Note E - Equity Interest Investments

3 Months Ended

Mar. 24, 2012

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note E – Equity Interest Investments

The Company has a 50% interest in a joint venture, Stiga Sports AB (Stiga). The joint venture is accounted for under the equity method of accounting. Stiga, located in Sweden, is a global sporting goods company producing table tennis equipment and game products. Financial information for Stiga reflected in the table below has been translated from local currency to U.S. dollars using exchange rates in effect at the respective period-end for balance sheet amounts, and using average exchange rates for statement of operations amounts. Certain differences exist between U.S. GAAP and local GAAP in Sweden, and the impact of these differences is not reflected in the summarized information reflected in the table below. The most significant difference relates to the accounting for goodwill for Stiga which is amortized over eight years in Sweden but is not amortized for U.S. GAAP reporting purposes. The effect on Stiga’s net assets resulting from the amortization of goodwill for the periods ended March 24, 2012 and March 19, 2011 are addbacks to Stiga’s consolidated financial information of $9.7 million and $8.5 million, respectively. These net differences are comprised of cumulative goodwill adjustments of $13.5 million offset by the related cumulative tax effect of $3.8 million as of March 24, 2012 and cumulative goodwill adjustments of $11.9 million offset by the related cumulative tax effect of $3.4 million as of March 19, 2011. The statement of operations impact of these goodwill and tax adjustments and other individually insignificant U.S. GAAP adjustments for the periods ended March 24, 2012, and March 19, 2011 are to increase Stiga’s net income by approximately $0.5 million and $0.3 million, respectively. The Company’s 50% portion of net income for Stiga for the periods ended March 24, 2012 and March 19, 2011 was $188 thousand and $57 thousand, respectively, and is included in other income on the Company’s statements of operations.

In addition, Escalade has a 50% interest in two joint ventures, Escalade International, Ltd. in the United Kingdom, and Neoteric Industries Inc. in Taiwan. Escalade International Ltd. is a sporting goods wholesaler, specializing in fitness equipment. The Company’s 50% portion of net income (loss) for Escalade International for the periods ended March 24, 2012 and March 19, 2011 was ($19,534) and $53,735 respectively, and is included in other income on the Company’s statements of operations. The income and assets of Neoteric have no impact on the Company’s financial reporting. Additional information regarding these entities is considered immaterial and has not been included in the totals listed below.

Summarized financial information for Stiga Sports AB balance sheets as of March 24, 2012, December 31, 2011, and March 19, 2011 and statements of operations for the periods ended March 24, 2012 and March 19, 2011 is as follows:

In thousands	March 24, 2012		December 31, 2011		March 19, 2011
Current assets	$	19,182	$	23,451	$	16,315
Non-current assets		9,252		9,460		11,774
Total assets		28,434		32,911		28,089
Current liabilities		5,689		10,033		6,089
Non-current liabilities		5,956		6,334		9,080
Total liabilities		11,645		16,367		15,169
Net assets	$	16,789	$	16,544	$	12,920

	Three Months Ended
	March 24, 2012			March 19, 2011
Net Sales	$	4,147		$	4,443
Gross Profit		2,167			2,041
Net Loss		(97	)		(194	)