EXHIBIT 99.1
PRESS RELEASE
ESCALADE ANNOUNCES SECOND QUARTER RESULTS
Wabash, IN (July 29, 2005) Escalade, Incorporated (NASDAQ: ESCA) announced today
that net income for the second quarter increased 15% to $2,255,000 or $0.17 per
share versus $0.15 per share in the year ago comparable quarter, bringing first
half net income up 34% to $3,409,000 or $0.26 per share versus $0.20 per share
last year, all due to the turnaround of office products. Net sales declined 10%
to $47,551,000 for the quarter, bringing year to date sales to $77,333,000, also
a 10% decline.
Escalade Sports' net sales declined 4% to $28,569,000 for the quarter, bringing
the seasonally slow first half to $42,590,000, a 5% decline. The first half of
2004 was the beneficiary of one time sales gains as some customers increased
their inventories and bought earlier. Sporting goods net income was off 7% for
the quarter, due to the lower sales. Mr. Messmer, President of Escalade Sports,
stated that "Our largest customer has implemented a new strategy to enhance
their profitability that is centered around product line reductions, margin
increases, and reduced promotions that will result in a significant decrease in
our net sales to that customer this year. Our efforts over the recent years to
create growth by diversifying our product lines and customer base, along with
the recent Childlife acquisition, will result in increased sales in some
segments that will partially offset this. For the full year, we expect that
sporting goods revenues will be somewhat lower than last year, however,
profitability should be flat to slightly up." The Company also announced the
construction of a new manufacturing facility in Reynosa, Mexico, that should be
in operation in the first quarter of 2006 that will provide a second location in
Mexico with the advantage of close proximity to low cost raw materials, labor,
and a more centralized distribution point.
Net income at Martin Yale (office/graphic arts products) increased 76% for the
quarter and is up 148% over the prior year as the Company begins to reap the
efforts of two years of cost cutting, facility consolidation, product
rationalization, and management reorganization. Net income has also been helped
by lower effective tax rates as the Company continues to build profitability in
Europe where it can utilize tax loss carry forwards. Net sales were off 17% for
the quarter to $18,982,000 and are off 16% year to date at $34,743,000 due
primarily to product rationalization, discontinued business with unprofitable
customers, and a temporary supply disruption of shredders that was resolved
early in the second quarter. Mr. Reed, President and CEO of Escalade, stated,
"We continue to cut costs and consolidate in Europe, however, our main focus is
now shifting to product development and innovation, strategic planning, and
further bolstering the management team for future growth. We expect continued
profitability from Martin Yale throughout the balance of the year."
Mr. Reed also stated: "We continue to look for other means of utilizing our
strong balance sheet to further enhance shareholder value, including the
continued review of acquisition opportunities."
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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CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited, In Thousands Except Per Share Amounts)
Three Months Ended Six Months Ended Twelve Months Ended
------------------------ ------------------------ ------------------------
09 July 10 July 09 July 10 July 09 July 10 July
2005 2004 2005 2004 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
NET SALES .............................. $ 47,551 $ 52,516 $ 77,333 $ 86,174 $ 210,838 $ 225,119
OPERATING EXPENSES
Cost of goods sold ............... 32,348 37,125 53,207 61,643 149,954 163,827
Selling and administrative ....... 11,304 12,088 18,479 19,736 40,784 40,301
Restructuring .................... -- -- -- -- 2,366 --
Impairment of goodwill ........... -- -- -- -- 1,312 --
---------- ---------- ---------- ---------- ---------- ----------
OPERATING INCOME ....................... 3,899 3,303 5,647 4,795 16,422 20,991
OTHER INCOME (EXPENSE)
Interest expense ................. (494) (573) (780) (938) (1,614) (2,121)
Other income (expense) ........... 162 319 407 301 125 2,847
---------- ---------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES ............. 3,567 3,049 5,274 4,158 14,933 21,717
PROVISION FOR INCOME TAXES ............. (1,312) (1,096) (1,865) (1,607) (6,248) (6,577)
---------- ---------- ---------- ---------- ---------- ----------
NET INCOME ............................. $ 2,255 $ 1,953 $ 3,409 $ 2,551 $ 8,685 $ 15,140
========== ========== ========== ========== ========== ==========
PER SHARE DATA
Basic earnings per share ......... $ 0.17 $ 0.15 $ 0.26 $ 0.20 $ 0.64 $ 1.18
========== ========== ========== ========== ========== ==========
Diluted earnings per share ....... $ 0.17 $ 0.15 $ 0.26 $ 0.19 $ 0.63 $ 1.15
========== ========== ========== ========== ========== ==========
Average shares outstanding ....... 13,069 13,018 13,064 12,949 13,051 12,884
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
09 July 2005 10 July 2004 25 December 2004
---------------- ---------------- ----------------
ASSETS
Current assets ......................... $ 78,135 $ 81,674 $ 83,402
Property, Plant & Equipment - net ...... 14,660 16,370 16,498
Other assets ........................... 15,432 16,661 17,311
Goodwill ............................... 17,208 18,715 17,888
---------------- ---------------- ----------------
Total ............................... $ 125,435 $ 133,420 $ 135,099
================ ================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .................... $ 29,195 $ 42,851 $ 47,606
Other liabilities ...................... 28,417 28,520 17,515
Stockholders' equity ................... 67,823 62,049 69,978
---------------- ---------------- ----------------
Total ............................... $ 125,435 $ 133,420 $ 135,099
================ ================ ================
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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