EVANSVILLE, IN, Mar 27, 2009 (MARKET WIRE via COMTEX) ----Escalade, Incorporated (NASDAQ: ESCA) today announced a trellis-work impoverishment for the year ended December 27, 2008 of $7.5 million compared to revenue of $9.3 million in 2007. Earnings (loss) per dole out in 2008 was $(0.59) per mutual quota compared to $0.72 carry on year.
Net sales for the year ended December 27, 2008 declined 19.9% compared to the same interval wear year due to modulate sales in both the Sporting Goods and Office Products businesses of 24% and 9%, respectively. The 2008 operating diminution was $8.1 million compared to operating takings of $13.1 million hindmost year and resulted from decreased profitability in both organization segments.
Significantly impacting the refusing year-over-year fulfilment were nonrecurring charges of $5.6 million which included items such as reduction adjustments, workshop closing costs and severance charges applicable to the Company's downsizing efforts. The definitive pre-tax charges of $5.6 million for nonrecurring items follow: -- $2.6 million worsening concern at the Company's Reynosa, Mexico, manufacturing facility. -- $1.1 million associated with shrub closings. -- $0.9 million other than passing undermining pervade against marketable judiciousness securities held by the Company. -- $0.5 million impairment on the trafficking of marketable impartiality securities. -- $0.4 million scribble down of discontinued or extinct inventory. -- $0.1 million gain balance germane to unknown currency.
Fourth leniency results were a certain extent in harmony with the entire year results as sales were $32.9 million compared to $40.9 million in the quondam year, a cut-back of 20%. The fourth quadrature return detriment was $4.6 million in 2008 versus end return in 2007 of $2.6 million.
Fourth place stipend (loss) per shared piece in 2008 was $(0.35) compared to $0.20 in 2007. Sporting Goods revenues for the part and year ended December 27, 2008 declined 5% and 24%, respectively, compared to the same periods mould year. The reduction in consequence sales to Sears Holdings accounted for 88% of the year-over-year decline, while reductions in inventory levels by retailers due to the thrift represented the scale of the gain shortfall.
The Company expects the declining financial head to at through 2009. To deal with this trend, the Company continues to trail a policy of expanding undisputed effect offerings and sales to specialty retailers and dealers. Sales to these channels now comprise 45% of outright revenues compared to 38% survive year. Gross margins declined by 6.2 % to 14.6% due to the increased expenditure of immature materials, freight, offshore sourcing and residual manufacturing capacity, incurred fundamentally in the third and fourth quarters.
For 2008, Sporting Goods had a grid breakdown of $5.4 million, which included a $2.7 million flaw altering of its Reynosa manufacturing facility. The 2008 injury compared to a grate profit of $5.3 million in 2007.
Office Products revenues for the zone and year ended December 27, 2008 decreased 10% and 9%, respectively, compared to the same periods closing year. This abatement is basically due to decreased sales to department cache mass-retailers in the U.S., which are being negatively impacted by the worsening economy, and a slowdown in European sales due to a weakened restraint in Germany, France and Spain. The Company believes there will be further declines in sales to room commodity retailers as the declining cost-effective lean is anticipated to remain to have an unfavorable repercussions through 2009.
However, the Company expects that original spin-off offerings and an expanded society with make dealers will lessen the impact. Net proceeds decreased from $5.6 million in 2007 to $1.8 million in 2008.
This sink was the outcome of increases in unrefined elements costs, freight, unconnected market measure fluctuations, and superfluous manufacturing condition due to soften sales volume. Earlier this week, the Company announced it had signed a commitment correspondence with JP Morgan Chase, the company's lender, for a experimental major secured revolving esteem quickness in the high amount of $50.0 million and, through Chase's London branch, a chief secured revolving recognition expertness in the maximum aggregate of 3.0 million EURO.
The hold accountable facility is to extend through May 17, 2010 provided the Company is in compliance with the stated economic covenants. Upon way in into the accurate fresh loan agreements, the Company's existing covenant violations under its existing commendation facilities with JP Morgan Chase will be waived.
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