Escalade Inc 10-Q for FY2020 Q3

Escalade Inc (ESCA)

10-Q 2020-10-29 For: 2020-10-03

Added on April 08, 2026

About this 10-Q

Escalade Inc filed this 10-Q on October 29, 2020, covering the quarter ended October 3, 2020 (FY2020 Q3).

Headline figures

Quarter ended October 3, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $78.07M; up 70.6% from $45.76M a year earlier
Net income: $10.19M; up 301.0% from net income of $2.54M a year earlier
Diluted EPS: $0.71; up 294.4% from $0.18 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Indiana	13-2739290
(State of incorporation)	(I.R.S. EIN)

817 Maxwell Ave, Evansville, Indiana	47711
(Address of principal executive office)	(Zip Code)


Title of each class	Trading Symbol	Name of Exchange on which registered
Common Stock, No Par Value	ESCA	The NASDAQ Stock Market LLC

Large accelerated filer ☐		Accelerated filer ☒
Non-accelerated filer ☐		Smaller reporting company ⌧
		Emerging growth company ☐

Class		Outstanding at October 26, 2020
Common, no par value		14,169,404

		Page No.

Part I.	Financial Information:

Item 1 -	Financial Statements:

	Consolidated Condensed Balance Sheets as of October 3, 2020, December 28, 2019, and October 5, 2019	3

	Consolidated Condensed Statements of Operations for the Three Months and Nine Months Ended October 3, 2020 and October 5, 2019	4

	Consolidated Condensed Statements of Stockholders’ Equity for the Three Months and Nine Months Ended October 3, 2020 and October 5, 2019	5

	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended October 3, 2020 and October 5, 2019	6

	Notes to Consolidated Condensed Financial Statements	7

Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4 -	Controls and Procedures	15

Part II.	Other Information

Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 6 -	Exhibits	18

	Signature	19


	October 3,		December 28,		October 5,
All Amounts in Thousands Except Share Information	2020		2019		2019
	(Unaudited)		(Audited)		(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	6,811	$	5,882	$	5,226
Receivables, less allowance of $798; $483; and $519; respectively		63,750		35,450		35,592
Inventories		63,738		42,269		48,424
Prepaid expenses		2,580		3,151		2,696
Prepaid income tax		—		163		1,613
TOTAL CURRENT ASSETS		136,879		86,915		93,551

Property, plant and equipment, net		16,029		15,111		15,207
Operating lease right-of-use assets		1,271		1,080		1,242
Intangible assets, net		17,739		18,847		19,181
Goodwill		26,749		26,749		26,749
Other assets		49		77		86
TOTAL ASSETS	$	198,716	$	148,779	$	156,016

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Note payable	$	—	$	135	$	135
Trade accounts payable		32,102		7,765		9,947
Accrued liabilities		18,702		9,689		8,819
Income tax payable		1,675		—		—
Current operating lease liabilities		693		621		689
TOTAL CURRENT LIABILITIES		53,172		18,210		19,590

Other Liabilities:
Long-term debt		—		—		5,221
Deferred income tax liability		3,537		3,537		3,409
Operating lease liabilities		591		475		575
Other liabilities		387		387		1,094
TOTAL LIABILITIES		57,687		22,609		29,889

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 – 14,169,404; 14,214,777; and 14,291,347; shares respectively		14,169		14,215		14,291
Retained earnings		126,860		111,955		111,836
TOTAL STOCKHOLDERS’ EQUITY		141,029		126,170		126,127
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	198,716	$	148,779	$	156,016


	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands Except Per Share Data	2020		2019		2020		2019
Net sales	$	78,069	$	45,756	$	198,882	$	133,497

Costs and Expenses
Cost of products sold		54,548		35,717		141,911		102,022
Selling, administrative and general expenses		10,374		6,793		29,752		24,576
Amortization		332		347		1,108		1,135

Operating Income		12,815		2,899		26,111		5,764

Other Income (Expense)
Interest expense		(44)		(96)		(148)		(295)
Other income		40		3		108		12

Income Before Income Taxes		12,811		2,806		26,071		5,481

Provision for Income Taxes		2,625		266		5,224		798

Net Income	$	10,186	$	2,540	$	20,847	$	4,683

Earnings Per Share Data:
Basic earnings per share	$	0.72	$	0.18	$	1.48	$	0.32
Diluted earnings per share	$	0.71	$	0.18	$	1.47	$	0.32

Dividends declared	$	0.140	$	0.125	$	0.390	$	0.375


	Common Stock			Retained
All Amounts in Thousands	Shares	Amount		Earnings		Total

Balances at July 13, 2019	14,468	$	14,468	$	112,775	$	127,243

Net income					2,540		2,540
Expense of stock options and restricted stock units					68		68
Dividends declared					(1,805)		(1,805)
Purchase of stock	(177)		(177)		(1,742)		(1,919)

Balances at October 5, 2019	14,291	$	14,291	$	111,836	$	126,127

Balances at December 29, 2018	14,439	$	14,439	$	113,882	$	128,321

Net income					4,683		4,683
Expense of stock options and restricted stock units					409		409
Exercise of stock options	10		10		108		118
Settlement of restricted stock units	25		25		(25)		—
Dividends declared					(5,423)		(5,423)
Purchase of stock	(192)		(192)		(1,891)		(2,083)
Stock issued to directors as compensation	9		9		93		102
Balances at October 5, 2019	14,291	$	14,291	$	111,836	$	126,127


			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 5, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,226	$	5,226	$	—	$	—

Financial liabilities
Long-term debt	$	5,221	$	—	$	5,221	$	—


	For the Three Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total

Revenues from external customers	$	78,069	$	—	$	78,069
Operating income (loss)		13,177		(362)		12,815
Net income		9,554		632		10,186


	As of and for the Nine Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total

Revenues from external customers	$	198,882	$	—	$	198,882
Operating income (loss)		27,640		(1,529)		26,111
Net income		20,017		830		20,847
Total assets	$	190,309	$	8,407	$	198,716


	For the Three Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total

Revenues from external customers	$	45,756	$	—	$	45,756
Operating income (loss)		3,223		(324)		2,899
Net income		2,269		271		2,540


All Amounts in Thousands

Year 1	$	738
Year 2		330
Year 3		211
Year 4		53
Year 5		27
Thereafter		1
Total future minimum lease payments		1,360
Less imputed interest		(76)
Total	$	1,284

Reported as of October 3, 2020
Current operating lease liabilities		693
Long-term operating lease liabilities		591
Total	$	1,284


	Three Months Ended				Nine Months Ended
	October 3, 2020		October 5, 2019		October 3, 2020		October 5, 2019
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of products sold	69.9	%	78.1	%	71.4	%	76.4	%
Gross margin	30.1	%	21.9	%	28.6	%	23.6	%
Selling, administrative and general expenses	13.3	%	14.8	%	15.0	%	18.4	%
Amortization	0.4	%	0.8	%	0.5	%	0.9	%
Operating income	16.4	%	6.3	%	13.1	%	4.3	%


	Nine Months Ended
	October 3,		October 5,
All Amounts in Thousands	2020		2019

Operating Activities:
Net income	$	20,847	$	4,683
Depreciation and amortization		3,252		3,266
Provision for doubtful accounts		394		277
Loss (gain) on disposal of property and equipment		(2)		6
Stock-based compensation		756		409
Adjustments necessary to reconcile net income to net cash provided by operating activities		(14,378)		(1,453)
Net cash provided by operating activities		10,869		7,188

Investing Activities:
Purchase of property and equipment		(3,064)		(1,849)
Acquisitions		—		(765)
Payment on note payable related to an acquisition		(135)		—
Proceeds from sale of property and equipment		3		4
Net cash used by investing activities		(3,196)		(2,610)

Financing Activities:
Proceeds from long-term debt		8,493		65,191
Payments on long-term debt		(8,493)		(59,969)
Proceeds from exercise of stock options		—		118
Deferred financing fees		—		(112)
Purchase of stock		(1,326)		(2,083)
Cash dividends paid		(5,515)		(5,423)
Director stock compensation		97		102
Net cash used by financing activities		(6,744)		(2,176)
Net increase in cash and cash equivalents		929		2,402
Cash and cash equivalents, beginning of period		5,882		2,824
Cash and cash equivalents, end of period	$	6,811	$	5,226

Non-Cash Transactions
Note payable for deferred purchase price obligation	$	—	$	135


	October 3,		December 28,		October 5,
In thousands	2020		2019		2019

Raw materials	$	8,446	$	3,186	$	3,860
Work in progress		4,217		2,177		2,410
Finished goods		51,075		36,906		42,154
	$	63,738	$	42,269	$	48,424


	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019

Gross Sales by Channel:
Mass Merchants	$	36,234	$	20,757	$	77,418	$	51,025
Specialty Dealers		21,741		11,826		57,666		41,590
E-commerce		25,172		15,712		78,242		50,452
International		2,637		1,880		6,129		5,228
Other		598		637		1,669		2,079
Total Gross Sales		86,382		50,812		221,124		150,374

Less: Gross-to-Net Sales Adjustments
Returns		2,117		1,473		5,538		4,353
Warranties		376		360		1,152		1,092
Customer Allowances		5,820		3,223		15,552		11,432
Total Gross-to-Net Sales Adjustments		8,313		5,056		22,242		16,877
Total Net Sales	$	78,069	$	45,756	$	198,882	$	133,497


	Nine Months Ended
	October 3,		October 5,
All Amounts in Thousands	2020		2019
Weighted Average Remaining Lease Term – Operating Leases	2.40	years	2.03	years
Weighted Average Discount Rate – Operating Leases	5.00	%	5.00	%


				(c) Total Number	(d) Maximum Number
	(a) Total			of Shares (or Units)	(or Approximate Dollar
	Number of	(b) Average		Purchased as Part	Value) of Shares (or
	Shares (or	Price Paid		of Publicly	Units) that May Yet Be
	Units)	per Share		Announced Plans	Purchased Under the
Period	Purchased	(or Unit)		or Programs	Plans or Programs
Share purchases prior to 7/11/2020 under the current repurchase program.	1,397,490	$	9.28	1,397,490	$	10,000,330
Third quarter purchases:
7/12/2020–8/8/2020	None		None	No Change		No Change
8/9/2020-9/5/2020	None		None	No Change		No Change
9/6/2020-10/3/2020	None		None	No Change		No Change
Total share purchases under the current program	1,397,490	$	9.28	1,397,490	$	10,000,330


Number		Description
3.1		Articles of Incorporation of Escalade, Incorporated. Incorporated by reference from the Company’s 2007 First Quarter Report on Form 10-Q.

3.2		Amended By-laws of Escalade, Incorporated, as amended April 22, 2014. Incorporated by reference from the Company’s 2014 First Quarter Report on Form 10-Q.

31.1		Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certification.

31.2		Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certification.

32.1		Chief Executive Officer Section 1350 Certification.

32.2		Chief Financial Officer Section 1350 Certification.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

	ESCALADE, INCORPORATED


Date: October 29, 2020	/s/ Stephen R. Wawrin
	Vice President and Chief Financial Officer
	(On behalf of the registrant and in his capacities as Principal Financial Officer and Principal Accounting Officer)


Date: October 29, 2020	/s/ Scott J. Sincerbeaux
	Chief Executive Officer


/s/ Scott J. Sincerbeaux
Chief Executive Officer
October 29, 2020


/s/ Stephen R. Wawrin
Vice President and Chief Financial Officer
(On behalf of the registrant and in his
capacities as Principal Financial Officer
and Principal Accounting Officer)
October 29, 2020