What changed in this filing

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Item 1. Financial Statements

2024-07-25 compared with 2024-04-25 · 82 added, 46 removed, 235 unchanged (35% of the section changed)

18 unchanged sentences

Accrued liabilities

Income tax payable

Current operating lease liabilities

22 unchanged sentences

Three Months Ended

Six Months Ended

All Amounts in Thousands Except Per Share Data

5 unchanged sentences

Interest expense

Income (Loss) Before Income Taxes

Provision (Benefit) for Income Taxes

Net Income (Loss)

Earnings (Loss) Per Share Data:

Basic earnings (loss) per share

Diluted earnings (loss) per share

Income Before Income Taxes

Provision for Income Taxes

Earnings Per Share Data:

Basic earnings per share

Diluted earnings per share

Dividends declared

1 unchanged sentence

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

All Amounts in Thousands

Balances at March 31, 2023

Expense of restricted stock units

Settlement of restricted stock units

Dividends declared

Issuance of common stock for service

Balances at June 30, 2023

Balances at December 31, 2022

3 unchanged sentences

Issuance of common stock for service

Balances at June 30, 2023

All Amounts in Thousands

Balances at March 31, 2024

Expense of restricted stock units

Settlement of restricted stock units

Dividends declared

Balances at June 30, 2024

Balances at December 31, 2023

2 unchanged sentences

Dividends declared

Balances at March 31, 2024

Balances at June 30, 2024

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 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

Operating Activities:

Net income (loss)

Depreciation and amortization

3 unchanged sentences

Common stock issued in lieu of bonus to officers

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

Director stock compensation

Changes in assets and liabilities

Net cash provided by operating activities

6 unchanged sentences

Payments on long-term debt

Deferred financing fees

Cash dividends paid

Net cash provided (used) by financing activities

Net increase in cash and cash equivalents

Net cash used by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

21 unchanged sentences

The revisions had no impact on total assets, total liabilities, total shareholders' equity, net income or the cash flow statement.

The impact of this revision on our consolidated balance sheet and consolidated statement of stockholders’ equity as of March 31, 2023 was as follows:

The impact of this revision on our consolidated balance sheet and consolidated statement of stockholders’ equity as of June 30, 2023 was as follows:

As Previously

2 unchanged sentences

Note B ‑ Seasonal Aspects

The results of operations for the three months ended March 31, 2024 and March 31, 2023 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and six months ended June 30, 2024 and June 30, 2023 are not necessarily indicative of the results to be expected for the full year.

Note C ‑ Inventories

7 unchanged sentences

Unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated their carrying values at March 31, 2024, December 31, 2023 and March 31, 2023.

Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated their carrying values at June 30, 2024, December 31, 2023 and June 30, 2023.

The Company believes the carrying value of borrowings under our senior secured revolving credit facility, due to variable rate interest, adequately reflects the fair value of these instruments.

The Company discloses the fair value of its term loan using Level 2 inputs, which are estimated using treasury rates for a similar instrument, as follows:

March 31, 2024

June 30, 2024

December 31, 2023

March 31, 2023

June 30, 2023

Term Loan Facility

1 unchanged sentence

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

For the three months ended March 31, 2024 and March 31, 2023, the Company recognized stock based compensation expense of $ 429 thousand and $ 459 thousand, respectively.

At March 31, 2024 and March 31, 2023, respectively, there was $ 991 thousand and $ 2,816 thousand in unrecognized stock-based compensation expense related to non-vested stock awards.

The unrecognized compensation expense of unvested restricted stock awards net yet recognized as of March 31, 2024 are expected to be recognized over the weighted average period of 1.3 years.

On April 3, 2024, the Company awarded 130,800 restricted stock units to employees.

During the six months ended June 30, 2024, the Company awarded 12,900 restricted stock units to directors and 130,800 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.

Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company.

The 2024 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 continues to serve as an employee, director or consultant of the Company on the vesting date.

For the three and six months ended June 30, 2024, the Company recognized stock based compensation expense of $ 497 thousand and $ 926 thousand, respectively compared to stock based compensation expense of $ 458 thousand and $ 917 thousand for the same periods in the prior year.

At June 30, 2024 and June 30, 2023, respectively, there was $ 2,341 thousand and $ 2,525 thousand in unrecognized stock-based compensation expense related to non-vested stock awards.

The unrecognized compensation expense of unvested restricted stock awards net yet recognized as of June 30, 2024 are expected to be recognized over the weighted average period of 1.6 years.

Note F ‑ Segment Information

As of and for the Three Months

Ended March 31, 2024

Sporting Goods

For the Three Months

Ended June 30, 2024

Revenues from external customers

1 unchanged sentence

Net income (loss)

As of and for the Three Months

Ended March 31, 2023

Sporting Goods

As of and for the Six Months

Ended June 30, 2024

Revenues from external customers

Operating income (loss)

Net income (loss)

For the Three Months

Ended June 30, 2023

Revenues from external customers

Operating income (loss)

Net income (loss)

As of and for the Six Months

Ended June 30, 2023

Revenues from external customers

Operating income (loss)

Net income (loss)

Note G – Dividend Payment

1 unchanged sentence

The total amount of the dividend was approximately $ 2.1 million and was charged against retained earnings.

On April 22, 2024, the Company paid a quarterly dividend of $ 0.15 per common share to all shareholders of record on April 15, 2024.

The total amount of the dividend was approximately $ 2.1 million and was charged against retained earnings.

On July 15, 2024, the Company paid a quarterly dividend of $ 0.15 per common share to all shareholders of record on July 8, 2024.

The total amount of the dividend was approximately $ 2.1 million and was charged against retained earnings.

Note H ‑ Earnings Per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

Weighted average common shares outstanding

2 unchanged sentences

Note I – New Accounting Standards and Changes in Accounting Principles

With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2024, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, that are of significance, or potential significance to the Company.

With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2024, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, that are of significance, or potential significance to the Company.

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

7 unchanged sentences

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods.

Sales commissions are expensed as incurred.

The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts.

These costs are recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations.

4 unchanged sentences

Due to the nature of the contracts, no significant judgment exists in relation to the identification of the customer contract, satisfaction of the performance obligations, or transaction price.

The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts.

Gross-to-net sales adjustments – We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statement of operations.

6 unchanged sentences

Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the accrued liability and sales in the current year.

The accrued liability amount attributable to warranties was $ 610 thousand as of June 30, 2024.

There were no changes to the accrual due to a change in estimate during the current period.

Customer Allowances – Customer allowances are common practice in the industries in which the Company operates.

1 unchanged sentence

The Company reviews such allowances on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available.

Contract Balances – Amounts relating to returns and customer allowances create contract liabilities, which were $ 4,662 thousand, $ 5,325 thousand and $ 5,866 thousand as of June 30, 2024, December 31, 2023, and December 31, 2022.

Disaggregation of Revenue – We generate revenue from the sale of widely recognized sporting goods brands in basketball goals, archery, indoor and outdoor game recreation and fitness products.

3 unchanged sentences

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 31, 2024

March 31, 2023

Gross Sales by Channel:

10 unchanged sentences

Our leases have remaining lease terms of 1 year to 8 years.

As of March 31, 2024, the Company has not entered into any lease arrangements classified as a finance lease.

As of June 30, 2024, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheets.

The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet.

4 unchanged sentences

When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options.

Lease terms may include options to extend or terminate the lease and recognized in the presentation of the ROU assets and operating lease liabilities when it is reasonably certain that we will exercise those options.

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

1 unchanged sentence

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 31, 2024

March 31, 2023

Lease Expense

4 unchanged sentences

Operating Lease – Operating Cash Flows

New ROU Assets – Operating Leases (non-cash)

Weighted Average Remaining Lease Term – Operating Leases (years)

New ROU Assets – 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 – Operating Leases (in years)

Weighted Average Discount Rate – Operating Leases

Future minimum lease payments under non-cancellable leases as of March 31, 2024 were as follows:

Future minimum lease payments under non-cancellable leases as of June 30, 2024 were as follows:

All Amounts in Thousands

Remainder of Year 1

Total future minimum lease payments

Less imputed interest

Reported as of March 31, 2024

Reported as of June 30, 2024

Current operating lease liabilities

26 unchanged sentences

As reflected in the Fourth Amendment to the Restated Credit Agreement effective September 1, 2023, the maximum availability of the senior revolving credit facility was reduced to $ 85.0 million following the dissolution of Escalade Insurance, Inc.

As of March 31, 2024, the outstanding principal amount of the term loan was $ 31.0 million and total amount drawn under the Revolving Facility was $ 22.5 million.

The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of June 30, 2024.

As of June 30, 2024, the outstanding principal amount of the term loan was $ 29.2 million and total amount drawn under the Revolving Facility was $ 14.0 million.

Note N – Provision for Taxes

The effective tax rate for the three months ending June 30, 2024 was 23.8 % compared to 22.3 % for the same three month period last year.

The effective tax rate for the first six months ending June 30, 2024 was 23.8 % compared to 22.6 % for the same period last year.

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