Form 8-K ESCALADE INC For: Oct 27
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 27, 2016
ESCALADE, INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
Indiana
(State or Other Jurisdiction of Incorporation)
| 0-6966 | 13-2739290 |
| (Commission File Number) | (IRS Employer Identification No.) |
| 817 Maxwell Avenue, Evansville, Indiana | 47711 |
| (Address of Principal Executive Offices) | (Zip Code) |
(812) 467-1251
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| 1 |
Section 2 – Financial Information
| Item 2.02 | Results of Operations and Financial Condition. |
On October 27, 2016, Escalade, Incorporated ("Escalade") issued the press release attached hereto as Exhibit 99.1 announcing its results for the third fiscal quarter ended October 1, 2016.
The information under this Item 2.02 shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Section 8 – Other Events
| Item 8.01 | Other Events. |
On October 27, 2016, the Board of Directors of Escalade announced that a quarterly dividend of eleven cents $0.11 per share would be paid to all shareholders of record on December 12, 2016 and disbursed on December 19, 2016.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit | Description |
| 99.1 | Press release dated October 27, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Escalade, Incorporated has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: October 27, 2016 | ESCALADE, INCORPORATED | ||
| By: | /s/ STEPHEN R. WAWRIN | ||
| Stephen R. Wawrin, Vice President and Chief Financial Officer | |||
| 2 |
Exhibit 99.1
Escalade Reports Third Quarter 2016 Results
- Third quarter sales of $38.8 million, up 12% from prior year
- Diluted earnings per share of $0.30, up 114% from prior year
- Company declared a quarterly dividend of $0.11 per share
EVANSVILLE, Ind., Oct. 27, 2016 /PRNewswire/ -- Escalade, Incorporated (NASDAQ: ESCA) announced that net sales for the third quarter of 2016 were $38.8 million, or 12% higher compared to net sales of $34.6 million for the same quarter in 2015. Acquisitions completed in 2015 and 2016 as well as new product offerings introduced into the market during 2016 are the primary drivers for the increase in sales. Continued softness within the archery category partially offset these increases.
Gross margin ratio for the third quarter of 2016 remained relatively flat at 27% compared to the same period in 2015.
Selling, general and administrative expenses (SG&A) were $4.6 million for the quarter compared to $6.9 million for the same period in 2015, a decrease of $2.3 million. As a percentage of sales, SG&A for the third quarter of 2016 decreased to 12% from 20% reported for the same period in 2015. SG&A was favorably impacted by the recognition of a gain of approximately $1.9 million on the sale of our Wabash, IN land and building. One-time expenses of $0.4 million unfavorably impacted SG&A during the third quarter of 2016. SG&A, excluding the gain recognized on the Wabash, IN sale and one-time expenses incurred during the quarter, decreased $0.8 million during the third quarter of 2016 compared to the same period in 2015.
Other income for the third quarter of 2016 decreased due to operating results of the Company's 50% ownership in STIGA, a Swedish entity.
Net income for the third quarter of 2016 was $4.2 million, or $0.30 diluted earnings per share compared to net income of $2.0 million or $0.14 diluted earnings per share for the same quarter in 2015.
The Company announced a quarterly dividend of $0.11 per share would be paid to all shareholders of record on December 12, 2016 and disbursed on December 19, 2016.
"Our growth strategy through acquisitions and internally developed product continues to work, as we showed revenue growth of over 12% in the quarter," stated Dave Fetherman, President and Chief Operating Officer of Escalade, Inc. "We also did a great job of managing expenses, resulting in a reduction of over $0.8 million of SG&A within the quarter. Excluding the gain recognized on the Wabash, IN sale and one-time expenses incurred during the quarter, income before taxes would have been $4.2 million for the quarter, an increase of $1.3 million, or 45% compared to prior year. We are committed to growing our operating income, despite challenging market conditions."
Escalade is a leading manufacturer and marketer of sporting goods products sold worldwide. To obtain more information on the Company and its products, visit our website at: www.EscaladeInc.com or contact Patrick Griffin, Vice President of Corporate Development & Investor Relations at 812/467-1358.
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, new product development, Escalade's ability to achieve its business objectives, especially with respect to its Sporting Goods business on which it has chosen to focus, Escalade's ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures of non-core assets and businesses, the continuation and development of key customer and supplier relationships, disruptions or delays in our supply chain, Escalade's ability to control costs, general economic conditions, fluctuation in operating results, changes in foreign currency exchange rates, changes in the securities market, Escalade's ability to obtain financing and to maintain compliance with the terms of such financing 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 release revisions to these forward-looking statements after the date of this report.
Escalade, Incorporated and Subsidiaries
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| Three Months Ended |
| Nine Months Ended | ||||
All Amounts in Thousands Except Per Share Data | October 1, 2016 |
| October 3, 2015 |
| October 1, 2016 |
| October 3, 2015 |
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Net sales | $38,793 |
| $34,584 |
| $121,824 |
| $111,798 |
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Costs and Expenses |
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Cost of products sold | 28,505 |
| 25,156 |
| 87,793 |
| 78,336 |
Selling, administrative and general expenses | 4,583 |
| 6,905 |
| 21,256 |
| 21,018 |
Amortization | 376 |
| 650 |
| 1,963 |
| 2,127 |
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Operating Income | 5,329 |
| 1,873 |
| 10,812 |
| 10,317 |
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Other Income (Expense) |
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Interest expense | (211) |
| (108) |
| (631) |
| (340) |
Equity in earnings of affiliates | 573 |
| 1,069 |
| 749 |
| 2,080 |
Other income | 35 |
| 39 |
| 168 |
| 276 |
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Income Before Income Taxes | 5,726 |
| 2,873 |
| 11,098 |
| 12,333 |
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Provision for Income Taxes | 1,483 |
| 845 |
| 3,068 |
| 3,586 |
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Net Income | $ 4,243 |
| $ 2,028 |
| $ 8,030 |
| $ 8,747 |
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Earnings Per Share Data: |
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Basic earnings per share | $ 0.30 |
| $ 0.14 |
| $ 0.56 |
| $ 0.62 |
Diluted earnings per share | $ 0.30 |
| $ 0.14 |
| $ 0.56 |
| $ 0.61 |
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Dividends declared | $ 0.11 |
| $ 0.11 |
| $ 0.33 |
| $ 0.32 |
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Consolidated Condensed Balance Sheets | |||
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All Amounts in Thousands Except Share Information | October 1, 2016 | December 26, 2015 | October 3, 2015 |
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| (Unaudited) | (Audited) | (Unaudited) |
ASSETS |
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Current Assets: |
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Cash and cash equivalents | $ 4,306 | $ 1,982 | $ 2,701 |
Receivables, less allowance of $554; $1,086; and $885; respectively | 37,034 | 38,984 | 31,407 |
Inventories | 42,936 | 25,862 | 40,337 |
Prepaid expenses | 2,492 | 2,534 | 2,134 |
Deferred income tax benefit | 1,553 | 1,543 | 949 |
Prepaid income tax | 952 | 1,910 | 1,699 |
Other current assets | 395 | -- | -- |
TOTAL CURRENT ASSETS | 89,668 | 72,815 | 79,227 |
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Property, plant and equipment, net | 13,665 | 14,363 | 13,848 |
Intangible assets, net | 21,221 | 16,868 | 17,517 |
Goodwill | 21,456 | 20,047 | 20,142 |
Investments | 19,268 | 19,644 | 18,799 |
Other assets | -- | -- | 5 |
TOTAL ASSETS | $165,278 | $143,737 | $149,538 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities: |
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Notes payable | $ 30,686 | $ 19,776 | $ 27,963 |
Current portion of long-term debt | 1,405 | 1,810 | 1,810 |
Trade accounts payable | 9,726 | 2,547 | 6,630 |
Accrued liabilities | 10,342 | 14,174 | 12,430 |
TOTAL CURRENT LIABILITIES | 52,159 | 38,307 | 48,833 |
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Other Liabilities: |
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Long-term debt | 5,313 | 1,750 | 1,750 |
Deferred income tax liability | 7,166 | 7,200 | 5,031 |
TOTAL LIABILITIES | 64,638 | 47,257
| 55,614 |
Stockholders' Equity: |
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Preferred stock: |
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Authorized 1,000,000 shares; no par value, none issued |
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Common stock: |
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Authorized 30,000,000 shares; no par value, issued and outstanding – 14,301,959; 14,179,844; and 14,125,935; shares respectively |
14,302 |
14,180 |
14,126 |
Retained earnings | 89,582 | 85,478 | 83,064 |
Accumulated other comprehensive loss | (3,244) | (3,178) | (3,266) |
TOTAL STOCKHOLDERS' EQUITY | 100,640 | 96,480 | 93,924 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $165,278 | $143,737 | $149,538 |
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