EXHIBIT 99.1
PRESS RELEASE
ESCALADE, INCORPORATED ANNOUNCES SECOND QUARTER EARNINGS
SECOND QUARTER ENDED JULY 12, 2003
Evansville, IN (August 1, 2003) -- Escalade, Incorporated (NASDAQ: ESCA)
announced that, Compared to 2002, net sales in the second quarter increased 55%
to $49.8 million and for the first half increased 59% to $78.9 million. Net
income for the quarter and the first half was 35 cents, compared to 2002 a
decline of 5 cents and 4 cents, respectively, due primarily to the one time gain
of a building sale in the second quarter of 2002.
Sporting goods sales increased 13% to $26.4 million due mainly to the
inclusion of one month's sales of the recently acquired North American Archery
Group (now known as Bear Archery) and a full quarter of Murrey billiard sales.
High year-end retail inventories resulted in lower purchases of some product
categories, almost totally masking gains in the fitness and basketball product
lines. Operating income, helped by Bear Archery, increased slightly, but was
more than offset by increased interest and amortization expense. Now that the
excess retail inventories are depleted, we believe that improved product
placement will result in increased sales and income at Escalade Sports for our
upcoming peak selling season and will minimize the effect of costs such as
amortization and interest expense, even excluding the additional sales and
income we expect from Bear.
Sales of office and graphic art products increased 164% to $23.4
million due entirely to the inclusion of Schleicher International AG's net
sales, which were helped by favorable exchange rates and solid market share
gains. After excluding the building sale in 2002, Martin Yale's net income
declined 10% due to the inclusion of a slight loss at Schleicher (which is a
substantial improvement over 2002), softer domestic sales, and higher interest
expense due to the Schleicher acquisition. During the quarter, Martin Yale
completed its tender offer for Schleicher, acquiring just over 97% of all
shares, and has now started a process that should result in ownership of 100% of
the shares by the end of August 2003. Once wholly owned, we will convert
Schleicher to a private company and we can then explore synergistic
opportunities. The two companies have begun a sales co-operation that has
already resulted in increased sales abroad and will result in increased domestic
sales later this year.
During the quarter, we discontinued the exploration of the new Hardwood
Creek photo frame and gift line. The net result was a $47,000 gain for the
quarter after selling the trademark and adjusting for inventory write-offs and
expenses.
Escalade, Inc. increased its ownership in Sweden Table Tennis AB to 50%
during the quarter. Including Escalade International, we now have two sporting
goods joint ventures in Europe that have turned around and are in their second
year of profitability. These two companies contributed 3 cents per share to our
earnings this quarter.
During the quarter, we acquired an additional 121,080 shares of our
stock bringing year to date purchases to 126,080 shares at an average cost of
$14.59 per share, leaving $1,161,000 of the $3,000,000 previously authorized
capital available for repurchase of our shares through the open market or
negotiated transactions as a means of continued enhancement of shareholder
value.
Escalade is a diversified holding company leveraging more than 75 years of
operating experience to deliver outstanding products, value and customer
relations through wholly owned subsidiaries. For more information on Escalade,
Inc., please visit our website at www.EscaladeInc.com or contact John Wilson, VP
and CFO at 812/467-1265 or C.W. (Bill) Reed, President and CEO at 260/569-7233.
Unaudited, In Thousands, Except Per Share Data
TWELVE MONTHS
THREE MONTHS ENDED SIX MONTHS ENDED ENDED
July 12, July 13, July 12, July 13, July 12, July 13,
2003 2002 2003 2002 2003 2002
--------- --------- --------- --------- --------- ---------
Net Sales $ 49,837 $ 32,202 $ 78,940 $ 49,707 $ 184,688 $ 152,305
Cost of Goods Sold 31,160 21,579 49,819 33,913 127,070 109,325
Selling, and Administrative Costs 14,389 6,635 24,321 11,617 39,033 23,761
--------- --------- --------- --------- --------- ---------
Operating Income 4,288 3,988 4,800 4,177 18,585 19,219
Interest Expense (652) (246) (1,100) (367) (1,683) (1,003)
Other Income (Expense) 11 326 (40) 151 (260) (62)
Amortization of Goodwill -- -- -- -- -- (332)
--------- --------- --------- --------- --------- ---------
Income Before Taxes and Minority
Interest 3,647 4,068 3,660 3,961 16,642 17,822
Provision for Income Taxes (1,399) (1,465) (1,403) (1,426) (5,782) (6,360)
Minority Interest Holders Share in
Subsidiary Net Loss 6 -- 4 -- 4 --
--------- --------- --------- --------- --------- ---------
Net Income $ 2,254 $ 2,603 $ 2,261 $ 2,535 $ 10,864 $ 11,462
========= ========= ========= ========= ========= =========
Basic Earnings Per Share $ 0.35 $ 0.40 $ 0.35 $ 0.39 $ 1.67 $ 1.78
Diluted Earnings Per Share $ 0.34 $ 0.39 $ 0.34 $ 0.38 $ 1.64 $ 1.73
Average Shares Outstanding 6,500 6,495 6,505 6,467 6,506 6,446
July 12, 2003 July 13, 2002 December 28, 2002
Current Assets $ 81,140 $ 52,379 $ 59,417
Fixed Assets 18,558 10,017 9,060
Other Assets 15,700 12,323 14,960
Goodwill 17,791 13,351 13,351
-------- -------- --------
Total Assets $133,189 $ 88,070 $ 96,788
======== ======== ========
Current Liabilities $ 52,049 $ 31,211 $ 32,376
Other Liabilities 34,310 19,516 18,537
Stockholder's Equity 46,830 37,343 45,875
-------- -------- --------
Total Assets $133,189 $ 88,070 $ 96,788
======== ======== ========
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements relating to present or
future trends or factors that are subject to risks and uncertainties. These
risks, include, but are not limited to, the impact of competitive products and
pricing, product demand and market acceptance, Escalade's ability to
successfully integrate the operations of acquired assets and businesses, new
product development, the continuation and development of key customer and
supplier relationships, Escalade's ability to control costs, general economic
conditions, fluctuations in operating results, changes in the securities markets
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 update these forward-looking statements
after the date of this report.