Contact Information: Contacts: Terry Frandsen Vice President and CFO 812/467-1334 Daniel Messmer President and CEO 812/467-4449
Escalade to Restate Financial Results to Increase Fiscal Year 2005 and Fiscal Year 2004 Net Income
| Source: Escalade, Inc.
EVANSVILLE, IN -- (MARKET WIRE) -- February 20, 2007 -- Escalade, Inc. (NASDAQ : ESCA ), announced
that it will restate previously issued financial statements for the fiscal
years ended December 31, 2005 and December 25, 2004. These restatements
will correct errors discovered by the Company while preparing its financial
statements for the year ended December 30, 2006. These restatements result
primarily from a correction relating to the overstatement of the provision
for income taxes. These restatements also include a correction relating to
the overstatement of employee benefit costs. The Company will also restate
the quarterly financial statements issued in fiscal 2006. Pending further
analysis, the Company expects to complete these restatements of its
financial statements before it files its 2006 Form 10-K on or before March
15, 2007.
Based on the analysis to date, the Company believes these restatements will
increase previously reported net income for the fiscal year ended December
31, 2005 by approximately $0.9 million or $0.08 per share and will increase
net income for the fiscal year ended December 25, 2004 by approximately
$0.3 million or $0.03 per share.
The Company believes the changes resulting from these restatements will
have no effect on previously reported revenue or net cash flows. Further,
these restatements are not expected to have an impact on segment profits as
previously reported by the Company or on compliance with any debt covenants
with the Company's lenders.
Consistent with the Company's prior expectations, revenues for fiscal 2006
will be higher than that achieved in fiscal 2005, but profitability will be
lower.
Escalade is a quality manufacturer and marketer of sporting goods and
office/graphic arts products sold worldwide. To obtain more information on
the Company and its products, visit our website at: www.EscaladeInc.com or
contact Terry Frandsen Vice President and CFO at 812/467-1334 or Daniel
Messmer, President and CEO at 812/467-4449.
This news release contains forward-looking statements. Words such as
"expects," "believes," "will," "may," and "should" identify forward-looking
statements. Forward-looking statements include, but are not limited to,
Escalade's expectations regarding the need to amend and restate it
financial statements, the reasons for the restatements, the periods
affected, the impact of the restated financial statements on the Company's
results and its expectations regarding the filing of the amended and
restated financial statements. Forward-looking statements are subject to
risks and uncertainties including, but not limited to, the final outcome of
the Company's accounting review and actions that may be taken or required
as a result of the expected restatements and the conclusions reached by the
Company's management, Audit Committee, Board of Directors or its
independent registered public accounting firm based on the results of the
review; the impact of competitive products and pricing; product demand and
market acceptance; Escalade's ability to successfully integrate the
operations of acquired assets and businesses; new product development; the
continuation and development of key customer and supplier relationships;
Escalade's ability to control costs; general economic conditions;
fluctuations in operating results; changes in the securities markets and
other risks detailed from time to time in Escalade's filings with the
Securities and Exchange Commission. Escalade's future financial performance
could differ materially from the expectations of management contained
herein. Escalade undertakes no obligation to update these forward-looking
statements after the date of this news release.