EXHIBIT 99.1
PRESS RELEASE
ESCALADE ANNOUNCES FOURTH QUARTER AND FISCAL 2004 RESULTS
Wabash, IN (February 11, 2005) Escalade, Incorporated (NASDAQ: ESCA) announced
today that Fourth quarter net sales declined 15% to $57,588,000 due primarily to
a shift in timing in sporting goods sales, however, full year net sales
increased to a record $220,709,000, a 2% gain over the comparable year ago
period. Fourth quarter net income declined 85% to $946,000 due to $5,206,000 of
non-cash expenses recorded to recognize excess inventory, investment write
downs, and additional restructuring charges including severance and legal fees,
all within the Martin Yale Group's office products operations. Full year net
income declined 47% to $7,827,000 or sixty cents per share. Both the quarter and
the full year results were significantly affected by higher effective tax rates
and costs associated with compliance with Sarbanes-Oxley legislation. During the
year, bank debt was reduced nearly $10,000,000 after using cash of $1,721,000
for dividends and stock repurchases; reflecting cash flow well above net income.
As in the past, the highly seasonal nature of the sporting goods business makes
quarter to quarter comparisons difficult. Escalade Sports' net sales of sporting
goods products declined 19% to $37,316,000 for the quarter, however, full year
net sales increased to $141,644,000, a 5% gain over the prior year's comparable
period. Net income was down 13% for the quarter, but up 11% for the year.
Substantial progress continues to be made in our ongoing operations cost
reduction program. Our customers' inventories are at relatively overall normal
levels so the first half of 2005 may not see gains similar to 2004 when their
inventory levels were lower, however, our improved product offerings and
expanding customer base make us cautiously optimistic that 2005 will be another
good year for sporting goods. Escalade Sports was once again awarded the coveted
Sears Partners in Progress Award for the sixth straight year for its stellar
2004 performance.
Martin Yale's net sales of office products dipped 6% for the quarter to
$20,272,000 resulting in full year net sales of $79,065,000 a decline of 3%
against the comparable year ago period. Net income declined 182% for the quarter
resulting in a loss due to the one time pretax charges of $5,206,000 discussed
above. This coupled with the $2,724,000 of restructuring charges and goodwill
impairment loss recorded in the third quarter put the full year net income down
136%, also a loss. The entire decline in profitability is within the European
operations as the U.S. net income increased during the quarter and for the full
year. The product rationalization that has occurred throughout the year will
make it difficult to achieve a sales increase in 2005, however, the results of
the cost cutting, restructuring, and consolidation efforts should put us in a
more competitive position and provide substantial improved profitability for
2005.
Our European (50% owned) sporting goods joint ventures, Stiga and Escalade
International continued to contribute to earnings, collectively providing $.06
per share for the full year.
We are continuing to evaluate acquisition opportunities in the sporting goods
industry, along with other means of enhancing shareholder value.
Escalade is a quality manufacturer and marketer of sporting goods and
office/graphic arts products sold worldwide. To obtain more information on the
Company and its products, visit our website at: www.EscaladeInc.com or contact
Terry Frandsen Vice President and CFO at 260/569-7208 or C.W. (Bill) Reed,
President and CEO at 260/569-7233.
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ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited, In Thousands Except Per Share Amounts)
3 Months Ended 12 Months Ended
---------------------------- ----------------------------
25 Dec 2004 27 Dec 2003 25 Dec 2004 27 Dec 2003
------------ ------------ ------------ ------------
NET SALES ................................... $ 57,588 $ 67,341 $ 220,709 $ 216,268
OPERATING EXPENSES
Cost of goods sold .................... 40,010 50,994 158,391 154,365
Selling and administrative ............ 12,656 8,639 43,070 40,907
Restructuring Costs ................... 954 -- 2,366 --
Goodwill impairment loss .............. -- -- 1,312 --
------------ ------------ ------------ ------------
OPERATING INCOME ............................ 3,968 7,708 15,570 20,996
OTHER INCOME (EXPENSE)
Interest expense ...................... (345) (482) (1,772) (2,282)
Other income (expense) ................ (527) 1,425 19 2,509
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES .................. 3,096 8,651 13,817 21,223
PROVISION (BENEFIT) FOR INCOME TAXES ........ 2,150 2,186 5,990 6,373
------------ ------------ ------------ ------------
NET INCOME .................................. $ 946 $ 6,465 $ 7,827 $ 14,850
============ ============ ============ ============
PER SHARE DATA
Basic earnings per share .............. $ 0.07 $ 0.50 $ 0.60 $ 1.15
============ ============ ============ ============
Diluted earnings per share ............ $ 0.07 $ 0.49 $ 0.59 $ 1.13
============ ============ ============ ============
Average shares outstanding ............ 13,031 12,850 12,980 12,937
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
25 December 2004 27 December 2003
---------------- ----------------
ASSETS
Current assets .................... $ 83,402 $ 79,619
Property, Plant & Equipment - net.. 16,498 17,537
Other assets ...................... 17,311 18,504
Goodwill .......................... 17,888 18,777
---------------- ----------------
Total .......................... $ 135,099 $ 134,437
================ ================
Current liabilities ............... $ 47,606 $ 54,962
Other liabilities ................. 17,515 18,192
Stockholders' equity .............. 69,978 61,283
---------------- ----------------
Total .......................... $ 135,099 $ 134,437
================ ================
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.
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