SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 25, 1995
Commission File Number 0-6966
ESCALADE, INCORPORATED
----------------------
(exact name of registrant as specified in its charter)
Indiana 13-2739290
------- ----------
(State of incorporation) (I.R.S. EIN)
817 Maxwell Avenue, Evansville, Indiana 47717
---------------------------------------------
(Address of principal executive offices)
812-467-1200
------------
Securities registered pursuant to Section 12(b) of the Act
NONE
Securities registered pursuant to section 12(g) of the Act:
Common Stock, No Par Value
--------------------------
(Title of Class)
Indicate by check mark whether the registrant (a) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
The number of shares of Registrant's common stock (no par value)
outstanding as of April 12, 1995 : 4,133,361
INDEX
Page No.
Part I. Financial Information:
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheet --
March 25, 1995, March 19, 1994, and
December 31, 1994 3
Consolidated Condensed Statement of Income --
Three Months Ended March 25, 1995 and March 19,1994 4
Consolidated Condensed Statement of Cash Flows --
Three Months Ended March 25, 1995 and March 19, 1994 5
Notes to Consolidated Condensed Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations: 7-8
Part II. Other Information 8
Signatures 8
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
<CAPTION>
(Dollars in Thousands) March 25, March 19, December 31,
1995 1994 1994
ASSETS ------------------------------------
<S> <C> <C> <C>
Current assets:
Cash $ 118 $ 259 $ 995
Receivables, less allowances of
$589, $680 and $777 10,645 11,860 31,872
Inventories 27,067 24,455 24,437
Prepaid expense 198 122 258
Income tax refundable 399 --- 399
Deferred income tax benefit 1,631 1,534 1,644
------- ------- -------
TOTAL CURRENT ASSETS 40,058 38,230 59,605
Property, plant, and equipment 37,908 34,948 37,525
Accum. depr. and amortization (24,718) (21,379) (23,815)
------- ------- -------
13,190 13,569 13,710
Deferred income tax benefit 706 195 706
Other assets 1,850 1,479 1,862
------- ------- -------
$ 55,804 $53,473 $75,883
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - bank $ 11,500 $ 4,775 $29,237
Current portion of long-term debt 2,478 2,202 1,978
Trade accounts payable 2,802 3,411 3,586
Accrued liabilities 6,428 6,352 7,967
------- ------- -------
TOTAL CURRENT LIABILITIES 23,208 16,740 42,768
Other Liabilities:
Long-term debt 8,648 11,126 9,148
Deferred compensation 1,100 1,003 1,078
------- ------- -------
9,748 12,129 10,226
Stockholders' equity:
Preferred stock:
Authorized 1,000,000 shares;
no par value, none issued
Common stock:
Authorized 10,000,000 shares;
no par value,Issued
and outstanding - 4,133,361,
4,130,010, and 4,133,361 at 3-25-95,
3-19-94, and 12-31-94
$17,571 17,582 17,571
Retained earnings 5,277 7,022 5,318
------- ------- -------
$22,848 24,604 22,889
------- ------- -------
$55,804 $53,473 $75,883
======= ======= =======
<FN>
See notes to Consolidated Condensed Financial Statements.
</TABLE>
<TABLE>
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF INCOME (UNAUDITED)
(Dollars in Thousands, except per share amounts)
<CAPTION>
Three Months Ended
-------------------------------
March 25, 1995 March 19, 1994
-------------- --------------
<S> <C> <C>
Net sales $18,110 $14,200
Costs, expenses and other income:
Cost of products sold 14,117 11,588
Selling, administrative and
general expenses 3,521 3,444
Interest 571 285
Other income (53) (37)
------- -------
18,156 15,280
INCOME (LOSS) BEFORE INCOME TAXES (46) (1,080)
Provision (benefit) for income taxes (5) (403)
------- -------
NET INCOME (LOSS) (41) (677)
======= =======
Per share data:
NET INCOME (LOSS) $ (.01) $ (.16)
======= =======
<FN>
See notes to Consolidated Condensed Financial Statements.
</TABLE>
<TABLE>
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
<CAPTION>
Three Months Ended
March 25, 1995 March 19, 1994
Operating Activities: -------------------------------
<S> <C> <C>
Net Income (Loss) $ (41) $ (677)
Depreciation and amortization 903 1,148
Deferred income taxes 0 ---
Adjustments necessary to reconcile
netincome to net cash provided by
operating activities 16,381 9,773
------- -------
Net cash provided by operating
activities 17,243 10,244
------- -------
Investing Activities:
Purchase of property and equipment (383) (485)
------- -------
Net cash used by investing activities (383) (485)
------- -------
Financing Activities:
Net inc.(dec.) in notes pay.- bank (17,737) (9,663)
Reduction of long-term debt --- (437)
Proceeds from exercise of stock options --- 119
Payments on fractional shares --- (2)
------- -------
Net cash used by financing activities (17,737) (9,983)
------- -------
Decrease in cash (877) (224)
Cash, beginning of period 995 483
------- -------
Cash, end of period $ 118 $ 259
======= =======
<FN>
See notes to Consolidated Condensed Financial Statements.
</TABLE>
ESCALADE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note A - Basis of Presentation
- ------------------------------
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position
of the company as of March 25, 1995, March 19, 1994, and December 31, 1994 and
the results of operations and changes in financial position for the three
months ended March 25, 1995 and March 19, 1994. The balance sheet at December
31, 1994 was derived from the audited balance sheet included in the 1994
annual report to shareholders.
Note B - Seasonal Aspects
- -------------------------
The results of operations for the three month periods ended March 25,
1995 and March 19, 1994 are not necessarily indicative of the results to be
expected for the full year.
Note C - Inventories (Dollars in Thousands)
- -------------------------------------------
3-25-95 3-19-94 12-31-94
------- ------- --------
Raw Materials $10,472 $ 7,880 $ 7,597
Work In Process 3,619 3,283 3,723
Finished Goods 12,976 13,292 13,117
------- ------- -------
$27,067 $24,455 $24,437
======= ======= =======
Note D - Earnings Per Share
- ---------------------------
Earnings (loss) per common and common equivalent shares are based on
average shares outstanding. Dilutive effects of stock options on net income
(loss) are not material. The number of shares used to calculate earnings
(loss) per share for the three months ended March 25, 1995 and March 19, 1994
was 4,133,361 and 4,120,290.
Note E - Income Taxes
- ---------------------
The provision (benefit) for income taxes was computed based on financial
statement income (loss).
ESCALADE, INCORPORATED AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is Management's discussion and analysis of certain
significant factors which have affected the Company's earnings during the
periods included in the accompanying consolidated condensed statements of
income.
RESULTS OF OPERATIONS
FIRST QUARTER COMPARISON 1995 vs. 1994
Net sales were $ 18,110,000 in the first quarter of 1995 as compared to
$14,200,000 in the first quarter of 1994 an increase of $3,910,000 or 27.5%.
Sales of sporting goods increased $3,788,000 or 36.1% and sales of office and
graphic arts products increased $123,000 or 3.3%.
The increase in sporting goods sales was mainly due to increased volume
in the table tennis and dartboard cabinet product lines. The increase in
office and graphic arts machines and equipment sales is attributable to some
increase in volume despite increased ordering during 1994's fourth quarter to
realize annual volume discounts and to beat 1995 price increases.
Cost of sales was $14,117,000 in the first quarter of 1995 as compared
to $11,588,000 in the first quarter of 1994, an increase of $2,529,000 or
21.8%.
Cost of sales as a percentage of net sales was 80.0% in the first
quarter of 1995 as compared to 81.6% in the first quarter of 1994. Sporting
goods cost of sales as a percentage of net sales decreased 6% and office and
graphic arts cost of sales as a percentage of net sales decreased 2%. These
decreases in the cost of sales percentage of net sales were due to reduced
factory expenses.
Selling, general, and administrative expenses were $3,521,000 in the
first quarter of 1995 as compared to $3,444,000 in the first quarter of 1994,
an increase of $77,000 or 2.2%.
Selling, general and administrative expenses as a percentage of net
sales was 19.4% in the first quarter of 1995 as compared to 24.2% in the first
quarter of 1994. This decrease as a percentage of net sales was mainly due to
increased sales volume.
Interest expense increased $286,000 to $571,000 in 1995 from $285,000 in
1994, an increase of 100.3% due to increased borrowing levels and increased
interest rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash provided by operating activities was $17,243,000
in the first quarter of 1995 as compared to $10,244,000 in the first quarter
of 1994. Most of the cash provided by operating activities was from collection
of the year end accounts receivable during the first quarter. The net accounts
receivable balance at the end of the year was $31,872,000 and at the end of
the first quarter the net accounts receivable balance was $10,645,000. The
Company's net cash used for investing activities was $383,000 in the first
quarter of 1995 as compared to $485,000 in the first quarter of 1994. This
decrease of $102,000 was in the purchase of property and equipment. The
Company's net cash used by financing activities was $17,737,000 in the first
quarter of 1995 as compared to $9,983,000 in the first quarter of 1994. Most
of the cash used by financing activities was for the pay down of notes payable
- - bank. At the end of the year, the notes payable - bank was $29,237,000 and
at the end of the first quarter notes payable - bank was $11,500,000.
The Company's working capital requirements are currently funded by cash
flow from operations, a domestic line of credit in the amount of $28,000,000,
and a letter of credit facility in the amount of $4,000,000. The outstanding
loans under the domestic line of credit bear interest at either of the
following rates, as selected by the Company from time to time; the bank's
prime lending rate plus .50% or the London Inter-Bank Offered Rate plus 2.00%.
The Company's domestic line of credit agreement expires on May 31, 1995.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
three months ended March 25, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ESCALADE, INCORPORATED
Date:April 14, 1995 Robert E. Griffin
-------------- ----------------------------
Robert E. Griffin
Chairman and Chief
Executive Officer
Date:April 14, 1995 John R. Wilson
-------------- ----------------------------
John R. Wilson
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000033488
<NAME> ESCALADE, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-25-1995
<CASH> 118
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0
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</TABLE>
