ESCALADE INC (ESCA)
SIC breadcrumb: Manufacturing > SIC Major Group 39 > SIC 3949 Sporting & Athletic Goods, NEC
SEC company page: https://www.sec.gov/edgar/browse/?CIK=33488. Latest filing source: 0001437749-26-006094.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 240,158,000 | USD | 2025 | 2026-02-27 |
| Net income | 13,701,000 | USD | 2025 | 2026-02-27 |
| Assets | 222,109,000 | USD | 2025 | 2026-02-27 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000033488.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 189,958,000 | 195,779,000 | 175,780,000 | 180,541,000 | 273,649,000 | 313,612,000 | 313,757,000 | 263,566,000 | 251,510,000 | 240,158,000 |
| Net income | 11,493,000 | 14,061,000 | 20,442,000 | 7,258,000 | 25,934,000 | 24,405,000 | 17,989,000 | 9,829,000 | 12,986,000 | 13,701,000 |
| Operating income | 14,583,000 | 14,600,000 | 13,817,000 | 9,275,000 | 33,032,000 | 31,896,000 | 26,315,000 | 17,811,000 | 20,004,000 | 18,727,000 |
| Diluted EPS | 0.80 | 0.98 | 1.41 | 0.50 | 1.82 | 1.76 | 1.31 | 0.71 | 0.93 | 0.99 |
| Operating cash flow | 12,169,000 | 13,363,000 | 6,506,000 | 16,038,000 | 2,633,000 | 1,074,000 | 8,575,000 | 48,328,000 | 36,049,000 | 31,014,000 |
| Capital expenditures | 2,653,000 | 2,745,000 | 2,818,000 | 2,185,000 | 5,455,000 | 9,696,000 | 2,111,000 | 2,085,000 | 2,038,000 | 2,512,000 |
| Dividends paid | 6,282,000 | 6,607,000 | 7,215,000 | 7,204,000 | 7,466,000 | 7,693,000 | 8,154,000 | 6,180,000 | 8,306,000 | 8,277,000 |
| Share buybacks | 0.00 | 0.00 | 10,000 | 2,938,000 | 6,739,000 | 10,434,000 | 0.00 | 0.00 | 2,194,000 | 3,098,000 |
| Assets | 150,761,000 | 156,105,000 | 149,527,000 | 148,779,000 | 220,705,000 | 251,798,000 | 298,718,000 | 253,005,000 | 226,330,000 | 222,109,000 |
| Liabilities | 49,048,000 | 44,435,000 | 21,206,000 | 22,609,000 | 81,549,000 | 105,183,000 | 140,243,000 | 88,426,000 | 57,333,000 | 48,893,000 |
| Stockholders' equity | 101,713,000 | 111,670,000 | 128,321,000 | 126,170,000 | 139,156,000 | 146,615,000 | 158,475,000 | 164,579,000 | 168,997,000 | 173,216,000 |
| Free cash flow | 9,516,000 | 10,618,000 | 3,688,000 | 13,853,000 | -2,822,000 | -8,622,000 | 6,464,000 | 46,243,000 | 34,011,000 | 28,502,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 6.05% | 7.18% | 11.63% | 4.02% | 9.48% | 7.78% | 5.73% | 3.73% | 5.16% | 5.70% |
| Operating margin | 7.68% | 7.46% | 7.86% | 5.14% | 12.07% | 10.17% | 8.39% | 6.76% | 7.95% | 7.80% |
| Return on equity | 11.30% | 12.59% | 15.93% | 5.75% | 18.64% | 16.65% | 11.35% | 5.97% | 7.68% | 7.91% |
| Return on assets | 7.62% | 9.01% | 13.67% | 4.88% | 11.75% | 9.69% | 6.02% | 3.88% | 5.74% | 6.17% |
| Liabilities / equity | 0.48 | 0.40 | 0.17 | 0.18 | 0.59 | 0.72 | 0.88 | 0.54 | 0.34 | 0.28 |
| Current ratio | 4.11 | 4.11 | 5.26 | 4.77 | 3.16 | 3.55 | 4.83 | 4.41 | 3.88 | 4.28 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000033488.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2012-Q2 | 2012-07-14 | 0.08 | reported discrete quarter | ||
| 2012-Q3 | 2012-10-06 | -0.85 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | -0.07 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 67,771,000 | 3,642,000 | 0.26 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 73,358,000 | 4,275,000 | 0.31 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 65,506,000 | 2,864,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 57,304,000 | 1,775,000 | 0.13 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 62,526,000 | 2,844,000 | 0.20 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 67,738,000 | 5,667,000 | 0.40 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 63,942,000 | 2,700,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 55,479,000 | 2,619,000 | 0.19 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 54,333,000 | 1,825,000 | 0.13 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 67,786,000 | 5,554,000 | 0.40 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 62,560,000 | 3,703,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 55,785,000 | 4,381,000 | 0.32 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001437749-26-013975.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 3b-6 promulgated thereunder. All statements, other than statements of historical fact, are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. These risks include, but are not limited to: Escalade’s ability to achieve its business objectives; Escalade’s plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs, a potential trade war with China and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; our international operations, including any related to political uncertainty and geopolitical tensions; Escalade’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade’s ability to protect its intellectual property; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, terrorist attacks, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; the evaluation and implementation of remediation efforts designed and implemented to enhance the Company’s control environment; the potential identification of one or more additional material weaknesses in the Company’s internal control of which the Company is not currently aware or that have not yet been detected; Escalade’s ability to control costs, including managing inventory levels; general economic conditions, including inflationary pressures; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company’s inclusion or exclusion from certain market indices; Escalade’s ability to obtain financing, to maintain compliance with the terms of such financing and to manage debt levels; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; risks related to data security of privacy breaches; the potential impact of regulatory claims, proceedings or investigations involving our products; Escalade’s use of estimates in its financial reporting as well as in its forward looking statements; 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 release revisions to these forward-looking statements after the date of this report. Overview Escalade, Incorporated (Escalade, the Company, we, us or our) is focused on growing its Sporting Goods business through organic growth of existing categories, strategic acquisitions, and new product development. The Sporting Goods business competes in a variety of categories including basketball goals, archery, billiards, indoor and outdoor game recreation and fitness products. Strong brands and on-going investment in product development provide a solid foundation for building customer loyalty and continued growth. Within the sporting goods industry, the Company has successfully built a robust market presence in several niche markets. This strategy is heavily dependent on expanding our customer base, barriers to entry, strong brands, excellent customer service and a commitment to innovation. A key strategic advantage is the Company’s established relationships with major customers that allow the Company to bring new products to market in a cost effective manner while maintaining a diversified portfolio of products to meet the demands of consumers. In addition to strategic customer relations, the Company has substantial manufacturing and import experience that enable it to be a low cost supplier. 13 To enhance growth opportunities, the Company has focused on promoting new product innovation and development and brand marketing. In addition, the Company has embarked on a strategy of acquiring companies or product lines that complement or expand the Company's existing product lines or provide expansion into new or emerging categories in sporting goods. A key objective is the acquisition of product lines with barriers to entry that the Company can take to market through its established distribution channels or through new market channels. Significant synergies are achieved through assimilation of acquired product lines into the existing Company structure. Management believes that key indicators in measuring the success of these strategies are revenue growth, earnings growth, new product introductions, and the expansion of channels of distribution. The United States Government has made a series of announcements concerning tariffs enacted and/or proposed to be enacted on the importation of goods into the United States including a baseline tariff rate and individualized higher rates on many countries including countries that supply goods to the Company, including China from which the Company imports a substantial amount of goods. Although the United States Supreme Court ruled that many of these tariffs were invalid, the availability of any refunds of such tariffs remains uncertain and the Government has initiated new tariffs and may impose other tariffs as well. Additionally, hostilities in the Middle East have adversely affected shipping routes and oil prices and may have effects on the economy in general. Tariffs, restrictions on trade, rising energy costs and disrupted shipping routes could result in increased costs and/or the unavailability of goods purchased by the Company, which in turn may result in lower profitability and/or a decline in sales as well as the loss of goodwill among customers. General economic conditions, inflation, recessionary fears, rising energy costs, rising interest rates, changes in the housing market and declining consumer confidence also may impact the Company adversely. Management cannot predict the full impact of these factors on the Company. Due to the above circumstances and as described generally in this Form 10-Q, the Company’s results of operations for the period ended March 31, 2026 are not necessarily indicative of the results to be expected for fiscal year 2026. Results of Operations The following schedule sets forth certain consolidated statement of operations data as a percentage of net revenue: Three Months Ended March 31, 2026 March 31, 2025 Net revenue 100.0 % 100.0 % Cost of products sold 69.3 % 73.3 % Gross margin 30.7 % 26.7 % Selling, administrative and general expenses 19.2 % 19.1 % Amortization 1.0 % 1.0 % Operating income 10.5 % 6.6 % Revenue and Gross Margin Sales increased 0.6% for the first quarter of 2026, compared with the same period in the prior year. Sales increased primarily due to increases in our archery categories due to the recent Gold Tip acquisition and increased demand in our billiards and safety categories. These increases were partially offset due to a decline in our outdoor and indoor game categories. Gross margin increased to 30.7% for the first quarter of 2026 compared to 26.7% for the same period in 2025 primarily driven by lower fixed costs and favorable sales mix. Selling, General and Administrative Expenses Selling, general and administrative expenses (SG&A) were $10.7 million for the first quarter of 2026 compared to $10.6 million for the same period in the prior year, an increase of $0.1 million or 1.5%. SG&A as a percent of sales is 19.2% for the first quarter of 2026 compared with 19.1% for the same period in the prior year. Provision (Benefit) for Income Taxes The effective tax rate for the first three months of 2026 was 23.6% compared to 23.8% for the same period in the prior year. 14 Financial Condition and Liquidity Total debt at the end of the first three months of 2026 was $16.7 million, a decrease of $1.8 million from December 31, 2025. The following schedule summarizes the Company’s total debt: In thousands March 31, 2026 December 31, 2025 March 31, 2025 Current portion of long-term debt $ 16,667 $ 7,143 $ 7,143 Long term debt - 11,309 16,667 Total Debt $ 16,667 $ 18,452 $ 23,810 As a percentage of stockholders’ equity, total debt was 9.5%, 10.7% and 14.1% at March 31, 2026, December 31, 2025, and March 31, 2025 respectively. On October 11, 2024, the Company entered into the Fifth Amendment (the “Fifth Amendment”) to its Amended and Restated Credit Agreement with its issuing bank, JPMorgan Chase Bank, N.A. and the other lenders identified therein (the “Restated Credit Agreement”). The Fifth Amendment eliminated the fixed charge coverage ratio covenant and related provisions. The fixed charge ratio covenant was replaced by a new minimum interest coverage ratio covenant of 3.50 to 1:00 effective September 30, 2024. Under the terms of the Fifth Amendment, the Company and the Lender also agreed to decrease the maximum availability under the senior revolving credit facility from $75.0 million to $60.0 million, but added an accordion feature that could increase the facility in an amount not to exceed $85.0 million. The Fifth Amendment further revised the restricted payments covenant to provide that if at any time the Company’s Funded Debt to EBITDA Ratio would exceed 1.75 to 1.0, then the aggregate combined total of cash dividends and Company share repurchases may not exceed $12.0 million in any trailing twelve month period. The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of March 31, 2026. As of March 31, 2026, the outstanding principal amount of the term loan was $16.7 million a [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following section should be read in conjunction with Item 1: Business; Item 1A: Risk Factors; and Item 8: Financial Statements and Supplementary Data. Forward-Looking Statements This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 3b-6 promulgated thereunder. All statements, other than statements of historical fact, are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. These risks include, but are not limited to: Escalade’s ability to achieve its business objectives; Escalade’s plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs, a potential trade war with China and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; our international operations, including any related to political uncertainty and geopolitical tensions; Escalade’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade’s ability to protect its intellectual property; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, terrorist attacks, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; the evaluation and implementation of remediation efforts designed and implemented to enhance the Company’s control environment; the potential identification of one or more additional material weaknesses in the Company’s internal control of which the Company is not currently aware or that have not yet been detected; Escalade’s ability to control costs, including managing inventory levels; general economic conditions, including inflationary pressures; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company’s inclusion or exclusion from certain market indices; Escalade’s ability to obtain financing, to maintain compliance with the terms of such financing and to manage debt levels; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; risks related to data security of privacy breaches; the potential impact of regulatory claims, proceedings or investigations involving our products; Escalade’s use of estimates in its financial reporting as well as in its forward looking statements; 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 release revisions to these forward-looking statements after the date of this report. 22 Overview Escalade, Incorporated (Escalade, the Company, we, us or our) is focused on growing its Sporting Goods segment through organic growth of existing categories, strategic acquisitions, and new product development. The Sporting Goods segment competes in a variety of categories including basketball goals, archery, indoor and outdoor recreation and fitness products. Strong brands and on-going investment in product development provide a solid foundation for building customer loyalty and continued growth. Within the sporting goods industry, the Company has successfully built a robust market presence in several niche markets. This strategy is heavily dependent on expanding our customer base, barriers to entry, strong brands, excellent customer service and a commitment to innovation. A key strategic advantage is the Company’s established relationships with major customers that allow the Company to bring new products to market in a cost-effective manner while maintaining a diversified portfolio of products to meet the demands of consumers. In addition to strategic customer relations, the Company has substantial manufacturing and import experience that enable it to be a reliable and low-cost supplier. To enhance growth opportunities, the Company has focused on promoting new product innovation and development and brand marketing. In addition, the Company has embarked on a strategy of acquiring companies or product lines that complement or expand the Company's existing product lines or provide expansion into new or emerging categories in sporting goods. A key objective is the acquisition of product lines with barriers to entry the Company can take to market through its established distribution channels or through new market channels. Significant synergies are achieved through assimilation of acquired product lines into the existing Company structure. In September 2025, Escalade acquired the assets of Gold Tip, a leading brand of products for target archery and bow and crossbow hunting from Revelyst, Inc., strengthening the Company’s market position in archery. In December 2025, Escalade acquired AllCornhole, a leading brand and supplier of cornhole bags and equipment for competitive cornhole play. Management seeks acquisitions that strengthen the Company’s leadership in various product categories or provide entry into attractive new product categories. The Company also sometimes divests or discontinues certain operations, assets, and products that do not perform to the Company's expectations or no longer fit with the Company's strategic objectives. Consistent with that philosophy, the Company completed the discontinuance of its Mexico operations, sale of its Mexican facilities, discontinuance of its Orlando, FL operations and terminated its long-term lease for the Orlando, FL facility in 2024. Management believes that key indicators in measuring the success of these strategies are revenue growth, earnings growth, new product introductions, and the expansion of channels of distribution. The following table sets forth the annual percentage change in revenues and net income over the past two years: 2025 2024 Net sales Sporting Goods (4.5 %) (4.6 %) Consolidated (4.5 %) (4.6 %) Net income Sporting Goods (1.0 %) 72.6 % Consolidated 5.5 % 32.1 % General economic conditions, inflation, recessionary fears, rising interest rates, changes in the housing market and declining consumer confidence may impact the Company adversely. Management cannot predict the full impact of these factors on the Company. Due to the above circumstances and as described generally in this Form 10-K, the Company’s results of operations for the 2025 fiscal year are not necessarily indicative of the results to be expected for fiscal year 2026. 23 Results of Operations The following schedule sets forth certain consolidated statement of operations data as a percentage of net sales: 2025 2024 Net sales 100.0 % 100.0 % Cost of products sold 73.1 % 75.3 % Gross margin 26.9 % 24.7 % Selling, administrative and general expenses 18.2 % 17.2 % Amortization 0.9 % 1.1 % Gain on sale of assets held - (1.6 %) Operating income 7.8 % 8.0 % Revenue and Gross Margin Net sales decreased 4.5% in 2025 compared to 2024. The Company recognized declines in sales across multiple categories due to softer consumer demand, partially offset by improved demand in the archery, billiards, and fitness categories. The overall gross margin increased to 26.9% in 2025 compared with 24.7% in 2024. Gross margins were favorably impacted by lower manufacturing costs due to a smaller operational footprint, when compared to the prior-year period. Selling, General and Administrative Expenses Selling, general and administrative expenses (SG&A) were $43.6 million in 2025 compared to $43.3 million in 2024, an increase of $0.3 million or 0.7%. The increase in SG&A was primarily related to CEO transition costs incurred during 2025. SG&A as a percent of sales is 18.2% in 2025 compared with 17.2% in 2024. Provision for Income Taxes The effective tax rate for 2025 and 2024 was 24.0% and 26.9%, respectively. The 2025 effective tax rate is higher than the federal statutory rate primarily due to the impact of state taxes and nondeductible expenses. The 2024 effective tax rate is higher than the federal statutory rate primarily due to state income tax expense, nondeductible expenses, and the sale of Harvard Sports, partially offset by federal income tax credits. Sporting Goods Net sales, operating income, and net income for the Sporting Goods segment for the two years ended December 31, 2025 were as follows: In Thousands 2025 2024 Net sales $ 240,158 $ 251,510 Operating income 21,346 23,088 Net income 14,970 15,128 Net sales decreased 4.5% in 2025 compared to 2024. Gross margin in 2025 was 26.9% compared to 24.7% in 2024. Operating income, as a percentage of net sales, decreased to 8.9% in 2025 compared to 9.2% in 2024. 24 Financial Condition and Liquidity The current ratio, a basic measure of liquidity (current assets divided by current liabilities), for 2025 was 4.3, compared to 3.9 in 2024. Receivable levels decreased to $46.3 million in 2025 compared with $48.8 million in 2024 as a result of lower sales. Net inventory decreased $7.5 million to $68.5 million in 2025 from $76.0 million in 2024, due to continued efforts to right size our on hand inventory. Trade accounts payable and accrued liabilities decreased $4.1 million to $22.8 million from $26.9 million in 2024. The Company’s working capital requirements are primarily funded through cash flows from operations and revolving credit agreements with its bank. During 2025, the Company’s maximum borrowings under its primary revolving credit lines and overdraft facility totaled $27.0 million compared to $58.7 million in 2024. The overall effective interest rate in 2025 was 3.7% compared to the effective rate of 5.4% in 2024. Total debt at the end of the Company’s 2025 fiscal year was $18.5 million. On January 21, 2022, the Company and its wholly owned subsidiary, Indian Industries, Inc. (“Indian”), entered into an Amended and Restated Credit Agreement (the “2022 Restated Credit Agreement”) with its issuing bank, JPMorgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lenders”). Pursuant to the October 11, 2024 amendments to the 2022 Restated Credit Agreement, the Lenders have now made available to Escalade and Indian a senior revolving credit facility with maximum availability of $60.0 million (the “Revolving Facility”), which includes a $7.5 million swingline commitment by Chase, plus an accordion feature that would allow borrowings up to $85.0 million under the Revolving Facility subject to certain terms and conditions. The maturity date of the revolving credit facility is 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 2022 Restated Credit Agreement further extended the maturity date for the Company’s existing $50.0 million term loan facility to January 21, 2027. On October 11, 2024, the Company entered into the Fifth Amendment to the 2022 Restated Credit Agreement. This amendment eliminated the fixed charge coverage ratio covenant and related provisions. The fixed charge ratio covenant was replaced by a new minimum interest coverage ratio covenant of 3.50 to 1:00 effective September 30, 2024. The amendment further revised the restricted payments covenant to provide that if at any time the Company’s Funded Debt to EBITDA Ratio would exceed 1.75 to 1.0, then the aggregate combined total of cash dividends and Company share repurchases may not exceed $12.0 million in any trailing twelve-month period. The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of December 31, 2025. As of December 31, 2025, the outstanding principal amount of the term loan was $18.5 million and total amount drawn under the Revolving Facility was zero. Cash flows from operations and revolving credit agreements were used to pay shareholder dividends and to fund stock repurchases. The Company believes cash generated from its projected 2026 operations and the commitment of borrowings from its primary lender will provide it with sufficient cash flows for its operations. The Company expects cash generated from 2026 and Q1 2027 operations will be sufficient to pay the remaining term loan balance of $11.3 million due on January 21, 2027. It is possible that if economic conditions deteriorate, this could have adverse effects on the Company’s ability to operate profitably during fiscal year 2026. To the extent that occurs, management will pursue cost reduction initiatives and consider realignment of its infrastructure in an effort to match the Company’s overhead and cost structure with the sales level dictated by current market conditions. 25 New Accounting Pronouncements Refer to Note 1 to the consolidated financial statements under the sub-heading “New Accounting Pronouncements”. Contractual Obligations The following schedule summarizes the Company’s material contractual obligations as of December 31, 2025: Amounts in thousands Total 2026 2027 2028 2029 2030 Thereafter Debt(1) $ 18,452 $ 7,143 $ 11,309 $ - $ - $ - $ - Future interest payments(1) 610 442 168 - - - - Operating leases 1,447 580 473 203 136 55 - Minimum payments under purchase, royalty and license agreements 8,883 1,957 5,621 641 664 - - Total $ 29,392 $ 10,122 $ 17,571 $ 844 $ 800 $ 55 $ - Note: (1) Assumes that the Company will not increase borrowings under its long-term credit agreements, the fixed term loan rate of 2.97% was used to calculate future interest payments. Critical Accounting Estimates The methods, estimates and judgments used in applying the Company’s accounting policies have a significant impact on the results reported in its financial statements. Some of these accounting policies require difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. The most critical accounting estimates are described below and in the Notes to the Consolidated Financial Statements. Impairment of Goodwill The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable, in accordance with guidance in Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 350, Intangibles – Goodwill and Other. A qualitative assessment is first performed to determine if the fair value of the reporting unit is "more likely than not" less than the carrying value. If so, we proceed to a quantitative assessment, in which the fair value of the reporting unit is compared to its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge to current operations is recorded to reduce the carrying value to the fair value. If a quantitative assessment of goodwill impairment testing is required, the Company establishes fair value by using an income approach or a combination of a market approach and an income approach. The market approach uses the guideline-companies method to estimate the fair value of a reporting unit based on reported sales of publicly-held entities engaged in the same or a similar business as the reporting unit. The income approach uses the discounted cash flow method to estimate the fair value of a reporting unit by calculating the present value of the expected future cash flows of the reporting unit. The discount rate is based on a weighted average cost of capital determined using publicly-available interest rate information on the valuation date and data regarding equity, size and country-specific risk premiums/decrements compiled and published by a commercial source. The Company uses assumptions about expected future operating performance in determining estimates of those cash flows, which may differ from actual cash flows. 26 The Company has one reporting unit that is identical to our operating segment, Sporting Goods. Of the total recorded goodwill of $42.3 million at December 31, 2025, the entire amount was allocated to the Escalade Sports reporting unit. The results of the quantitative impairment assessment of the Escalade Sports reporting unit indicated that the fair value of the reporting unit was greater than the carrying value as of September 1, 2025. The Company performed a qualitative assessment for the interim period from September 1, 2025 to December 31, 2025. The results of the qualitative impairment assessment indicated that it was not “more likely than not” that the fair value of the reporting unit was less than the carrying value as of December 31, 2025. Capital Expenditures As of December 31, 2025, the Company had no material commitments for capital expenditures. In 2026, the Company has budgeted capital expenditures in the range of approximately $4.2 million to $5.2 million. Actual expenditures may be higher or lower than budgeted amounts.