involved in litigation arising in the normal course of business. The Company does not believe that the disposition or ultimate resolution of existing claims or lawsuits will have a material adverse effect on the business or financial condition of the Company. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 21, 2020 | |
Subsequent Events | |
Subsequent Events | Note N – Subsequent Events There are many uncertainties regarding the current coronavirus ("COVID-19") pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its customers, employees, suppliers, vendors, business partners and distribution channels. While the pandemic did not materially adversely affect the Company's financial results and business operations in the Company's first fiscal quarter ended March 21, 2020, we are unable to predict the impact that COVID-19 will have on its financial position and operating results due to numerous uncertainties. The Company expects to continue to assess the evolving impact of the COVID-19 pandemic and intends to make adjustments to its responses accordingly. The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted on March 27, 2020 in the United States. On April 14, 2020, Indian Industries, Inc., a wholly-owned subsidiary of Escalade, Incorporate (“Indian”), was informed by its leader, JPMorgan Chase Bank, N.A. (the “Bank”), that the Bank received approval from the U.S. Small Business Administration (“SBA”) to fund Indian’s request for a loan under the SBA’s Paycheck Protection Program (“PPP Loan”) created as part of the recently enacted CARES Act administered by the SBA. In connection with the PPP Loan, Indian has entered into the promissory note attached as Exhibit 10.4 to this Form 10-Q. Per the terms of the PPP Loan, Indian will receive total proceeds of $5,627,500 from the Bank. In accordance with the requirements of the CARES Act, Indian intends to use the proceeds from the PPP Loan primarily for payroll costs. The PPP Loan is scheduled to mature on April 9, 2022, has a 1.00% interest rate, and is subject to the terms and conditions applicable to all loans made pursuant to the Paycheck Protection Program as administered by the SBA under the CARES Act. As disclosed in the Company's Form 8-K filed with the SEC on April 1, 2020, on March 30, 2020, the Board of Directors of Escalade, Incorporated announced that Scott Sincerbeaux has agreed to become the Company's new President and Chief Executive Officer. Mr. Sincerbeaux is expected to commence his employment with the Company on or about April 27, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 21, 2020 | |
Summary of Significant Accounting Policies | |
Presentation of Consolidated Condensed Financial Statements | Presentation of Consolidated Condensed Financial Statements – The significant accounting policies followed by the Company and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for its annual financial reporting. All adjustments that are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated condensed financial statements. The consolidated condensed balance sheet of the Company as of December 28, 2019 has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10‑K annual report for 2019 filed with the Securities and Exchange Commission. |
Reclassifications | Reclassifications - Certain reclassifications have been made to prior year financial statements to conform to the current year financial statement presentation. These reclassifications had no effect on net earnings. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 21, 2020 | |
Inventories | |
Schedule of Inventories | March 21, December 28, March 23, In thousands 2020 2019 2019 Raw materials $ 4,452 $ 3,186 $ 4,052 Work in progress 2,329 2,177 2,891 Finished goods 35,454 36,906 40,801 $ 42,235 $ 42,269 $ 47,744 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 3 Months Ended |
Mar. 21, 2020 | |
Fair Values of Financial Instruments | |
Schedule of estimated fair values of the Company's financial instruments | The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at March 21, 2020, December 28, 2019 and March 23, 2019. Fair Value Measurements Using Quoted Prices in Significant Active Markets Significant Other Unobservable March 21, 2020 Carrying for Identical Observable Inputs Inputs In thousands Amount Assets (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 6,167 $ 6,167 $ — $ — Fair Value Measurements Using Quoted Prices in Significant Active Markets Significant Other Unobservable December 28, 2019 Carrying for Identical Observable Inputs Inputs In thousands Amount Assets (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 5,882 $ 5,882 $ — $ — Fair Value Measurements Using Quoted Prices in Significant Active Markets Significant Other Unobservable March 23, 2019 Carrying for Identical Observable Inputs Inputs In thousands Amount Assets (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 4,299 $ 4,299 $ — $ — Financial liabilities Long-term debt $ 3,662 $ — $ 3,662 $ — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 21, 2020 | |
Segment Information | |
Schedule of certain operating segment information | As of and for the Three Months Ended March 21, 2020 In thousands Sporting Goods Corp. Total Revenues from external customers $ 37,289 $ — $ 37,289 Operating income (loss) 2,823 (399) 2,424 Net income (loss) 2,049 (98) 1,951 Total assets $ 137,010 $ 8,411 $ 145,421 As of and for the Three Months Ended March 23, 2019 In thousands Sporting Goods Corp. Total Revenues from external customers $ 32,102 $ — $ 32,102 Operating income (loss) 761 (367) 394 Net income (loss) 507 (240) 267 Total assets $ 144,006 $ 6,326 $ 150,332 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 21, 2020 | |
Earnings Per Share | |
Schedule of weighted average number of shares | The shares used in computation of the Company’s basic and diluted earnings per common share are as follows: Three Months Ended March 21, March 23, In thousands 2020 2019 Weighted average common shares outstanding 14,118 14,447 Dilutive effect of stock options and restricted stock units 56 28 Weighted average common shares outstanding, assuming dilution 14,174 14,475 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 21, 2020 | |
Revenue from Contracts with Customers | |
Schedule of disaggregation of revenue | The following table depicts the disaggregation of revenue according to sales channel: Three Months Ended March 21, March 23, All Amounts in Thousands 2020 2019 Gross Sales by Channel: Mass Merchants $ 13,468 $ 11,430 Specialty Dealers 13,067 13,601 E-commerce 13,581 9,934 International 1,556 1,174 Other 476 702 Total Gross Sales 42,148 36,841 Less: Gross-to-Net Sales Adjustments Returns 1,079 1,175 Warranties 405 373 Customer Allowances 3,375 3,191 Total Gross-to-Net Sales Adjustments 4,859 4,739 Total Net Sales $ 37,289 $ 32,102 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 21, 2020 | |
Leases | |
Schedule of lease, cost | Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information as follows: Three Months Ended March 21, March 23, All Amounts in Thousands 2020 2019 Lease Expense Operating Lease Cost $ 207 $ 191 Short-term Lease Cost 23 90 Variable Lease Cost 36 55 Total Operating Lease Cost $ 266 $ 336 Operating Lease - Operating Cash Flows $ 187 $ 175 New ROU Assets - Operating Leases $ 688 $ 73 Weighted Average Remaining Lease Term - Operating Leases 2.61 years 1.65 years Weighted Average Discount Rate - Operating Leases |
Schedule of future minimum rental payments for operating leases | Future minimum lease payments under non-cancellable leases as of March 21, 2020 were as follows: All Amounts in Thousands Year 1 $ 790 Year 2 502 Year 3 291 Year 4 86 Year 5 30 Thereafter 2 Total future minimum lease payments 1,701 Less imputed interest (104) Total $ 1,597 Reported as of March 21, 2020 Current operating lease liabilities 730 Long-term operating lease liabilities 867 Total $ 1,597 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 21, 2020 | Dec. 28, 2019 | Mar. 23, 2019 |
Inventories | |||
Raw materials | $ 4,452 | $ 3,186 | $ 4,052 |
Work in process | 2,329 | 2,177 | 2,891 |
Finished goods | 35,454 | 36,906 | 40,801 |
Inventories | $ 42,235 | $ 42,269 | $ 47,744 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 21, 2020 | Dec. 28, 2019 | Mar. 23, 2019 |
Financial assets, Carrying Amount | |||
Cash and cash equivalents | $ 6,167 | $ 5,882 | $ 4,299 |
Financial liabilities, Fair Value | |||
Long-term debt, Fair Value | 3,662 | ||
Fair Value, Inputs, Level 1 [Member] | |||
Financial assets, Carrying Amount | |||
Cash and cash equivalents | 6,167 | 5,882 | 4,299 |
Fair Value, Inputs, Level 2 [Member] | |||
Financial assets, Carrying Amount | |||
Cash and cash equivalents | 0 | 0 | 0 |
Financial liabilities, Fair Value | |||
Long-term debt, Fair Value | 3,662 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Financial assets, Carrying Amount | |||
Cash and cash equivalents | $ 0 | $ 0 | $ 0 |
Stock Compensation (Details)
Stock Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
Restricted Stock Units (RSUs) [Member] | Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 20,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | |
Restricted Stock Units (RSUs) [Member] | Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 68,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
Nonvested Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 136 | $ 144 |
Employee and Non Employee Service Share-based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized | $ 1,200 | $ 1,200 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 21, 2020 | Mar. 23, 2019 | Dec. 28, 2019 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 37,289 | $ 32,102 | |
Operating income (loss) | 2,424 | 394 | |
Net income | 1,951 | 267 | |
Total assets | 145,421 | 150,332 | $ 148,779 |
Sporting Goods [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 37,289 | 32,102 | |
Operating income (loss) | 2,823 | 761 | |
Net income | 2,049 | 507 | |
Total assets | 137,010 | 144,006 | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 0 | 0 | |
Operating income (loss) | (399) | (367) | |
Net income | (98) | (240) | |
Total assets | $ 8,411 | $ 6,326 |
Dividend Payment (Details)
Dividend Payment (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 16, 2020 | Mar. 09, 2020 | Mar. 21, 2020 | Mar. 23, 2019 |
Dividend Payment | ||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.125 | |||
Dividends, Common Stock, Cash | $ 1,800 | $ 1,762 | $ 1,809 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
Earnings Per Share | ||
Weighted average common shares outstanding | 14,118 | 14,447 |
Dilutive effect of stock options and restricted stock units | 56 | 28 |
Weighted average common shares outstanding, assuming dilution | 14,174 | 14,475 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
Earnings Per Share | ||
Number of anti-dilutive stock options and unvested restricted stock units | 79,700 | 89,431 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
Sales Revenues Goods Net [Abstract] | ||
Total Gross Sales | $ 42,148 | $ 36,841 |
Sales Returns And Allowance Goods [Abstract] | ||
Returns | 1,079 | 1,175 |
Warranties | 405 | 373 |
Customer Allowances | 3,375 | 3,191 |
Total Gross-to-Net Sales Adjustments | 4,859 | 4,739 |
Total Net Sales | 37,289 | 32,102 |
Mass Merchants [Member] | ||
Sales Revenues Goods Net [Abstract] | ||
Total Gross Sales | 13,468 | 11,430 |
Specialty Dealers [Member] | ||
Sales Revenues Goods Net [Abstract] | ||
Total Gross Sales | 13,067 | 13,601 |
E-commerce [Member] | ||
Sales Revenues Goods Net [Abstract] | ||
Total Gross Sales | 13,581 | 9,934 |
International [Member] | ||
Sales Revenues Goods Net [Abstract] | ||
Total Gross Sales | 1,556 | 1,174 |
Other [Member] | ||
Sales Revenues Goods Net [Abstract] | ||
Total Gross Sales | $ 476 | $ 702 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 21, 2020 | Mar. 23, 2019 | |
Lease Expense | ||
Operating Lease Cost | $ 207 | $ 191 |
Short-term Lease Cost | 23 | 90 |
Variable Lease Cost | 36 | 55 |
Total Operating Lease Cost | 266 | 336 |
Operating Lease - Operating Cash Flows | 187 | 175 |
New ROU Assets - Operating Leases | $ 688 | $ 73 |
Weighted Average Remaining Lease Term - Operating Leases | 2 years 7 months 10 days | 1 year 7 months 24 days |
Weighted Average Discount Rate - Operating Leases | 5.00% | 5.00% |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) - USD ($) $ in Thousands | Mar. 21, 2020 | Dec. 28, 2019 | Mar. 23, 2019 |
Leases | |||
Year 1 | $ 790 | ||
Year 2 | 502 | ||
Year 3 | 291 | ||
Year 4 | 86 | ||
Year 5 | 30 | ||
Thereafter | 2 | ||
Total future minimum lease payments | 1,701 | ||
Less imputed interest | (104) | ||
Total | 1,597 | ||
Current operating lease liabilities | 730 | $ 621 | $ 595 |
Long-term operating lease liabilities | 867 | $ 475 | $ 288 |
Total | $ 1,597 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 21, 2020 | |
Maximum [Member] | |
Operating Lease Remaining Lease Term | 5 years |
Minimum [Member] | |
Operating Lease Remaining Lease Term | 1 year |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events | Apr. 14, 2020USD ($) |
Subsequent Event [Line Items] | |
Total receive from bank | $ 5,627,500 |
Interest rate | 1.00% |