EXHIBIT 99.1
PRESS RELEASE
ESCALADE ANNOUNCES FIRST QUARTER RESULTS OF $0.11 PER SHARE
Wabash, IN (April 13, 2006) Escalade, Incorporated (NASDAQ: ESCA) announced that
first quarter net sales were $32,800,000, a 10% increase compared to the year
ago quarter. Net income rose 18% to $1,364,000 or $0.11 per share versus $0.09
in the year ago quarter. During the first quarter of 2006, the Company began
expensing the fair value of employee stock options; this totaled $130,000.
Net sales at Escalade Sports increased 42% to $19,883,000 driven primarily by
increased basketball system sales to sporting goods chains, and secondarily by
increased sales to specialty dealers. Although the first quarter is the seasonal
low point of the year for sporting goods sales and usually results in a loss,
Escalade Sports recorded a small profit as compared to a loss in the year ago
quarter, in spite of absorbing most of the start up costs for a new
manufacturing facility in Reynosa, Mexico. This new facility will require
additional start-up expenses in the second quarter, however most of the expense
has been incurred and expected savings in the second half will more than offset
these start-up costs. Late in the quarter, the Company completed the acquisition
of the Woodplay line of premium outdoor redwood play systems which broadens the
Company's specialty dealer offering. This acquisition contributed $700,000 net
sales in the first quarter and compliments the Company's strategy of
diversifying its distribution channels, customers, and product lines. Mr. Reed,
CEO and President of Escalade, Inc. stated "We are only partially through the
2006 fall and Christmas product placement process with our large customers, and,
early indications point to overall placement gains. This coupled with the gains
we are making with the specialty dealers; lead us to believe this should be a
good year for sporting goods with gains in both sales and income."
Although net sales at Martin Yale's office products declined 18% for the quarter
to $12,916,000, the Company is encouraged by the fact that net income increased
18% as a result of the product rationalization and restructuring programs
initiated in 2004 and continued throughout 2005. The sales decline was due
primarily to the European operations product rationalization, exchange rate
differences and greater competition in the paper shredder market. Both North
America and International increased in profitability. Dan Messmer, President of
Martin Yale, stated "With our prior emphasis on profitability through product
rationalization and restructuring successfully paying off and now nearing
completion, we have shifted our main focus to increasing sales. We are
continuing to strengthen our management team, primarily in the sales/marketing
area and have developed a new line of lower cost paper shredders that are priced
competitively and yield higher margins. This new line of paper shredders is now
being introduced worldwide and is receiving favorable customer comments. We are
continuing to take the steps necessary to achieve a sales turnaround and expect
to see sales gains in the core product lines in 2006 with improved profitability
over the prior year."
Mr. Reed further stated that "Based upon our solid and improving balance sheet,
along with optimism that cash flow will continue to be strong, the Board of
Directors voted to increase the annual dividend to $0.20 per share, an increase
of 33%. Additionally, the Directors voted to replenish our stock buyback
program, returning it to the $3,000,000 level, providing the opportunity to
acquire shares when the market appears to undervalue them. We are continuing to
look for other means to enhance shareholder value, including the ongoing 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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ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited, In Thousands Except Per Share Amounts)
3 Months Ended 12 Months Ended
------------------------------- -------------------------------
25 March 2006 19 March 2005 25 March 2006 19 March 2005
-------------- -------------- -------------- --------------
NET SALES ................................... $ 32,800 $ 29,782 $ 188,635 $ 213,808
OPERATING EXPENSES
Cost of goods sold .................... 22,048 20,859 131,210 154,732
Selling and administrative ............ 8,405 7,175 36,665 39,572
Restructuring ......................... -- -- -- 2,366
Impairment of goodwill ................ -- -- -- 1,312
-------------- -------------- -------------- --------------
OPERATING INCOME ............................ 2,347 1,748 20,760 15,826
OTHER INCOME (EXPENSE)
Interest expense ...................... (254) (286) (1,450) (1,692)
Other income (expense) ................ (65) 245 227 281
-------------- -------------- -------------- --------------
INCOME BEFORE INCOME TAXES .................. 2,028 1,707 19,537 14,415
PROVISION FOR INCOME TAXES .................. 664 553 7,385 6,032
-------------- -------------- -------------- --------------
NET INCOME .................................. $ 1,364 $ 1,154 $ 12,152 $ 8,383
============== ============== ============== ==============
PER SHARE DATA
Basic earnings per share .............. $ 0.11 $ 0.09 $ 0.93 $ 0.64
Diluted earnings per share ............ $ 0.10 $ 0.09 $ 0.92 $ 0.63
Average shares outstanding ............ 12,979 13,058 13,042 13,031
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, In Thousands)
25 March 2006 19 March 2005 31 December 2005
-------------- -------------- ----------------
ASSETS
Current assets ......................... $ 68,315 $ 77,910 $ 71,187
Property, Plant & Equipment - net ...... 21,080 15,773 20,307
Other assets ........................... 16,161 16,838 16,645
Goodwill ............................... 21,759 17,793 17,157
-------------- -------------- -----------
Total ............................... $ 127,315 $ 128,314 $ 125,296
============== ============== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .................... $ 25,983 $ 27,865 $ 30,867
Other liabilities ...................... 27,394 31,849 19,836
Stockholders' equity ................... 73,938 68,600 74,593
-------------- -------------- -----------
Total ............................... $ 127,315 $ 128,314 $ 125,296
============== ============== ===========
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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