Q2 2024 Escalade Inc Earnings Call Transcript
Key Points
- Escalade Inc (ESCA) demonstrated strong operational discipline by reducing fixed overhead costs and improving manufacturing efficiency.
- Cash flow from operations increased nearly 60% year-over-year in Q2, allowing the company to repay $8.6 million of high-interest variable-rate debt.
- Net leverage was reduced to 1.7 times trailing 12 months EBITDA, nearing the low end of their long-term target range.
- Continued consumer demand for leading brands such as Steve table tennis, archery, and Brunswick billiards.
- Owned DTC e-commerce volumes increased by 28% year-over-year during the quarter, reflecting strong consumer loyalty to their brands.
- Net sales declined by 7.7% compared to the prior year, indicating a softer consumer spending environment.
- Gross margin declined modestly to 24.2% from 24.6% in the prior year period, impacted by higher promotional activity and nonrecurring manufacturing rationalization costs.
- Selling, general, and administrative expenses increased by 30% year-over-year, driven by additional selling and marketing spending.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by $1.8 million to $5.8 million compared to the prior year period.
- The company anticipates seasonally softer cash generation in the third quarter, followed by stronger cash flow in the fourth quarter amid holiday demand.
Good morning and welcome to the Escalade Second Quarter 2024 Results Conference Call. All participants will be moved from only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question. You must have started when you're telephone keypad to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Patrick Griffin, VP, Corporate Development and Investor Relations Please go ahead.
Thank you, operator. On behalf of the entire team at Escalades, I'd like to welcome you to our second quarter 2024 Results Conference Call. Leaving the call with me today are President and CEO, Walt Glazer, and Stephen Warren, our Chief Financial Officer.
Dave discussion contains forward-looking statements about future business and financial expectations. Actual results
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