What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-04-14 · 79 added, 201 removed, 257 unchanged (52% of the section changed)

5 unchanged sentences

Cash and cash equivalents

$ 6,392  

$ 4,374  

$ 5,879  

Receivables, less allowance of $ 726 ;

67,301  

65,991  

54,475  

114,605  

92,382  

91,425  

Prepaid expenses

12,716  

Prepaid income tax

TOTAL CURRENT ASSETS

201,014  

171,055  

155,823  

Property, plant and equipment, net

28,812  

24,936  

18,962  

Operating lease right-of-use assets

Intangible assets, net

36,208  

20,778  

22,216  

38,837  

32,695  

$ 307,061  

$ 251,798  

$ 231,960  

LIABILITIES AND STOCKHOLDERS' EQUITY

1 unchanged sentence

Current portion of long-term debt

$ 7,143  

Trade accounts payable

27,378  

15,847  

22,708  

Accrued liabilities

19,875  

24,385  

12,194  

Income tax payable

1 unchanged sentence

TOTAL CURRENT LIABILITIES

56,087  

48,193  

37,668  

Other Liabilities:

Long‑term debt

92,850  

50,396  

46,907  

Deferred income tax liability

2 unchanged sentences

TOTAL LIABILITIES

155,442  

105,183  

90,060  

Stockholders' Equity:

7 unchanged sentences

shares respectively

13,585  

13,493  

13,925  

Retained earnings

138,034  

133,122  

127,975  

TOTAL STOCKHOLDERS' EQUITY

151,619  

146,615  

141,900  

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 307,061  

$ 251,798  

$ 231,960  

See notes to Consolidated Condensed Financial Statements.

2 unchanged sentences

Three Months Ended

Six Months Ended

All Amounts in Thousands Except Per Share Data

$ 72,380  

$ 59,191  

Costs and Expenses

Cost of products sold

52,261  

41,757  

Selling, administrative and general expenses

10,526  

Operating Income

1 unchanged sentence

Interest expense

( 560 )  

Income Before Income Taxes

Provision for Income Taxes

$ 6,654  

$ 5,442  

Earnings Per Share Data:

Basic earnings per share

$ 0.49  

$ 0.39  

Diluted earnings per share

$ 0.49  

$ 0.39  

Dividends declared

$ 0.15  

$ 0.14  

See notes to Consolidated Condensed Financial Statements.

3 unchanged sentences

All Amounts in Thousands

Balances at March 20, 2021

Expense of stock options and restricted stock units

Settlement of restricted stock units

Dividends declared

Purchase of stock

Stock issued to directors as compensation

Balances at July 10, 2021

Balances at December 26, 2020

13,919  

$ 13,919  

$ 125,237  

$ 139,156  

Expense of stock options and restricted stock units

1 unchanged sentence

Settlement of restricted stock units

( 45 )  

Dividends declared

( 1,950 )  

Purchase of stock

( 49 )  

( 954 )  

Stock issued to directors as compensation

Balances at July 10, 2021

All Amounts in Thousands

Balances at March 19, 2022

13,925  

$ 13,925  

$ 127,975  

$ 141,900  

Expense of restricted stock units

Settlement of restricted stock units

Dividends declared

Stock issued to directors as compensation

Balances at July 9, 2022

Balances at December 25, 2021

13,493  

$ 13,493  

$ 133,122  

$ 146,615  

Expense of restricted stock units

Settlement of restricted stock units

( 92 )  

Dividends declared

( 2,038 )  

Balances at March 19, 2022

13,585  

$ 13,585  

$ 138,034  

$ 151,619  

Stock issued to directors as compensation

Balances at July 9, 2022

See notes to Consolidated Condensed Financial Statements.

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 19, 2022

March 20, 2021

July 10, 2021

Operating Activities:

$ 6,654  

$ 5,442  

Depreciation and amortization

1 unchanged sentence

Stock-based compensation

Loss (gain) on disposal of property and equipment

Adjustments necessary to reconcile net income to net cash provided by operating activities

( 11,486 )  

Gain on disposal of property and equipment

Adjustments necessary to reconcile net income to net cash used by operating activities

Net cash used by operating activities

( 2,872 )  

Investing Activities:

Purchase of property and equipment

( 730 )  

Proceeds from sale of property and equipment

( 34,616 )  

Net cash used by investing activities

( 35,346 )  

Financing Activities:

Proceeds from issuance of long-term debt

72,830  

49,072  

Payments on long-term debt

( 30,376 )  

Proceeds from exercise of stock options

Purchase of stock

Director stock compensation

Deferred financing fees

( 180 )  

Cash dividends paid

( 2,038 )  

Net cash provided by financing activities

40,236  

14,025  

Net increase in cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents, end of period

$ 6,392  

$ 5,879  

See notes to Consolidated Condensed Financial Statements.

11 unchanged sentences

Seasonal Aspects

The results of operations for the three months ended March 19, 2022 and March 20, 2021 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and six month periods ended July 9, 2022 and July 10, 2021 are not necessarily indicative of the results to be expected for the full year.

Note C ‑

Raw materials

$ 9,395  

$ 9,142  

$ 9,749  

Work in progress

Finished goods

100,892  

79,711  

77,602  

$ 114,605  

$ 92,382  

$ 91,425  

Note D –

5 unchanged sentences

Fair values of long-term debt is estimated based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and determined through the use of a discounted cash flow model.

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at March 19, 2022, December 25, 2021 and March 20, 2021.

Fair Value Measurements Using

March 19, 2022

Quoted Prices in

1 unchanged sentence

for Identical

Assets (Level 1)

Significant Other

Observable Inputs

Assets (Level 1)

Financial assets

Cash and cash equivalents

$ 6,392  

Financial liabilities

Current portion of long-term debt

$ 7,143  

Long-term debt

$ 92,850  

Fair Value Measurements Using

3 unchanged sentences

for Identical

Assets (Level 1)

Significant Other

Observable Inputs

Assets (Level 1)

Financial assets

Cash and cash equivalents

$ 4,374  

Financial liabilities

Current portion of long-term debt

$ 7,143  

Long-term debt

$ 50,396  

Fair Value Measurements Using

March 20, 2021

July 10, 2021

Quoted Prices in

1 unchanged sentence

for Identical

Assets (Level 1)

Significant Other

Observable Inputs

Assets (Level 1)

Financial assets

Cash and cash equivalents

$ 5,879  

Financial liabilities

Current portion of long-term debt

Long-term debt

$ 46,907  

Note E –

1 unchanged sentence

The fair value of stock-based compensation is recognized in accordance with the provisions of FASB ASC 718, Stock Compensation .

During the three months ended March 19, 2022, the Company awarded 15,000 restricted stock units to directors and 196,254 restricted stock units to employees.

During the six months ended July 9, 2022 and pursuant to the 2017 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 3,886 shares of common stock.

During the six months ended July 9, 2022, the Company awarded 20,000 restricted stock units to directors and 196,254 restricted stock units to employees.

The restricted stock units awarded to directors time vest over two years (one-half one year from grant date and one-half two years from grant date) provided that the director is still a director of the Company at the vest date.

1 unchanged sentence

The 2022 restricted stock units awarded to employees time vest over three years (one-third one year from grant, one-third two years from grant and one-third three years from grant) provided that the employee is still employed by the Company on the vesting date.

For the three months ended March 19, 2022 and March 20, 2021, the Company recognized stock based compensation expense of $ 388 thousand and $ 111 thousand, respectively.

At March 19, 2022 and March 20, 2021, respectively, there was $ 3.2 million and $ 1.5 million in unrecognized stock-based compensation expense related to non-vested stock awards.

For the three and six months ended July 9, 2022, the Company recognized stock based compensation expense of $ 688 thousand and $ 1,076 thousand, respectively compared to stock based compensation expense of $ 326 thousand and $ 437 thousand for the same periods in the prior year.

At July 9, 2022 and July 10, 2021, respectively, there was $ 2.6 million and $ 1.1 million in unrecognized stock-based compensation expense related to non-vested stock awards.

Note F ‑

Segment Information

As of and for the Three Months

Ended March 19, 2022

Sporting Goods

For the Three Months

Ended July 9, 2022

Revenues from external customers

$ 72,380  

Operating income (loss)

( 512 )  

$ 300,074  

$ 6,987  

$ 307,061  

As of and for the Three Months

Ended March 20, 2021

Sporting Goods

Net income (loss)

As of and for the Six Months

Ended July 9, 2022

Revenues from external customers

$ 59,191  

Operating income (loss)

( 466 )  

Net income (loss)

$ 225,183  

$ 6,777  

$ 231,960  

For the Three Months

Ended July 10, 2021

Revenues from external customers

Operating income (loss)

As of and for the Six Months

Ended July 10, 2021

Revenues from external customers

Operating income (loss)

Note G –

Dividend Payment

On June 7, 2022, the Company paid a quarterly dividend of $ 0.15 per common share to all shareholders of record on May 31, 2021.

The total amount of the dividend was approximately $ 2.0 million and was charged against retained earnings.

On March 21, 2022, the Company paid a quarterly dividend of $ 0.15 per common share to all shareholders of record on March 14, 2022 (the amount was funded to the transfer agent by the Company on March 17, 2022).

4 unchanged sentences

Three Months Ended

Six Months Ended

Weighted average common shares outstanding

13,509  

13,880  

Dilutive effect of stock options and restricted stock units

Weighted average common shares outstanding, assuming dilution

13,647  

13,977  

Stock options that are anti-dilutive as to earnings per share and unvested restricted stock units which have a market condition for vesting that has not been achieved are ignored in the computation of dilutive earnings per share.

2 unchanged sentences

New Accounting Standards and Changes in Accounting Principles

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 19, 2022, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10 -K for the fiscal year ended December 25, 2021, that are of significance, or potential significance to the Company.

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended July 9, 2022, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021, that are of significance, or potential significance to the Company.

Note J –

27 unchanged sentences

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 19, 2022

March 20, 2021

Gross Sales by Channel:

Mass Merchants

$ 27,030  

$ 18,396  

Specialty Dealers

25,343  

22,560  

22,856  

21,226  

International

Total Gross Sales

80,083  

65,480  

Gross-to-Net Sales Adjustments

2 unchanged sentences

Total Net Sales

$ 72,380  

$ 59,191  

Note K –

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment.

Our commenced leases have remaining lease terms of 1 year to 5 years.

As of March 19, 2022, the Company has not entered into any lease arrangements classified as a finance lease.

Our leases have remaining lease terms of 1 year to 10 years.

As of July 9, 2022, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception.

8 unchanged sentences

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Components of lease expense and other information as follows:

Components of lease expense and other information is as follows:

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 19, 2022

March 20, 2021

Lease Expense

3 unchanged sentences

Total Operating Lease Cost

$ 1,021  

Operating Lease –

1 unchanged sentence

New ROU Assets –

Operating Leases (non-cash)

Operating Leases

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

Six Months Ended

All Amounts in Thousands

Weighted Average Remaining Lease Term –

2 unchanged sentences

Operating Leases

5.00 %  

Future minimum lease payments under non-cancellable leases as of March 19, 2022 were as follows:

Future minimum lease payments under non-cancellable leases as of July 9, 2022 were as follows:

All Amounts in Thousands

1 unchanged sentence

Less imputed interest

$ 1,902  

Reported as of March 19, 2022

Reported as of July 9, 2022

Current operating lease liabilities

Long-term operating lease liabilities

$ 1,902  

As of March 19, 2022, we have entered into a lease for additional warehouse and operations which has not yet commenced.

Although the location is currently under construction, we do not control the building during construction, and are thus not deemed to be the owner during construction. Amounts in the table above exclude legally binding minimum lease payments for leases signed but not yet commenced of $ 9.9 million.

Note L –

4 unchanged sentences

On January 21, 2022, the Company completed its acquisition of the assets constituting the Brunswick Billiards business of Life Fitness, LLC.

The estimated purchase price of the acquisition is $ 34.6 million, subject to final adjustment for net working capital as of the closing date.

The purchase price of the acquisition is $ 35.8 million.

The acquisition was funded by cash and the Company’s revolving credit facility.

The Company has not yet finalized the purchase price or its final evaluation of the fair value of certain items, including net working capital.

The current estimates of fair value for the more significant assets acquired and liabilities assumed were receivables ($ 1.2 million), inventory ($ 14.5 million), fixed assets, including building and land ($ 4.0 million), accounts payable ($ 4.7 million), other accrued liabilities ($ 2.6 million), goodwill ($ 6.1 million) and other intangible assets ($ 16.0 million).

The Company has not yet finalized its final evaluation of the fair value of certain items.

The current estimates of fair value for the more significant assets acquired and liabilities assumed were receivables ($1.3 million), inventory ($13.6 million), fixed assets, including building and land ($4.1 million), accounts payable ($3.2 million), other accrued liabilities ($2.5 million), goodwill and other intangible assets ($22.5 million).

Note N –

On January 21, 2022, the Company entered into an Amended and Restated Credit Agreement (“Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A.

(“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lender”).

Under the terms of the Restated Credit Agreement, Old National Bank has been added as a Lender.

The Lenders have now made available to the Company a senior revolving credit facility with increased maximum availability of $ 65.0 million (the “Revolving Facility”), up from $ 50.0 million, plus an accordion feature that would allow borrowings up to $ 90.0 million under the Revolving Facility subject to certain terms and conditions.

The maturity date of the revolving credit facility was extended to January 21, 2027.

The Company may prepay the Revolving Facility, in whole or in part, and reborrow prior to the revolving loan maturity date.

The Restated Credit Agreement further extended the maturity date for the term loan facility to January 21, 2027.

As of July 9, 2022, the outstanding principal amount of the term loan was $ 43.5 million and total amount drawn under the Revolving Facility was $ 57.7 million.

Note O –

Subsequent Events

On July 18, 2022, the Company entered into the First Amendment to the Restated Credit Agreement.

Under the terms of the First Amendment, the Lender increased the maximum availability under the senior revolving credit facility from $ 65.0 million to $ 75.0 million pursuant to the accordion feature in the Restated Credit Agreement.

The First Amendment also adjusted the funded debt to EBITDA ratio financial covenant to 3:00 to 1:00 as of the end of the Company’s third and fourth fiscal quarters of 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements