Quarterly profit dips for Escalade
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Evansville-based Escalade Inc. is reporting second-quarter net income of $2.8 million, down from $3.6 million from the same period last year.
The sporting goods and recreation equipment manufacturer said its consumers and retail partners have adopted a more cautious stance on near-term spending for discretionary recreational goods.
The company said total net sales declined 7.7% to $62.5 million. The drop was attributed to softening consumer demand and channel inventory destocking, particularly in the indoor/outdoor games categories.
“During the second quarter, cash flow from operations increased nearly 60% versus the prior-year period, supporting a further reduction in outstanding indebtedness and improving our net leverage,” CEO Walter Glazer said in a news release. “With a strengthened balance sheet, a leading portfolio of recreational brands, and a proven track record of weathering market fluctuations, we are confident in our ability to achieve profitable growth as we approach a cyclical recovery.”
Glazer said entering the third quarter, the company has initiated additional cost rationalization programs to further reduce fixed overhead expenses.
“As part of our continued focus on our asset base, we have made good progress on the divestiture of our Mexico operations,” Glazer said. “Beyond our Mexico operations, we continue to focus on maximizing our return on assets and took further steps to rationalize our domestic footprint during the second quarter.”
“Despite the drop in sales last quarter, the company said it saw solid demand for products from its Stiga table tennis, Bear Archery, and Brunswick Billiards brands.
“Overall, our differentiated branded products continue to resonate with consumers, and we believe that our strong portfolio of brands position us to outperform the broader recreational equipment market as we move through this economic cycle,” said Glazer.
Escalade stock was down 8.27% to $13.42 per share at midday trading Thursday.
You can view the full earnings report by clicking here.